Thursday, 13 October 2011

Unemployment - a price worth paying?

Norman Lamont famously said on 16 May 1991, "Rising unemployment and the recession have been the price that we have had to pay to get inflation down. That price is well worth paying."

In 1992 a young Conservative named David Cameron was his special advisor.

Yesterday, the latest unemployment figures published by the ONS estimates that UK unemployment rose by 114,000 between June and August to 2.57 million - a 17-year high.

A main plank of the Conservative led Coalition Governments austerity plans was a belief that jobs created in the private sector would more than make up for the jobs lost in the public sector.

Stephanie Flanders, BBC Economics Editor says in her blog: "For some time, we were able to say that employment growth in the private sector was outweighing the loss of jobs in the public sector. That is no longer true. The public sector lost 111,000 over the three months to June (97,000 excluding temporary jobs for the census), while the number of jobs in the private sector rose by 41,000."

The official government line: The Employment Secretary, Chris Grayling, said [to BBC News] that what the UK was now seeing was "the impact of the international financial crisis".

David Cameron at Question Time also defended the Governments Plan A, and as reported by the BBC:

The Prime Minister, David Cameron, rejected the criticism and said he would stick to his plans to reduce the deficit of nearly 10%.

"These are very disappointing figures that have been announced today and every job that is lost is a tragedy for that person and for their family and that is why this government is going to do everything it possibly can to help get people into work."

One worrying aspect of the latest unemployment figures has been the increase in the number of young people out of work. The BBC highlights today a survey by the Association of Colleges which claims, almost half of England's further education colleges have seen a decline in student numbers - with the drop blamed on the scrapping of the Education Maintenance Allowance (EMA).

Whilst the Department of Education defended the more closely targeted £180m bursary scheme, which replaces the EMA, which had cost £560m per year. It says that under the new scheme students who would have been eligible for free school meals could receive up to £800 per year.

The shadow skills minister Gordon Marsden said,"These findings are underlined by today's devastating figures on Youth Unemployment which show their failure to have a strategy for growth which will start remedying this."

Returning to the Conservative led Coalition Government, they say 'another reason why we need to stick to Plan A, is to keep international confidence in our economy, which has resulted in record low interest rates. This will benefit us all in the long term.'

In other words "Rising unemployment and a recession will be the price that we have had to pay to keep interest rates low, cut the defecit and get inflation down. That price is well worth paying"

In logic a pure neoliberal statement, but in these days of media savy politicians not one you will hear any of them declare soon.


kp said...

I want to know what the assembly is planning to do about matters ... we've got our own responsibilities now!

Gruntfuttocks said...

You must be joking RM, that lot down in Cardiff Bay would rather spend our taxes on silly schemes like free breakfasts for schoolkids. Wales is still like some former Soviet republic with the nanny state providing for all we need from cradle to grave - with the exception of a decent health service and education for our children (instead of those free breakfasts). Just think of the wonderful people we have down there running our affairs, Edwina Hart, Jane Hutt. Would you trust either of them to look after your piggy bank let alone a country's economy? 'Twas a sad day indeed when the Welsh voted for devolution.

Prometheuswrites said...

The skim goes on:

"West Wales and the valleys are expected to qualify for a third pot of funding in 2013 as one of the poorest regions in the EU".

"West Wales and the valleys are joined by Malta, two regions of Portugal and four regions of southern Italy as the only areas that became relatively poorer despite the investment. Every other region that received both Objective 1 and convergence funding got wealthier including Greece, Latvia, Slovakia and Spain. Welsh Labour MEP Derek Vaughan said it was clear the earliest years of the funding, known as Objective 1, were not properly managed".