The number of unemployed adults claiming the Jobseekers Allowance in the West Midlands jumped by 15 per cent last year; economists are predicting that the region will lose some 180,000 jobs over the next two years.
The ominous statistical drum-roll of recession are beginning to beat almost on a weekly basis, as politicians who remained resolutely optimistic even a month ago are admitting openly now that the road ahead is likely to be as tough as anything this country has experienced since the 1930s.
Twelve months ago, if most people thought at all about what was being termed the “credit crunch” they perhaps regarded it as just desserts for greedy banks who had been stupid enough to sell sub-prime mortgages to borrowers without the necessary means to repay the loan, and then tried to cover their backs by selling-on the debt to other institutions. There was very little understanding at first about how quickly this cocktail of incompetence would spread through the financial world – until, that is, the US Government allowed the investment bank Lehman Brothers to go to the wall. This, surely a defining moment in the history of capitalism, hammered home an unpalatable truth that nothing, and no-one, could be deemed fire-proof.
Western governments face little option now but to pour unimaginable sums of money into shoring up the financial system, including stringent tax cuts, in an attempt to kick-start consumers into having the confidence to start spending again. It is too soon to say how quickly fiscal stimulus on such a scale will work, but in a world where even the once pre-eminent General Motors teeters on the edge of bankruptcy nothing can be taken for granted.
There are those who insist Birmingham may be in a better position to cope with this recession than was the case in the past. And while it is true that the West Midlands is no longer quite so reliant on manufacturing, and that many regeneration projects including New Street Station and the QE super hospital are financed by public money and will proceed in any case, the savage economic collapse will only make worse ingrained unemployment and social deprivation in many inner city wards.
It is understandable that Birmingham City Council leader Mike Whitby should strike an optimistic note. Doom-mongering will get us nowhere.
But when he talks about “oven-ready” projects remaining on course to be developed when the good times return, he must know in his heart that economic recovery is a long, long way away.