Time to examine Osborne's "500,000"

Chancellor's claim on job creation is highly misleading.

Writing on the Spectator's Coffee House blog earlier this week, the editor, Fraser Nelson, trumpeted: "George Osborne was right to boast in the Commons that Britain has the second-highest rate of net job creation in the G7." This is highly misleading.

My conclusion is that Nelson and Osborne are playing fast and loose with the truth, as the vast majority of these jobs were created before any of the coalition's economic policies took effect. Furthermore, things are likely to worsen soon, as indicated by the recent increase in both ILO unemployment and the claimant count.

Osborne did make the claim Nelson attributes to him. When parliament was recalled on 11 August, the Chancellor boasted: "Some 500,000 new private-sector jobs have been created in the past 12 months."

And Osborne repeated that claim during questions, insisting that the UK was doing better than the US. This was his answer in response to a question from Michael Meacher:

The British economy is growing and it is the assessment of the Bank of England and the Office for Budget Responsibility that it will continue to grow. The growth in the last six months has actually been stronger than in the United States, and half a million jobs have been created in the private sector in the last year.

Later, in the same debate, he repeated the claim in an answer to a question from Geoffrey Clifton-Brown:

Small businesses are, of course, the engine of job creation in our country. As I have said, 500,000 new jobs have been created in the private sector over the last year. That is the second highest rate of job creation in the G7.

Then, he repeated it yet a third time in an answer to a question by Dame Anne Begg.

It's time to examine these claims. Here is the data from the latest release from the ONS (Table 4), which reports employment in the private and public sectors:

It is clear that there has been a growth in private-sector jobs over the past year of over 500,000. The past year, however, refers to the period March 2010 to March 2011. Given the coalition didn't take office until May 2010 -- and its policies would not have taken effect until much longer after that date -- it is entirely disingenuous for the Chancellor to claim credit.

Let's be generous and take the data from June 2010. Here, the number is reduced from 520,000 to 208,000. That wipes out most of the claimed success.

Of course, it takes quite some time for the coalition's policies to feed into measured job creation; being charitable, we could measure the growth from December 2010, which means that only 100,000 private-sector jobs were created. Even less to boast about.

This raises another issue -- we are now in August, not March, so this data is way out of date. Why is that? The data come from the Labour Force Survey, which is a sample of individuals that is collected monthly. (Identical surveys are used in every EU country.) The trouble is, the sample size for the UK survey is so small -- due to underfunding and simple incompetence -- that the ONS feels unable to report monthly.

Instead, it generally pools three months of data together. The result? We find ourselves in the crazy position of comparing unemployment in April to June with unemployment in January to March. This makes analysis of underlying trends difficult, because, each month, a new month is added and another is dropped. This makes the moving average move -- but slowly. Plus, it makes little sense to report private- and public-sector jobs every three months, when it should be reported monthly.

The ONS needs to publish labour market data every month in a timely fashion, just as every other major advanced country does, and if it has to put more resources into it and move to bigger samples, so be it.

Today's data release by Eurostat of unemployment data for July for the EU27 countries plus Norway, the US and Japan illustrates the point. Of the 30 countries, data is available for July for 22 of them. Data up to June is available for a further five -- Denmark, Estonia, Lithuania, Norway and Japan. The UK joins Greece and Latvia as the only countries whose latest unemployment data is from May or earlier. How dumb is that?

Data lag or no data lag, Nelson is wrong: Osborne really doesn't have much to boast about on the job-creation front. He is trying to take the credit for jobs that Alastair Darling created.

Let's wait for a few months and reconvene on this one, shall we?

David Blanchflower is economics editor of the New Statesman and professor of economics at Dartmouth College, New Hampshire

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As the strangers approach the bed, I wonder if this could be a moment of great gentleness

I don’t know what to do. In my old T-shirt and M&S pants, I don’t know what to do.

It’s 1.13am on an autumn morning some time towards the end of the 20th century and I’m awake in a vast hotel bed in a small town in the east of England. The mysterious east, with its horizons that seem to stretch further than they should be allowed to stretch by law. I can’t sleep. My asthma is bad and I’m wheezing. The clock I bought for £3 many years earlier ticks my life away with its long, slow music. The street light outside makes the room glow and shimmer.

I can hear footsteps coming down the corridor – some returning drunks, I guess, wrecked on the reef of a night on the town. I gaze at the ceiling, waiting for the footsteps to pass.

They don’t pass. They stop outside my door. I can hear whispering and suppressed laughter. My clock ticks. I hear a key card being presented, then withdrawn. The door opens slowly, creaking like a door on a Radio 4 play might. The whispering susurrates like leaves on a tree.

It’s an odd intrusion, this, as though somebody is clambering into your shirt, taking their time. A hotel room is your space, your personal kingdom. I’ve thrown my socks on the floor and my toothbrush is almost bald in the bathroom even though there’s a new one in my bag because I thought I would be alone in my intimacy.

Two figures enter. A man and a woman make their way towards the bed. In the half-dark, I can recognise the man as the one who checked me in earlier. He says, “It’s all right, there’s nobody in here,” and the woman laughs like he has just told her a joke.

This is a moment. I feel like I’m in a film. It’s not like being burgled because this isn’t my house and I’m sure they don’t mean me any harm. In fact, they mean each other the opposite.

Surely they can hear my clock dripping seconds? Surely they can hear me wheezing?

They approach, closer and closer, towards the bed. The room isn’t huge but it seems to be taking them ages to cross it. I don’t know what to do. In my old T-shirt and M&S pants, I don’t know what to do. I should speak. I should say with authority, “Hey! What do you think you’re doing?” But I don’t.

I could just lie here, as still as a book, and let them get in. It could be a moment of great gentleness, a moment between strangers. I would be like a chubby, wheezing Yorkshire pillow between them. I could be a metaphor for something timeless and unspoken.

They get closer. The woman reaches her hand across the bed and she touches the man’s hand in a gesture of tenderness so fragile that it almost makes me sob.

I sit up and shout, “Bugger off!” and they turn and run, almost knocking my clock from the bedside table. The door crashes shut shakily and the room seems to reverberate.

This article first appeared in the 12 January 2017 issue of the New Statesman, Putin's revenge