‘Quite often there is a stigma attached to going to work’: Inside Britain’s labour market crisis

Published

1 year ago

June 11, 2024

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Michael is fair haired and frail, with a face that tells a story. Until seven years ago his life was perhaps as he imagined it. He was married and working for a fancy food shop in his home town in north Yorkshire.

Then something happened. He is reluctant to share the full details but his marriage broke down, he lost the job, and was left with a choice: “It was to be homeless, or move to a bedsit in Middlesbrough,” he says.

Which is how we come to be speaking in the Employment Hub on Corporation Road, opposite Middlesbrough’s Jobcentre.

A council-backed centre, it offers help and guidance to anyone looking to get back into work.

Young adults making the leap from education to employment; older people who want or need to earn again; and clients like Michael, who fall somewhere in between, derailed by illness or personal circumstances.

‘I’ve lost my confidence’

He has not worked for six years and he’s here to try to change that. “With not being in work for a while I’ve lost my confidence,” he says.

“I got stuck in a routine and I’m not the best at helping myself out at times. You feel like you’re stuck. It would be nice to get back into a work routine. You feel better in yourself through having a job.”

Michael has an appointment with Doug Hewitson, once long-term unemployed himself. He points clients towards an array of services they might need to help them work, from compiling a CV and getting basic qualifications, to training and work experience opportunities.

“We primarily work with retirees, the short-term sick and people with young families, that tends to be with children younger than two,” Doug says. “Generally, they will be on a type of universal credit that doesn’t have the requirement to seek work attached to it. And we have a lot of them.”

The Employment Hub is trying to help fill a gap that exists across the country as the economy struggles with a labour market crisis that has nothing to do with the number of jobs.

Unlike the unemployment crisis of the 1980s, there are plenty of opportunities, close to a million vacancies at the most recent count. The problem is finding people to fill them.

Since the pandemic almost 800,000 people have fallen out of employment into “economic inactivity”, a catch-all definition that covers the nine million people of working age not currently able or looking to work.

That includes students, early retirees and stay-at-home parents and carers, but the largest and most pernicious reason is long-term sickness, which now accounts for more than 2.5 million people, an increase of more than 400,000 since COVID, driven largely by mental health conditions.

‘There is a stigma attached to going to work’

That has held back growth and pushed the welfare bill up, and the issue has gained political salience with Rishi Sunak characterising some mental health challenges as “the ups and downs of everyday life”.

Unemployment, inactivity and workless households are all above the national average in Middlesbrough and the Tees Valley but they are not unique.

“You can walk out on the High Street now and find several people who are economically inactive,” says Philip Bentham, who leads the employability team at housing association Thirteen in Stockton-on-Tees, which aims to help people into work.

“For some it’s health, mental health, low skills and qualifications, or generational unemployment. We’re working with families who are three and four generations unemployed within the household, mum and dad and grandparents that have never worked.

“Quite often there is a stigma attached to going to work. Their families are afraid of not having the safety net of the benefits system, and people sometimes sadly think work doesn’t pay. Our job is to convince them there is always something they can do.”

The state response to worklessness is Universal Credit, a single payment that covers benefits for housing, children and childcare, as well as unemployment benefit, administered by the Jobcentre Plus network.

At Middlesbrough’s Corporation Road branch a steady stream of claimants arrive for their strict 10-minute appointments, watched by up to four security guards.

A mix of carrot and stick

In principle it’s a deal between the state and the claimant, a mix of carrot and stick. Claimants who can work are required to attend weekly meetings with a work coach and take steps to find a job. Fail to do this and you can be “sanctioned”, often by reducing cash payments.

If you are too sick to work however the requirement to look for a job falls away leading to the suspicion, apparently shared by the prime minister, that some claimants are citing mental health conditions to get signed off.

I ask work coach Michaela Fulleylove if some people do play the system.

“I’m saying yes, definitely. But we have to treat every individual with trust, fairness and compassion.

“But we have to be able to ask questions, because not only is it our job to support the public, we’ve also got to protect the public purse.”

For all the challenges in Middlesbrough and the Tees Valley there are opportunities.

The demise of ICI and British Steel, huge paternal employers that offered their own safety net, left a gap that has never been adequately filled.

The latest attempt is levelling up, largely channelled through the Tees Valley mayoralty of Ben Houchen.

Europe’s largest brownfield development, the controversial Teesworks freeport, is taking shape and there are advanced manufacturing opportunities in the renewable energy industry serving a huge new offshore wind project at Dogger Bank.

Thousands of jobs are promised, an incentive for the workforce and a challenge for employers.

