Industry in crisis: Unemployment: Spectre of decline that haunts Britain

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The Independent Online
THE WINTER looks set to follow summer and autumn in being littered with the famous names of British industry making staff redundant.

Manufacturing companies appear to have borne the brunt of the job losses - about 30,000 in the summer with a confident forecast of an average 10,000 going each month until well into 1993. No industry observers are willing to predict an early recovery.

Despite the concentration of announcements on manufacturing, construction and service companies have been shedding labour just as fast. Their reductions come in smaller chunks but the impact is just as dramatic.

The recession has destroyed thousands of small businesses, from corner shops to firms supplying cleaning to financial services.

Seldom do retail outlets, for example, figure on the 'hit-lists' broadcast on television news. It is only when the redundancies are aggregated, such as when Sears closed 350 shoe shops with the loss of 1,800 jobs last month, that the shake-out is evident.

Redundancy has also stalked suburban homes as well as council estates. Managers, professionals and white-collar workers have been laid off in numbers previously believed unthinkable.

The housing market collapse has devastated small building companies, estate agents, surveyors and a host of associated firms dealing with fixtures fittings and household equipment.

More than 120,000 jobs will be lost this year as a result of the recession according to both the House Builders' Federation, which yesterday attacked the Government's 'quack objections' to a cut in interest rates, and Ucatt, the building workers' union.

The federation's latest survey, of 500 companies, representing 80 per cent of industry output, shows the worst two months in living memory with a record fall in the number of people visiting sites - down 45 per cent on last year.

One federation source said that many builders, traditional supporters of the Conservative Party, were stopping their political contributions. Another said: 'We are not going to be the Tories' lapdog industry any more.'

David Holliday, the federation president, said: 'The industry is desperately upset. They are almost wild in their feelings about Government economic policy.'

George Brumwell, general secretary of Ucatt, urged the Government to release pounds 5bn in capital receipts from council house sales to local authorities and housing associations. 'It is widely acknowledged that housing holds the key to economic recovery,' he said.

The big banks, struggling under bad debt provisions, are expected to have made more than 20,000 staff redundant this year. A further 10,000 jobs have been lost in building societies and insurance companies. Barclays and NatWest have indicated that the reductions will continue in 1993.

A brief respite from redundancies around the general election fast disappeared. The jobs-lost company list is impressive: GEC, Ford, Coats Viyella, Lotus, Jaguar, Shorts, London Electricity, BP, BT, Shell, the BBC, ITN, Rolls-Royce, Vickers Shipbuilding and Lucas have all announced redundancy programmes in the past four months.

A running tally of manufacturing job losses kept by the Amalgamated Engineering and Electrical Union reached 94,829 by the beginning of the month. The last quarter saw 39,102 jobs disappear, mainly in the South-east and the Midlands.

The Engineering Employers Federation expects employment to fall by more than 70,000 next year following a reduction of over 110,000 in the previous 12 months.

Construction, reeling under the loss of 400,000 jobs between the height of the boom in 1989 and June this year, expects another 50,000 redundancies before the end of December. The Building Employers Confederation says that is 580 construction jobs lost on every single working day since June 1989.

Sir Brian Hill, confederation president, warned that if the industry continued to contract at its current pace any economic upturn would itself be inflationary because builders would be unable to cope with demand.

Builders' frustration with Government policy has also been aggravated by speculation that the latest round of public spending cuts, to be announced by Mr Lamont next month, will include hospital and school maintenance and road-building and repair.

The motor industry, both manufacturing and retail, has seen more than 70,000 jobs disappear. It forecasts further restructuring if the gloom of the past 30 months is not lifted soon by better sales.

The Post Office, British Telecom and other companies dependent on the general level of economic demand have both predicted job losses.

A survey by Hay Management Consultants showed that 75 per cent of organisations had made some reductions. Even a third of employers in the public sector, which has been more insulated from the recession, had reported redundancies.

Nick Boulter, director of Hay Management, commented: 'Unemployment figures alone do not reflect the full effect the recession is having. For every one person unemployed there are many more who are seeing their rewards reduced in some fashion.'

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