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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Apprenticeships remain a university alternative in name only for too many young people

New research shows that those who do the best apprenticeships will earn higher salaries than graduates, but government targets undermine the quality of such schemes.

Rare is the week that passes by without George Osborne donning a hi-vis jacket and lauding the worth of apprenticeships. The Conservatives have made creating 3m apprenticeships a governing mission. Labour, both under Ed Miliband and Jeremy Corbyn, are scarcely less enthusiastic about their value.

The best apprenticeships live up to the hype. Those with a level five apprenticeship (there are eight levels) will earn £50,000 more in their lifetime than someone with a degree from a non-Russell Group university, as new research by the Sutton Trust reveals.

But too many apprenticeships are lousy. In 2014/15, just 3 per cent of apprenticeships were level four or above. Over the last two years, there have only been an estimated 30,000 apprenticeships of at least level four standard. So while David Cameron comes up with ever grander targets for the amount of apprenticeships he wants to create, he neglects what really matters: the quality of the apprenticeships. And that's why most people who can are still better off going to university: over a lifetime the average graduate premium is £200,000.

Proudly flaunting lofty targets for apprenticeships might be good politics, but it isn’t good policy. “The growth in apprenticeships has been a numbers game with successive governments, with an emphasis on increasing quantity, not quality,” says Sir Peter Lampl, Chairman of the Sutton Trust.

60 per cent of apprenticeships today are at level two – considered to be no better than GCSE standard. These might help people get a job in the short-term, but it will do nothing to help them progress in the long-term. Too often an apprenticeship is seen as an end in itself, when it should be made easier to progress from lower to higher apprenticeships. The Sutton Trust is right to advocate that every apprentice can progress to an A-Level standard apprenticeship without having to start a new course.

Apprenticeships are trumpeted as an alternative to going to university. Yet the rush to expand apprenticeships has come to resemble the push to send half the population to university, focused more on giving ever-greater numbers a qualification then in ensuring its worth. For too many young people, apprenticeships remain an alternative to university in name only.

Tim Wigmore is a contributing writer to the New Statesman and the author of Second XI: Cricket In Its Outposts.