AV Dawson has operated the Port of Middlesbrough in the shadow of the town’s landmark Transporter Bridge for 80 years.

They employ around 200 staff and people and culture director Louise Croce tells me they have no problem filling roles or retaining staff.

‘We get people who want to be hairdressers applying to be forklift truck drivers’

She points out the perverse incentives of a benefits system that requires claimants to apply for jobs, irrespective of whether they can do them.

“We get people who want to be hairdressers applying to be forklift truck drivers. You do question whether some of it’s around their ability to claim benefits,” she says.

But those who do work for her receive a level of support, particularly around mental health, that would have been unimaginable in Middlesbrough’s macho industrial past.

“We provide a lot of support inside the company, we have health and well being ambassadors, because mental health is such an issue in the area. We try and look after people, help them with issues early, before they become a problem.”

On the edge of a city centre abandoned by big retailers is Teesside University, a cluster of new buildings that is evidence of badly needed investment.

The vast majority of the 20,000 students come from within a five mile radius, and deputy vice chancellor Professor Mark Simpson tells me they aim to prepare them for the promised jobs, from digital and AI, health and life sciences, public sector jobs and the net zero industries.

“We work with businesses and we work with industry to look at demands, look at what skill sets they need from our graduates,” he says. “But we don’t just respond, through those clusters of courses we help create the industries.”

“But when you see the levels of deprivation across the Tees Valley a big part of what we need to do is raise aspiration.”

Business

US and China extend tariffs deadline again

Published

25 mins ago

August 12, 2025

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US and China extend tariffs deadline again

The world’s two largest economies, the US and China, have again extended the deadline for tariffs to come into effect.

A last-minute executive order from US President Donald Trump will prevent taxes on Chinese imports to the US from rising to 30%. Beijing also announced the extension of the tariff pause at the same time, according to the Ministry of Commerce.

Those tariffs on goods entering the US from China were due to take effect on Tuesday.

The extension allows for further negotiations with Chinese Premier Xi Jinping and also prevents tariffs from rising to 145%, a level threatened after tit for tat increases in the wake of Trump’s so-called liberation day announcement on 2 April.

It’s the second 90-day truce between the sides.

The countries reached an initial framework for cooperation in May, with the US reducing its 145% tariff on Chinese goods to 30%, while China’s 125% retaliatory tariffs went down to 10% on US items.

A tariff of 20% had been implemented on China when Mr Trump took office, over what his administration said was a failure to stop illegal drugs entering the US.

Sector-specific tariffs, such as the 25% tax on cars, aluminium and steel, remain in place.

Chinese stock markets were mixed in response to the news, with Hong Kong’s Hang Seng down 0.08%

The Shanghai Composite stock index rose 0.46%, and the Shenzhen Component gained 0.35%.

Business

Wage rises slow as retail and hospitality jobs continue to fall

Published

25 mins ago

August 12, 2025

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Wage rises slow as retail and hospitality jobs continue to fall

The rate of wage rises in the UK continued to slow as the number of job vacancies and people in work fell, according to new figures.

Average weekly earnings slowed to 4.6% down from 5%, while pay excluding bonuses continued to grow 5%, according to data from the Office for National Statistics (ONS) for the three months to June.

It means the gap between inflation – the rate of price rises – and wage increases is narrowing, and the labour market is slowing. Inflation stood at 3.6% in June.

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The number of employees on payroll has fallen in ten of the last 12 months, with the falls concentrated in hospitality and retail, the ONS said. It came as employers faced higher wage bills from increased minimum wages and upped national insurance contributions.

As a result, it’s harder to get a job now than a year ago.

“Job vacancies, likewise, have continued to fall, also driven by fewer opportunities in these industries,” the ONS director of economic statistics, Liz McKeown, said.

The number of job vacancies fell for the 37th consecutive period and in 16 of the 18 industry sectors. Feedback from employers suggested firms may not be recruiting new workers or replacing those who left.

Unemployment remained at 4.7% in June, the same as in May.

The ONS, however, continued to advise caution in interpreting changes in the monthly unemployment rate due to concerns over the figures’ reliability.

The exact number of unemployed people is unknown, partly because people do not respond to surveys and answer the phone when the ONS calls.

The worst is yet to come

Wage rises are expected to fall further, and redundancies are anticipated to rise.

“Wage growth is likely to weaken over the course of the year as softening economic conditions, rising redundancies and elevated staffing costs increasingly hinder pay settlements,” said Suren Thiru, the economics director of the Institute of Chartered Accountants in England and Wales (ICAEW).

