How Many Million Unemployables?

Tyler has just attended a rather depressing event hosted by a normally rather upbeat think tank. It was a seminar on a question we've mulled many times - Where will all the new jobs come from?

The correct answer of course is that nobody knows.

Nobody knows because nobody ever knows ahead of time where the new jobs will come from. And as we've blogged before, the best thing government can do to assist is to cut taxes, cut regulation, cut working age welfare and the minimum wage, break up public sector monopolies, decentralise, and cap mass immigration.

And that's pretty well all we can say. Other than reminding people that in the three decades following the invigorating pro-market reforms of St Maggs, our "Sick Man Of Europe" economy managed to throw off its bedclothes and create 6 million new jobs - and that net of 4 million fewer jobs in manufacturing (see this blog).

To be fair, none of today's panel members disagreed with the St Maggs' prescription for private sector jobs growth (well, OK, a couple of panelists weren't keen on welfare cuts). But that's mainly because her prescription wasn't really mentioned at all.

Instead, there was much talk of difficulties with people whose "labour market characteristics" make them unappealing to potential employers.

Labour market characteristics?

Yes, that's things you will know better as motivation, work ethic, and previous employment record. Labour market characteristics turns out to be a euphemism for unemployable. And according to one of the panelists, such characteristics now cripple large swathes of the working age population in the old high unemployment blackspots we've blogged so often.

So how many people are affected? Just how many million unemployables have we now got? We've taken a quick look.

Overall, Britain has 40 million people aged between 16 and 64 (the age band the ONS counts as working age adults). Of those, 11.7 million are not in employment. So that's roughly 70% of the working age population working, and 30% not working.

Fortunately, not all of those 30% are people suffering from labour market characteristics. A big chunk of the younger ones are still in full-time education, and hopefully will find employment in due course. And a big chunk of the older ones either have working partners supporting them, or they're plutocrats who don't need to work.

Stripping out those groups, the hardcore unemployables are among the 5 million people of working age who are entirely dependent on welfare handouts - about 12% of the working age population.

So how many of those 5 million are unemployable?

In truth we don't know. But up until 2008 our economy had experienced the longest period of boom since records began. Between the beginning of 1997 and mid-2008, 2.8 million new jobs were created (net). It's surely reasonable to think that anyone who really wanted a job should have been able to get one.

Indeed, so keen were UK employers to fill those jobs that they actually imported new workers from overseas. Foreign workers flooded in, and as things stand today, 86% of the new jobs created since 1997 are filled by workers born overseas. 86%!

Even at the peak of the boom, we still had 4.3 million working age people dependent on welfare - over 10% of our working age population.

4.3 million apparently unemployable people.

Depressing.

Both for us and for them.

We Don't Make Anything Anymore

On the starting grid

You know how our problem is that we don't make anything anymore? How most of our manufacturing base has already been exported to China, and that the government should damned well do something before the rest joins it?

Well, Tyler's local area is bucking the trend. Just down the road, McLaren Automotive is opening a brand new factory to build its brand new road-going sports car, the snappily named MP4-12C. If the car is a success, it's reckoned it will create thousands of new jobs.

Which is brilliant. Especially since it gives us some key pointers to the future of British manufacturing.

First of all, the McLaren sports car is no family runabout. It will be priced north of �150 grand, and BOM's motoring correspondent says it will be pitched at the same high-rolling market segment as the Ferrari 458 Italia and Lamborghini Gallardo. Production is planned to be just 1000-2000 pa (street value �150-�300m).

This is manufacturing focused on high-tech luxury goods, aimed at emulating the kind of global success achieved by the resurgent Rolls Royce, and capitalising on Britain's F1 heritage of speed and engineering excellence (oh yes). Critically, it is a high value-added product that will not be competing primarily on price and volume.

Second, it's happening in the already prosperous, and already crowded, Greater South East. The GSE's advantages of geography and skilled motivated workforce seem to have been critical, as presumably they were in BMW's decision to locate their new RR factory in genteel Goodwood, rather than our old friend Hull. As we've blogged many times, to get any new business up to Hull, you have to offer something even more compelling - much lower taxes.

