EARLY ONE MORNING.........................
Liberal Democrat Councillor for Stansted North on Uttlesford District Council and former Leader of the Liberal Democrat Group Learn more
by Alan Dean on 17 August, 2011
Harlow has been successful in its bid to become an enterprise zone. The coalition government announced today a list of places which will be given financial support and special powers to encourage business growth to boost the economy, jobs and tackle run down communities.
A small district like Harlow is not an island. It’s geographically small and predominantly urban. Neighbouring Uttlesford has about the same population but is much more rural. Average pay levels paid to people who work in Uttlesford are actually lower than the pay rates of people who work in Harlow. Uttlesford’s residents are higher paid.
Those of us in Uttlesford with an interest in economic development, business and jobs will be discussing the enterprise zone with out neighbours in Harlow and Epping Forest. East Hertfordshire ought not be left out; a county boundary has little relevance to jobs and businesses?
12 Comments
Is average pay really lower than in Harlow? I’m looking at ONS data for 2009 and it has male full-time pay at £649.50 per week in Uttlesford (fourth highest in Essex) and £481.80 in Harlow (lowest in Essex). I can’t find female full-time pay, though. Unemployment is also far greater in Harlow.
It all depends on whether you look at earnings based on where people work or where they live. The average weekly earnings in 2010 of people who reside in Uttlesford was £584.10. The comparative earnings for a Harlow residents was £396.40. However, someone who works in Harlow on average earned £667.10 each week against a lower income of £624.90 for people who work in Uttlesford. This also is ONS data. I am intrigued that the data says that Uttlesford-based jobs pay more than the average resident of Uttlesford gets. Does this district have high paid jobs that are not open to local residents? Is there a skills gap or is the data flawed?
Hi Alan, long time no see!
If there are any benefits to be had from Harlow’s Enterprise Zone status – and that’s a mighty Big If – I’m sure Uttlesford will have a share in these, not least in supplying Harlow with the highly skilled staff we would need. Harlow has major skills gap issues and consequently the highest rate of unemployment in Essex. A significant proportion of our most skilled staff commute from outside of Harlow, many from Uttlesford and Herts. This explains the quite staggering differential between the average salaries of those who work in Harlow as opposed to those who live here.
However, I’m old enough to remember so many similarly misty eyed schemes: the ‘white heat’ of Harold Wilson’s, Thatcher’s, Blair’s and Brown’s promised industrial revolutions, all of which fizzled out like the damp squibs they always were beside the roaring furnace of ruthless international competition. Blair and Bill Rammell also claimed Harlow would become an Enterprise Zone: Essex’s very own high tec silicon and pharmaceuticals valley. The result: 1,200 jobs lost at NTL, 600 at MSD, 300 at Kores, hundreds at Smithklines and many, many hundreds elsewhere. So I’m highly sceptical of all whiz wonder plans like this one.
These schemes invariably boil down to the same old common denominator too: an excuse for yet another doomed housing boom. If we can only (re)generate critical mass, they all cry, then we’ll reach the celestial city! And every time we ignore the lessons of history, that the finest example of critical mass during the century gone was our last boom and bust. For all that critical mass every was is a bust waiting to happen.
I ask our councillors where all of the jobs are to come from for the children of these new commuter developments they’re planning, in particular since Harlow’s unemployment is already so high. If you hadn’t fought Stansted expansion, they tell me, that would have provided thousands more jobs for Harlow – Stansted expansion cannot be held back forever!
Meanwhile, the 4 million SMEs and our 17 million staff who are on the sharp end of these policy failures do what we always do, carry on being the real enterprise zone…
Colleen
It’s early days for knowing what this will deliver. It’s true that jobs are needed not just for professional people, but for less skilled people. Opposition to high growth at Stansted has made no difference to job levels; the market has caused employment to decline as passenger numbers have dropped to half the current permission. So nothing is restaining jobs at Stansted apart from the economy and people’s reduced desire or ability to fly.
