The birth of a zombie statistic

"Record numbers of people in work" is a meaningless fact.

The Daily Telegraph's Jeff Randall has a triumphalist opinion piece today, proclaiming that, contrary to the claims of "Armageddonistas" (who apparently count amongst their numbers our own David Blanchflower):

The British economy’s most recent data show that we’ve just experienced the fastest quarterly growth in five years, employment is going up, unemployment is coming down, public-sector borrowing is falling; pay in both the public and private sectors is rising, inflation is fading (though still above target), retail sales are positive, as are new car registrations.

Many of the counter-arguments to Randall are a question of framing, and some of the straw men he attacks aren't worth defending.

So while we've experienced the fastest quarterly growth in five years, we've also experienced annual growth of exactly zero per cent; and the ONS explicitly stated in the press conference accompanying the figures that the quarterly fluctuations mean that looking at the longer-term is more accurate.

Similarly, pay in the public and private sector is indeed rising, as it has been for three years. But real pay – pay deflated by inflation – has been negative for years. August, the latest month data for which data is available, saw a 2.3 per cent rise in wages for the whole economy, and a CPI rate of 2.5 per cent. So while the average worker had more pounds in their payslip, they still got 0.2 per cent poorer. And even that nominal pay increase was a high point – in the last year, nominal weekly earnings have risen by above 2 per cent just three times.

(I also can't let it pass that in the same piece in which Randall attacks Blanchflower for "abusing those who challenge his view that fear of inflation is overblown", he also argues that the Armageddonistas are wrong because "inflation is fading".)

Beneath the bluster and legitimate disagreements in which to focus on – for it is just a disagreement as to whether to look at this quarter or this year, or whether falling unemployment is enough to offset falling real wages – is one very concerning use of an outright misleading statistic.

We hoped it would be confined to Prime Minister's Questions and the DWP's perennially dodgy press releases, but Randall's repetition of the "record" 29.59 million in work means that this bears spelling out: the only record is how many people there are in the UK.

Population is at since 1960. This employment statistic has only been counted since 1971. If you look at the employment rate, which is 71.3 per cent, then it is at a high since just 2009. Which isn't much of a record at all.

Of course, it may be that Randall is – against the grain for the Telegraph – cheering the economic benefits of well-managed migration into the UK, which has allowed the economy to grow far larger than it would have with closed borders, and is decrying the "lump of labour" fallacy so commonly applied by his fellow columnists.

That may be the case. Probably not, though.

The statue on the top of the Bank of England. Photograph: Getty Images

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

Getty
Show Hide image

Why Angela Merkel's comments about the UK and US shouldn't be given too much weight

The Chancellor's comments are aimed at a domestic and European audience, and she won't be abandoning Anglo-German relationships just yet.

Angela Merkel’s latest remarks do not seem well-judged but should not be given undue significance. Speaking as part of a rally in Munich for her sister party, the CSU, the German Chancellor claimed “we Europeans must really take our own fate into our hands”.

The comments should be read in the context of September's German elections and Merkel’s determination to restrain the fortune of her main political rival, Martin Schulz – obviously a strong Europhile and a committed Trump critic. Sigmar Gabriel - previously seen as a candidate to lead the left-wing SPD - has for some time been pressing for Germany and Europe to have “enough self-confidence” to stand up to Trump. He called for a “self-confident position, not just on behalf of us Germans but all Europeans”. Merkel is in part responding to this pressure.

Her words were well received by her audience. The beer hall crowd erupted into sustained applause. But taking an implicit pop at Donald Trump is hardly likely to be a divisive tactic at such a gathering. Criticising the UK post-Brexit and the US under Trump is the sort of virtue signalling guaranteed to ensure a good clap.

It’s not clear that the comments represent that much of a new departure, as she herself has since claimed. She said something similar earlier this year. In January, after the publication of Donald Trump’s interview with The Times and Bild, she said that “we Europeans have our fate in our own hands”.

At one level what Merkel said is something of a truism: in two year’s time Britain will no longer be directly deciding the fate of the EU. In future no British Prime Minister will attend the European Council, and British MEPs will leave the Parliament at the next round of European elections in 2019. Yet Merkel’s words “we Europeans”, conflate Europe and the EU, something she has previously rejected. Back in July last year, at a joint press conference with Theresa May, she said: “the UK after all remains part of Europe, if not of the Union”.

At the same press conference, Merkel also confirmed that the EU and the UK would need to continue to work together. At that time she even used the first person plural to include Britain, saying “we have certain missions also to fulfil with the rest of the world” – there the ‘we’ meant Britain and the EU, now the 'we' excludes Britain.

Her comments surely also mark a frustration born of difficulties at the G7 summit over climate change, but Britain and Germany agreed at the meeting in Sicily on the Paris Accord. More broadly, the next few months will be crucial for determining the future relationship between Britain and the EU. There will be many difficult negotiations ahead.

Merkel is widely expected to remain the German Chancellor after this autumn’s election. As the single most powerful individual in the EU27, she is the most crucial person in determining future relations between the UK and the EU. Indeed, to some extent, it was her intransigence during Cameron’s ‘renegotiation’ which precipitated Brexit itself. She also needs to watch with care growing irritation across the EU at the (perceived) extent of German influence and control over the institutions and direction of the European project. Recent reports in the Frankfurter Allgemeine Zeitung which suggested a Merkel plan for Jens Weidmann of the Bundesbank to succeed Mario Draghi at the ECB have not gone down well across southern Europe. For those critics, the hands controlling the fate of Europe are Merkel’s.

Brexit remains a crucial challenge for the EU. How the issue is handled will shape the future of the Union. Many across Europe’s capitals are worried that Brussels risks driving Britain further away than Brexit will require; they are worried lest the Channel becomes metaphorically wider and Britain turns its back on the continent. On the UK side, Theresa May has accepted the EU, and particularly Merkel’s, insistence, that there can be no cherry picking, and therefore she has committed to leaving the single market as well as the EU. May has offered a “deep and special” partnership and a comprehensive free trading arrangement. Merkel should welcome Britain’s clarity. She must work with new French President Emmanuel Macron and others to lead the EU towards a new relationship with Britain – a close partnership which protects free trade, security and the other forms of cooperation which benefit all Europeans.

Henry Newman is the director of Open Europe. He tweets @henrynewman.

0800 7318496