‘Quite often there is a stigma attached to going to work’: Inside Britain’s labour market crisis
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.”
50 Futures business development officer Doug Hewitson
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.”
Middlesbrough Transporter Bridge
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.
Louise Croce, AV Dawson people and culture director
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.
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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.”
Professor Mark Simpson, deputy vice chancellor at Teesside University
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
Elon Musk says his time working for Donald Trump’s administration will ‘drop significantly’ next month – as Tesla profits sink
Elon Musk has said the time he spends with Donald Trump’s Department of Government Efficiency (DOGE) will “drop significantly” from May and he will allocate more time to Tesla.
It comes after first-quarter profits at Tesla sank as the company grapples with falling sales, partly due to President Trump’s tariffs.
As a special government employee, Mr Musk was limited to 130 days in his role at DOGE, which is primarily aimed at slashing federal spending.
But the cuts, which included axing government jobs, have divided the country and prompted a backlash against his company, including protests and attacks on Tesla showrooms, prompting Donald Trump to label the vandals “terrorists”.
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‘Elon Musk has got to go’
Tesla said on Tuesday that quarterly profits fell by 71% to $409m (£306.77m) from $1.39bn (£1.04bn) in the first quarter of 2024. Revenues were also well below forecasts, dropping 9% to $19.3bn (£14.5bn) between January and March.
The company’s value has plummeted since reaching a record high in mid-December. Since then, Tesla’s share price has fallen more than 50%.
Tesla’s share price has tumbled following the financial market turbulence caused by the global trade war tariffs, competition from Chinese EV rivals and concern over Mr Musk’s ability to give the firm the attention it requires.
Mr Musk’s role as chief executive of the company was among the most common questions shareholders were asking about in a question-and-answer portal ahead of an investor call on Tuesday evening.
As well as his role at the top of Tesla, he is also the CEO of space exploration company SpaceX and owns social media company X, formerly known as Twitter.
Donald Trump hired Elon Musk to help cut federal spending, but Tesla has faced a public backlash. Pic: AP
Musk has ‘lost focus’
An early Tesla investor Ross Gerber said in a recent interview with Sky’s Business Live that Mr Musk had lost his focus and was now too “divisive”.
There has been no clear sign of improvement at Tesla as much-awaited updates on making affordable cars and developing driverless technology left some questions unanswered.
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‘I think Tesla needs a new CEO’
Work on an affordable car remained “on track for start of production in the first half of 2025”, Tesla’s financial results said, but no details on a prototype were given.
Production of Tesla’s self-driving robotaxi, named Cybercab, is scheduled to start in 2026.
Tariffs harming outlook
Uncertainty was also evident in the outlook statement, which pointed to the harm tariffs could pose to the business.
“It is difficult to measure the impacts of shifting global trade policy on the automotive and energy supply chains, our cost structure and demand for durable goods and related services,”
“The rate of growth this year will depend on a variety of factors, including the rate of acceleration of our autonomy efforts, production ramp at our factories and the broader macroeconomic environment”.
While Teslas are made in the US, there are also factories in China and Germany. Under the tariff regime, those car parts are subject to additional taxes when they enter America.
The new owner of WH Smith’s high street arm is drawing up plans which could result in the closure of nearly a quarter of the stores operated by Hobbycraft, the arts and crafts chain.
Sky News has learnt that Modella Capital, a private investment firm which specialises in taking over troubled retailers, is preparing to launch a company voluntary arrangement (CVA) at Hobbycraft as soon as Wednesday.
People close to the proposals said that nine of its shops would be closed, with the loss of roughly 100 jobs, and that 18 more would remain open only if negotiations with landlords over rent cuts concluded successfully.
A further 97 stores will remain unaffected by the CVA, the people added, protecting 1,800 jobs.
Money latest: Trump’s ‘major loser’ attack on Fed chair sparks market alarm
If the talks with landlords do not progress as envisaged and the 18 affected stores are also earmarked for closure, at least 150 more redundancies could be triggered based on Hobbycraft’s average number of employees per store.
Some job losses are also expected at the company’s head office and distribution operations, according to insiders.
The Hobbycraft CVA is expected to be launched shortly before Modella also pursues a restructuring at The Original Factory Shop (TOFS), the discount chain it acquired just two months ago.
Modella owns WH Smith. File pic: NetStorage
One industry source speculated that as many as between 30 and 40 TOFS outlets could close, resulting in hundreds more layoffs.
The dual restructuring processes will raise questions about whether Modella plans a similar cull of shops and workers at WH Smith, which it has said will be renamed TG Jones following the takeover.
In a statement, a Modella spokesman said: “Modella Capital is absolutely committed to bricks and mortar retail, at a time when the sector is coming under increasing pressure.
“[Modella] understands that high streets provide a vital service to consumers, are an essential source of employment and are key to the future success of local economies.
“Modella Capital believes that many retailers can thrive on the high street; particularly those with a distinctive offer and a loyal customer base.
“Where necessary, Modella Capital has the skills and experience to restructure retailers that require it, in order to ensure they create profitable, ongoing businesses that will continue to serve communities and employ thousands of people across the UK.”
FRP, the professional services firm, is overseeing the Hobbycraft CVA, while Interpath Advisory is working on the equivalent process at TOFS.
CVAs – a widely used tool in the retail and hospitality sectors in recent years – are frequently utilised to facilitate store closures and rent cuts from landlords.
Modella bought Hobbycraft, which was founded in 1995, from the private equity firm Bridgepoint last summer.
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