Let's help Dave get his facts straight

Two more thoughts following yesterday's awful joblessness figures.

A couple of points. Some have claimed that the UK private sector created half a million jobs over the past 12 months -- including, apparently, the Prime Minister at PMQs yesterday.

So let's help Dave get his facts straight. The Office for National Statistics (ONS) only provides data on employment in the public and private sector every three months and the latest data is only available up until June 2011. Over the 12 months to June 2011, private-sector employment grew by 264,000, while public-sector employment fell by 240,000.

Notably, the ONS also produces estimates of what happened to employment since then. Over the three month period between June and August 2011, employment fell by a further 178,000. It will be interesting to see the mix between public- and private-sector job losses in due course. This coalition is destroying jobs, not creating them.

Second, my friend Adam Posen set out very clearly in his recent speech the arguments for assisting small and medium-size businesses in obtaining lending. I am pleased that the Chancellor is looking into possible ways that the Treasury can implement this plan. The concern is that little preparation has been done, which means that any scheme is likely to take a really long time to have any impact. The big rise in unemployment announced yesterday makes this all the more urgent.

Data reported by the European Commission this week suggests that the situation in the UK is much more serious than in almost any other country in Europe. The table below shows how the proportion of unsuccessful loan applications by SMEs (small and medium-sized enterprises) has changed over time. Loan denials have risen in every country with the economic crisis.

 

A scary thought: the proportion of loan denials is especially high in the UK, and higher than in all other major western countries other than the Netherlands. The concern is that this Chancellor, once again, is doing too little, too late.

So, when will loans to SMEs start to improve? My suspicion is not for a very long time and this will slow growth further.

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

David Lammy. Photo: Getty
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David Lammy calls for parliament to overturn the EU referendum result

The Labour MP for Tottenham said Britain could "stop this madness through a vote in Parliament".

David Lammy, the Labour MP for Tottenham, has called on parliament to stop Brexit.

In a statement published on Twitter, he wrote: "Wake up. We do not have to do this. We can stop this madness and bring this nightmare to an end through a vote in Parliament. Our sovereign Parliament needs to now vote on whether we should exit the EU. 

"The referendum was an advisory, non-binding referendum. The Leave campaign's platform has already unravelled and some people wish they hadn't voted to Leave. Parliament now needs to decide whether we should go forward with Brexit, and there should be a vote in Parliament next week. Let us not destroy our economy on the basis of lies and the hubris of Boris Johnson."

Lammy's words follow a petition to re-run the referendum, which has gathered 1.75 million signatures since Friday.

However, the margin of victory in the referendum - more than a million votes - makes it unlikely party leaders would countenance any attempt to derail the Brexit process. On Saturday morning, Labour leader Jeremy Corbyn said there should be no second referendum. Tory leader David Cameron has also accepted the result, and triggered a leadership election.

It is true, though, that had Britain's EU membership been decided in parliament, rather than by a referendum, there would have been an overwhelming vote to Remain. Just 138 Tory MPs declared for Leave, compared with 185 for Remain. In Labour, just 10 declared for Leave, versus 218 for Remain, while no Lib Dem, Scottish Nationalist, Plaid Cymru, Sinn Fein or SDLP MPs backed Leave.

Rob Ford, an academic who has studied Ukip voters, said Lammy's call was "utter madness":