An unemployed man walks through a street in Accrington, Lancashire. Photograph: Getty Images
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Decoding the unemployment figures exposes the truth behind the coalition’s spin

It is clear that the coalition is bad for jobs.

In August 2009 George Osborne said it would be “humiliating” if Britain’s AAA credit rating was downgraded and later that it was “absolutely essential we don’t have the downgrade that hangs over the country at the moment”. In the Commons in 2011, our part-time chancellor gloated that “our credit rating had been put on negative watch. Now, however, thanks to the policies of this coalition government, Britain has economic stability again.” Presumably the inference is that, after the Moody’s downgrading of the UK’s AAA rating on 22 February, we now have economic instability. Osborne suggested that maintaining the AAA rating was the number-one benchmark by which he should be judged, so we need to keep him to his word. It isn’t as if he wasn’t warned. And we seem to be heading for a sterling crisis, as there is growing pressure on the pound.

The only bit of apparently good news for the government came from the labour market. On 20 February, the Office for National Statistics reported that in the past quarter UK unemployment had fallen by 14,000 and employment had reached a “record” level of 29.7 million. Many took this as a vindication of the government’s economic strategy but it wasn’t. Youth unemployment was up by 11,000 and real wages fell once again. Also, the working-age population has risen, so the employment rate, calculated as a proportion of the working-age population, was below its old level spanning the entire period from 1997 through to the start of 2008.

The government’s claim that it has created a million private-sector jobs is false. Over the past two years public-sector employment has fallen 521,000 while private-sector employment has increased by just over one million, a net increase of about half a million jobs. But of the one million “new” private-sector jobs the coalition claims were “created”, a fifth were obtained by cheating, because lecturers in further education and sixth-form colleges were reclassified from the public to the private sector last spring. Fiddling the data isn’t the same as creating private-sector jobs.

It turns out that the news on the labour market isn’t very good. In fact, the unemployment rate no longer captures the full picture of spare capacity in the market, as many workers are employed but say they would like to work more hours and well over a million part-timers want to go full-time. These workers are “hours-constrained”. In part, this is related to real wages not growing, and many firms have reduced overtime and extra shift payments. The jobless rate takes no account of this “underutilisation” of the workforce.

Together with David Bell, professor of economics at the University of Stirling, I have devised a new “underemployment index”. It is based on the idea that the best possible outcome for the labour market would be one in which every worker is able to work the number of hours he or she wants. There is a host of reasons why this nirvana will not be realised, but it is a useful concept, in the sense that deviations from it could occur because some workers are unemployed, or because some workers already in a job are offered fewer hours than they would like, or both. The size of the deviation measures the real level of excess capacity in the UK labour market.

We use data on individuals from the Lab - our Force Survey that is released to researchers, and is used to calculate the number of unemployed. We then calculate the number of hours unemployed people would work if they had a job, assuming they work the number of hours that we calculate are consistent with their characteristics. We add these to the extra hours existing workers say they would like to work and we subtract the hours of those who wish to cut their hours. Finally, we calculate a rate that measures the proportion by which actual hours fall short of desired hours. The graph (below) shows both our index and the published unemployment rate for the period 2001-2012.

There are two clear messages from our index. First, underemployment consistently adds to the measured excess labour capacity in the UK labour market. Even though unemployment rates were low between 2001 and 2007, our index exceeded the unemployment rate by 36 per cent on average between 2001 and 2007 and by 38.7 per cent between 2008 and the second quarter of 2010. Those wanting to work more hours consistently exceed those who want to work fewer hours in the UK labour market.

Second, since the start of the recession, underemployment has been contributing an increasing share of overall excess labour capacity in the UK. Unemployment may not have increased much recently, but there has been a substantial rise in the number of extra hours that those already employed would like to work. Our index exceeded the unemployment rate by 42.4 per cent between the second quarter of 2010 and the third quarter of 2012, down from 44.9 per cent in the second quarter of 2012. In the last two quarters for which we have data, our measure of excess capacity is higher – at 43.8 per cent under this coalition – than it has been since our series started in 2001 or the recession began in 2008.

It might seem better to have some work rather than none and, therefore, there might be a tendency to discount short-time working as not much of a problem. But our latest research also suggests that this group is almost as unhappy as the unemployed. Furthermore, when (and if) the upturn comes, reductions in unemployment will be delayed, as it is likely that those already employed will be offered extra hours before new workers are hired.

