What is it in the politician’s DNA which leads them to over-promise so often on so many fronts?
The most cynical answer, of course, is that ministers usually get a sweep of positive headlines when announcing big, shiny new schemes – and much less publicity when those schemes turn out to be not quite so game-changing as expected.
At the back end of 2009 I did a thorough examination of Labour’s many recession-busting initiatives for the FT newspaper. Of the 16, some had been a success, many were faltering and a few were utter failures.
(The duds included a mortgage rescue scheme which helped 92 households, against a target of 6,000; a ‘working capital‘ scheme which gave £2bn of guarantees, against a target of £10bn; and a ‘trade credit insurance‘ scheme which provided just £18m of help compared to a promise of ‘up to £5bn.)
The Tories, as you would expect, were quite critical of this ‘piecemeal and inadequate’ package.
Now one of George Osborne’s big recovery plans has turned out to be a damp squib of similar proportions. His plan to boost jobs growth outside the prosperous south-east England – a national insurance holiday for new small companies – has so far proved a flop, with early applications falling far short of official expectations.
The chancellor announced in last June’s Budget that he hoped 400,000 employers would use the scheme over three years, taking advantage of an NI exemption for the first 10 staff they took on.
The policy was supposed to provide a £940m boost for small companies in the regions and lead to the creation of 800,000 new jobs. Instead it looks set to cost more in administration and red tape than it has provided in support for new businesses.
Figures unearthed by Labour today suggest that so far just 5,137 companies have benefited, with the potential for just over 10,000 new jobs.
With an average benefit of £2,000 per business, the party calculates, that suggests only £10.3m has been paid out to firms – less than the £12m the scheme costs to administer.
Here is our full story on ft.com.
Jim Pickard
Kiran Stacey