Coffee House Specdata

The British jobs miracle

19 March 2014

10:38 PM

19 March 2014

10:38 PM

George Osborne rather glossed over the single most solid piece of good news in the Budget today: the Jobs Miracle. His pensions announcement means that tomorrow’s papers are likely to skip over it too. But it’s worth looking at – the government seems genuinely baffled as to why so many people are finding work. As I wrote in my last Telegraph column, the Treasury does not seem to recognise a supply-side, cross-departmental success when it bites them on the nose.

I’m just back from the annual Spectator Budget presentation, sponsored by Aberdeen Asset Management. We spoke a lot about this – the below graph sums it up…

Screen Shot 2014-03-19 at 22.21.14

As my earlier blog on the “six scary graphs” shows, almost all of George Osborne’s initial forecasts have proven to be laughably optimistic. But not jobs. Employment is rising, having seemingly become detached from the sluggish growth. Employment data has a life of its own.

The brown line shows Osborne’s June 2010 forecast – and the other lines show subsequent OBR forecasts. Every budget or Autumn Statement seems to involve a massive upwards revision in employment. Something is going badly right.

[Alt-Text]


It’s not as if George Osborne has gone easy on public sector workers. He’s shed 780,000 jobs – but for every one of these jobs shed, he said the economy would create two private sector jobs. Ed Balls once called this a “fantasy”. Osborne has been amply vindicated:-

Screen Shot 2014-03-19 at 22.26.28

Now, there were jobs galore under Labour. But the vast majority of rise in employment under Labour was accounted for by foreign-born workers. Until fairly recently the same trend was visible under Osborne too. As an unreformed welfare system trapped people rather than helped them back to work. But in recent months there has been a surge in UK-born workers – look at the red line below…

Screen Shot 2014-03-19 at 22.25.48

The deeper you look into Osborne’s jobs figures, the more encouraging the signs. So why didn’t the Chancellor boast about it more? As I said in my Daily Telegraph column, the Treasury isn’t quite sure why all of these jobs are being created. Programmed by Brown, it cannot recognise the fruits of supply-side reform – even its own reform. If you raise the tax threshold and cut taxes, work will be more attractive so more people will choose work.

When the Bank of England was mulling the jobs miracle  a few weeks ago, it credited

…a tightening in the eligibility requirements for some state benefits might also have led to an intensification of job search.

In other words, the IDS reforms – and tougher sanctions regime – are making life on welfare less of an option. So the DWP can play its part in this extraordinary government success story.

So can the Home Office. Michael Sunders from CitiGroup recently pointed out that the non-EU immigrants, whom Theresa May is cracking down on, are finding it harder to work here. As Saunders put it:-

The gap in job growth between people born inside the EU and outside the EU also suggests that the tightening in visa policies for non-EU workers is biting. This effect probably will continue.

So the British Jobs miracle is brought to you not just by a Chancellor who culled public sector jobs to free up the rest of the economy but a radical welfare secretary (IDS) and a Home Secretary (Mrs May).  It’s a real story of joint Tory government success – but not a story the Chancellor felt like telling yesterday.

 

More Spectator for less. Stay informed leading up to the EU referendum and in the aftermath. Subscribe and receive 6 issues delivered for just £6, with full web and app access. Join us.




Show comments
  • mandril

    very good….

  • Mike Barnes

    Jobs miracle or productivity calamity.

    1million+ extra people in work, yet the economy as a whole is smaller than it was 6 years ago. WTF are all the extra people doing?

    • the viceroy’s gin

      Well, it’s sort of like they used to say in the Soviet Union: “We pretend to work and they pretend to pay us.”

      • rtj1211

        Next time you go get treatment from an NHS doctor (who usually break EU employment law by working too many hours), you tell them what a pretence they are and see what kind of treatment you get.

        Next time you drive your car you ask who paid for the road you drive on and try driving at 70mph on one with potholes – hopefully you’ll roll the car and end up needing treatment by that doctor who’s too lazy to treat you.

