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Economic crisis facing the Western Isles after jobs blow

Loss of 59 roles in Stornoway is equivalent to 3000 being left out of work in Glasgow.

Western Isles: Jobs blow has highlighted economic crisis.
Western Isles: Jobs blow has highlighted economic crisis. Geograph

By Murdo Maclean

The Western Isles is facing an economic crisis, sparked by a huge jobs blow and growing numbers of young people leaving for the mainland.

Talk Talk is shutting down its base on Stornoway to centralise its operations in Manchester - leaving 59 staff without a job.

While the job figures may seem modest, the Western Isles Council has pointed out that it's the equivalent of 3000 redundancies in Glasgow.

"In such a small community like ours, 60 or so jobs is the same as many hundreds," echoes Kenneth Macleod, boss of Macleod and Macleod butchers - one of three producers of the famed Stornoway black pudding.

"If a similar scale of redundancies happened in a place like Glasgow they'd be making a big commotion about it.

"At crucial times like this, it's important for government to step in and help. They would, if this was Glasgow."

Black pudding: Stornoway's famous export.
Black pudding: Stornoway's famous export. © STV

In contrast, the recent announcement of 180 workers caught up in the closure of Springburn rail works provoked an outcry with one trade union condemning it as "industrial vandalism".

Michelin's decision to cease making tyres in Dundee resulted in the speedy establishment of Scottish Government-led action, plus, last week, a royal visit by the Duke and Duchess of Cambridge.

Also attracting huge attention was the collapse of construction company McGill, affecting workers spread across Edinburgh, Glasgow and Dundee.

But headline figures don't tell the whole story and ignores the mammoth impact modest numbers of redundancies have on low-populated rural communities.

Starkly putting the TalkTalk closure in perspective is a briefing note circulated to councillors from the authority's economic advisers explaining: "With induced and indirect impacts the loss of 59 jobs will result in a total job loss figure of 74 jobs.

"There are approximately 10,000 jobs in the Western Isles economy so this represents a loss of 0.74% of the workforce.

"The Glasgow economy has a total employment figure of 443,000. Loss of 0.74% of that workforce would therefore equate to circa 3300 jobs in Glasgow."

'Real body blow' for local economy

Western Isles MSP Alasdair Allan warns the ramifications in the struggling island economy "cannot be overstated"

"It is proportionate to job losses in the thousands for a city the size of Glasgow," he says. "This is a real body blow to Lewis."

From his shop in the Stornoway's narrow Church Street, Kenneth Macleod describes the call centre shutdown as "massive" which will inevitably inflict a "huge knock-on effect" in various ways.

"It's bad enough for islanders who are already out of work and trying to find employment, for an extra 60 people to come onto the job market," he says.

Alasdair Allan: Worried for local economy.
Alasdair Allan: Worried for local economy. © STV

"There's going to be more people chasing the same vacancies, that's not good at all."

And, there will be "less spending as people become more careful" and watch the pennies.

Though customers may opt for less expensive cuts of meat, butcher shops in the town will survive this latest blow, he believes, but undoubtedly there will be an "impact on some businesses."

Exodus as young people head for mainland

Later this month, the harsh implications of TalkTalk's decision will face island councillors as they discuss the need to save £10m over four years.

The economic crisis is resulting in a growing exodus of young people heading for opportunity on mainland Scotland.

One council report outlines a bleak future, revealing: "In order to sustain an economic position equivalent to that of 2010, 1500 new jobs and 2200 replacement jobs by 2028 would need to be created."

It warns that increasing young people will leave and never return.

Population decline in the Western Isles is dramatic. School rolls have fallen year-on-year for three decades. There are now just over 3300 pupils, when 32 years ago there were 6000.

Overall, the Western Isles population is projected to fall by nearly 14% over the next two decades from 27,250 in 2014 to 23,515 in 2039.

Numbers of pensioners are set to rise by an estimated 11% but there will be far fewer carers and health workers to look after them with a 21% reduction in the working-age population.

A separate economic study indicated around 37% of island youth want to work in the Western Isles but only 25% believe there are good opportunities for getting a job locally.

Numerous schools have shut in recent years while pupil rolls continue to decline resulting in less central government income to provide public services.

Once thriving rural communities have increasing numbers of vacant properties, vacant crofts and public buildings with low occupancy, says the report.

Modernising broadband connections is an important part of the strategy to create jobs for the future.

But, even a major £146m internet infrastructure upgrade involving laying superfast fibre cable across the seabed to the Hebrides cannot persuade TalkTalk not to ship out across the border.

'We are committed to doing everything possible to address this situation urgently in the hope of obtaining a positive outcome'
Scottish Government spokesperson

A Scottish Government spokesperson said: "We take all job losses seriously, wherever they might happen, and alongside our enterprise agencies, we offer as much support as possible in order to secure a positive outcome if they do arise.

"In the unfortunate event of individuals facing redundancy, we stand ready to provide support through our Partnership Action for Continuing Employment (Pace) initiative.

"We are concerned to learn of the developments at TalkTalk in Stornoway and the impact this will have on the employees affected, their families as well as the broader local economy.

"Highlands and Islands Enterprise, the Scottish Government's economic development agency, is in direct contact with the company to explore all potential opportunities and we are committed to doing everything possible to address this situation urgently in the hope of obtaining a positive outcome."

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