A visit from Gordon ... then recession hit

The Prime Minister shared Mo Knowles’s settee 10 months ago. How has her family and the town of Stevenage fared since? Andy McSmith reports from the economic front line
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Mo Knowles has been a minor celebrity in the Hertfordshire town of Stevenage since Gordon Brown and Harriet Harman paid her a campaigning visit in March.

The Prime Minister hailed her as a "local hero" for her work with teenagers on the local council estate, trying to get them to be as disciplined and respectful as she taught her two sons to be.

In a parable of our times, one of those sons took a job in the Civil Service, and is bringing in enough money to pay his mother's mortgage. The other, aged 40, took work in the private sector, in an export business. Then the recession bit and he lost his job just before Christmas.

That puts him in a similar position to Mo Knowles's neighbour, a self-employed painter and decorator whose work has dried up. Yet the Knowles family is less badly hit than at least one extended Stevenage family, four of whose members lost their jobs in the run-up to Christmas.

This is a prosperous town, with a substantial high-technology industry, in one of the richest counties of south-east England. In rush hour, the roads around Stevenage are clogged up with commuter traffic – yet here, everybody seems to know somebody who has been hit by the downturn. It did not take yesterday's official figures to tell Stevenage that there is a recession.

Currently, about one in 40 of the town's workforce is registered unemployed. That is not as bad as it was 30 years ago, or as bad as in other parts of the UK but it is worse than anything Stevenage has experienced in the lifetime of its younger generation.

The effects of recession are visible in the main shopping centre, beneath the clock tower and ornamental pool that commemorate the official opening of the Stevenage New Town by the Queen in 1959, where – until a month ago – there was a huge branch of Woolworths. Now it is empty. So is the nearby Zavvi shop.

Clifford Leary has lived in Stevenage for four-fifths of his 60 years, and, until a few days before Christmas, was earning £55,000 as an operations manager for a small technology company. Now he is out of work, with a £150,000 mortgage to service.

Three members of the extended family also lost their jobs just before Christmas, including his daughter's partner's mother, who worked for Adams, the children's clothes chain, which has closed, and his two brothers lost their jobs about the same time. A neighbour's son worked for Woolworths.

"Everybody you talk to knows somebody who has lost their job," he said. "I was made redundant during the last recession, in 1991. That was worse because it was the first time. There is a mental attitude you have, if you have never been out of work: you need work for your self-respect. I think I came out of that experience stronger. I changed mentally, and I changed my career.

"I'm definitely looking for work this time too. I don't think I'm going to walk into a job tomorrow but I know there are jobs out there."

Part of what Mr Leary had to say about his own experience had an echo of Franklin Roosevelt's famous words about the 1930s recession, that "fear itself" is something we should fear. Mr Leary thinks the recession has been talked up so much that firms are being more cautious than they need to be, which is why he is now out of work. He was managing a contract to install new software for a shoe company.

"I don't think the company itself was the victim of recession directly: they were just being cautious," he said. "Most companies are being very cautious about spending money, and are cutting back in certain areas – training is one, software is another. These are things that can go on the back burner."

In these uncertain times, meals out also become an expendable luxury, unless the food is cheap. McDonald's in the new town has seen trade increase but, in the leisure park, there used to be an Australian diner called Outback Steakhouse– "a really great restaurant, with real hospitality," according to an ex-customer. It closed just before Christmas.

While times are so uncertain, there is also reluctance among the young to risk the expense of a wedding – which is bad news for Van Kloof, a small jeweller's business that has been part of the High Street in the Old Town for three decades. In December, trade was 25 per cent down on the same month in 2007. Wedding rings are an important part of its business, since it makes gold jewellery as well as selling it, but people are not buying.

Peter Tippett, a director of Van Kloof, warned: "It is important for people to use independent jewellers, and independent shops of all kinds, because if they don't, they will find that when the recession is over, all they will have is the big chains. That will mean less choice and less quality of service.

"We are still getting people coming through the door, but they are spending less. If you had asked me a year ago whether I was confident that we would still be here in another year, it was obvious that we were going to be. This year, it's not so obvious."

Sharon Taylor, leader of Stevenage Council, said: "There has been a bit of a sense that people out there have had that there has been a phoney war. They have heard about the bank crisis, but there was a lag in the effect on jobs. Now they are worried, and they're not taking on new commitments."

But she warned against unnecessary gloom, when three of the town's biggest employers – the technology firm, Astrium, the defence contractor MBNA, and the healthcare company GlaxoSmithKline – have unfilled vacancies for skilled employees. There is an expanding business and technology centre, backed by Stevenage Council, where people who want to try their luck starting up a small company can hire an office for £324 a month, with business rates and heating and lighting costs included.

The council and the Citizens Advice Bureau have combined to set up a Credit Crunch Task Force to help people cope with the money problems thrown up by recession – some of which shed light on the frightening amount of easy credit that was around when times were good.

Marion Hurle, from the Stevenage Citizens Advice Bureau, said that, in the last quarter of 2008, there was a 42 per cent increase in the number of people seeking help with credit card loans and other unsecured debt. Typically, they are people on annual incomes of £15,000 or less, who owe £25,000 or more. One recent case was that of a widow living off a state pension, who owes £120,000. She had been planning to sell her house to pay it off, but cannot find a buyer. "This is something that has been building for years, with more and more people moving from one credit card to another, and now the bubble has burst," Ms Hurle said.

One political question is whether the Labour government will, or should, be blamed for a recession that began on its watch. For 35 years, the Stevenage parliamentary seat has been a barometer: whichever party wins it, wins the general election. The current Labour MP, Barbara Follett, has a majority of 3,319. Her supporters hope that her assiduous constituency work, and a favourable boundary change, will see her through another election, but she is plainly vulnerable.

Having met Gordon Brown, Mo Knowles is not inclined to hold him personally responsible for what has happened, but she thinks that others will. "He's a nice guy, he came in at the wrong time," she said. "It's not just us that's having a recession, it's everywhere, but people moan about the Government. Whoever you vote for, you've still got to live with whatever comes next. Blaming the Government won't help that."

Stevenage A guide

*Total population: 79,800 (Ethnic minorities 9,200)

*Population, 1801: 1,430

*Stevenage Old Town: appears in the Domesday Book (1086) as Stigenace

*Stevenage New Town: designated 1 August 1946, as the first post-war new town

*Most famous son: Lewis Hamilton, F1 champion, born in 1985

*Second most famous son: E M Forster, 1879-1970, who lived at Rooksnest, Stevenage, 1883-93. The house is reputedly the setting for Howard's End

*MP: Barbara Follett, since 1997

*Best known ex-MP: Shirley Williams, 1974-79

*Jobless rate: 2.4 per cent