Third, most of the new jobs - by a ratio of 2-to-1 - will come not in the factory itself, but from the spill-overs into the local economy (shops, healthcare, schools, etc etc). Just like the City, our world-beating manufacturers are the bed-rock that holds everything else up. Which is why we should praise and value them, not devise new ways of dragging them down.

Fourth, the real value added at McLaren will not be bashing metal. Indeed much of the actual bashing (or carbon fibre shaping as it is today) will be done elsewhere, often abroad. No the real value-added lies in the design, the management of the production process - especially quality control - and the marketing. Not, it must be said, areas in which British Austin Allegro manufacturing has always excelled.

And that's why we shouldn't necessarily be concerned by the long decline in UK manufacturing production as measured. To the extent we are exporting the commodity, low value-added, end of manufacturing we're not losing that much.

As you probably know, although China has become a major exporter, many of its products are manufactured under contract for western companies, using many imported components, and the percentage of value-added retained by China is quite small (it has been famously estimated that of the $150 cost of a Chinese assembled Apple iPod, only $4 actually goes to the Chinese).

And finally, that long looong decline in British manufacturing... the one we hear so much about... er... just a minute... where's it gone?

When you look up the actual stats, you get rather a shock. Because setting aside the current downturn, by 2007 UK manufacturing had reached the highest level of output in its entire history - even back when we were the workshop of the world. Here's the chart (the ONS stats only go back to 1948):

WTF?

Well, some industries, like textiles, have indeed seen a very pronounced decline. But others have delivered big growth. For example, Britain's world-beating pharmaceutical industry has driven an elevenfold production increase in the chemical and artificial fibres sector since 1948.

The fact is that when people talk about the problem with manufacturing, they're not really talking about output at all - they're talking about employment. Since 1950, despite the increase in output, employment in manufacturing has fallen from over 8m down to less than 3m - a big fall, especially when you remember that many of those job losses have been concentrated in particular regions.

But in truth, for Britain, high employment manufacturing is a thing of the past. Massive productivity growth - A GOOD THING THAT'S MADE US ALL RICHER - combined with globalisation, has blown these jobs away.

And instead of crying over the past, we need to find ways of rewarding the likes of McLaren for setting up in Hull instead of Woking (or better yet, get Merc to set up in Hull instead of Hungary). State direction won't do it. State subsidies are expensive and distortionary. The only real course is lower taxes and less regulation - just as we've blogged many times.

Yes, it would be much better to cut tax and regulation right across the country. But the pressing priority has to be some action in places like Hull.

What McLaren shows is that Britain can still attract manufacturing investment. We can still make things. And we can still create real jobs outside the financial sector.

Jobs Growth - Even In The Great Depression

Wages up, jobs up... maybe the Great Depression wasn't quite as depressing as they'd have us believe

The left continues to rubbish the Office for Budget Responsibility's forecast of 2m new private sector jobs by 2015-16. This morning the BBC's Evan Davis described it as "quite a claim", and according to the Grun, Alan Budd is going to be hauled before the Treasury Select Committee to confess his manifest pro-Tory bias.

But in truth - as we blogged a couple of days ago - Budd's forecasts do no more than suggest a return to the same sort of private sector jobs growth we've seen for at least the last two decades.

The key issue is whether we can trust the private sector to deliver these jobs, given the uncertain international background. We're with Budd in believing we can, but the left reckons we can't, and warns of a second Great Depression if we and others push ahead with fiscal retrenchment.

Which is why we've taken a closer look at what actually happened to jobs growth during the Great Depression itself. Because as our previous blog noted, despite the Depression, during the early 1930s the number of jobs actually increased.

The chart above shows what happened to total employment throughout the 1920s and 1930s*. And as we can see, it was on a rising trend throughout the period, driven by the private sector.

To be sure, the onset of the Depression in 1929/30 brought a significant fall in employment with about 1m jobs lost. But within 3 years, employment was growing again. And within 5 years it has surpassed its 1929 peak. All driven by the private sector (this was pre-rearmament, and took place despite the fiscal restraint imposed by MacDonald's government).

So how was it done?

In a nutshell, monetary policy was loosened substantially, with interest rates cut from 6% to 2% (Bank Rate), and sterling depreciated by about 30% (only possible because we abandoned the Gold Standard). And that - along with the fact that no British banks were allowed to fail - was enough to save us from worst ravages of the global downturn. Despite the fact that world trade fell by a whopping 66% between 1929 and 1934.

