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Economy class: public or private?

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Cutting the public sector doesn't guarantee private investment

Everyone agrees that the economic disparities between north and south need to be tackled. It is unacceptable that a child born in one part of Britain has hugely different life chances to one born a few hundred miles away. The chancellor, George Osborne, was careful to state that the recent emergency Budget would “promote job creation in all parts of the country.” The government is rightly sceptical of the record of public-sector regeneration schemes, but goes further in seeing the size of the public sector as a barrier to regeneration.

The state is certainly a heavyweight employer in some places. More than 40 per cent of workers in Middlesbrough, in the northeast, have jobs in public administration, education and housing—far above the national average of 27 per cent and far, far above the 12 per cent in places such as Crawley, in the southeast. The private sector fails to thrive

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Tim Leunig

Tim Leunig teaches at the LSE


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