There is mild optimism among staff in West Midlands after a rise in output but elsewhere chances of getting work look remote
It is a measure of returning confidence to the fortunes of BSA Machine Tools that four apprentices have been taken on over the past two years, bringing the full-time UK staff up to a total of 38. Given that in the 1960s the parent companies that became BSA Machine Tools employed about 14,000 people, this represents a very small step upwards after decades of decline. Nevertheless, staff here are inclined to be cautiously positive.
Steve Brittan, managing director at the company, which makes machine tools for the aerospace, defence, oil and automotive industries – 90% for export, feels there is a new confidence in the economy and is tentatively reaping the dividends of an export-led recovery.
He welcomed the chancellor’s vision of a Britain that makes things again, though he recognises that for his business to be successful its high-end UK headquarters will continue to be supplemented with much of its work being outsourced to more low-tech partner enterprises in China and Taiwan.
The mild optimism felt by staff here echoes the wider excitement about the surge in exports from West Midlands to China and the rapid expansion of nearby Jaguar Land Rover, which is employing thousands of new workers. But the confidence is felt in isolated pockets and has not filtered through to much of the local area, the parliamentary constituency of Hodge Hill, south Birmingham, which still has the highest level of youth unemployment and the second highest overall unemployment in the country.
Liam Byrne, Labour MP for the constituency, said many of the new jobs that had recently been created were part time, zero-hours contracts. While he welcomed signs of recovery in West Midlands manufacturing, he noted: “The flipside of that is that this new wealth is not widely shared. It sits alongside deeply entrenched poverty.”
BSA Machine Tools’ headquarters have shrunk from the vast expanse they occupied until the 1980s, with land sold to make car parks and a large bingo hall (where managers will be celebrating the chancellor’s decision to halve bingo duties to 10%), and now occupy a long narrow warehouse, where mainly elderly staff are working on three £1.7m machines for export, and are preparing to start work on a £1.1m order for two more machines that will be exported to Mexico for fracking.
“It is small beer,” he says of his modest employee expansion, but he believes the government is genuine in its commitment to supporting manufacturing. In the past year he has had breakfast with David Cameron in Downing Street, to explain the needs of manufacturers exporting abroad, and has given Vince Cable lunch and a tour of the Birmingham headquarters.
The announcement of a focus on cutting energy costs, given US industrial energy prices are half those in Britain, is welcome, since this is an issue Brittan cites as a significant obstacle to being competitive. “I think they recognise the problems caused to manufacturing by 30 years of progressive dismantling by various governments, and that’s encouraging,” he said.
The decades-long decline in manufacturing is evident on the shop floor, where there is a noticeable gulf in ages between the majority of staff and new recruits: 70% of employees are over 60, a high percentage are over 65 and three are over 70. One older staff member is instructing a new electrical apprentice, pointing out important aspects of a piece of equipment with his grey hospital crutch.
“I hope these guys will hang on in there while the apprentices come through,” Brittan said. With the decline in profitability of UK manufacturing the company shrank and stopped employing new apprentices. “It’s a microcosm of what has happened in the UK manufacturing industry and the way it has been treated.”
He thinks a corner was turned about three years ago when the value of the pound dropped, making British exports more attractive globally, and when the government began making more positive commitments to the manufacturing sector. As well as the core team in Birmingham, the company contracts in a further 800 staff in China when orders require them.
Increased willingness from banks to lend to the business over the past year and the confidence given by assurances of continued low interest rates from the governor of the Bank of England have also helped the business begin to feel more secure about its future, he said.
Andrew Manning, 25, one of the new apprentices who joined two years ago when the company took on a handful of big orders to make machines for the US oil industry, said: “There is a missing generation in terms of apprentices – we’re having to learn from the blokes who are about to retire, and they’re having to hold on until we learn more.”
He is thrilled to be in work, particularly given the bleak employment statistics in the local area, but life remains complicated even when you are working. Because he is older than the other apprentices, he earns more than the standard £5 an hour but still finds the rising cost of living in Birmingham, ever increasing rents and soaring bills a struggle and is conscious that the prospect of buying somewhere to live remains remote.
A mile from the headquarters in the offices of a community centre, the Hub, which works with marginalised young people offering free access to the internet and support with looking for work, staff do not believe the people they support are feeling the effects of a recovery. The Firs and Bromford estate sits on the other side of the M6 from the Jaguar Land Rover site, but the charity has yet to help anyone find work there.
“We’re not in Cornwall where there are no jobs, but there is a disconnect,” said Paul Wright, branch director of Worth Unlimited, the charity that oversees the centre. Although the car manufacturing plant was visible from the windows of the estate’s tower blocks, locals felt finding work there was only a remote possibility.
This area is in the top 1% most deprived wards in England. Statistically “it has all the highs that you wouldn’t want to be high and all the lows that you wouldn’t want low: high unemployment, high deprivation, social exclusion; low educational attainment, levels of skills”, Wright said.
“All those statistics are there. People here do have talents and skills, the willingness to work, but there are problems with access to jobs. We see the Range Rover success story, and they are taking on people – but the jobs that tend to be available are agency, zero hour, night shifts, with no long-term security.”
He conceded that: “If you look hard, there are some positive signs,” and described the happy case of a 30-year-old man who had been unemployed for a long time and recently got a job with Land Rover, at a different site, a bit further away. His success is used to try to inspire other job-seekers who come in looking for work.
“It does help to be able to tell people about this person who got a job. There’s nothing more inspiring than that,” he said, but he conceded that this job too was a short-term placement through an agency, on a zero hour contract, night shifts, and with no long-term security.
“Technically he doesn’t actually work for Land Rover because he is contracted through an agency. Still, in this climate he is a success story. That’s why we’re celebrating him.”