Monday, January 12, 2009

Its Monday - so it must be govt wasting £500 million on a half baked scheme to buy it votes day

As I have just argued the current Labour Government is obsessed by "the narrative" and finds reality annoying and just plain disloyal.

Hence we have the as bad as useless scheme to spend £500 million on a combination of itself ( training job centre staff etc ) and some sort of bribe on getting the long term unemployed into work.

Firstly who knows if this is a another reannoucement ? On past form much of it probably is.

Next £2.5 k per employee taken on is a drop in the ocean for most employers, especially compared to the cost of employing someone they don't want or worse need to get rid of. Lets assume very conservatively that with support costs an employee, of the type of jobs we are talking about, will cost about £25k/yr - all support costs added in - thus the cost of an empoyment mistake and the opportunity cost of not having a good employee dwarf the governments bribe. My guess is that this bribe has been set at a level to allow the biggest number of people who Gordon has "done something to" to grab the headlines.

Also they are playing a zero sum game - trying to change the way the unemployed rotate, rather than doing something like cutting Coporation tax that might help business grow ( or suffer less ). On this subject the ignoring of the Conservatives idea on delaying VAT repayment from business is just spiteful not invented hereism by Labour.

And there are further objections from Labour MP Frank Field who correctly points out that non-EU immigration is crushing the incentives for people to up their skills. Of course the same thing applies for EU immigrants with most empoyers preferring work hard Poles to our unskilled alternative.

All in all the only thing we know is that we all will owe £500 million more to Saudi and Chinese investors in govt debt soon, the figure we can't be sure of ( as David McNulty shows Govt propoably don't know themselves ), but we do know it will have to be repaid with interest by all of us under a Conservative govt.

Update: I note that Gordon Brown kicked of his summit for jobs in the science museum - yep its the white heat of technology ploy from Labour again.

Further: Guido has reproduced the press release from Tony McNulty (Nov 08) condemning a very similar plan by the Conservatives. As you'll see from the above I agree with McNulty on his criticism of both plans.

His press release is here: ( Guido is just a hero for coming up with this ).

Press release
Tuesday 11 November 2008
For immediate use

Tories making headlines on the hoof - McNulty

Tony McNulty MP, Labour's Employment Minister, responding to the Tory announcement on unemployment said: "This is desperate stuff from the Tories, who continue to scrabble around trying to find a coherent economic policy.

"There is no way they can get 350,000 new jobs out of these proposals. There are too many restrictions being applied, the incentive is too small and many of these 'new' jobs will simply displace other people seeking work.

"In addition, the Conservatives just cannot pay for this tax cut - it is misleading of Cameron to say he can pay for getting the short-term unemployed back into work by using figures of savings you would make from the long-term unemployed.

"Osborne's judgment is wrong yet again. They are making headlines on the hoof and they will be found out. "They need to make their sums add up - particularly at such a difficult time for the global economy."

Editor's notes:
1. Their figures on how many jobs would be created are complete fantasy. The Tory plan assumes that an employer would create a new job for someone unemployed for more than a year for just £2500. The Tories have failed to take account of the displacement of workers who would have gotten jobs anyway. Currently 60% of people come off job seekers allowance within three months - this number would drop dramatically under Conservative proposals as employers would be incentivised to overlook people who have been out of work for 13 weeks or less. -


Letters From A Tory said...

If an employer is already strapped for cash because the bank won't lend them any money, they would hardly look at 1-2 months wages for a single employee as a significant boost.

Man in a Shed said...

LFAT - absolutely.

As anyone who has had to supervise people or project manage knows having the wrong person is worse than having no person at all.

Employers will recruit the best person for the job - in the priovate sector.

The fantasy world of the public sector is another matter all together.

The Welsh Worrier said...

Sigh. I also agree. See my comment on

Man in a Shed said...

WW - good luck with your new blog.

I suspect you'll have no shortage of material right now.

PS To one and all - sorry about the excess letters ( the typed ones) in some of my posts. Private not Priovate Dooah.