The Tories are still lying about "a million" new private sector jobs

The party still won't admit that Cameron is including 196,000 posts reclassified from the public sector.

Earlier this week, I explained why David Cameron is misleading voters when he claims that "one million" private sector jobs have been created since the coalition took office (as he did in his conference speech and at this week's PMQs). Cameron's figure deceptively includes 196,000 further education and sixth form college posts reclassified from the public sector in March; the real figure is a less impressive 874,000 (1,070,000 minus 196,000). As the Office for National Statistics stated in its most recent release:

These educational bodies employed 196,000 people in March 2012 and the reclassification therefore results in a large fall in public sector employment and a corresponding large increase in private sector employment between March and June 2012.

When Conservative MP Claire Perry nevertheless trotted out the stat on last night's Question Time, I called her out on it. In response, the Tory Treasury team tweeted:

Yet the only way that the Tories can achieve a figure of a million, whilst excluding the reclassified posts, is by measuring the rise in private sector employment since quarter one of 2010. In other words, by using pre-election data from April and May 2010 (resulting in a figure of 1,377,000). This would be allowable if Cameron referred to "private sector job creation since March 2010" (noting, perhaps, how Alistair Darling's fiscal stimulus aided job creation), but he doesn't. In his speech to the Conservative conference, he said:

Since this government took office, over one million new jobs have been created in the private sector.

Despite the Tories' protestations, it's clear that Cameron is misleadingly including the 196,000 posts transferred from the public sector. For one thing, if he isn't, why doesn't he use the figure of 1,377,000?

After promising a new era of accuracy and transparency in statistics, the Tories have lamentably failed to deliver.

David Cameron at the Conservative conference in Birmingham earlier this month. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

Photo: Getty Images
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There are risks as well as opportunities ahead for George Osborne

The Chancellor is in a tight spot, but expect his political wiles to be on full display, says Spencer Thompson.

The most significant fiscal event of this parliament will take place in late November, when the Chancellor presents the spending review setting out his plans for funding government departments over the next four years. This week, across Whitehall and up and down the country, ministers, lobbyists, advocacy groups and town halls are busily finalising their pitches ahead of Friday’s deadline for submissions to the review

It is difficult to overstate the challenge faced by the Chancellor. Under his current spending forecast and planned protections for the NHS, schools, defence and international aid spending, other areas of government will need to be cut by 16.4 per cent in real terms between 2015/16 and 2019/20. Focusing on services spending outside of protected areas, the cumulative cut will reach 26.5 per cent. Despite this, the Chancellor nonetheless has significant room for manoeuvre.

Firstly, under plans unveiled at the budget, the government intends to expand capital investment significantly in both 2018-19 and 2019-20. Over the last parliament capital spending was cut by around a quarter, but between now and 2019-20 it will grow by almost 20 per cent. How this growth in spending should be distributed across departments and between investment projects should be at the heart of the spending review.

In a paper published on Monday, we highlighted three urgent priorities for any additional capital spending: re-balancing transport investment away from London and the greater South East towards the North of England, a £2bn per year boost in public spending on housebuilding, and £1bn of extra investment per year in energy efficiency improvements for fuel-poor households.

Secondly, despite the tough fiscal environment, the Chancellor has the scope to fund a range of areas of policy in dire need of extra resources. These include social care, where rising costs at a time of falling resources are set to generate a severe funding squeeze for local government, 16-19 education, where many 6th-form and FE colleges are at risk of great financial difficulty, and funding a guaranteed paid job for young people in long-term unemployment. Our paper suggests a range of options for how to put these and other areas of policy on a sustainable funding footing.

There is a political angle to this as well. The Conservatives are keen to be seen as a party representing all working people, as shown by the "blue-collar Conservatism" agenda. In addition, the spending review offers the Conservative party the opportunity to return to ‘Compassionate Conservatism’ as a going concern.  If they are truly serious about being seen in this light, this should be reflected in a social investment agenda pursued through the spending review that promotes employment and secures a future for public services outside the NHS and schools.

This will come at a cost, however. In our paper, we show how the Chancellor could fund our package of proposed policies without increasing the pain on other areas of government, while remaining consistent with the government’s fiscal rules that require him to reach a surplus on overall government borrowing by 2019-20. We do not agree that the Government needs to reach a surplus in that year. But given this target wont be scrapped ahead of the spending review, we suggest that he should target a slightly lower surplus in 2019/20 of £7bn, with the deficit the year before being £2bn higher. In addition, we propose several revenue-raising measures in line with recent government tax policy that together would unlock an additional £5bn of resource for government departments.

Make no mistake, this will be a tough settlement for government departments and for public services. But the Chancellor does have a range of options open as he plans the upcoming spending review. Expect his reputation as a highly political Chancellor to be on full display.

Spencer Thompson is economic analyst at IPPR