The coalition is wrong to be complacent about unemployment

The latest fall in unemployment becomes a rise if you take out the massive drop in London.

The DWP select committee has given its verdict on the government’s much-heralded Youth Contract. And it’s not good news. The scheme compares poorly to previous projects and is in danger of missing its targets. You might not be surprised – after all there are still over a million young people out of work and long-term youth unemployment has more than trebled in the last year. You hardly need a report to tell you things aren’t going well.

So why is unemployment falling? What is going on behind the headlines? Well, closer study of the figures reveals that new employment minster Mark Hoban was perhaps a little rash to describe the state of the labour market as "very encouraging." What we are really seeing is that in great swathes of the country Britain’s jobs crisis is becoming deep set. For Britain’s women, there has been no let up – women account for 80% of the rise in long-term unemployment since the election. And our construction industry, a sector we need roaring back to life if we are to rebuild Britain, has seen nearly 120,000 jobs wiped out since the election. Whilst in eight out of twelve regions across the country , unemployment is higher than it was in May 2010.

In fact, the latest fall in unemployment becomes a rise if you take out the massive drop in London as it prepared to host the Olympic Games. Even for those in employment, the glass is emptier than you might think. Two-thirds of the increase in employment since the election is due to a rise in people becoming temporarily employed, or working part-time - now at record highs. And that rise is almost entirely down to people who would rather be in full-time work. They are being forced to take part-time jobs because no full-time jobs are available.

So how do these figures square with ministers’ claims that their flagship Work Programme is doing the job? Well the signs aren’t good – earlier this year DWP downgraded its projection for their flagship scheme by almost half. The sad truth is ministers refuse to tell us how they are getting on. The figures remain tethered behind a depressingly familiar wall of secrecy along with the truth about their Youth Contract and the blueprints for the increasingly beleaguered Universal Credit. David Cameron once told us that sunlight is the greatest disinfectant, but if something is rotting in DWP, it seems ministers aren’t ready for the cure.

The time for secrecy and excuses has long past. Britain desperately needs a change of course. We are now in the longest double-dip recession since the Second World War,  the government’s failing economic plan has pushed borrowing up by a quarter already this year and programmes to get people off benefits and into work seem to be stuck in neutral. The select committee’s report should act as a wake-up call. Thanks to research done by Acevo we know that today’s youth unemployment emergency is set to cost our country £28bn in the coming decade – that’s money we can’t afford to waste.

We now need decisive action – not more tinkering round the edges. Ministers should listen to the International Labour Organisation and urgently bring in a jobs guarantee, like Labour’s Real Jobs Guarantee. They should pay for it with a sensible tax on bankers' bonuses and create a fund that'll help us get 100,000 young people back to work.

Work and Pensions Secretary Iain Duncan Smith arrives for a Cabinet meeting at 10 Downing Street. Photograph: Getty Images.

Liam Byrne is Labour MP for Birmingham Hodge Hill, cofounder of the UK-China Young Leaders Roundtable and author of Turning to Face the East: How Britain Prospers in the Asian Century.

Photo: Getty Images
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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.