        Next time you go to a parents’ evening at your kid’s school, you tell the teachers how lazy they are and ask how much work they do after school, how much marking they take home, what meetings they have the week before terms start and the week after terms end. And ask who pays their salary.

        Next time you rail about the loss of economic activity go ask who caused it. Was it those public sector bankers or private sector bankers?? Was it due to Gordon Brown creating ‘mortgage-backed security portfolios or was it the private sector?? Who was it who rated those bonds AAA?? Was it Gordon Brown or was it those private sector luminaries at Moodys, Fitch and S&P???

        Well????

        Have you worked on a zero hours contract recently?? If not, it’s high time you did. I want you having no chance of getting a mortgage because those ‘productive’ private sector luminaries like McDonalds want you as a slave and a serf.

        I think your right to have children should be severely curtailed if you think that is ‘the private sector nirvana’.

        You need to see a psychiatrist, you need to be sacked from any job you think you are capable of holding and you need to be taught how to behave and that should be done in the context of the most humiliating, degrading and ‘toughening up’ conditions used in the harshest of military training regimes.

        If it breaks your body, your spirit and your soul well, that’s acceptable collateral damage as far as I’m concerned. Wastrels like you should be thrown on the scrapheap if you aren’t the toughest, meanest, strongest, most emotionally cut-off 0.01% of the population, after all…….

    • HookesLaw

      What were the 700,000 people who are no longer in the public sector producing then?

      Just pause on that little nugget from Mr Nelson.
      Under the tories 700,000 jobs have been shed from the public sector. Yet the nutjobs of the loony kipperesque fringe want to split the right wing vote and hand power to Labour. And their excuse? It is all ‘liblabcon’ and Cameron is not a ‘proper tory’ !!
      What a load of pillocks.

      • the viceroy’s gin

        The nutjobs of the loony Camerluvvie socialist fringe want to split the UKIP vote and hand power to the Millipedes.

        • HookesLaw

          You have to try harder than that Mr Nutjob. Even Miliband is more coherent.

          • the viceroy’s gin

            …that must be why you socialist Camerluvvies are so anxious for him to be PM.

      • andagain

        And their excuse? It is all ‘liblabcon’ and Cameron is not a ‘proper tory’ !!

        It is not an excuse. It is a psychological tactic. It makes them feel good about themselves. The results are beside the point – after all, no single voter will have any detectable effect on the results anyway.

        • the viceroy’s gin

          Nonsense. In 13.5 months, Call Me Dave’s head is going to be mounted on a spike, which as Dave would surely tell you is definitely a “detectable effect”.

          • andagain

            Thank you for providing me with such an excellent example of someone with no interest whatsoever in whatever is actually likely to happen.

            BTW – that would only be a “detectable result” of your own actions if you yourself were the murderer. But I am sure you would manage to feel heroically responsible anyway.

            • the viceroy’s gin

              Oh no, lad, it will be a “detectable result” of the electorate, as mentioned.

              But it doesn’t sound like you’re too enthused about it, a common enough trait amongst you Camerluvvies.

          • balance_and_reason

            Labour stooge…

            • the viceroy’s gin

              LibLabCon socialist stooge…

    • manonthebus

      Traditionally, once you stop the state ‘crowding-out’ private investment, jobs grow. I think this has been happening with a stop on public investment.

    • balance_and_reason

      700,000 less public sector workers are not being funded by the taxpayer, and that includes a massive iceberg of an unfunded pension liability for them that is not being racked up….what you need to do is go get a private sector job, pay some tax, and focus on not being a liability to your fellow citizen’s. The productivity will look after itself.

      • rtj1211

        Do you include private sector companies ‘delivering Govt programmes’ as private sector or ‘dependent on the State’??

        Awful bunch of scroungers at G4S, Serco and Capita, aren’t there??