Here is some data about the enterprise zone:
West Essex Enterprise Zone in Harlow – led by the Kent, Essex and East Sussex local enterprise partnership proposes:
• Size: 51ha;
• Sector Focus: medical technologies and advanced manufacturing;
• Tax breaks: will save business £16.3 – 21.3 million in forgone business rates;
• Job creation: LEP estimates 100 businesses 2,200 – 2,570 jobs by 2015;
• Planning: simplified regime will cover change of uses without the need for planning permission to be sought will facilitate those businesses in the health and allied industries and advanced manufacturing sectors.
Such enterprise zones have led economic growth in the developing world and commonly involve a manufacturing specialism that utilises skills and resources. Colleen is absolutely right about the skills gap being a principle cause for Harlow’s high unemployment. Unless the skills are locally developed to match the requirements of such a zone, it will simply lead to commuting to the area and therefore more burden on the transport infrastructure and potentially a rise in house prices that will disadvantage locals further. Skills are also key to increasing competitive advantage against Asian producers. Otherwise, why invest in Harlow when you can site a plant in an emerging market with higher margins? This factor was likely to be crucial to the closure of factory units in Harlow. Yet, what incentives are there to gain a skill when good vocational courses that teach necessary skills are over-subscribed, the EMA has been withdrawn and higher education students are now being forced to foot the bill for costly and often poor quality university courses?
I don’t think that Harlow’s problems are anything to do with future changes to educational funding, but rather the result of past economic mechanisms and cultural attitudes that have left a lot of people with low aspirations. Much of the root problem has been international competition/globalisation, which has marginalised many people without competitive skills. Marginalisation has been made worse by efficiency/competitiveness changes that have benefited the favoured majority but worked against the less favoured minority. Even the favoured members of society are finding they are living beyond their means – but don’t want to see their living standards eroded. There is no going backwards five years! The result may be even greater divisions between the haves and the have-nots. What is needed is a complete overhaul of the UK economy and culture away from “me first” and instead towards greater fairness (not based simple handouts) based of enabling everyone to give of their best to the rest of society. After all, the favoured don’t like riots!
Yes, the problems are not related to the coalition government’s education policies, but EMA abolition and university tuition fees certainly won’t help.
The unemployment data for Harlow over recent months shows that female joblessness is steadily declining, outweighed by increasing male unemployment. Could this be a sign that recession/stagnation is leading to greater casualisation of labour in the district and with it a decline in skilled labour demand?
As for the enterprise zone, it’s too small to make any difference. Such zones in developing countries such as China and India – which British manufacturers are competing against – are massive and fully integrated up the manufacturing value chain. Take, for instance, the Sutong Science and Technology Park in Nantong, Jiangsu province (with which Essex is twinned) – 50 square km (100 times larger than the one planned for Harlow) developed over three phases and is focused on the kind of industries the Harlow enterprise zone is focused on. I know that it is unlikely that anything on this scale is possible in the UK, apart from some existing industrial areas such as Teesside.
So what is the purpose of this average sized industrial park benefiting from tax breaks? SME manufacturing units may very well locate there, but they may be relocating from other parts of Essex and Herts – eg the electronics components factory in Saffron Walden – to take advantage of the tax breaks. It may not create any more jobs, but simply move them to a different area with not guarantee that locals in Harlow will be employed.
As someone who has always worked in scientific R&D, I am pleased that the Lib Dems in government are nurturing our science base, which is still a big earner for Britain. We have also invested heavily in the Babraham Institute between Saffron Walden and Cambridge (http://www.bbc.co.uk/blogs/deborahmcgurran/2011/03/budget_fills_a_pothole.html). I know that my fellow scientist Julian Huppert, Cambridge’s Lib Dem MP, takes a keen interest in these matters.
SMEs form an important part of that science base because they are often better at discovery than bigger enterprises: small is indeed beautiful. From personal experience, increasingly the latter in-licence products from the former in a symbiotic relationship. Bigger enterprises are even learning not to asset-strip: why kill the goose that lays the golden eggs?
I fear that the EZ will be more useful to commuting professionals like me than to those residents of Harlow who lack markettable skills. As the boy from the council estate who made good and got a science PhD, I think Alan is spot on about poverty of aspiration: it has been endemic for years – in the valleys of South Wales at least. That’s why I think the pupil premium and the wider fairness premium are a much better use of scarce resources than the EMA: the damage is done between 10 and 14.
