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.

Grant Shapps on the campaign trail. Photo: Getty
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Grant Shapps resigns over Tory youth wing bullying scandal

The minister, formerly party chairman, has resigned over allegations of bullying and blackmail made against a Tory activist. 

Grant Shapps, who was a key figure in the Tory general election campaign, has resigned following allegations about a bullying scandal among Conservative activists.

Shapps was formerly party chairman, but was demoted to international development minister after May. His formal statement is expected shortly.

The resignation follows lurid claims about bullying and blackmail among Tory activists. One, Mark Clarke, has been accused of putting pressure on a fellow activist who complained about his behaviour to withdraw the allegation. The complainant, Elliot Johnson, later killed himself.

The junior Treasury minister Robert Halfon also revealed that he had an affair with a young activist after being warned that Clarke planned to blackmail him over the relationship. Former Tory chair Sayeedi Warsi says that she was targeted by Clarke on Twitter, where he tried to portray her as an anti-semite. 

Shapps appointed Mark Clarke to run RoadTrip 2015, where young Tory activists toured key marginals on a bus before the general election. 

Today, the Guardian published an emotional interview with the parents of 21-year-old Elliot Johnson, the activist who killed himself, in which they called for Shapps to consider his position. Ray Johnson also spoke to BBC's Newsnight:


The Johnson family claimed that Shapps and co-chair Andrew Feldman had failed to act on complaints made against Clarke. Feldman says he did not hear of the bullying claims until August. 

Asked about the case at a conference in Malta, David Cameron pointedly refused to offer Shapps his full backing, saying a statement would be released. “I think it is important that on the tragic case that took place that the coroner’s inquiry is allowed to proceed properly," he added. “I feel deeply for his parents, It is an appalling loss to suffer and that is why it is so important there is a proper coroner’s inquiry. In terms of what the Conservative party should do, there should be and there is a proper inquiry that asks all the questions as people come forward. That will take place. It is a tragic loss of a talented young life and it is not something any parent should go through and I feel for them deeply.” 

Mark Clarke denies any wrongdoing.

Helen Lewis is deputy editor of the New Statesman. She has presented BBC Radio 4’s Week in Westminster and is a regular panellist on BBC1’s Sunday Politics.