        • balance_and_reason

          Whilst Serco, G4S and Capita are very large and begin to resemble public sector entities with all the associated weakness, they have one key difference. When they transgress they apologise profusely, are fined heavily, and its payed, and generally the actual job has largely been done properly, with improvements moving swiftly in after issues such as Serco’s tagging fiasco recently.
          When have you ever heard of a public sector department paying serious cash compensation, let alone apologies etc (care quality, immigration, etc etc etc)….In fact in the case of the recent tagging screw up it is doubtful if G4s actually behaved fraudulently….it was poor contract definition.G4S started charging when they were asked to go and look for the scum bag…the government said they should have started charging after they had found him ….G4S have caved in and paid up despite there being two equally reasonable sides to the case…..THis would never happen in the public sector. Cover up, buck passing, etc rule of the day there…..and you get a generally lower grade service at a higher cost.

    • SupremeBeing

      Delivering leaflets, Avon reps, aid collectors, sign holders that kind of thing more than likely.

  • HookesLaw

    On the one hand you say Osborne is ‘baffled’ then you say he actually predicted that the economy would create ‘two private sector jobs’ for every public job shed.

    You are pathologically incapable of giving Osborne and the tories any credit. You are as bigoted and the numpty readership you so clearly treasure.

    Please please Nr Nelson – unless you want to lose your cosy little band of bigots do not for a moment imply that the govt are having any success on the immigrant front.

  • Tom Tom

    Fraser you never give figures for pig iron production or sulphuric acid ! I know The Plan is being surpassed and that Stakhanovites throughout the nation are exceeding norms, but you never tell us how Real-Existing Socialism is leading the world and everyone is looking at Britain as a beacon of hope and moral leadership in a world of despair. You are failing to be upbeat and I fear my pencil is hovering on the ballot paper

    • the viceroy’s gin

      Heh. “Stakhanovites”. It’s been a while since I heard that one. Which quotas are they exceeding in the Londonistan bubble, I wonder?

  • swatnan

    A ‘miracle’ by definition is an unexplainable phenonomen.
    And despite Frazer’s carefull analysis he and every other Economist hasn’t a clue how and where this sudden change in fortune and growth has come from. In the same way that it suddenly appeared on Britains doorstep like Orphan Oleg, it could just as easily disappear tomorrow like Crimea from the Ukraine. These are unknowns that we known absolutely nothing about. And I challenge any Economist to tell me otherwise.
    ‘There are more things in this Heaven and Earth horatio that we know b****r all about’

  • Lady Magdalene

    The problem with immigration from the EU is that it is uncontrollable and these are small and over-crowded islands (particularly in the SE).
    A strengthening jobs market here is just going to suck in more and more EU immigrants from the EU’s Euro-unemployment-zone in the south and the USSR’s former disaster-zone in the East.
    And as Migration Watch recently reported, immigrants – even if they’re working – cost this country £3000 a day in welfare and public services.
    Most of them are taking low-paid jobs, so they are paying virtually NO tax.

  • Count Dooku

    Perhaps Osborne isn’t crowing about it because the Govt cannot create jobs. This is pretty fundamental. It can only steal it from someone and give it to their inefficient bureaucratic cronies.
    Only the private sector creates jobs, prosperity and wealth.

  • Patrick

    Osborne needs something to wow the crowds with in next year’s GE giveaway budget. Maybe he just doesn’t want to dilute the good message on savings and pensions in this budget. The jobs goody (and others) are still there in the Ozzy armoury. He’s intensely political and will have worked out already what he wants to do between now and the GE. I guarantee that the jobs miracle is going to get plenty or airtime. Just not today.

    • Tom Tom

      He could abolish VAT for 30 days and double it after the election

  • Two Bob

    What a load of clap trap. Youth unemployment has barely changed.

  • Daniel Maris

    Altogether now – “I don’t believe it!”.

    Miracle mumbo jumbo.

    As others have pointed out, the nature of employment has changed.

