The Informal Economy in Coalfield Communities in Yorkshire: Preliminary Thinking John Erskine 20 April, 2012

Presentation Structure  My background  Understanding the informal economy  Scope of the study  Local context  Policy context

The Informal Economy: Definition 'paid production and sale of goods and services that are unregistered for tax, social security and labour law purposes, but are which are otherwise legal' European Union 1998

Studying the Informal Economy: Why?  Recurring policy interest in enterprise as a solution for disadvantaged areas – Enterprise Allowance/New Business Grant; Social Exclusion Unit; LEGI  A test for deregulatory and neo-liberal policy approaches  A realisation that communities survive in very difficult circumstances – how?  Exploring the disconnect in planning, employment, economic and housing policy and programmes

The Informal Economy: Current Research  Weakness of quantitative approaches (ONS, 2005)  UK and European research – Hart (1973, 2011), Pahl (1984), Williams (2004, 2005)  US research – Venkatesh  Neo-liberal approaches – De Soto (2002)  Entrepreneurship literature – Greene, Mole et al.(2008); Armstrong (2005); Rouse (2006)

Context and Specificity: England 2012 Geography Coalfield communities Relative isolation Homogeneity and identity Institutional Factors The institutional behaviours of a centralised state The enterprise consensus Business Climate Recession Agglomeration and the end of cash Casualisation and agency working

What will the study look at? Substantial programme of qualitative fieldwork in three disadvantaged communities in Wakefield, working with stakeholders, residents and participants in the informal economy.  Initial survey work will use a modified version of the framework developed by Pahl (1984).  Detailed follow-up with participants will continue over 18 months to identify developing issues  There have been limited opportunities to assess the impact of the recession in economically fragile areas.  Current research on the informal economy in the UK is also limited

Wakefield: The Economic Context Job Losses  1981 – 20 pits; 18,000 employees  2011 – 0 pits; 500 employees Job Growth  Logistics, logistics, logistics  12,000 employed by 2003  143% growth,  A8 Migration – 2004 onwards Manufacturing  Berwins  Bombardier  British Jeffrey Diamond  Double Two  SR Gent

Wakefield: The Regeneration Context  Planning – motorway junctions, housing development  Housing investment – Estate Action and after, SRB, LSVT/Decency  Major projects – Waterfront, Westgate, Trinity Walk  Community-based economic development – Employment Programmes, Community Learning Centres, Business Support, Social Enterprise However, high levels of geographically concentrated deprivation in South East of District, Castleford, Knottingley and Inner Wakefield still persist.

Enterprise Myths?

Enterprise Policy: Four Phases 1970's – Policy off? Bolton Report, NEB,Common Ownership, Regional Policy – Enterprise as policy, discourse, and politics – Evidence-based policy? Business Link, RDA's, LEGI 2010 – Year Zero.....

Enterprise Policy: Implicit Assumptions Nascent businesses exist in disadvantaged areas. Some already operate in the informal economy Individuals in disadvantaged areas have entrepreneurial aspirations. Some have potentially useful skills and experience People are entitled to be entrepreneurial, which should be supported through public policy Making legislative and regulatory compliance possible will help informal businesses move into the formal economy, but as an implicit outcome of public policy, not an explicit one

Policy: Interelationships Welfare Policy The Work Programme and Conditionality Housing Benefit Changes Working Tax Credit Childcare Policy Regional Policy The end of RDA's The end of WNF, and spatial targeting Regional Growth Fund Public-sector dependence The Big Society Civil society as a substitute for the state Social investment and social responsibility Localism Enterprise Policy Reintroduction of the Enterprise Allowance The end of state-funded face-to- face business support BIS leadership

Contribution of the study Economics The challenge to neo-liberal models The role of regulation Competition within local markets Management The nature of entrepreneurship Knowledge, learning and skill Organisation within small businesses Sociology Understanding social exclusion post-2007 Expectations and aspirations, legality and legitimacy The role of self help and social capital Geography The limits of existing approaches to regional economic development The nature of local economies in post-industrial communities Networks and connectivity

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