Government doesn't create jobs, businesses create jobs. That was the slightly harsh answer I gave someone at a dinner party this week when they asked me how government and politicians were going to create jobs. My answer wasn't well received by my dinner guest as she suddenly thought I was some right wing neo-liberal nut. However all I was doing was trying to change her mindset on what role the government was able to play as we come out of this recession.
Barrack Obama gave an excellent speech in Cleveland recently on what the government could do in terms of getting the economy back on track. He said:
I have a different vision for the future. I’ve never believed that government has all the answers to our problems. I’ve never believed that government’s role is to create jobs or prosperity. I believe it’s the drive and ingenuity of our entrepreneurs, the skill and dedication of our workers, that has made us the wealthiest nation on Earth. I believe it’s the private sector that must be the main engine of our recovery.
The Labour government seemed to believe that it was them that created jobs and not private enterprise. Indeed during Labour's term nearly half of the jobs created in the UK were public sector jobs (849,000).
What the government can and should be doing is to create the right environment for entrepreneurs and businesses to flourish and create that sense of confidence that encourages them to create jobs. By tackling the deficit we ensure that we have the low interest rates that businesses need to fund growth. It also means a government which makes long-term investments in the countries future which individuals, charities and companies cannot make on their own. It requires government investing in education, R&D, science, technology, low-carbon energy and infrastructure.
The private sector will be the engine of our recovery in the UK and we need to start investing for it now.