    I suspect as well, that with the benefits squeeze, some of the black economy activity has gone white, which is good but not a real increase in employment (it might be one reason why overall productivity hasn’t improved).

    Another key issue is how many jobs are taken by desperate immigrants. Such employment is irrelevant to our citizens, the people who vote for our MPs who make the decisions on such matters as budgets.

    • Daniel Maris

      I might add that the red line on UK born workers does not support the interpretation in the article. Since the coalition came in, after three year of UK born and non-UK born employees tracking each other as near as damn it, the gap has opened up hugely, with something like 700,000 more jobs being created for workers born abroad! Also, it looks to me like the figure for the last quarter shows the gap widening, not closing.

      • Alexsandr

        hardly the coalitions fault. its that damn single market and free movement of people. Forpeople from the poorer countries of europe the minimum wage must look like a fortune. And they will be prepared to rough it sleeping many to a room to keep costs down.
        I know there are EE graduates working picking orders in warehouses. the wage there is more then they can get at home for a graduate job.

        • Tom Tom

          I should think Africa and Pakistan find minimum wage less attractive than Baby Bonds and Credits

      • andagain

        Did you notice that bit at the front of the graph when UK-born employment dropped through the floor, and foreign born emplyment stayed steady?

        A fact which suggests to me that you could end immigration tommorrow without having mush effect on the employment prospects of people born in the UK. Although it would be a good thing for the existing immigrants. The resulting higher prices could be spread over the mostly-UK-born entire population.

  • The BBC Sucks BBCs

    There’s jobs, & then there’s zero hour minimum wage jobs, how many of these jobs are zero hour minimum wage jobs? How many need to be topped up by tax credits? Until I see figures that show that these aren’t mainly zero hour minimum wage jobs that need to be topped up by tax credits, housing benefit & council tax benefit, I remain sceptical about this ‘miracle’. But if ‘the gap in job growth between people born inside the EU and outside the EU also suggests that the tightening in visa policies for non-EU workers is biting. This effect probably will continue’ then that flies in the face of the perceived wisdom of the BBC/guardian/Indy/huffpost etc. all of whom claim that foreign migrant workers have no effect on indigenous employment & it also suggests that the job prospects for UK citizens is boosted by cutting immigration. Why don’t you run with that story Fraser?

    • Alexsandr

      i am on a zero hours contract. but i am a freelance IT worker, so if i dont have freelance work I dont get paid. I use a managed service company. Its a convenient way for working for me. so not all zero hours contracts are bad.

      • Tom Tom

        The Managed Service Company is the better deal though

    • Tom Tom

      Tax Credits show up as a lag on Income Tax revenue growth

    • Count Dooku

      Whine whine whine. No one forces anyone to take a zero-hours contract and if you looked at the data you’ll see that the rise in employment s being driven by full-time and self-employed people.
      A job is a job is a job. If people are working and gaining skills then their private contractual agreements with their employer should be none of your business.

      • the viceroy’s gin

        It is if we’re discussing what is really important here, something more in line with disposable income available per capita, and other such analysis. The top line number is only a part of a story. You have to dig deeper, and it may mean analyzing the frequency of these “contractual agreements” and other such indicators you find to be out of bounds.

        • Count Dooku

          Why are you concerned about other people’s legal contractual employment terms?
          Luckily the UK govt hasn’t attempted to implement pay policies outside the public sector for decades. Outside taxaction and monetary policy, there’s little the govt can do on living standards. That is how it should be.

          • the viceroy’s gin

            I’m concerned with a properly comprehensive collection of data concerning employment and income and disposable income. You shouldn’t extrapolate any further than that required data collection and analysis. We’re discussing data sets here, and these are important. The Camerluvvies are cherrypicking and massaging the ones they want to promulgate, but it’s best if more complete and accurate data be substituted for those creations.

            • Count Dooku

              You may question the stats to your heart’s content. I’m not going to comment on that.
              I don’t care what the composition is of the labour force. I am concerned that my employer pays me well and the govt doesn’t tax me at unreasonable rates.

