Osborne is misleading voters on employment

The Chancellor's claim that "800,000 new jobs" have been created since the election is a myth.

One of George Osborne's favourite boasts is that 800,000 new private sector jobs have been created since the election. Last week, after the release of the stunningly bad GDP figures, he claimed that "We’ve made progress over the past two years in cutting the deficit by 25 per cent and creating over 800,000 new jobs." He was at it again in Saturday's Metro, writing that "we've seen the benefits already of our pro-business approach. Unemployment has been falling, where in other countries like the US it has risen. Over 800,000 new jobs in the private sector have been created." The Treasury repeated the claim on Twitter.

Similarly, at Prime Minister's Questions on 11 July, David Cameron declared: "It was under this government that we got 800,000 more private sector jobs"

It's an impressive figure but, unfortunately for Cameron and Osborne, it's also completely false. According to the most recent ONS figures, private sector employment has risen by 843,000 since March 2010 but, as Osborne wants you to forget, the coalition wasn't elected until May. If we look at job creation since then, we find that the increase is actually 529,000, with a concurrent loss of 393,000 public sector jobs (who said that the cuts aren't happening?)

Yet the 800,000 figure appeared unchallenged in almost every paper and on every news channel over the weekend. With the economy now smaller than it was at the time of the election and 4.5 per cent below its 2008 peak, Osborne's desire to massage his record is understandable. But while he can make as many wrong-headed arguments for austerity as he likes, he should not be allowed to mislead voters with bogus statistics.

Update: I've just written to the UK Statistics Authority requesting that they ask Cameron and Osborne to retract the claim.

Contrary to George Osborne, 800,000 private sector jobs have not been created since the election. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

Photo: Getty Images
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Autumn Statement 2015: George Osborne abandons his target

How will George Osborne close the deficit after his U-Turns? Answer: he won't, of course. 

“Good governments U-Turn, and U-Turn frequently.” That’s Andrew Adonis’ maxim, and George Osborne borrowed heavily from him today, delivering two big U-Turns, on tax credits and on police funding. There will be no cuts to tax credits or to the police.

The Office for Budget Responsibility estimates that, in total, the government gave away £6.2 billion next year, more than half of which is the reverse to tax credits.

Osborne claims that he will still deliver his planned £12bn reduction in welfare. But, as I’ve written before, without cutting tax credits, it’s difficult to see how you can get £12bn out of the welfare bill. Here’s the OBR’s chart of welfare spending:

The government has already promised to protect child benefit and pension spending – in fact, it actually increased pensioner spending today. So all that’s left is tax credits. If the government is not going to cut them, where’s the £12bn come from?

A bit of clever accounting today got Osborne out of his hole. The Universal Credit, once it comes in in full, will replace tax credits anyway, allowing him to describe his U-Turn as a delay, not a full retreat. But the reality – as the Treasury has admitted privately for some time – is that the Universal Credit will never be wholly implemented. The pilot schemes – one of which, in Hammersmith, I have visited myself – are little more than Potemkin set-ups. Iain Duncan Smith’s Universal Credit will never be rolled out in full. The savings from switching from tax credits to Universal Credit will never materialise.

The £12bn is smaller, too, than it was this time last week. Instead of cutting £12bn from the welfare budget by 2017-8, the government will instead cut £12bn by the end of the parliament – a much smaller task.

That’s not to say that the cuts to departmental spending and welfare will be painless – far from it. Employment Support Allowance – what used to be called incapacity benefit and severe disablement benefit – will be cut down to the level of Jobseekers’ Allowance, while the government will erect further hurdles to claimants. Cuts to departmental spending will mean a further reduction in the numbers of public sector workers.  But it will be some way short of the reductions in welfare spending required to hit Osborne’s deficit reduction timetable.

So, where’s the money coming from? The answer is nowhere. What we'll instead get is five more years of the same: increasing household debt, austerity largely concentrated on the poorest, and yet more borrowing. As the last five years proved, the Conservatives don’t need to close the deficit to be re-elected. In fact, it may be that having the need to “finish the job” as a stick to beat Labour with actually helped the Tories in May. They have neither an economic imperative nor a political one to close the deficit. 

Stephen Bush is editor of the Staggers, the New Statesman’s political blog.