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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Labour tensions over pro-EU campaign grow

Andy Burnham warned Alan Johnson of danger of appearing part of the "establishment case". 

Compared to the Conservatives, Labour is remarkably united over the EU, with the entire shadow cabinet and 214 of its 231 MPs backing the party's In campaign. Only a handful have joined the rival Labour Leave group, though sources are confident that more, potentially including shadow ministers, will do so when David Cameron's renegotiation concludes. 

But there are notable tensions within the In campaign. At this week's shadow cabinet meeting, which received a presentation from pro-EU head Alan Johnson, Andy Burnham warned of electoral damage to Labour if it was part of the "establishment case" for staying in. Burnham emphasised the need for the party to differentiate itself from Cameron and business leaders, I'm told. Angela Eagle also spoke of her concern at the number of eurosceptic Labour supporters. 

Just as the SNP surged following the Scottish independence referendum, so some shadow cabinet members believe Ukip could do so after the EU vote. One told me of his fear that those Labour supporters who voted Out would make "the transition" to voting for Farage's party. Ukip finished second in 44 of Labour's seats at the last election and helped the Tories win marginals off the opposition. 

Among Labour's pro-Europeans, the fear is that the party's campaign will be "half-hearted". Jeremy Corbyn, a long-standing eurosceptic (who some believe would have backed withdrawal had he not become leader), struggles to express enthusiasm for remaining In. Speaking to the New Statesman, former shadow Europe minister Emma Reynolds warned: 

"The British public will expect the Labour Party to have a clear position. And we do have a clear position and that's that we're going to campaign to stay in the EU. Trying to fudge the issue or hedge your bets is not going to go down well with the British public. Of course we need to talk to people about all aspects of the EU, and that will involve talking to people about immigration, but there isn't a 'maybe' on the ballot paper it's a binary choice between remain and leave. We have to be clear with people where we are because they won't thank us for being wishy-washy."

Labour's Brexiters draw comfort from the dearth of MPs campaigning for EU membership. Kate Hoey told me: "I have been genuinely surprised how few supposedly 'pro-EU' Labour MPs have been prepared to come out and speak publicly of their support for staying in. They know, as those of us campaigning on the Leave side know, that thousands and thousands of Labour supporters, all over the country, want to come out and they are not going to receive a great reception on the doostep". 

George Eaton is political editor of the New Statesman.