It is clear that the coalition is bad for jobs.

David Blanchflower is economics editor of the New Statesman. This column is written jointly with David Bell

David Blanchflower is economics editor of the New Statesman and professor of economics at Dartmouth College, New Hampshire

This article first appeared in the 04 March 2013 issue of the New Statesman, The fall of Pistorius

Martin O’Neill for New Statesman
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1966 and all that

A year of World Cup glory, meeting Paul McCartney and eating placenta.

Fifty years ago this Saturday, on 30 July 1966, I was at Wembley. I have my ticket and my programme to prove it. I also have my 1966 ­diary, which I am looking at now. I was 30, weighed ten stone and eight pounds, and my waist was 32 inches – about as hard to believe now as England winning another World Cup final.

I am still in the same house, all these decades later, but my telephone number then was GUL 4685. GUL was short for Gulliver, I can’t remember why. In my list of contacts at the end of my diary is Melvyn Bragg, who was another recent arrival in London from Cumbria, like myself and my wife, on PRO 0790. PRO stood for Prospect, I think, which was the exchange name for somewhere over the river, possibly Kew.

My office number was TER 1234. I always thought that was a great and memorable number. It’s only now, thinking about it, that I realise that TER – meaning Terminus –
probably related to King’s Cross, which the Sunday Times was near in those days.

At the top of the charts in July 1966 were the Kinks with “Sunny Afternoon”, which I can well remember, as it was so ironically chirpy, and Georgie Fame with “Getaway”. I liked Georgie Fame – low-key, cool – but I can’t remember that tune. Both were replaced in August by the Beatles’ “Yellow Submarine”/“Eleanor Rigby”.

My day job in July 1966, on the Sunday Times staff, was writing the Atticus column. It still exists, but in a smaller, more skittery format. Previous incumbents included Ian Fleming, John Buchan and Sacheverell Sitwell, who was reputed to have got free Mateus rosé for life after giving the wine its first mention in an English newspaper.

I had been on the paper since 1960, after spending two years as a so-called graduate trainee journalist, mainly in Manchester, which was a laugh. There was no training and there were no lessons in law. You had a mentor for a few weeks and then you got on with it.

In my first few years as the boy on Atticus, I never had my name in the paper. I had to write dreary paragraphs about who might be our next man in Washington, or the bishop of London, or the master of Balliol, as if I cared. I wanted to write about footballers, gritty northern novelists, pop stars.

When I started at the Sunday Times, I felt for a while that people were prejudiced against me, because I was northern and working class and had gone to grammar school and a provincial university (Durham). Everyone else seemed to have been at Oxbridge and gone to public school.

But this prejudice was all in my head, imagined, just as it had been when I used to go from Durham to visit my girlfriend, Margaret – whom I married in 1960 – at Oxford. I was convinced that some of her posh friends were being condescending ­towards me. Total nonsense, but I had a chip on my shoulder for some years. Gone, all gone, just like my 32-inch waist. (I am now 12 stone and the new shorts I bought last week have a 38-inch waist. Oh, the horror.) If anything, these past 50 years, any prejudice has been in my favour.

Harold Wilson was the prime minister in 1966. His northern accent was even stronger than mine. I still have a letter from him, dated 21 March 1963, after I interviewed him for Atticus. In the letter, he ­describes the 1938 FA Cup final in which Preston beat Huddersfield Town 1-0, scoring in the last minute of extra time. At the bottom of the page, in handwriting, he’d added: “after hitting the crossbar”.

What I remember most about the interview was George Brown, who was deputy to
Wilson as Labour leader at the time, hanging around outside his office, drunk. Marcia Williams, Wilson’s secretary, was going around tut-tutting, making faces, complaining about George. I thought she shouldn’t have done, not in front of me, as I was a total stranger and a hack. (I don’t think we called ourselves hacks in those days, which is the normal, half-ironic self-description today.)

Harold was a football man and also a real know-all, forever boasting about his memory for facts and figures. The contents of this letter illustrate both aspects of his character. It led me later to collect a letter or autograph from every prime minister, going back to Robert Walpole. Only took me ten years.