Which is all encouragingly similar to where we find ourselves today. Yes, there's pain, and yes, jobs are still being lost. But official interest rates are even lower than they were during the Depression, sterling has depreciated by about 25%, and no British bank has been allowed to default on its deposits. What's more, although world trade fell 11% last year, the OECD expects it to grow by 11% this year with another 8% to come next. The key conditions for a decent UK private sector revival are already in place.

Of course, Cam and George do need to help the private sector create the jobs we need, by implementing the tax cuts and other measures summarised in our previous blog.

But the left's warnings of a second Great Depression are not only wildly overstated, they also ignore the inconvenient fact that UK jobs actually increased during the first one.

PS I know what you're thinking - if there were so many jobs being created during the Depression, how come there was so much unemployment? Well, as always, the new jobs were in the new industries (like cars), and they were not generally located in the same areas as the old declining industries. But abstracting from that, the reason that jobs growth did not shorten the aggregate dole queue back to 1929 levels until almost the onset of WW2 was that the working population was also growing quite rapidly. So while a net 0.6m new jobs were created between 1929 and 1935, the working population grew by around 1.4m. Which just goes to show how rapid population growth may not be the blessing the left make out when they're promoting mass immigration. (There was also the small matter of real wages being stuck at too high a level to clear the market. As described in the book referenced below, reductions in working hours following WW1 had cut worker productivity but had not been matched by pay cuts, so costs per worker increased, making them less attractive to employ. And this problem was compounded by a substantial increase in unemployment benefits, which effectively put a higher floor under wage rates... unless you're a Keynesian of course, in which case you ignore market economics and put the whole thing down to deficient demand and a lack of deficit spending.)

*Footnote - The chart is copied from The Cambridge Economic History of Modern Britain, Vol II, Ch 13. Well worth a read if you like that kind of thing.

Labour's Legacy Of Misery

We've blogged the Misery Index before. It was first devised when Labour last had a go at wrecking our economy, back in the 70s. It comprises the sum of the annual increase in the RPI and the unemployment rate, which are two key statistics in gauging economic misery.  

The latest reading has pushed the index up to 12.4%, comprising 4.4% RPI inflation and an 8% unemployment rate.

So they really have done it again. When Labour came to power, the index was running at 10% and falling. It is now 12.4% and rising.

And today's unemployment stats show quite clearly that Brown's apparent miracle of stabilised employment in the teeth of recession was no more than a cruel illusion. And the unemployment rate of 8% compares to the 7% they inherited.

What a disaster.

PS Tyler lunched with a friend who has now completed his contingency arrangements to bail out on 7 May. He has a private pilot's licence, and even if the air space eco police have again closed us down, he's off. He reckons remaining here with Brown still at the controls will be far more hazardous to his health than any conceivable cloud of volcanic ash. But he'll need an early start - our guess is that the runways could be pretty packed that day.

Unemployment - What's Really Going On?

 

...although they have got better at fudging the numbers

Does anyone understand what's really going on with the unemployment numbers? Today's shock ONS stats showing that the number of unemployed claiming benefits has gone down seems frankly incredible. And yet the ONS are not liars, so what's happening?

The first thing to remember is that not everyone who is unemployed claims benefits, or even registers with a JobCentre. Tyler personally knows one unemployed City type who has been jobless for a year but has not registered for anything - it wouldn't help him, so why should he bother? And from what we can see, many of the newly unemployed middle class feel exactly the same way. The claimant count numbers are highly misleading.

So rather than looking at the headline claimant count, let's concentrate on the ONS stats for the total jobless, whether claiming benefits or not. And let's put them in the context of the growth of the overall population of working age.

Now, the ONS distinguishes between those it says are unemployed (whether claiming benefits or not) and those who are of working age but are economically inactive. But what does that mean exactly? Here's how the ONS explains it:

"Economically inactive: People who are neither in employment nor unemployed. This includes those who want a job but have not been seeking work in the last four weeks, those who want a job and are seeking work but not available to start work, and those who do not want a job."

In contrast, the unemployed are defined as those who are:

"without a job, want a job, have actively sought work in the last four weeks and are available to start work in the next two weeks or;

out of work, have found a job and are waiting to start it in the next two weeks."