              • the viceroy’s gin

                But you are commenting on that, lad.

                It’s really too bad that your thinking is too shallow to be concerned with the composition of the above mentioned statistics, but apparently the Camerluvvies are, or at least their version of them. So are others of us, even if you’re not.

                The above discussions didn’t mention your employer, your pay or your taxes, lad.

                • Count Dooku

                  Hahaha. Glad to see you are “capable” of deep thought. I was starting to worry.

                • the viceroy’s gin

                  I was never worried that you were, lad.

      • The BBC Sucks BBCs

        It is our business if the employer isn’t paying them enough to live & their income has to be topped up by tax credits paid by the taxpayers.

        • HookesLaw

          Its our business if the employer goes broke and all his staff thrown out of work with no wages at all..

          • The BBC Sucks BBCs

            Why should the government subsidise private businesses that can’t make a profit?

        • Count Dooku

          Then the simple solution is to scrap tax credit (which the govt controls).

        • HJ777

          And if the alternative is no job and so their entire income has to be paid for by taxpayers?

          • The BBC Sucks BBCs

            The alternative is to lower taxes on business such as business rates & NI.

            • HJ777

              Of course, I agree that it is ridiculous to criticise employers for not paying people enough to live on while at the same time taxing them when they employ people and taxing those employees on what is deemed an inadequate income.

              However, insofar as business rates are a form of land value tax, there is logic in business rates (so long as they are not disproportionate to other property taxes).

          • balance_and_reason

            Thats capitalism my friend, and in an unfettered system, a better performer will take up the slack, serve demand better and more efficiently, and society wins…..pay attention.

        • balance_and_reason

          now who’s the freaking socialist, listen to yourself.

      • Tom Tom

        “self-employed” defined how exactly ?

    • Richard

      does it really hurt that much to say the numbers are good or are you labourites really hoping that it all goes belly up? Disgraceful attitude from a group of people who were quite happy to chuck money at people, allow them to fester at home all day and contribute nothing. Whilst of course Brown and Balls f****ed up the economy.
      You agree with the welfare cap – okay then – where will you cut? Lets see some ideas please or are there none?

      • The BBC Sucks BBCs

        Labourite? Where did you get that from? I’m UKIP, welfare cap? I’d abolish all welfare, including housing benefit & just have a £6000 per year minimum income/negative income tax for all British citizens living in the UK over 21 who don’t live at home & I’d raise the income tax threshold to £12,500. I’d radically cut immigration & after shipping out all the illegal immigrants I’d probably abolish the minimum wage & let workers & employers negotiate free of government intervention for salary.

        • Richard

          Hmmm, not wanting to offend you but have you missed some medicine lately? I think some of those ideas are more suited to Putin than Bolton.

          • the viceroy’s gin

            …the typical socialist LibLabCon response to conservative thought.

            • Richard

              far from it, I will almost definitely vote Conservative – but I do not think the extremist views as listed above represent where I see the UK coming or going from. Create wealth and opportunity (via private industry|) but have some compassion for people less fortunate, surely we can afford that? If you want radical policies, repeal Uni’ fees, introduce flat rate income tax, abolish corporate loopholes to avoid tax (ala google, amazon) and reduce the size of parliament

              • HookesLaw

                To mr gin everyone is a socialist who is not an aryan with a white sheet over his head.

                • Tom Tom

                  You should wear a winding-sheet

              • the viceroy’s gin

                It doesn’t matter who you vote for, lad, if it’s one of the socialist LibLabCon clones.

                And it’s only you LibLabCon socialists who call conservative thought “extremist”.

                • Richard

                  I’m neither a socialist or a ‘lad’ sonny boy.
                  Merely a human with a conscience – you should try it. It doesn’t stop you being wealthy but you do sleep better at night.

                • the viceroy’s gin

                  …all socialists resist being called socialist, these days. You’d definitely qualify, lad.

