Creating jobs

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With an election on the horizon, and the economic situation in which Wales finds itself likely to be a key factor, it is no surprise to find that politicians’ thoughts turn to ideas for boosting the economy and creating jobs.

I’ll admit that I was highly sceptical of the promise made by Hain, on behalf of Labour, during the last election that Labour would create 50,000 jobs in Wales.  It’s not that we don’t need the jobs, more that I’m not sure that politicians and government can actually ‘create’ jobs at all, other than by increasing taxes and employing people directly. 

It is surely more than pure coincidence that Plaid’s promise to create jobs alights on the same number, 50,000, (albeit with the added bonus of 30,000 promised apprenticeships).  But my innate scepticism about what governments can achieve doesn’t magically disappear just because the source is different.

Some would argue that economic performance is simply not terribly amenable to being improved by government policy at all, as this research suggests.  I wouldn’t support taking a fatalistic approach on that basis, though.  We expect politicians to have answers to problems, and they will always oblige by telling us what their solutions are.  But we do need to exercise an appropriate degree of care before simply accepting any figures which are put forward for primarily electoral purposes.

Betsan Powys pointed out some confusion as to the mechanism actually being proposed.  And, rather than debating whether the idea of finding a creative way around Treasury rules to get hold of £500m to invest in Welsh infrastructure is a good one or not, the other parties seem to be more interested in demolishing the idea because of the detail of the approach proposed and the idea’s provenance rather than on its merit.

But leaving aside – for the moment at least – the question as to whether the establishment of such a fund is practicable, the more important questions are surely whether such a fund, if it could be established, would enable investment of the sums suggested, or could have the effect of creating the numbers of jobs suggested.

On the jobs issue, I’m not entirely convinced by the numbers.  That an investment of £500million in infrastructure developments in Wales would create, or at least safeguard, jobs in the short term is irrefutable, but how many and for how long?  £500m invested to create up to 50,000 jobs looks like something of a bargain – it implies that one job can be created for each £10,000 of direct capital spend in the public sector. 

That’s a rather better return on investment than either Objective One Funding or Convergence Funding have achieved.  Neither of them have come close to that level of job creation, despite the very much higher levels of funding involved.  Perhaps we should just note the words ‘up to’ and set our expectations accordingly.

It would be a pity though if an attempt at a creative approach to trying to fund serious investment in Welsh infrastructure were to be dismissed because of where it came from, or because the number of jobs likely to be created might have been overstated.  A more constructive approach would be to take the core idea and collectively work out how it, or something similar, actually could be implemented – particularly given that at least two of the parties agree that 50,000 more jobs is a reasonable target to aim at.  Isn’t that what we should expect of politicians if they’re serious about working together for Wales?