There is a myth that England’s 1966 win helped Labour stay in power – which does not quite stand up. The general election was in March – four months before the final. But Wilson did milk England’s victory, identifying himself and the nation with our English champions.

It is possible that the reverse effect happened in 1970, when Wilson was chucked out and Edward Heath came in. England’s defeat at the 1970 World Cup by West Germany was just four days before the June general election.

***

I got my ticket for the 1966 World Cup final – for one of the best seats, priced at £5 – from my friend James Bredin, now dead, who was the boss of Border Television. Based in Carlisle, Border covered the Scottish Borders and the Isle of Man. It was a thriving, thrusting regional ITV station, now also deceased.

James’s chauffeur came to pick me up and waited for us after the match, a sign of the importance and affluence of even minor ITV stations. Border contributed quite a bit to the network, such as Mr and Mrs, starring Derek Batey, who presented 450 editions of this very popular national show. Batey was a local lad who started his show business life as an amateur ventriloquist in the little market town of Brampton, Cumbria, before becoming Carlisle’s Mr Show Business. He was so polished – lush hair, shiny suits, so starry, so glittery – that I always wondered why he was not in London, in the West End.

Border TV also produced some excellent documentaries that were networked across the ITV region, two of which I presented. One was about walking along Hadrian’s Wall and the other was about George Stephenson. For a while in the 1970s, I began to think I was going to become a TV presenter, despite being not much good. I was lousy at acting, which you need for television, and disliked asking questions to which I already knew the answers. And it took so much time. For each programme, we spent eight weeks on location with a crew of eight, just to make a one-hour documentary. Now they
do docs in a week with just two people.

For half an hour, I also imagined that I was going to become a playwright. In 1967, I had a play in the BBC’s Wednesday Play slot, awfully prestigious at the time, called The Playground. It was one of those shows that were filmed live and then wiped, so I have never seen it since, nor has anybody else. I blamed that for blighting my playwriting career, though till I was looking in my 1966 diary and saw that I was working on that play, I’d forgotten about its existence. As we go through life, we forget all the paths not trodden.

I’ve boasted endlessly about being at the 1966 Wembley final, and it was so exciting, but I can’t remember many of the details. I must have been aware of Geoff Hurst’s second goal being a bit dodgy, as there were loud complaints from the German fans, but as Sir Geoff, as he then wasn’t, went on to score a third goal, it didn’t really matter. At the time, I considered that the England-Portugal semi-final had been a better game, with our Bobby Charlton scoring two goals against one from Eusebio, but of course winning a final is winning a final and the excitement and the patriotic pride continued for weeks and months. We felt as if it had been our right to win – after all, did we not give the game to the world, lay down the first rules, show all those foreigners how to play our game?

The result was that we usually ignored all the new ideas and developments that were emerging from Europe and South America, carrying on with our old ways, stuffing our faces with steak before a game and knocking back six pints afterwards, a bit like Alf Tupper in the Rover comic. He lived on fish and chips, but on the race track he could beat anyone.

Those funny Continental players started playing in funny lightweight boots, more like slippers or ballet shoes, which seemed barmy to us. How we scoffed. How can you play properly, far less kick someone properly, unless your ankles are encased in hard leather as tough as steel? Who cared if they weighed a ton, especially in wet weather? We Brits were tough.

The top First Division stars of 1966 earned about £200 a week, including bonuses, and lived in £20,000 houses, semi-detached, on new estates with Tudor overtones. The top players drove Jaguars. But most were lucky to afford a Ford Cortina. I had one myself for a while. Awfully smart, or so I thought at the time.

Their basic wages were little more than double that of the best-paid working men, such as a foreman bricklayer or a successful plumber. Their neighbours on their estates were bank mangers or salesmen, a higher scale socially than their own background, but still fairly modest. Not like today. Footballers don’t even have neighbours any more. They are cocooned in their own gated mansions, with personal staff, gardeners, nannies, accountants, lawyers, agents.

Yet despite their modest lifestyles in those days, there were celebrity players, such as Bobby Moore, Bobby Charlton and, before them, Billy Wright, all household names, loved and admired, recognised everywhere.

