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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Jeremy Corbyn wins Labour leadership contest in crushing victory

The Labour leader increased his mandate from 2015. 

Jeremy Corbyn has stormed to victory with an increased mandate in his second Labour leadership contest, with 61.8 per cent of the vote.

The Labour leader won 59 per cent of the member vote, 70 per cent of registered supporters' votes and 60 per cent of affiliated supporters' votes.

His triumph confirms for any remaining doubters the party's shift to the left - in 2015, he had won 59.5 per cent of the vote.

Owen Smith, the challenger, received 38.2 per cent of the vote. He was reported to have conceded defeat moments before the official result.

The turn out was 77.6 per cent, with 506,438 valid votes cast. 

Both men ran on a similar platform of opposition to austerity and zero-hours contracts, but Corbyn commanded the support of the majority of grassroots activists and party members.

In his victory speech, he struck a conciliatory note, thanking volunteers on both teams and telling Smith: "We are part of the same Labour family."

He said: "I will do everything I can to repay the trust and support, to bring our party together."

Pledging to make Labour an engine of change, he urged party members to "wipe the slate clean" after a summer of sniping and work together.

"We are proud as a party that we're not afraid to discuss openly, to debate and disagree. That is essential for a party that wants to change people's lives for the better," he said. 

Noting the party had tripled its membership since last spring, he urged members to take Labour's message into every community, and said the party had a duty of care to its members: "Politics is demeaned and corroded by intimidation and abuse. It's not my way, and it's not the Labour way, and never will be."

Smith, by contrast, stepped forward to represent disaffected Labour MPs, who were unimpressed with Corbyn's campaign during the EU referendum and feared he was unelectable. 

Corbyn's victory will at least temporarily quash any rival leadership bids, but it nevertheless leaves the leader with a headache. 

After the vote for Brexit, a wave of resignations emptied Corbyn's shadow cabinet, and he has not succeeded in fully refilling it. He now faces the choice of building bridges with the parliamentary Labour party, or going down the more radical route of reshaping the party itself. 

Much hinges on the decision of the National Executive Committee on whether to allow elected shadow cabinet positions, which could potentially offer a way back in for anti-Corbyn MPs. But if such elections extended to grassroots members, this could also end up isolating them further.