Margareta Pagano: No rider should be heavier than his horse, Darling

Chancellor's Budget must stimulate jobs as well

Whatever the spin around this week's Budget, the Chancellor, Alistair Darling, will make a grave error if he doesn't introduce measures to stimulate jobs, proper jobs in the private sector that create wealth. If anyone is in any doubt about how Britain has become a bloated state, they should look behind last week's disturbing employment figures. Although these showed a headline drop in unemployment, by 33,000 down to 2.45 million, they also revealed a striking split between public and private-sector trends. The former has grown by 13 per cent since 1997 – environmental protection officers and refuse collectors are the fastest-growing jobs – while jobs in business grew by the slower rate of 8 per cent. Since 2007, the private sector has been shedding jobs, including 60,000 in the final quarter of last year alone.

This means one in four of the working population works for the state, or depends on it for unemployment or disability benefits. Regionally, it's worse; about 70 per cent in Wales and 50 per cent in Scotland depend on the state. Out of a working population of around 28 million, 8 million work for the Government and another 6.4 million are dependants.

According to the Office for National Statistics, 10.6 million people don't have a job. This includes a 149,000 rise in the "economically inactive" – a phrase which sounds as though it's come from the pen of George Orwell – to a staggering 8.16 million people, the highest level since the ONS started collecting the numbers in 1971. But the figures also disclosed that 2.3 million people say they would like a job. Most people do; and it's a terrible indictment of our society that we now have more people dependent on a client state than ever – ironically, more than in Russia.

More worrying is that nervous private firms are storing cash, rather than investing. And yet it is the "animal spirits" of those who risk their capital to start a business who create work – 60 per cent of private-sector jobs come from small firms. Over the past two years, business has banked £65bn, double the rate just a year ago. This is partly because firms are either frightened banks won't lend to them, or not confident about expansion; classic deflationary behaviour. Can you blame them? As Sir Keith Joseph put it in the 1970s: "We are over-governed, over-spent, over-taxed, over-borrowed and over-manned," while warning that riders shouldn't be heavier than their horses. Not much has changed.

To put the tax burden into perspective, half a million workers paid 15 per cent of all income tax in 2006 while another two million workers paid 45 per cent of the total, giving government 27 per cent of its revenue. Money really doesn't grow on trees, or at the Bank of England. If Darling wants to assure the markets that he has a credible plan, his Budget should show how he is going to reduce our deficit, but also how to stimulate revenue. He could slash tax rates for small business, raise the threshold for the lower paid to £10,000 to encourage people out of benefits, and abolish the proposed National Insurance rise. Sadly, he won't dare, as the "forces of hell" would be unleashed once more. Then again, as this will be his last Budget, whatever the election outcome, he could go for broke.

Top fashion Brands fly off the shelves

There must be something other than spring in the air as the fashion trade saw a whole slew of top brands changing hands last week.

First off the runway was the sale by Natalie Massenet of her highly successful online fashion boutique, Net-a-porter, to Richemont, the Swiss luxury brand company.

The former fashion journalist stands to make around £50m from the sale, which values the 10-year-old company at a reputed £350m. Massenet started the online retailer in London in 2000, defying the convention of the day by proving that rich ladies don't mind buying brands such as Jimmy Choo and Alexander McQueen online. And last year she defied the credit-crisis too, making pre-tax profits of £10m on sales of £81m, up 47 per cent on the previous year.

Richemont is buying out the 70 per cent it doesn't own and hopes to put its own snazzy brands such as Cartier, Chloé and Alfred Dunhill for sale on the site.

Another top brand which netted its owners a fortune was Apax Partners, which made £2.2bn from selling the Tommy Hilfiger brand to the Phillips-Van Heusen Corporation, the US owners of Calvin Klein and DKNY, while Stephen Marks of French Connection sold his Nicole Farhi label to Los Angeles-based private-equity firm OpenGate Capital.

Crisis? What crisis?

Myners's 'cynical Scots' will need a bit of Celtic fire to become Bravehearts

I do love it when Lord Myners gets angry. The City minister may be unelected, but I so approve of the way he doesn't give up his attacks on how the country's biggest shareholders failed to act as proper stewards of the companies they invested in. He was at it again last week at the Future of Banking Commission, accusing bank shareholders of lacking teeth, arguing that de facto "our banks were ownerless institutions". As Myners has said before, shareholders who invested in Lloyds and RBS will have seen all their investments wiped out over the past decade, so it must be in their interest to be tougher.

To prevent another banking crash, Myners suggests that all boards should appoint a "cynical Scot" to act as devil's advocate to keep them in check. What he thinks about the latest news that Barclays is paying Bob Diamond up to £20m in new incentives is probably unprintable.

Myners should now extend his wrath to all UK boards, particularly ITV and M&S which have alsojust given generous pay awards to top brass. At ITV the outgoing chairman, Michael Grade, collected a £1.2m bonus even though the shares collapsed from 108p in 2007, when he took over, to 54p on Friday. Despite ITV's troubles, Grade saw his total pay leap from £934,000 to £2.1m during his last year in charge. The new chief executive, Adam Crozier, could make up to £8.6m over the next three years. And Sir Stuart Rose is once again annoying his M&S shareholders by taking only a 25 per cent pay cut – down to £800,000 – when he steps down as executive chairman to non-executive. It's hard to understand how any board can justify paying these salaries in this climate. It's even harder to know how the shareholders allow them to get away with it.