Molecular Products at Thaxted is already lined up for a jobs drain from Uttlesford to Harlow. Part of the problem is Uttlesford DC’s absence of an economic/jobs strategy and local companies’ consequent inability to expand locally. The planning system seems to work against enterprise in Uttlesford, according to business people that I meet.
Such zones work best where there are a cluster of complementary manufacturers, often trading between each other, sharing services and forming joint ventures. This improves efficiency, adds value and boosts competitiveness. I wonder whether the authorities are negotiating with a range of businesses to fill the park before it is established or whether they will just allocate a piece of land and allow it to fill up with disparate businesses that have little to do with each other. If the latter, then I don’t see the point – it’s just a public subsidy to business, rather than a dynamic industrial zone.
To benefit the local economy, they also need to utilise local resources and Harlow currently lacks resources in terms of labour skills; Cambridge does not lack scientists and engineers, so it can exploit these skills for R&D, but such job opportunities in Harlow will be taken by commuters as Peter says. Specialising in medical technology certainly excludes most Harlow residents from many of the better paying jobs.
What can be done to ensure that local skills are improved to ensure that an industrial park? The answer will be crucial to multiplying the advantages for Harlow. Light manufacturing could lead to improved skills. But Harlow’s light manufacturing base has declined over the past decade or so, only to be replaced by companies such as Raytheon which says that the majority of its 600 employees in Harlow are “high grade engineers and skilled electronics technicians”. This trend hasn’t done much to bring down unemployment which remains consistently one of the highest rates in the Eastern region. So why would having more of these companies in Harlow benefit residents? Why isn’t anyone addressing the problem of the continuing erosion of the town’s light manufacturing sector, which is its chief employer?
Also, to create jobs rather than transfer them from one area to another, there needs to be a focus on expansion of existing businesses and new start-ups. How will the zone encourage this?
In terms of logistics and commuting, I would imagine that Harlow is preferable to Thaxted – it is better situated, closer to rail services and the motorway. Unless Thaxted can offer other benefits that outweigh the benefits of operating from Harlow, I can’t see why anyone would set up a factory there.
I think Uttlesford should be concerned about developments in neighbouring districts and seek to co-operate in economic development. What happens in Harlow, East Herts and South Cambridgeshire – the M11 corridor – will affect us.
I don’t believe that there should be a choice between pupil premium and EMA. If we really want to boost a broad range of skills in the economy and compete against BRIC, we have to invest in high quality, life-long education that is free. If this country can go headlong into war at any opportunity and if it has unlimited resources to plough into the banking sector (without any change in regulatory structure to avert another crisis), then it can invest in education. I agree that low expectations are a problem, but creating massive personal debt – even on excellent repayment terms – is not going to encourage children in many working-class homes to take up degrees, particularly those likely to lead to post-graduate qualifications and research.
I suspect Uttlesford’s undeclared default policy is to be a dormitory for surrounding districts. I suspect many of its residents work in Harlow.
Harlow’s EZ could build on its existing high tech. pharma presence (and that of neighbouring parts of Herts.).
Helping families out of generations of poverty and underachievement remains an unresolved question, even if it long predates the advent of the current government. I have no relatives who have A-levels let alone a degree: that cannot be right or good.
Paul: The problem is that the new pharma/high-tech presence doesn’t utilise the local labour force and is not a replacement for the loss of the town’s manufacturing base. I agree with you – Uttlesford is situating itself as a dormitory area for industries outside the district, paying little attention to existing industrial activities. There is a risk that the few industrial units in the district will move outside the area, starving it of jobs for people who have not chosen to take up degrees.
Why should academic qualifications be seen as the only indication of skills and education anyway? There’s a lot that cannot be learned within a university. I would prefer people get appropriate technical further education than undertake superfluous degrees that serve as cash cows for low-rung universities that contribute little to research. Further education is crucial and Harlow College should be a vital part of any renaissance in industry in the town and surrounding districts.