                  And the surest indicator of a socialist is when they start yammering about “conscience”…. as defined by you socialists, of course.

                • Richard

                  Boy, so anyone to the left of Atilla the Farage is a socialist eh? About sums UKIP up really. No, boy, very much a capitalist who wants to earn enough money to live comfortably but not have to drive by peasants and beggars on my way to work. Try coming up with some thought through policies though, as I am prepared to listen.

                • the viceroy’s gin

                  No, not anyone to the left of anybody is a socialist, lad.

                  But you are a socialist, most definitely. You are as pure a socialist as there is. Read your above posts, and try to understand that you fit the profile in its entirety.

                • Richard

                  lay off the gin sonny, wait until daddy gets home. You have no idea what you are let alone any clue whatsoever about me. Why not emigrate to the the Isle of Man if they’ll let you in without your nurse.

                • the viceroy’s gin

                  …yes, that’s where you started off above, with that sort of nonsense. You socialists are good for that. It’s another tell.

                • balance_and_reason

                  Oi, lay off the Isle of Man; they had the last sensible policy on theft and homosexuality in the UK before the filthy eurocrats got innvolved.

              • Count Dooku

                To be fair to Mr BBC the -ve income tax is precisely meant to prevent people becoming destitute.

                • Richard

                  It’s Viceroy Gordons who my ire is mostly directed at!! As I’m writing this I can feel the force Count. (Not long to wait for the new ones, are you in any of them do you know (they can always stick your head back on – think Dallas)

          • The BBC Sucks BBCs

            Milton Friedman supported a minimum income/negative income tax. No fan of Russia & Communism he.

            • HookesLaw

              Various studies and trials over a period of time have suggested that NIT is not particularly workable.

          • HookesLaw

            Kippers love Putin. Lets face it when those policies are espoused to the public the only way they would gain power would be by a violent coup.

            • the viceroy’s gin

              Hey, you socialist Camerluvvies love violent coups, lad. You promote them all over the world, including those of your islamofascist headchopping buddies in Syria and Libya.

              • HookesLaw

                No one is ‘promoting’ any coups. More of the bigoted fantasy which fills your hysterical world. How is the grand wizard these days?

                • the viceroy’s gin

                  Of course you Camerluvvies are promoting violent coups, laddie.

                  You particularly love them when your islamofascist buddies are involved. You Camerluvvies are pleased to see Christian heads get chopped off, and you’re willing to pay good money to see that done, as we know.

  • Gareth Hunt

    Osborne probably felt inclined to ‘gloss over’ unemployment because of the very real number of part time and zero hour contract employees. Low unemployment can quickly be turned around as an example of high underemployment.

    This success needs to be placed within the context of a changing work environment. The rise of freelance and outsourced support and the families with two or three jobs doesn’t wholly support the premise that ALL of Britain is hard at work!

    • Makroon

      Yeah, that’s right, but the hundreds of thousands of non-jobs and client jobs in the public sector created by Labour and paid for by the tax-payer, were all “legit” I suppose ?
      You clowns are priceless !

      • Two Bob

        Both situations are unacceptable. Considered that?

      • Tom Tom

        but there are Romanians being born to take up jobs as translators at DWP for their fellow nationals gaining Consumer Credits to boost the economy

    • Dan Grover

      The last set of figures from the ONS showed that full time positions were growing faster than part time or zero hour ones. Do you have more recent data to suggest this trend has reversed?

    • HJ777

      I believe that the figures show that most of the recent rise in employment is for full-time jobs.

      Of course, there are many part-time and zero hour contract jobs, but we are talking about changes in unemployment, not absolute levels and is there any evidence of a disproportionate rise in part time or zero hours contracts? I don’t know – do you?

      Incidentally, surveys show that zero hours contracts (which only account for a small fraction of employees) are very popular with most of the people on them – because they value flexibility as much as their employers do.

    • balance_and_reason

      and your point

Close
Can't find your Web ID? Click here