Where have all the good times gone?: The new towns thought the boom would go on forever, but now they are slowly dying. Kathy Marks reports (CORRECTED)

CORRECTION (PUBLISHED 11 OCTOBER 1992) APPENDED TO THIS ARTICLE

STEVENAGE has several modest claims to fame. It was the first new town designated by the post-war planners; the first town in Britain to get a pedestrianised shopping centre; the first in the world to get an integrated cycle track. And it has only one set of traffic lights.

Until a couple of years ago, it was also very prosperous. Proximity to London, a pool of skilled labour, and Hertfordshire's green and pleasant land attracted light engineering and hi-tech industries away from the capital.

The recession of the early Eighties barely grazed Stevenage and the other new towns along the A1(M) corridor - Hatfield, Letchworth, Welwyn Garden City. A few years ago, the talk was of overheating and skills shortages.

The turnaround has been swift, and savage. The run-down of the defence and aerospace industries, which were almost the raison d'etre of these towns, accompanied by the longest recession since the war, has bitten deep into the local economies. Unemployment in Stevenage - 2.4 per cent three years ago - has risen to nearly 11 per cent.

'It was absolutely boom city,' said Clive Wilmot, chairman of the Stevenage Chamber of Commerce. 'When you're in a boom, you always think it will go on forever. The bubble had to burst. But when businesses which have been built up over 30 years go bust, you know something is badly wrong.'

It is difficult to overestimate the influence of British Aerospace on the area. In the mid-Eighties, BAe employed 7,500 people at its civil aircraft plant in Hatfield - one in three of the town's workers - and 12,000 at its missile and space divisions in Stevenage.

Defence cutbacks and global problems in the aerospace industry have forced a major restructuring on the company. Only 2,000 workers remain at Hatfield; last week they learnt that the plant is to close next year. The announcement has devastated the town, which has produced aircraft since 1934. BAe workers in Stevenage, where thousands of jobs have already gone, fear for their future.

John Hill, 50, picked up his redundancy cheque on Friday morning after 10 years as a tool designer in the space division. Wandering through the town gardens in Stevenage, he said: 'I've lived here for 35 years and I don't want to move. But it's the younger ones I feel sorry for. A lot of people will be chasing the same jobs.

'People round here are very demoralised. They're turning off the TV when the news comes on; they can't take any more bad news. The aerospace industry will never recover; the government is just not prepared to sponsor it.'

The knock-on effects of BAe's decline have been severe. Al Rainnie, an economist at the University of Hertfordshire, estimates that for every 10 jobs lost in defence and aerospace, six more disappear in the engineering and service sectors.

BAe has not been the only big name adding to dole queues over the past few years. Marconi Instruments closed its Stevenage plant and the computer company ICL shut down two factories in Letchworth. Rank Xerox cut back massively in Welwyn, and Hawker Siddeley is doing the same there. At Hatfield Jobcentre, David Bryant, 32, was looking for building work. 'I've been out of work more times than I care to remember over the past three years,' he said. 'All the optimism has gone. The town is dying and I can't see it picking up.'

Perhaps the most potent symbol of decline is the Galleria shopping centre straddling the A1(M) in Hatfield. The pounds 150m development was conceived in the boom years and modelled on a centre in Houston, Texas. It opened last September. Two weeks ago, the Galleria went into receivership. The units are still trading but their fate is uncertain.

The future of the area, according to Simon Smith, an economist in the planning department of Hertfordshire County Council, lies in pharmaceuticals, telecommunications, financial services and computing.

Several big insurance companies such as Confederation Life moved to Stevenage during the Eighties. The pharmaceutical sector, in the new towns since the early days, continues to thrive; Smith-Kline Beecham has a big site at Welwyn, while Glaxo is building its European research headquarters in Stevenage. 'We're at rock bottom now, but we do have a clear vision for the future,' Mr Smith said. 'As we lose our manufacturing operations, we have to retain and seek investment in other activities.'

(Photograph and map omitted)

CORRECTION

Marconi Instruments has not closed its plant in Stevenage, as was incorrectly reported last week. We apologise for the error.