Long term unemployment

Who would be an employment minister during a recession? It is easy to gloat about the latest batch of record numbers in work when an economy is on the upslopes but less palatible when each day brings a fresh round of job losses, factory closures and business administrations. I look for a politician who is brutally honest and clear about where the economy is.

The Work and Pensions Secretary James Parnell will figure prominently in news broadcasts during the coming year and today he is outlining measures to help the long term unemployed - those who have been out of work for at least six months.

Long term unemployment is a thorny supply-side economic problem. The reality is that, the longer one remains out of paid work, the less attractive you become to a potential employer. The risks of de-skilling increase, and the motivation to actively search for a new job decreases. The problem is tied closely to the concept of occupational immobility and structural unemployment.

The trouble is that this government has developed such a reputation for making the most of new announcements that are either re-launches of previous schemes or which give the illusion of having new money behind them when in fact they dont. And whilst £50m of money for this or that pet project might dent the unemployment statistics in one or two areas, given that there are already nearly a quarter of a million people who have been out of work for over two years, this is not a problem that extra money can solve.

Instead of spending extra money, why not offer a national insurance holiday to businesses that take on the long term unemployed? Being in regular work is far and away the best route to staying as part of the economically active labour force.