Feb 2010 01

State-funded jobs boom2

Tough choices. Difficult decisions. We all know the drill by now. But an enormous deficit requires a clear, detailed plan to tackle it, and thus far none of the parties have gone into nearly enough detail on how this plan might look.

The fact that of the 2.24m net new jobs created in 1997-2007, 1.27m were state or para-state probably has something to do with this. These figures mean that 57 per cent of extra UK jobs created during 1997-2007 were reliant on taxpayers' money. Manchester University’s Centre for Research on Socio-Cultural Change reports that in some regions like the North-East, job creation since 1997 has been particularly state dependent: 79 per cent to be exact. Negotiating the assorted vested interests of a vast and expanding public sector means it’s easier to offer broad, sweeping comments about making the right cuts, without upsetting anyone in particular in the run-up to the election.

Yes, the choices are indeed tough, and the decisions difficult. But a credible strategy to deal with the deficit is badly needed; the report's authors say that Britain’s business model before the financial crisis was “undisclosed and unsustainable”. It's time for an honest debate about how we can fix that; a disproportionately large state payroll should not stand in the way.

(For an insight into one important part of that debate, see here.)

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  • gigbod

    State funded jobs like “hedge-fund manager”, or “investment banker” – is that what you mean?
    They cost the taxpayer an absolute fortune, I’d love it if you could devote as much time proportionally to those useless jobs, after all they did cost us £180 billion and nearly a new depression.

  • Brian Smith

    Some reality is needed about the current situation we are in.
    The greater part of the £180Bn debt we are saddled with arises from structural faults in the economy – too much spending supported by too much borrowing – rather than unanticipated borrowing arising out of the banking crisis.
    Radio 4 – that well known megaphone of the right – broadcast an interview with an investment banker yesterday evening. In the interview the young man said that his basic salary was £50,000pa – not exceptional although very pleasant – and he hoped for a £40,000 bonus; £90,000 in all. Which may strike some as excessive.
    He then revealed that he worked about 100 hours a week; three 35 hour week jobs equivalents.
    Or £30,000pa IF he gets his bonus and £17,000pa if he doesn’t. Anybody want his job?