£100,000 PER JOB

According to the UK Government, the much lauded car scrappage scheme will have protected around 4,000 jobs in the UK automotive industry, Government estimates have claimed.

Given that the subsidy from Whitehall amounted to £400 million, the cost has been an incredible £100,000 per job.

One would be hard pressed to find a higher subsidy for any industry during the last decade and shows the lobbying power of an industry that has failed because it has refused to modernise in line with changes in the global business environment.

One can only imagine the effect of £400 million on supporting thousands of small firms across the UK, especially at a time when banks were unwilling to lend money.

Indeed, it makes any support for inward investment over the last twenty years by the Welsh Office or the Welsh Assembly Government pale into insignificance. Even the disastrous LG project would have cost less than a third (per job) of what has been given to the automotive sector by Lord Mandelson.

The problem, of course, is that such short term schemes will still inevitably lead to redundancies if they are not continued until the recovery is well under way. For example, it has been estimated by the Society of Motor Manufacturers and Traders that sales will fall by 10 per cent in 2010 and one has to wonder how many jobs will be lost as a result of this dip in sales.

The same question arises for Wales specific schemes such as ProAct, and one would hope that its impact is measured very carefully after the scheme finishes at the end of June. Indeed, I would expect that, given that the scheme was supported by European money, that there will be a detailed evaluation of this initiative to properly examine its real impact on the economy of Wales during the worst recession since the 1920s.

The last thing we would want to see with this much lauded scheme is for companies, after delaying the inevitable, to continue with redundancies after government support has ended.