Osborne called it wrong on private sector employment

New figures show that the private sector isn't making up for public sector job losses.

New figures show that the private sector isn't making up for public sector job losses.{C}

In November 2010, George Osborne told the House of Commons that private sector job creation would "far outweigh" the job losses in the public sector. The Chancellor, an adherent of the theory of expansionary fiscal contraction, assumed that a bloated public sector was "crowding out" pirvate sector growth.

But today's employment figures tell a different story. Osborne's fiscal contraction has turned out to be, well, contractionary. In the last three months, 67,000 public sector jobs have been lost but just 5,000 private sector jobs have been created. The number of public sector jobs lost in the last year (276,000) now exceeds the number of private sector jobs created (262,000). As a result, unemployment has reached levels not seen for 17 years. There are now 2.64m people (8.3 per cent) out of work, including 1.03m young people. Youth unemployment is now 22 per cent, above the eurozone average of 21.4 per cent.

Over the course of this parliament, the Office for Budget Responsibility still expects private sector job creation to outweigh public sector job losses. By 2017, it forecasts that there will be 1.7 million more private sector jobs and 710,000 fewer public sector jobs. But given that the OBR has already had to raise its forecast for public sector job losses by 310,000, I wouldn't put too much faith in those figures. If the government wants to prevent unemployment hitting three million, it should call a halt to its job cuts now.

George Eaton is political editor of the New Statesman.

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Sadiq Khan gives Jeremy Corbyn's supporters a lesson on power

The London mayor doused the Labour conference with cold electoral truths. 

There was just one message that Sadiq Khan wanted Labour to take from his conference speech: we need to be “in power”. The party’s most senior elected politician hammered this theme as relentlessly as his “son of a bus driver” line. His obsessive emphasis on “power” (used 38 times) showed how far he fears his party is from office and how misguided he believes Jeremy Corbyn’s supporters are.

Khan arrived on stage to a presidential-style video lauding his mayoral victory (a privilege normally reserved for the leader). But rather than delivering a self-congratulatory speech, he doused the conference with cold electoral truths. With the biggest personal mandate of any British politician in history, he was uniquely placed to do so.

“Labour is not in power in the place that we can have the biggest impact on our country: in parliament,” he lamented. It was a stern rebuke to those who regard the street, rather than the ballot box, as the principal vehicle of change.

Corbyn was mentioned just once, as Khan, who endorsed Owen Smith, acknowledged that “the leadership of our party has now been decided” (“I congratulate Jeremy on his clear victory”). But he was a ghostly presence for the rest of the speech, with Khan declaring “Labour out of power will never ever be good enough”. Though Corbyn joined the standing ovation at the end, he sat motionless during several of the applause lines.

If Khan’s “power” message was the stick, his policy programme was the carrot. Only in office, he said, could Labour tackle the housing crisis, air pollution, gender inequality and hate crime. He spoke hopefully of "winning the mayoral elections next year in Liverpool, Manchester and Birmingham", providing further models of campaigning success. 

Khan peroration was his most daring passage: “It’s time to put Labour back in power. It's time for a Labour government. A Labour Prime Minister in Downing Street. A Labour Cabinet. Labour values put into action.” The mayor has already stated that he does not believe Corbyn can fulfil this duty. The question left hanging was whether it would fall to Khan himself to answer the call. If, as he fears, Labour drifts ever further from power, his lustre will only grow.

George Eaton is political editor of the New Statesman.