So what does that mean for Tyler's City acquaintance exactly? He most certainly considers himself economically active, but he's sitting on a reasonable pile of cash, and he's not scrabbling round applying for any old job that happens to come up in a given four week period.

So in ONS terms, is he unemployed or economically inactive? Or does he flip between the two, depending on whether during the last four weeks he's had a chat with some contact about a possible job working for a Maltese hedge fund?

The ONS probably won't have a view on that, if only because they've never asked him. And if they did, he'd probably tell them to... er... push off.

Which highlights another important point about the ONS figures - they're based on an entirely voluntary survey, and unsurprisingly, the response rate has been falling through the recession. It's now standing at just over 50%, which means an awful lot of potential non-respondent bias, especially from people like Tyler's acquaintance.

With that in mind, how do the figures actually stack up?

The latest ONS stats are published as a moving three month average, and the latest relate to the 3 month period November 2009 to January 2010. Comparing them to the corresponding figures from 12 months ago gives us the following picture:

So as we can see, over the last year, employment has fallen by nearly 500,000. And it would have fallen by much more if the public sector had not gone on a hiring binge. Between autumn 2008 and autumn 2009, 70,000 joined the public sector payroll, while private sector employment shrank by 600,000.

On the technical ONS definition set out above, unemployment has risen by just under 400,000. But at the same time, the working age population has grown by 200,000. Consequently, the ranks of the so-called economically inactive have swollen by 370,000. And while that may have nothing to do with the collapse of employment opportunities, a much more likely explanation is that most of these newly inactive are in the same boat as Tyler's ex-City acquaintance - ie unemployed in the normal meaning of the word.

Which means that real unemployment has risen by 750,000 - virtually double what the headline number says.

Of course, another factor holding down declared unemployment is that the government runs a multitude of scams schemes to get people off the unemployment register and into some kind of disguised unemployment training programme. But while that reduces the number of official unemployed, in terms of the stats we're unclear how many of them show up as "employed" and how many as economically inactive - we'll try to find out.

Conclusion? The next time some government minister or apologist spouts all that stuff about how brilliantly they've managed to stop unemployment rising in this recession, you need to remember two key points:

1. Unemployment has been artificially held down by a 70,000 recruitment binge in the public sector - a binge that will have to be reversed after the election.
2. Real unemployment - including the 370,000 growth in the number of so-called economically inactive - has increased by 750,000 in the last year.

Footnote 1: When you scratch beneath the surface of the ONS stats you find a bit of a mess. In particular, their numbers for employment and unemployment - but not economic inactivity - include those over state pension age. Still, that doesn't affect our conclusions here - if anything, it means we are understating the real rise in unemployment because we are excluding the increased number of unemployed pensioners who would take a job if one was available but haven't actively searched for one in the last 4 weeks.

Footnote 2: Apologies - the initial version of this quoted an incorrect figure for the growth of public sector employment. We had forgotten to adjust it for the redesignation of Lloyds and RBS as public sector employers. It's now corrected, and it doesn't affect our figure for the real growth of unemployment (HTP a number of correspondents).

Jobs Haircut

The other alternative

Yesterday Tyler had a haircut. As usual he went to a shop owned and staffed by the Surrey Italians, one of a small local chain that's operated here for decades. But for the first time ever, his hair was cut by Il Padrone, the man who set up and owns the biz. Was there a problem?

"Certainly there's a problem. Our takings are down 30%, the landlords won't cut the rent, and our bills are going through the roof."

"30%? But why are your takings down that much? Surely people always need haircuts."

"Yes, but we used to do all the office workers here in town, and they're losing their jobs, or getting moved out to cheaper places. Hundreds have gone. Surely you've seen all the empty shops round here. Things are bad. We're all working part-time."

"Well, at least you're not facing competition from China - I mean, we can't import haircuts."

"What! We don't need to import haircuts. The Chinese hairdressers are coming over here - loads of them - they've just opened a new shop down the road. We simply can't compete."

****

As all undergraduate economists will know, in international trade theory, haircuts are always quoted as the example of something that cannot be traded internationally - the fact that haircuts are cheap in Shanghai  is supposed to be irrelevant if you live in Guildford.