I'm not sure how well Myners's stereotyping will go down with our diversity officers, but his dour Scots will need a bit of Celtic fire in their bellies if they are going to turn into Bravehearts.

Start your day with The Independent, sign up for daily news emails
A boy holds a chick during the Russian National Agricultural Exhibition Golden Autumn 2014 in Moscow on October 9, 2014.
Life and Style
love + sex
Arts and Entertainment
Victoria Wood, Kayvan Novak, Alexa Chung, Chris Moyles
tvReview: No soggy bottoms, but plenty of other baking disasters on The Great Comic Relief Bake Off
Ashley Young celebrates the winner for Manchester United against Newcastle
footballNewcastle 0 Man United 1: Last minute strike seals precious victory
Life and Style
Tikka Masala has been overtaken by Jalfrezi as the nation's most popular curry
food + drink
Arts and Entertainment
Seth Rogan is one of America’s most famous pot smokers
filmAmy Pascal resigned after her personal emails were leaked following a cyber-attack sparked by the actor's film The Interview
Benjamin Netanyahu and his cartoon bomb – the Israeli PM shows his ‘evidence’
ebooksA special investigation by Andy McSmith
Arts and Entertainment
80s trailblazer: comedian Tracey Ullman
Life and Style
A statue of the Flemish geographer Gerard Kremer, Geradus Mercator (1512 - 1594) which was unveiled at the Geographical Congree at Anvers. He was the first person to use the word atlas to describe a book of maps.
techThe 16th century cartographer created the atlas
Arts and Entertainment
Stephen Tompkinson is back as DCI Banks
tvReview: Episode one of the new series played it safe, but at least this drama has a winning formula
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Ashdown Group: Graduate Application Support Analyst

£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...

Reach Volunteering: External Finance Trustee Needed!

Voluntary post, reasonable expenses reimbursed: Reach Volunteering: Would you ...

Christine McCleave: FP&A Analyst

£36,000 - £40,000: Christine McCleave: Are you looking for a new opportunity a...

Recruitment Genius: Sales Executive - OTE £40,000

£15000 - £18000 per annum: Recruitment Genius: This is a great opportunity for...

Day In a Page

War with Isis: Iraq's government fights to win back Tikrit from militants - but then what?

Baghdad fights to win back Tikrit from Isis – but then what?

Patrick Cockburn reports from Kirkuk on a conflict which sectarianism has made intractable
Living with Alzheimer's: What is it really like to be diagnosed with early-onset dementia?

What is it like to live with Alzheimer's?

Depicting early-onset Alzheimer's, the film 'Still Alice' had a profound effect on Joy Watson, who lives with the illness. She tells Kate Hilpern how she's coped with the diagnosis
The Internet of Things: Meet the British salesman who gave real-world items a virtual life

Setting in motion the Internet of Things

British salesman Kevin Ashton gave real-world items a virtual life
Election 2015: Latest polling reveals Tories and Labour on course to win the same number of seats - with the SNP holding the balance of power

Election 2015: A dead heat between Mr Bean and Dick Dastardly!

Lord Ashcroft reveals latest polling – and which character voters associate with each leader
Audiences queue up for 'true stories told live' as cult competition The Moth goes global

Cult competition The Moth goes global

The non-profit 'slam storytelling' competition was founded in 1997 by the novelist George Dawes Green and has seen Malcolm Gladwell, Salman Rushdie and Molly Ringwald all take their turn at the mic
Pakistani women come out fighting: A hard-hitting play focuses on female Muslim boxers

Pakistani women come out fighting

Hard-hitting new play 'No Guts, No Heart, No Glory' focuses on female Muslim boxers
Leonora Carrington transcended her stolid background to become an avant garde star

Surreal deal: Leonora Carrington

The artist transcended her stolid background to become an avant garde star
LGBT History Month: Pupils discuss topics from Sappho to same-sex marriage

Education: LGBT History Month

Pupils have been discussing topics from Sappho to same-sex marriage
11 best gel eyeliners

Go bold this season: 11 best gel eyeliners

Use an ink pot eyeliner to go bold on the eyes with this season's feline flicked winged liner
Cricket World Cup 2015: Tournament runs riot to make the event more hit than miss...

Cricket World Cup runs riot to make the event more hit than miss...

The tournament has reached its halfway mark and scores of 300 and amazing catches abound. One thing never changes, though – everyone loves beating England
Katarina Johnson-Thompson: Heptathlete ready to jump at first major title

Katarina Johnson-Thompson: Ready to jump at first major title

After her 2014 was ruined by injury, 21-year-old Briton is leading pentathlete going into this week’s European Indoors. Now she intends to turn form into gold
Syrian conflict is the world's first 'climate change war', say scientists, but it won't be the last one

Climate change key in Syrian conflict

And it will trigger more war in future
How I outwitted the Gestapo

How I outwitted the Gestapo

My life as a Jew in wartime Berlin
The nation's favourite animal revealed

The nation's favourite animal revealed

Women like cuddly creatures whilst men like creepy-crawlies
Is this the way to get young people to vote?

Getting young people to vote

From #VOTESELFISH to Bite the Ballot