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This Britain

Swindon's decline: 'The recession was almost instantaneous. Everybody stopped buying. It's like a tsunami'

The transport industry used to provide more than enough jobs for Swindon. Not any more, finds Andy McSmith

Swindon has seen hard times before. The town's economy once rested on a vast railway works, which at its peak employed 14,000 people, but that died a slow death in 1986. The old-timers will tell you that if Swindon could pull through that, it can pull through anything. Even so, the recession has hit hard.

This month, the Wiltshire town of 180,000 people, about 80 miles along the M4 from London, passed an unwelcome landmark when its unemployment rate overtook the national average for the first time in 30 years.

But the statistics do not even take into account what has been happening at the Honda car factory, Swindon's best-known employer. The town's JobCentre staff braced themselves for a sudden rush of business just before Christmas, when they heard that Honda planned to stop production at Swindon temporarily, but that flurry never came.

This is because hundreds of Honda workers live outside Swindon, but it also arises from the company's unusual philosophy. Honda's management never uses the word "redundancy", although they offer an "assisted release programme" for any who want to leave. About 1,000 have joined the programme, and Honda is looking for more volunteers. But most want their jobs back when the factory reopens in June. They include Kevin Parry, a paint-sprayer and panel-beater, who is confident there will be a job for him. "Honda's philosophy is no redundancies, and they said very clearly that anybody who wants to continue working for Honda will have a job," he said. "So Honda is not forcing anybody out. They can't guarantee a job for life, but they guarantee you a job when you go back."

Mr Parry originally came to work for Honda as a 20-year-old in 1995, because his previous employer, a vehicle repair shop called JP Bodies, was a victim of the recession of the early 1990s. Honda has promised those employees who stick with it that they will be on full pay in February and March, and half-pay in April and May, but with bonuses and other additions, Mr Parry calculates his income has fallen by only about a fifth of basic pay during the slack period.

"I think most people felt Honda had been supportive and truthful," he added. "I don't think they tried to hide anything. When they were hit by the recession, they could have been brutalist and made people compulsorily redundant, but they honoured bonuses and they set a system up to guarantee basic pay."

The job losses that show up on Swindon's statistics have hurt smaller businesses, forcing them to shut down or shed staff to survive. The town used to have a large Woolworths store, with 50 staff, and a Woolworths distribution centre, employing a further 350, both of which suddenly closed before Christmas. "It hit whole families very hard," Swindon South's Labour MP, Anne Snelgrove, said. "They tended to have worked there for a long time, and a lot of members of the same family worked at the same place."

H&H Joinery, a little firm operating out of premises resembling an aircraft hangar in Swindon's Quadrillian industrial estate, is still in business, after reluctantly laying off two staff but, like so many firms, it is having a nightmarish time trying to persuade the bank to give credit. Its local HSBC branch manager seemed to accept that the firm was a safe investment, but someone higher up apparently did not agree.

The firm was itself a redundancy offshoot in 2007, when its directors, Clive Humphreys and Bryan Hall, lost their old jobs. They sank their own money into H&H, and without help from the banks, pushed their turnover from £79,000 to £280,000 last year, most of it involving making counters and display units for shops. They moved into bigger, more expensive premises to cope with the extra load.

"From August, we were stacked out with work, but in December it just dropped off," the general manager, Michael Roberts, said. "This recession hit hard and very suddenly, and we were left with cash-flow problems. We're still being asked to tender for work, but it has become very competitive. The customer is pushing for cheaper and cheaper prices all the time. We have to pay up front for materials, and it can take 60 days before we are paid for the job. If we can get through the next three or four months, we will be the better for it. The difficulty is getting through it."

They have, with difficulty, persuaded the bank to allow them a £10,000 overdraft, but that is likely to be called very soon. They have been trying without success to find some of the government aid said to be available to small businesses, given that it would cost the state more if the firm went to the wall than if it helped tide it over the crisis.

Swindon's population is comparatively young. It has the highest proportion of children anywhere in the South-west. Traditionally, a high proportion of its teenagers have gone straight from school into relatively well-paid employment. But the rising unemployment figures are hitting the under-25s hardest, and in Swindon, that shows.

Some pupils at the newly-built Nova Hreod specialist maths and science secondary school are well-equipped to adapt, like the group of pupils aged 14 and 15 who have formed their own company, Nueva Empresa, selling bespoke pencils. But plenty are in danger of being put off the world of work for good as they see older friends and relatives thrown on to the dole. Swindon has always been an area of high employment," said the school's acting head, Fergus Stewart. "But that has changed quite dramatically over the past few months, and will continue to change. One of our biggest challenges is raising pupils' expectations."

Jim D'Avila, who runs the Swindon branch of the manufacturing union, Unite, said: "The recession was almost instantaneous. It was as if somebody suddenly put the flag up and said 'Stop buying things' and everybody stopped. It's like a tsunami."