Job Creation vs Job Preservation…again…

It is jobs stupid! As the official election campaign finally gets underway and we prepare ourselves for a month of claim and counter claim, promises and pledges, and of course the obligatory carefully staged photo opportunities, the economy is likely to come under renewed scrutiny as the political parties endeavour to persuade us that they have all the solutions.

It does not require the powers of Nostradamus to foresee that unemployment and job creation are likely to be at the forefront of the electorate’s current list of concerns. However, as touched upon in a previous blog, it remains clear that politicians still do not really understand the difference between job preservation and job creation.

Take the recent car scrappage scheme that has just ended. A great success it seems, in that it apparently saved 4,000 jobs. However this scheme appears to have had a budget of about £400million. Being an accountant, I am obviously not very good at maths, but I calculate that, on this basis, each job preserved has cost the government £100,000.

And there is no guarantee that the 4,000 jobs mentioned above will still remain in the future. As manufacturers and car retailers downgrade their sales expectations for the coming year it is hard to believe there will not be job losses in the sector. All that seems to have been achieved by the scheme is some short term job preservation.

It would have been more worthwhile to have given 4,000 SMEs approximately £100,000 each to see how they would have used the cash. Some no doubt would have squandered to the money (perhaps on a new car or two), but I would like to think that those that did use it wisely would have ended up creating more than 4,000 jobs, and, more importantly, that those jobs would have been sustainable and longer lasting. Perhaps they might even have further boosted the anticipated “green jobs bonanza”.

Anyway that’s my suggestion. The perfect combination – job creation with green credentials. The election’s already in the bag….