Martin Flanagan's Business Blog: Any jobless initiative is a good thing

Published on Monday 12 January 2009 02:08

GORDON Brown's £500m pump-priming exercise today to try and prevent a long-term underclass of unemployable people being the legacy of the nascent recession has polarised opinion.

It has been deemed a highly practical response to the danger by the government.The Conservatives claim it is long on spin, short on substance.

We've been here before. Political point-scoring aside, it is churlish to denigrate any government initiative to address the single most important issue now facing government: widespread joblessness.

The Prime Minister looks set to spend the extra money to help employers recruit and train people before they become long-term unemployed and out of the working mindset.

The individual handouts to firms will be 2500 and will apply to new staff, helping young people with new apprenticeships, and will also be used to help entrepreneurs start their own businesses.

My own feeling is that with three million expected to be unemployed by the end of 2009, any initiative has to be welcomed.

The question is how successful will it be? Is a 2500 payment _ with the money coming from the Treasury reserves _ going to be meaningful or gesture politics akin to the 13 month-cut in VAT announced by Alistair Darling which most retailers have said has so far had virtually no real effect on consumer spending?

Where these sort of political initiatives are concerned, one suspects it can be the employers' equivalent of Mori surveys.

People believe one thing, but think it politic (in every sense) to say another. Yes, I do believe in motherhood and apple pie, Mr Interviewer (for this read the PM in this instance). But at the (credit) crunch I will vote for more money in my pay packet and not-in-my-backyard nuclear policies.

Today's jobs summit, and organisations like the Confederation of British Industry, will therefore probably say Brown's demarche is welcome. But privately are employers going to think they will be so busy bailing water out of the business boat that the government's stimulus for recruitment and training will be seen as an electoral diversion and ineffectual drop in the bucket?

The Tories won't be so coy in pooh-poohing it, however. I disagree with them. I don't believe you need to make any grandiose claims for the Whitehall initiative to still welcome it.

Temporary unemployment is painful. Long-term unemployment is debilitating to the individual, never mind the effect on the wider economy.

Anything is worth a shot against the troubled economic backcloth. The rest is propaganda.