The truth about unemployment

It would have been much worse under the Tories.

Tory bloggers like Iain Dale have been getting very excited about today's unemployment figures, ahead of the Chancellors' debate on BBC2 this afternoon.

The figures are bad - but, as ever, some context is needed.

From a TUC press release that just popped into my inbox:

If unemployment had followed the same trend in the recent downturn as that in the 1980s recession, it would have kept rising until November 2014 and the dole queues would have been twice as long, according to a TUC analysis of the latest unemployment figures published today.

Six months after the end of the recent recession, there are 1.54 million people claiming unemployment benefit and the numbers are falling throughout the country. But six months after the 1980s recession ended, there were 2.32 million people on the dole and the claimant count was still rising.

A TUC analysis of claimant count unemployment across the UK since 1980 shows that Scotland, Northern Ireland and the East Midlands took the longest to recover from the 1980s recession.

Back in the 1980s, the number of people claiming the dole was more than twice as high at its peak as it is today in cities such as Newcastle, Liverpool, Manchester, Sheffield and Bristol, the TUC analysis shows.

Oh, and before you dismiss the TUC's analysis as leftie/Labour/trade union propaganda, here's CBI boss Richard Lambert speaking at the RSA in March:

Then there's the remarkable story of what's happened to the employment numbers in the course of this recession. Output has fallen by 6.2 per cent from the peak: unemployment is down just 1.9 per cent.

In the last recession, by contrast, GDP was down by 2.5 per cent and employment by 3.4 per cent.

The Tories, on the other hand, would have made unemployment much worse than it is now, with swingeing and immediate cuts to spending. Cameronomics has been tried in Ireland - and found wanting. Here's my NS colleague Danny Blanchlower, one of the world's leading labour-market economists, writing on the Irish experience:

In Ireland where the government has implemented Draconian public-spending cuts, unemployment now stands at 13.3 percent, up 5 percentage points on the year and rising at about 0.3 percent a month, with no peak in sight.

On Friday, the government will actually have some positive economic figures to trumpet, when the preliminary estimate of first quarter GDP growth for the UK is published. It's expected to show modest growth - 0.4 per cent? - and a further rise in manufacturing output. I'm intrigued as to how the Tories will respond. But, with the economy fragile and still reliant on public investment, I agree with Gordon Brown, the OECD, the IMF, David Blanchflower, Barack Obama, Vince Cable and the TUC - early spending cuts could plunge the UK back into recession and make unemployment much, much worse.

(The Conservative party, meanwhile, have released a new poster illustrating their depth of concern for the jobless.)

 

 

 

Mehdi Hasan is a contributing writer for the New Statesman and the co-author of Ed: The Milibands and the Making of a Labour Leader. He was the New Statesman's senior editor (politics) from 2009-12.

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Why are boundary changes bad for Labour?

New boundaries, a smaller House of Commons and the shift to individual electoral registration all tilt the electoral battlefield further towards the Conservatives. Why?

The government has confirmed it will push ahead with plans to reduce the House of Commons to 600 seats from 650.  Why is that such bad news for the Labour Party? 

The damage is twofold. The switch to individual electoral registration will hurt Labour more than its rivals. . Constituency boundaries in Britain are drawn on registered electors, not by population - the average seat has around 70,000 voters but a population of 90,000, although there are significant variations within that. On the whole, at present, Labour MPs tend to have seats with fewer voters than their Conservative counterparts. These changes were halted by the Liberal Democrats in the coalition years but are now back on course.

The new, 600-member constituencies will all but eliminate those variations on mainland Britain, although the Isle of Wight, and the Scottish island constituencies will remain special cases. The net effect will be to reduce the number of Labour seats - and to make the remaining seats more marginal. (Of the 50 seats that would have been eradicated had the 2013 review taken place, 35 were held by Labour, including deputy leader Tom Watson's seat of West Bromwich East.)

Why will Labour seats become more marginal? For the most part, as seats expand, they will take on increasing numbers of suburban and rural voters, who tend to vote Conservative. The city of Leicester is a good example: currently the city sends three Labour MPs to Westminster, each with large majorities. Under boundary changes, all three could become more marginal as they take on more wards from the surrounding county. Liz Kendall's Leicester West seat is likely to have a particularly large influx of Tory voters, turning the seat - a Labour stronghold since 1945 - into a marginal. 

The pattern is fairly consistent throughout the United Kingdom - Labour safe seats either vanishing or becoming marginal or even Tory seats. On Merseyside, three seats - Frank Field's Birkenhead, a Labour seat since 1950, and two marginal Labour held seats, Wirral South and Wirral West - will become two: a safe Labour seat, and a safe Conservative seat on the Wirral. Lillian Greenwood, the Shadow Transport Secretary, would see her Nottingham seat take more of the Nottinghamshire countryside, becoming a Conservative-held marginal. 

The traffic - at least in the 2013 review - was not entirely one-way. Jane Ellison, the Tory MP for Battersea, would find herself fighting a seat with a notional Labour majority of just under 3,000, as opposed to her current majority of close to 8,000. 

But the net effect of the boundary review and the shrinking of the size of the House of Commons would be to the advantage of the Conservatives. If the 2015 election had been held using the 2013 boundaries, the Tories would have a majority of 22 – and Labour would have just 216 seats against 232 now.

It may be, however, that Labour dodges a bullet – because while the boundary changes would have given the Conservatives a bigger majority, they would have significantly fewer MPs – down to 311 from 330, a loss of 19 members of Parliament. Although the whips are attempting to steady the nerves of backbenchers about the potential loss of their seats, that the number of Conservative MPs who face involuntary retirement due to boundary changes is bigger than the party’s parliamentary majority may force a U-Turn.

That said, Labour’s relatively weak electoral showing may calm jittery Tory MPs. Two months into Ed Miliband’s leadership, Labour averaged 39 per cent in the polls. They got 31 per cent of the vote in 2015. Two months into Tony Blair’s leadership, Labour were on 53 per cent of the vote. They got 43 per cent of the vote. A month and a half into Jeremy Corbyn’s leadership, Labour is on 31 per cent of the vote.  A Blair-style drop of ten points would see the Tories net 388 seats under the new boundaries, with Labour on 131. A smaller Miliband-style drop would give the Conservatives 364, and leave Labour with 153 MPs.  

On Labour’s current trajectory, Tory MPs who lose out due to boundary changes may feel comfortable in their chances of picking up a seat elsewhere. 

Stephen Bush is editor of the Staggers, the New Statesman’s political blog. He usually writes about politics.