Leading Article: Mr Brown's sketchy proposal

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The Independent Online
LABOUR is right to fix on unemployment as a stick with which to beat the Government. The jobless total is nearly back at the sensitive figure of three million. Unemployment blights not only the lives of those who endure it, but their families, too. Benefits paid to its victims are a big drain on the economy, diverting revenue from badly needed investment. Those who earn nothing pay no taxes, thus increasing the strain on the Treasury. An aggravating factor is the fear of those clinging to their jobs that they will lose them: an anxiety that discourages spending, helps prolong the recession and leads employers to lay off yet more employees. To Labour's advantage, mistakes in Conservative economic policy in the Thatcher era are widely seen to have helped deepen and accelerate the recession, however international it may be.

It is natural for the Opposition to try to persuade the public that the Government should be doing more to create jobs, and - however distant the next election - to try to convince the electorate that it has a coherent scheme for doing just that. Such was the aim of the Budget for Jobs and Industrial Expansion presented yesterday by Labour's shadow Chancellor, Gordon Brown. It came in two forms: a fairly detailed regurgitation of previous policy proposals, many of them sensible; and a statement from Mr Brown couched in his habitual sound-bite prose (sample: 'Instead of the Tory policy of deflation, deregulation and decline, Labour's policy is re-employment through reinvestment for economic regeneration').

If the first document is thin on analysis of the Government's failures, the second is threadbare in its proposals to raise the revenue required for the various initiatives suggested for modernising the infrastructure, investing in industry and training or retraining the unemployed. Skimpiest of all is the proposal for a 'one-off public dividend', or windfall tax, of unspecified level, on the large profits made by the privatised public utilities. A shadow Chancellor should not make statements as imprecise as: 'The electricity profits have risen by 100 per cent. . . . Utility rates of return are in many cases far higher than those of Europe and America.'

Labour is in effect saying that the regulatory bodies appointed to supervise the utilities have failed in their jobs. If it believes that, it should say so straight out, and justify its argument. Were it to do so, it would find the case stronger for reducing the price levied by the water, gas and electricity companies than for creaming off a windfall tax. The proposal raises many questions. Why are these profits bad? Are the utilities not making precisely the sort of investment in the country's infrastructure for which Labour is calling? Might not the companies concerned react by increasing their prices?

The main effect of once again raising this populist demand, which was first heard last autumn, is to draw attention away from the rest of Labour's proposals. They could have been more effectively rejuvenated by some evidence of research into the nature of today's fast-changing job market, and the skills most sought by employers: often nothing more complex than improved literacy and numeracy. Mr Brown is right to try to push unemployment to centre stage. But to carry conviction he must produce both a fresher as well as a more coherently argued case.

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