Should Gordon Brown set his sights higher than 100,000 jobs created through public works?

In his New Year interview with The Observer today, Gordon Brown talks about creating 100,000 jobs by a programme of public works, focused on school repairs, new rail links, hospital projects, investment in eco-friendly projects and the broadband infrastructure.

This is all eminently sensible, but should really be on a much greater scale. The 100,000 jobs presumably equates to the £3 billion of public investment included in last month’s PBR statement. I argued then that the balance was wrong with too great an emphasis on boosting consumer spending by cutting VAT.
Nothing that has happened since alters my view.
Yes, there has been a splurge of High Street buying – mainly of imported goods (this will no doubt help maintain world employment levels, but won’t do a lot in the UK and will further push down the value of the £ against the € and the $). Interestingly, elsewhere in The Observer, the excellent Bill Keegan (delightfully appointed a CBE in the New Year honours) points out that much of this High Street spending may have been overseas visitors capitalising on the low exchange rate.
Instead, we should be treating the economic situation as an opportunity to invest in the UK’s long-term future. The Government should set a series of infrastructure objectives to be achieved over the next four or five years and put in place the resources and mechanisms for these objectives to be met. For example, local councils could be tasked to achieve better insulation and energy efficiency in the housing stock in their areas, a major programme to further improve school buildings and health care facilities should be instituted, every home, every school and every NHS facility should be cabled and enabled to have high speed broadband access with public wi-fi access in every town centre etc..
The opportunity should be taken to improve skills and equip young people (and indeed any adult) with the training needed to achieve their aspirations in the modern world.
No doubt this is ambitious, but – as Barack Obama has preached about ‘The Audacity of Hope’ – perhaps in the UK a Labour Government should dare to put that hope into practice.

3 thoughts on “Should Gordon Brown set his sights higher than 100,000 jobs created through public works?”

  1. The reduction of VAT was exactly right, just as Howe’s increase in the early ’80s was exactly wrong.

    Targeted measures are fine, but more finicky and slow to take effect.

    Together with permitting delays for businesses in tax payments the VAT decrease, despite the usually tendentious prognostications of the critics, will slightly embolden businesses when confidence is on the floor.

    A reduction across the board (nearly) of 2 1/2% would ordinarily be greeted with glee. Foreign shoppers help to keep retail going, shopworkers aren’t complaining.

    More please, it has the merit of simplicity too!

  2. Well Tobe:

    “UK car registrations fall less than feared”

    “New car registrations fell 21.2% in the UK last month compared with December 2007, but the pace of decline was less than the expected 35%, which the industry said may have been due to the cut in VAT – ” From the FT.

    This will not be the only ‘possible’ result of the VAT reduction.

    The straightforward demand management side of HMG’s actions has its place alongside the slower Keynesian elements.

  3. Notable that Germany, where criticisms of our VAT reduction may have been almost as strident as among the Tory party here, has sunk into the recession more quickly than anticipated.

    The VAT reduction was the simplest and quickest means of demand management possible, well judged, regardless of how many vox pops saying “it’ll make no difference to me, Guv” were broadcast.

    The manipulation of the news to undermine public confidence in HMG, Britain and ourselves is an ongoing disgrace. There is an extreme right wing agenda widely operating amongst us all, and it includes claiming that the BBC is left wing. Perhaps Woman’s Hour is . . . .

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