Real wages down and unemployment stubbornly high, but could that be good news?

Unemployment's fall has stopped, but that could signal a recovery in productivity.

The ONS has released the latest labour market statistics, showing a 0.2 percentage point decline in the unemployment rate to 7.8 per cent in the last three months (2.51 million unemployed people, down by 57,000 people). The employment rate, however, was also down by 0.1 percentage points to 71.4 per cent over the same period (29.71 million employed people, up by 17,000 people).

Other headline stats show long term unemployment increasing by 15,000 to the highest level since 1996, youth unemployment decreasing by 0.2 percentage points to 20.9 per cent, and total pay increasing by 1.7 per cent, leading to a 1 per cent decrease in real wages.

As you can see from the first graph above, the quarter-on-quarter fall in unemployment is largely reversing the rise that was reported this spring. If you look at the month-on-month statistics, designated as "experimental" by the ONS due to their habit of fluctuating fairly wildly, we can see that unemployment was down by slightly over half a percentage point since April.

That's important, because it adds further support to the theory that the long-term improvement in the labour market has been replaced by stagnation. Economics reporters tend to focus on the fact that unemployment is down from a high of 8.4 per cent, even against a background of stagnant GDP. And indeed, for over a year, that decline was nearly constant. But the unemployment rate hit a low in December of last year, and since then it has been fluctuating in the high sevens.

That's bad news for Cameron and Osborne, because falling unemployment was frequently used as a fig leaf to cover the atrocious GDP growth. All the signs indicate that next week's GDP figures will be good, but they may not be good enough.

But it might paradoxically be good news for the country. The disconnect between employment and growth was due to productivity in Britain plummeting. In simple terms, a British worker doing an hour's work simply wasn't producing as much value after the recession as they were before. There's a lot of theories as to why, ranging from low morale and lazy workers to insipid investment and low demand, but regardless of why, they all point to the same conclusion: if GDP is to properly take off, productivity has to recover. The hope is that slowing decline in unemployment could be because the recovery is coming to productivity; and our catch-up growth might finally be around the corner.

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

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The Prevent strategy needs a rethink, not a rebrand

A bad policy by any other name is still a bad policy.

Yesterday the Home Affairs Select Committee published its report on radicalization in the UK. While the focus of the coverage has been on its claim that social media companies like Facebook, Twitter and YouTube are “consciously failing” to combat the promotion of terrorism and extremism, it also reported on Prevent. The report rightly engages with criticism of Prevent, acknowledging how it has affected the Muslim community and calling for it to become more transparent:

“The concerns about Prevent amongst the communities most affected by it must be addressed. Otherwise it will continue to be viewed with suspicion by many, and by some as “toxic”… The government must be more transparent about what it is doing on the Prevent strategy, including by publicising its engagement activities, and providing updates on outcomes, through an easily accessible online portal.”

While this acknowledgement is good news, it is hard to see how real change will occur. As I have written previously, as Prevent has become more entrenched in British society, it has also become more secretive. For example, in August 2013, I lodged FOI requests to designated Prevent priority areas, asking for the most up-to-date Prevent funding information, including what projects received funding and details of any project engaging specifically with far-right extremism. I lodged almost identical requests between 2008 and 2009, all of which were successful. All but one of the 2013 requests were denied.

This denial is significant. Before the 2011 review, the Prevent strategy distributed money to help local authorities fight violent extremism and in doing so identified priority areas based solely on demographics. Any local authority with a Muslim population of at least five per cent was automatically given Prevent funding. The 2011 review pledged to end this. It further promised to expand Prevent to include far-right extremism and stop its use in community cohesion projects. Through these FOI requests I was trying to find out whether or not the 2011 pledges had been met. But with the blanket denial of information, I was left in the dark.

It is telling that the report’s concerns with Prevent are not new and have in fact been highlighted in several reports by the same Home Affairs Select Committee, as well as numerous reports by NGOs. But nothing has changed. In fact, the only change proposed by the report is to give Prevent a new name: Engage. But the problem was never the name. Prevent relies on the premise that terrorism and extremism are inherently connected with Islam, and until this is changed, it will continue to be at best counter-productive, and at worst, deeply discriminatory.

In his evidence to the committee, David Anderson, the independent ombudsman of terrorism legislation, has called for an independent review of the Prevent strategy. This would be a start. However, more is required. What is needed is a radical new approach to counter-terrorism and counter-extremism, one that targets all forms of extremism and that does not stigmatise or stereotype those affected.

Such an approach has been pioneered in the Danish town of Aarhus. Faced with increased numbers of youngsters leaving Aarhus for Syria, police officers made it clear that those who had travelled to Syria were welcome to come home, where they would receive help with going back to school, finding a place to live and whatever else was necessary for them to find their way back to Danish society.  Known as the ‘Aarhus model’, this approach focuses on inclusion, mentorship and non-criminalisation. It is the opposite of Prevent, which has from its very start framed British Muslims as a particularly deviant suspect community.

We need to change the narrative of counter-terrorism in the UK, but a narrative is not changed by a new title. Just as a rose by any other name would smell as sweet, a bad policy by any other name is still a bad policy. While the Home Affairs Select Committee concern about Prevent is welcomed, real action is needed. This will involve actually engaging with the Muslim community, listening to their concerns and not dismissing them as misunderstandings. It will require serious investigation of the damages caused by new Prevent statutory duty, something which the report does acknowledge as a concern.  Finally, real action on Prevent in particular, but extremism in general, will require developing a wide-ranging counter-extremism strategy that directly engages with far-right extremism. This has been notably absent from today’s report, even though far-right extremism is on the rise. After all, far-right extremists make up half of all counter-radicalization referrals in Yorkshire, and 30 per cent of the caseload in the east Midlands.

It will also require changing the way we think about those who are radicalized. The Aarhus model proves that such a change is possible. Radicalization is indeed a real problem, one imagines it will be even more so considering the country’s flagship counter-radicalization strategy remains problematic and ineffective. In the end, Prevent may be renamed a thousand times, but unless real effort is put in actually changing the strategy, it will remain toxic. 

Dr Maria Norris works at London School of Economics and Political Science. She tweets as @MariaWNorris.