Disgrace of unemployment becoming a nice little earner

It's not clear who is supposed to have said these things, but on one interpretation Mr Cameron has a point. It would be patently unfair to link honest manufacturers struggling to do their best by their customers and their workers with the excesses of investment banking, or with FTSE executives hauling home 40% pay rises. The Prime Minister forgot to make that distinction.

"We have got to fight this mood with all we've got," he said of the new snobbery. "Not just because it's wrong for our economy because we need the jobs and investment it brings, but because it's wrong for our society. Business is not just about making money, as vital as that is. It's also the most powerful force for social progress the world has ever known."

That puts organised religion, education, trade unionism, the universal franchise, and every social reformer you could name in perspective. Never mind. Forget, too, that Mr Cameron has changed his tune since those lectures on "moral capitalism". Reports that he had interesting exchanges with business leaders (and Tory Party donors) at the Davos summit are clearly irrelevant.

He's sickened. Nausea has been induced by the claim that people in business could be out for themselves. How is the prime ministerial constitution coping, then, with the tale of Emma Harrison and her welfare-to-work company, A4e?

Happily, as you've probably heard, she doesn't need her own firm's services. Last year, while A4e was earning £180 million from state contracts, Ms Harrison felt able to pay herself a dividend of £8.6 million. Less happily, she has thought it necessary to step down as the Government's "troubled households" tsarina and resign as chairman of the company. An investigation into allegations of fraud within her company was liable, she said, to "distract" from her efforts.

Let's hope it doesn't distract the rest of us from the efforts of A4e – it means "Action for Employment" – and others like it. The more attention paid to the enterprises that have turned mass unemployment into a nice little earner the better. So let's start with a simple point.

Each time controversy breaks out over the activities of these firms – and it does, with remarkable regularity – a Government minister will pop up to talk about value for money. Companies such as Harrison's, the minister will say, are "paid by results". If that's the case, how come unemployment is still going up?

In the case of A4e, payment by results turns out to be an elastic notion. Thanks to "irregularities", and things not always being as they seemed, the firm has been investigated nine times since 2005 by the Department of Work and Pensions, and forced to repay public money on no fewer than five occasions.

It has meanwhile failed, according to the Commons public accounts committee, to meet its targets. It has been accused of acting as a mere go-between – for a slice of the funding – for the state and the "sub-contractors" who do the actual job of finding work for the unemployed. A4e's own treatment of such people, particularly the threat of benefit withdrawal, has attracted protest. The Edinburgh Coalition Against Poverty spent much of last year campaigning against the firm's Scottish management.

But let's not yield to snobbery. Let's not give in, as Mr Cameron put it, to "the snobbery that says business has no inherent moral worth like the state does, that it isn't really to be trusted, that it should stay out of social concerns and stick to making the money that pays the taxes". He once called Ms Harrison "inspirational". Presumably he was impressed by her entrepreneurial example as an alternative to the lumbering state.

Which is odd. If A4e is an example of private sector virtue, how does it come about that every penny of the company's UK revenue – and a large part, therefore, of Ms Harrison's reputed £70 million personal fortune – derives from the taxpayer? A4e doesn't provide an alternative to the state; it lives off the state. Unlike Jobcentre Plus, it turns unemployment into large dividends with each £400 "attachment fee", each £1200 "job outcome fee". If an individual manages to stay in work the company even gets a monthly "sustainment fee": dole, if you will.

Ed Miliband's Labour Party should be outraged by this sort of thing, you would think. In reality, outrage is tricky. The record shows that A4e got its first Government contract back in 1997, in the first flush of Blairite welfare reform, when the idea that human misery could be monetised was deemed to be perfectly acceptable. Results were all that mattered, even if the results did not bear scrutiny.

It returns us to my earlier, doubtless "simplistic", point: any sign that any of this is working? Is there any evidence that a jobs crisis is being addressed while A4e and its kind prosper from welfare farming? Where are the "results" for which we are paying? For once, I think we can trust the unemployment figures. Call the Government's Work Programme an outright failure or call it a scam, the numbers continue to rise.

Work experience, so often deemed crucial, isn't going well either. Some of the business people praised by Mr Cameron have been showing their wisdom. It turns out their customers are unimpressed by profitable high street names using unpaid, enforced labour with the taxpayer (yet again) picking up the bill. We pay the miserly benefit, the firms set young people to work for up to 30 hours a week, and anyone who drops out – the reasons don't matter – stands to lose their pittance.

One after another, companies have been deciding that this isn't a good look. Tesco, Poundland, Greggs, Waterstone, Sainsbury's, and TK Maxx have either "considered their position", offered real jobs for real wages, or withdrawn from the Jobcentre-administered schemes entirely. The only mystery – or perhaps it's not so mysterious – lies in why these firms signed up to begin with.

The Liberal Democrat portion of the Coalition hasn't had much to say about any of this. Chris Grayling, England's employment minister, has asserted, however, that critics of the schemes are "frankly job snobs". It is rank snobbery, apparently, to object to people being coerced by threats and menaces into any unpaid activity that can be defined as a job when the Government has unemployment figures to massage.

As a society, we have come to this. For those whose lives have been destroyed by the banking crisis no dignity is to be allowed, and certainly no rights. Meanwhile, the public purse becomes a franchise operation for the likes of A4e. Can this be what Mr Cameron means by "the most powerful force for social progress the world has ever known"?

Never fear. His backbenchers have the answer. Led by Liam Fox – remember him? – they have been warming up for the Budget by demanding tax cuts for business. There is certainly an argument to be had. Unless I'm being slow on the uptake, however, why are these MPs insistent – and they are – that an end to the 50% income tax rate for FTSE executives is the very thing to put people into work? Perhaps Mr Fox could nip down to a Jobcentre and explain the theory.