The geography of the economy has shifted, and politicians should be aware their ability to push jobs where they want them is limited, however much we may wish otherwise
To mark the 40th anniversary of the Miners’ Strike, the BBC has published a poll showing 73 per cent of people living in former coal mining areas have seen ‘little or no progress’ on levelling up. Where does the failure lie in creating this result? Is it the failure to put the right policies in place, or is it politicians’ unrealistic promises?
First, what does ‘levelling up’ actually mean? ‘Better access to jobs’ isn’t how everyone interprets levelling up, but it has been an important part of the debate since the beginning. Employment also has an impact on other parts of the levelling up agenda, such as the performance of high streets, by putting money in people’s pockets.
As is well known, the 1970s, 1980s and 1990s were very difficult for the coalfields as the industry all but disappeared in the UK. The supply of new manufacturing plants which had hitherto offset closures dried up too. But the number of jobs did start to increase again in these areas from the 1990s, and by 2021 the number of jobs in them was around eight per cent higher than in 1971 (see Figure 1). This recovery has not been as sharp as seen elsewhere in England and Wales, but in absolute terms there are more jobs today in these areas than there ever have been before.
The bigger issue is not the volume of jobs but their quality. In recovering from the heavy blows of the second half of the 20th century, coalfields have tended to swap coal mines for call centres and distribution sheds – rather than reinvent themselves by attracting knowledge-based activity. The result is that they have higher shares of jobs in manufacturing and warehousing than the rest of England and Wales, and smaller shares in high-value services (see Figure 2). The leading employer of higher-skilled workers is the public sector – a pattern also seen in other struggling post-industrial places.
Particularly visible examples of this can be seen in Shirebrook in Derbyshire, the home of Sports Direct’s headquarters, which covers the area of around 28 football pitches on the site of a former colliery, as well as Rugeley in Staffordshire, where Amazon built a large warehouse on a similar site.
This has meant that while work is available, and real terms pay has increased since the 1970s, the gap in pay on offer compared to other parts of the country has widened (see Figure 3). Average weekly gross male earnings in coalfield areas were between £10-15 lower than the rest of England and Wales during the 1970s, and that gap had widened to between £40-50 in the years immediately prior to the financial crisis (when this time series ends).
But here’s the crux. Whatever the culpability of various governments, this divide in jobs and pay has grown because of the inherent differences in the benefits that places offer to businesses. And the extent to which they are able to offer these benefits determines the prospects for local reinvention.
Colliery communities such as Shirebrook appeared because of the coal below and were sustained by manufacturing plants looking for space and manual workers. These things have become less important as the economy has shifted to more knowledge-focused activity, which depends on access to networks of higher-skilled businesses and lots of higher-skilled workers that cities are (in principle) best at providing.
Located away from urban cores and often lacking large numbers of higher-skilled workers, the main advantages offered by coalfield communities have remained essentially unchanged. Possessing large amounts of relatively cheap land and lower-skilled workers, coalfields have been attractive to investment, but this investment has tended to be mainly in the lower-skilled elements of manufacturing businesses and services such as warehousing.
Can policy reverse this? Slogans like ‘levelling up’ give the sense that it can. But there is very little governments can do to change the fundamental benefits that different places offer. In the same way that policy couldn’t have magicked up coal seams to create jobs in the places that didn’t have them in the past – and any politician claiming otherwise would surely have been derided – it can’t change the fundamentals as to why knowledge-based activity occurs in very specific places today. However, it hasn’t stopped politicians of all colours claiming they will bring better-paid jobs to coalfield communities.
This, of course, does not absolve politicians from trying to improve the standards of living of people living in former mining communities. It just means that they need to focus on what they can realistically do to bring about beneficial change.
Skills, health, and public services are three areas where there are very obvious levers policymakers can pull. In coalfield areas, 79 per cent of people are in ‘very good health’ compared to 83 per cent in the rest of England and Wales. Just 29 per cent of people in coalfield areas have high-level qualifications, compared to 35 per cent of people elsewhere. And the numerous section 114 notices that have, or are likely to be, announced speaks to the budgets available for services provided by local authorities. The minimum wage is another; while higher wage bills may incentivise firms to substitute labour with machines, better take-home pay would certainly improve living standards.
Access to ‘good’ jobs is a different matter. Policymakers should certainly make former coalmining communities attractive to investment where they can, but they should also recognise what policy can and can’t achieve. This makes addressing the underperformance of the UK’s largest cities outside of London all the more pressing. Part of the challenge faced in Shirebrook, where average incomes were around 11 per cent below the English and Welsh average, is the underperformance of Sheffield and Nottingham. The lack of prosperity that these cities generate for their wider areas is a big part of why a place like Shirebrook struggles.
None of this is likely to restore a place like Shirebrook’s relative position in the UK economy. But it would improve the chances of the people who live in Shirebrook to access higher-skilled jobs, even if those jobs aren’t in their own community. Maybe then a larger share of people will be able to report that they have seen some progress on levelling up.
Leave a comment
Be the first to add a comment.