But once you factor in NuLab-style unrestricted migration, that simple truth no longer holds. And as we've blogged before, it's often the previous generation of immigrants who really feel the pain of fiercer competition from the new migrants.

So what are we to make of today's employment stats? The headlines are grim enough, with both the claimant count and the number of long-term unemployed jumping to a 13-year pre-Lab high - ie both are now worse than they were before Brown's economic miracle got going. But what's going on beneath the headlines is just as worrying.

Over the last 18 months (Q2 2008 to Q4 2009), the number of people in jobs has fallen by 630,000. But at the same time, the number of people of working age has increased by 270,000. So the number of people of working age who don't have a job has shot up by nearly one million.

What's more, even among those who do have jobs, the number only working part-time has increased by 180,000 - ie the number of full-time jobs is down by 810,000. 

Or to put it another way, since the bubble burst, the proportion of the working age population in full-time employment has already fallen from 58.4% to 55.9%.

If we take a longer-term perspective, we can see that the potential labour force expanded rapidly under Labour. The population of working age has increased by 2.7 million, largely reflecting net migration. And until recently, jobs growth has nearly kept pace (up 2.4 million). That's even more jobs growth that we had under the Tories (1.4 million), and far more than during the sclerotic pre-Thatcher 1970s:

The question is though, where do we go from here?

The Tories built the platform for Labour's jobs growth, with their resolution of the union problem and trail-blazing cuts in corporate and income taxes. But that's all history now.

Labour is bequeathing Cam a disastrous jobs legacy, including a hike in the jobs tax (NI going up to 25.8%), and the jobs-destroying revenue-losing 50p income tax rate. On top of which, of course, tens of thousands of Labour's public sector non-jobs will have to be scrapped.

When it comes to incomes and employment, Tyler's hairdressers are not going to be the only ones taking a serious haircut. Whether it's Chinese barbers or higher taxes, the pressure on jobs is back again. And it's going to be with us for years.

Where Will The Jobs Come From?

Actually, it will soon be 3m

In yesterday's comments, Dreamingspire asked a question that's currently on many minds - given our krunched economy, where on earth will all the new jobs come from?

Unfortunately, the honest answer is that we have no idea. We will only know once they have arrived.

All we can say - as Dreaming himself said - is that the sharp fall in sterling should be good for jobs in export and import competing industries (just like it was during the thirties).

It's interesting to look back at how we got out of the last hole Labour left us in.

At the end of the 70s, we were the sick man of Europe, and the jobs outlook was grim. Callaghan's beleaguered government latched onto the new technology of microchips, betting that we could become world leaders and generate millions of new jobs. He poured hundreds of millions into a raft of companies which would become the winners of the future - Inmos, ICL, Cambridge Instruments, NEXOS all got our cash.

Yet none became the world beaters we were promised, and none provided the jobs the country needed (see this blog).

Despite that, over the next thirty years, our economy somehow managed to generate nearly 6 million additional jobs. And that was despite an eye-watering 4 million slump in manufacturing jobs.

How?

Well, jobs in health, education, and public administration increased by over 2 million. But even more important, jobs in finance increased by a whopping 4 million. And unlike the public sector jobs, they didn't have to be funded by taxpayers.

Here's the complete picture (click on image to enlarge):

Tyler doubts that anyone in 1978 would have predicted that outcome.

So can we look forward to a similar miracle of deliverance over the next thirty years?

Tyler is optimistic. He believes that despite the current problems, the markets will find a way.

But there are a couple of necessary conditions.

First, however tempting, the government should not try to "pick winners" like Callaghan did. All that will do is to burn even more of our money.

Second, the government should bust a gut to reduce taxes, especially corporate taxes, and to deregulate - just like you know who did during the 80s.

This is the only way we know to stimulate sustainable growth and employment.

Nice Work If You Can Get It

The wages of unemployment

Given that romantic strolls along sunset beach were out (on account of there being a howling gale and no sunset), one staycation evening Mrs T and I found ourselves watching a new C4 reality TV show.

It's about a woman who lives in a huge eff off mansion (Thornbridge Hall above), having made an even huger pile of cash.

She seemed jolly pleased with herself, as well she might. As the number one player in a growth industry, her business is booming. Even better, her biz is devoted to helping those far less fortunate than herself, so she and her staff get to feel real good about themselves.

