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

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Cabinet audit: what does the appointment of Andrea Leadsom as Environment Secretary mean for policy?

The political and policy-based implications of the new Secretary of State for Environment, Food and Rural Affairs.

A little over a week into Andrea Leadsom’s new role as Secretary of State for Environment, Food and Rural Affairs (Defra), and senior industry figures are already questioning her credentials. A growing list of campaigners have called for her resignation, and even the Cabinet Office implied that her department's responsibilities will be downgraded.

So far, so bad.

The appointment would appear to be something of a consolation prize, coming just days after Leadsom pulled out of the Conservative leadership race and allowed Theresa May to enter No 10 unopposed.

Yet while Leadsom may have been able to twist the truth on her CV in the City, no amount of tampering will improve the agriculture-related side to her record: one barely exists. In fact, recent statements made on the subject have only added to her reputation for vacuous opinion: “It would make so much more sense if those with the big fields do the sheep, and those with the hill farms do the butterflies,” she told an audience assembled for a referendum debate. No matter the livelihoods of thousands of the UK’s hilltop sheep farmers, then? No need for butterflies outside of national parks?

Normally such a lack of experience is unsurprising. The department has gained a reputation as something of a ministerial backwater; a useful place to send problematic colleagues for some sobering time-out.

But these are not normal times.

As Brexit negotiations unfold, Defra will be central to establishing new, domestic policies for UK food and farming; sectors worth around £108bn to the economy and responsible for employing one in eight of the population.

In this context, Leadsom’s appointment seems, at best, a misguided attempt to make the architects of Brexit either live up to their promises or be seen to fail in the attempt.

At worst, May might actually think she is a good fit for the job. Leadsom’s one, water-tight credential – her commitment to opposing restraints on industry – certainly has its upsides for a Prime Minister in need of an alternative to the EU’s Common Agricultural Policy (CAP); a policy responsible for around 40 per cent the entire EU budget.

Why not leave such a daunting task in the hands of someone with an instinct for “abolishing” subsidies  thus freeing up money to spend elsewhere?

As with most things to do with the EU, CAP has some major cons and some equally compelling pros. Take the fact that 80 per cent of CAP aid is paid out to the richest 25 per cent of farmers (most of whom are either landed gentry or vast, industrialised, mega-farmers). But then offset this against the provision of vital lifelines for some of the UK’s most conscientious, local and insecure of food producers.

The NFU told the New Statesman that there are many issues in need of urgent attention; from an improved Basic Payment Scheme, to guarantees for agri-environment funding, and a commitment to the 25-year TB eradication strategy. But that they also hope, above all, “that Mrs Leadsom will champion British food and farming. Our industry has a great story to tell”.

The construction of a new domestic agricultural policy is a once-in-a-generation opportunity for Britain to truly decide where its priorities for food and environment lie, as well as to which kind of farmers (as well as which countries) it wants to delegate their delivery.

In the context of so much uncertainty and such great opportunity, Leadsom has a tough job ahead of her. And no amount of “speaking as a mother” will change that.

India Bourke is the New Statesman's editorial assistant.