“The UK jobs market is facing more pain in the coming months with higher labour costs likely to lift unemployment moderately higher, particularly given growing concerns over more tax rises in this autumn’s budget.”

What does it mean for interest rates?

While wage rises are slowing, the fact that they’re still above inflation means the interest rate setters of the Bank of England could be cautious about further cuts.

Higher pay can cause inflation to rise. The central bank is mandated to bring down inflation to 2%.

But one more interest rate cut this year, in December, is currently expected by investors, according to data from the London Stock Exchange Group (LSEG).

The evidence of a weakening labour market provides justification for the interest rate cut of last week.

Business

Money Problem: ‘My husband is freelance and in hospital – how can I make sure we don’t lose our home?’

Published

25 mins ago

August 12, 2025

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Money Problem: 'My husband is freelance and in hospital - how can I make sure we don't lose our home?'

Every week, our Money blog team finds the answer to a reader’s financial problem or consumer dispute. Here’s our latest…

My husband is freelance and the breadwinner of the family. He is in hospital for an unknown length of time. Is there any support for us in the short term, so we can keep our home?
Anonymous

Our cost of living specialist Megan Harwood-Baynes tackles this one…

I am so sorry to hear this – I have recently been through something similar with my husband, and it can be really stressful when you add financial worries on top of medical issues.

To help you navigate the next steps, I’ve broken this up into what support you can get with your mortgage specifically, government help and some advice on the rest of your bills.

Help with housing

Your most immediate concern seemed to be housing (understandably). First, try not to panic – it is easy to skip to the thought of losing your home, but the last thing your mortgage lender is going to want to do is go through the hassle of repossession for what could just be a short-term issue.

Start by having a look through your insurance – certain types of insurance can help with mortgage repayments if your income falls due to sickness.

(If you don’t have this, make a note to consider taking it out for next time – you never know when something like this could happen again, and income protection insurance could make a huge difference in the future.)

Assuming you don’t have insurance coverage, the next step is to contact your lender. The sooner you do this, the better, as you’re more likely to have better options available to you before you miss a payment.

Things you can ask for include:

To lengthen the term of your mortgage;
To switch to interest-only repayments;
Ask about a temporary mortgage payment holiday.

There are pros and cons to all of the above, which you should consider carefully.

For example, a mortgage holiday is only suitable as a temporary fix – remember, you are still racking up interest on your remaining mortgage. It will leave the balance and remaining payments higher than they were before.

If you have already missed a payment, you are now in mortgage arrears. This can damage your credit file, and yes, it could eventually lead to you losing your home. But there is still support to get you back on track. Again, contact your lender and ask them for support.

The UK’s biggest mortgage lenders and the Financial Conduct Authority agreed on a set of standards under Rishi Sunak’s government, known as the Mortgage Charter. Under this, lenders are obligated to offer tailored support to anyone struggling – whatever the right option is will depend on your circumstances – so go into discussions with the mindset that they are there to help you.

Government support

If your husband is freelance, you won’t be eligible for Statutory Sick Pay (SSP), but he will be able to claim Employment Support Allowance. This is for people who are self-employed, unemployed, classed as a student or who are employed but not eligible for SSP.

To apply, you will need to demonstrate that he is unable to work because of his illness or injury. The doctors should be able to provide a sick note and medical evidence for this.

You will need to make sure he has paid enough national insurance contributions. He should be able to check his records for gaps and then voluntarily fill them if need be.

He may also be eligible for a personal independence payment or PIP, which is for people living with disabilities or long-term health conditions.

In some cases, he may also be able to claim universal credit – this would be based on his monthly income before he went off sick.

As well as benefits, you may be entitled to a working-from-home tax rebate, or you could reclaim bank charges if you’ve incurred fees for going beyond your limit.

This seems overwhelming, I realise, so the best bet is to start by looking at the government’s benefits calculator.

You should also reach out to Citizens Advice or a charity such as Turn2us for advice from someone who can look at your situation in more detail.

If you aren’t yet in a debt crisis, I would caution against visiting a debt-counselling agency. They may push you towards declaring bankruptcy or an individual voluntary arrangement, which you may not need at this point. They are serious measures designed for those with few options left.

Help with bills and all the rest

Before you start missing payments on your bills, try to contact your utility companies first. Explain the circumstances – they are also obligated to help you.

You can claim support with your energy bills and any other costs. There’s no “one-size-fits-all” approach, so the best thing is to contact each of them individually.

Good luck, and I hope your husband recovers soon.

This feature is not intended as financial advice – the aim is to give an overview of the things you should think about. Submit your dilemma or consumer dispute via: