Politicians of all parties profess to be concerned about unemployment – but they are absolutely clueless when it comes to implementing practical solutions. Or are they ignoring the facts deliberately?

They love to focus on big “job creation” projects – or, if in opposition, on big layoffs – by big business. British government spin doctors have been busy pushing the lasts ‘initiative’ this week.

Yet in most countries small businesses, having smaller reserves, are hardest hit by recession and are more likely to come under pressure to make people redundant – but also generate more new posts than big businesses.

In the UK, for example, there are over two million unemployed and almost five million small businesses. If half of those small businesses could take on just one new employee each, then there would be no more unemployment.

To this the objection might be made that over half of those five million small businesses consist of a single self-employed owner-operator with no other employees. However, this objection misses the point that these are the very people who would most like to take on some help – albeit on a casual basis, rather than full-time.

However, when they try to do so, they find that there are two enormous obstacles – one on each side of the deal that both parties want to make.

On the would-be employer’s side, there is a mountain of bureaucracy. Employing a single individual on a casual basis is a trip wire that triggers an avalanche of red tape that is, in some respects, just as complex and time-consuming as employing a dozen people full-time. Filling in tax forms for someone to whom you are paying a hundred pounds or dollars to do a little casual work is often more trouble than it is worth.

Meanwhile, on the would-be employee’s side, there is another, completely different pile of paperwork if the employee is, as usual, on some sort of benefits. Many benefits are withdrawn as soon as the unemployed person begins to earn – in effect 100% taxation of the very lowest earners!

So even where both parties are keen to do a deal, there are major disincentives on both sides.

Yet these disincentives are all artificial, the result of government regulation. If the government is serious about reducing unemployment, it is high time they did three things:

1.   Consult real small businesses – not various self-appointed trade bodies that cosy up to the government because they enjoy being part of the Establishment.

2.   Genuinely listen to and understand what they are being told – not just patronise us with the usual ‘lip service’.

3.   Find the political courage to act on the suggestions they are being given.

There are more employees than employers so in the short term there are more votes in robbing Peter (the employers) to pay Paul (the employees). But in the longer term we are left with a retarded economy and high unemployment. Short term political courage would lead to much long term economic gain.

Charles Dickens wrote of the French Revolution, “It was the best of times, it was the worst of times...”

The same can be said of many periods of history, perhaps all. Trials and tribulations are constants in life, and there is no avoiding them even in times of general prosperity. There are also individuals who prosper even in times of adversity. Those who are suffering like to complain about it and to hear others complaining – because if everyone is suffering, it implies it is not their fault. Those who are prospering tend, if they are wise, to keep quiet.

So Harold Macmillan, then the Prime Minister of the UK, was criticised in 1957 for saying, “Let us be frank about it: most of our people have never had it so good”.

That was in fact an accurate statement as far as most Britons were concerned in 1957, but the minority to whom it did not apply objected to being told they were better off when they were not.

It was therefore unwise of Lord Young, Britain’s “enterprise czar”, to use almost exactly the same words on Friday, even if they were technically accurate: most are benefitting from increasing GDP per head. It was even more unwise to speak of “this so-called recession”, despite the fact that the UK is indeed officially out of recession.

People prefer politicians who “feel their pain” to those who actually tell the truth.

The truth is that the global economy is still on the edge of a volcano but seems at least to be recovering from the last eruption. Interest rates are low, which is not in itself a sign of economic health, but which is indeed good news for businesses with large borrowings ... and home owners with large mortgages. That was the point Lord Young was making.

The fact that was the truth was not enough to save him and his “resignation” soon followed.

Lord Young is only the second incumbent – and is the second to alienate people by his insensitivity. His predecessor, Lord Sugar, made an even worse impression, but it was almost impossible to get fired for incompetence under the previous government. This government, by contrast, may be too eager.

We are generally sceptical about these so-called czars, however we did give a cautious welcome to Lord Young’s appointment. Our dilemma is that czars are at best ineffective, yet someone needs to tell our clueless leaders how to help business pull us out of our economic woes.

We had hoped Lord Young would be the man. After all, he was appointed to be “brutally honest” – it seems he was fired as soon as he started being so.

A personal tragedy for Young is a greater tragedy for Britain. No one in government is either able or willing to hear what needs to be done.