Archives for October 2010

Will Hutton’s piece in The Observer this weekend has some very useful insights. He has looked back at how the private sector ‘created’ 1.2 million jobs in the recovery from the last recession between 1993 and 1999.  (Interesting to note that ten years on it is many of these jobs that were created less than a decade ago that are now going….)

This time around the Government needs the private sector to create 2.5 million new jobs if the economy is to recover according to plan. Last time around we ‘created’ 900 000 jobs in business and financial services – and look how that panned out.  But this time the forecasters are saying that business and financial services is likely to shed 300 000 jobs.  I have written before about how the natural instinct of employers is to destroy (or at least off-shore) jobs not create them.

So where is our equivalent of ‘financial services’ this time around?  Where is the sector that can create the jobs that provide the ‘simple key to a set of interlinked problems‘

Well, the obvious place to look has to be in ‘green’ jobs.  If climate change is as big a gig as it has been billed then we need to lag, insulate and glaze like never before. We need to install solar panels, wind turbines and hydro-electric units unless we want to slowly poach in the products of our own carbon hedonism.  And while some of this will be about large engineering projects much of it will need to be done at the neighbourhood level.  It is work that has to be done in our houses and gardens.  On our streets.  This sounds like it might meet the criteria for ‘good work’ for many.

But how do we make this work ‘pay’ in a recession hit City?  Where does the money come from to make it happen?

The current plan is to make the recovery work by pushing hard for further ‘economic growth’, driven by large investments in export.  I guess the short hand is that instead of borrowing money from the Far and Middle East our businesses learn to sell more to them, profitably.  I am not yet quite sure what we have that those with the money need to buy – but there must be something.  Biotechnology no doubt.  Arms perhaps – that has always been a historical stalwart.  Premier League football teams.

So our strategy is to compete, profitably, in global export markets.  And we will finance this additional export by persuading the banks to ‘lend more’ (where have I heard that before). It is a familiar story and one that, even if it works in the medium term, is surely both unsustainable in the long and changes nothing.  It leaves us still reliant on sustaining rapid economic growth and creating profits for the wealthy and jobs for the rest of us.  But, if it works in the short term we can increase the tax take and use it to fund a whole load of green jobs.

We can put off transformation for another day.