None of them had an agent in 1966. The nearest thing to it was the system that operated if a team got to the FA Cup final. They would then agree to divvy up the peripheral proceeds, such as money from giving newspaper interviews, posing for staged corny photographs, opening shops, or selling their spare tickets to touts (which they were not supposed to do). They’d appoint some dodgy friend of one of the senior players to arrange the deals and collect the monies for them. Times, they always change. Otherwise, what’s the point, eh?

***

In 1966, two big events occurred in my personal life. In May that year, my son, Jake, was born – at home, in what is now our kitchen. He arrived so quickly that the midwife hadn’t turned up yet and he emerged with the cord twisted around his neck. I managed to untie it, which I have maintained since kept him alive (a trick I had learned at fathers’ classes).

Fathers’ classes – wow, what a novelty that was in the 1960s. Who says we were all chauvinist pigs back then? (Today’s young, female star writers at the New Statesman, probably.) I attended my first ones, at the Royal Free Hospital in 1964, when our firstborn, Caitlin, was about to arrive. I remember immediately thinking when the invite came that I would get 1,000 words out of this – which I did, for the Sunday Times women’s pages.

Also at those first-ever fathers’ classes at the Royal Free was a young BBC producer whose wife was also about to give birth: Wilfred De’Ath. He, too, was desperate to get a piece out of it. (He now writes occasionally for the Oldie, and he appears to be down and out and living in France.)

After Jake’s birth, I got the midwife to give me the placenta and I ate it, fried with onions. Tasted like liver. Another 1,000 words.

The other event of note in my ever-so-exciting life in 1966 was meeting Paul McCartney. When “Eleanor Rigby” came out, I thought the words – not just the tune – were so wonderful. Possibly the best poetry of the year, I said, as if I knew anything about poetry. I went to see him for Atticus in his new house in St John’s Wood, which he still has, being a very conservative feller. I talked to him about the background to the lyrics, as opposed to his hair, which interviewers were still asking him about.

A few months later, at the end of 1966, I went to see him again, wearing a different cap, as a screenwriter. I’d had a novel published the previous year, Here We Go Round the Mulberry Bush, which was being made into a film, with Clive Donner directing. We went to see Paul at his house and discussed with him if he would do the theme tune. He turned us down in the end but it was while I was with him that I suggested that there should be a proper biography of the Beatles. He said Brian (Epstein, the band’s manager) would have to agree – and there and then sat me down and helped me write a suitable arse-licking letter to him.

I eventually saw Brian, after several cancellations, at his home in Belgravia and he played me the acetate of “Strawberry Fields Forever”. I was astounded. It seemed to break every rule of what was then considered pop music. I wondered if all Beatles fans
would take to it. But I could see that it was amazing and perhaps the Beatles weren’t finished, which was what some people were saying in 1966. At my publisher, Heinemann, which paid me £3,000 for the book, there was one director who maintained the Beatles bubble was about to burst.

Brian agreed to my project and offered a clause in the contract that we had not requested or even thought of. He said he would not give any other writer access to the Beatles for two years after my book came out. This was 1966. The book came out in 1968. Two years later, in 1970, the Beatles were no more. Without realising it at the time, I became the only authorised ­biographer of the Beatles.

***

So, 1966, a big year for me, so glad I kept that diary, and also a big year for the nation. I thought at the time that the Beatles were bound to fade, eventually, while England surely would dominate world football from now on. After their humbling by Iceland at this year’s World Cup, I now realise that England will never win the World Cup again in my life, what’s left of it. And probably not even another game.

The only way to rationalise it is to tell ourselves that we are ahead of the game. We are rubbish, but in turn it will happen to all the other so-called advanced nations.

You could say Brexit is a bit like that. We are ahead of the other leading European nations in going it alone, even though it is depressing and awful and shameful. We are advanced in wilfully turning ourselves into a rubbish nation. We are leading the way, as ever. Inger-land, Inger-land.

Hunter Davies’s memoir of the postwar years, “The Co-op’s Got Bananas!” (Simon & Schuster), was published in April, followed by “Lakeland: a Personal Journal” (Head of Zeus). His final book on the Fab Four, “The Beatles Book” (Ebury), will be published on 1 September

Hunter Davies is a journalist, broadcaster and profilic author perhaps best known for writing about the Beatles. He is an ardent Tottenham fan and writes a regular column on football for the New Statesman.

This article first appeared in the 28 July 2016 issue of the New Statesman, Summer Double Issue