But what really got our attention was that all her cash comes not from those she's helping, but from us - the battered and bemused British taxpayer. Our Simple Shopper Alarm began screaming.

The show is called Benefit Busters, and the lady in the mansion is one Emma Harrison, founder and chairman of a company called A4e (Action 4 employment).

A4e is a job broking company who describe their principal mission as being "moving people into jobs and promoting sustainable employment". Which right now is a very saleable proposition - especially to politicos who need something to clutch at as the economy sinks into the jobless joyless abyss. And Emma's trading results show just how saleable she's made it:

Now don't get me wrong - Emma is clearly a star, and a glance at her upbeat website (including her own personal lower case blog) shows just how well she's packaged and marketed her services. She makes tackling long-term unemployment sound like a branch of the entertainment industry rather than a canker that destroys lives. No wonder our clueless politicos and commissars have been such ready customers (Bonkers Blunkers is a �30k pa consultant).

So good luck to her for spotting and exploiting a great business opportunity (and here's her entry in the Sunday Times Rich List).

But as always, the big question is whether we taxpayers get value for money?

On last week's show, ten unemployed single mums living on benefits were put through one of A4e's six week re-employment programmes. They were under the wing of Hayley, a brassy Northern lady straight out of Corrie, who tutored and bullied them through the course. Mrs T and I rather took to her, although Vicki Woods was less impressed:

"A similar-sized woman to Jade Goody, but with Sharon Osbourne�s hair and make-up, Hayley... was comedically forthright. She told the women they were �dreary� and badly dressed, explained that work was a blessing, made them cry, kissed them better and eventually got five of them a job at Poundland. The viewer (me) was left loathing the loudmouth Hayley, empathising like mad with the poor dreary women."

(In case you missed it, you can taste Hayley here).

As Woods explains, only four of the ten women actually ended up with a job. And that was no more than a two week try-out at Poundland.

A4e's overall success rate?

According to Jim Knight, DWP minister of state for employment and welfare reform:

�The Department currently has 47 contracts with A4e for the delivery of a range of welfare to work provision. On those contracts where we count job outcomes, during the period 2008-09, 20 per cent of people starting provision delivered by A4e have started work. Some customers, however, will still be on provision.�

20% - hardly the greatest record.

Especially when you consider that some of those jobs will be displacing others who might have got them anyway (Poundland would have had to employ somebody). And especially when you consider the ever present risk of cream-skimming - ie only taking onto the programme the easiest to place candidates. And especially when you consider that some of the "successful" candidates will drop out again after a relatively short time.

We've blogged the pitfalls of job brokers before. They are everyone's Great Idea for tackling long-term unemployment. Yet there is virtually no evidence that they work in the aggregate. When the Public Accounts Committee looked at DWP's use of private job brokers under the New Deal for Disable People, they found:

"There are more than 500 providers contracting with Jobcentre Plus to deliver one or more of the disability programmes. The quality and value for money of provision varies widely and acceptable standards are not always achieved. Between 2002 and 2005, for example, over 50% of the learning offered in Workstep provider placements was judged unsatisfactory by the Adult Learning Inspectorate.

...Providers of the New Deal for Disabled People may be deliberately picking people who are easier to help, at the expense of the more difficult to help. The contract for New Deal for Disabled People specifies that providers must accept all self-referred people who are eligible. However, such a stipulation does not preclude subtle encouragement to the easiest to place and discouragement of those who would require more effort."

So good luck to Emma, and we hope she enjoys her mansion.

But don't expect us to believe she's giving us value for money.

The wholesale use of job brokers is turning into yet another triumph of the Simple Shopper's art. Dave and George will need to grip it soonest.

PS A4e has attracted a rapidly growing army of critics. In June it was revealed that it was being probed by the DWP for possible fraud: "The DWP started its investigation into A4e's Hull office in May 2008, after discrepancies emerged in "confirmation of employment" forms submitted by the company. Two recruiters filled in forms meant for employers who agreed to take on workers. In some cases, employers' signatures were falsified. One of the recruiters had also entered into a fraudulent deal with a local temp agency." And here's a dedicated blog on the New Deal Scandal, including many posts on A4e.

PPS During the TV prog, one of the unemployed women on the A4e course put her finger on the real reason we have so many long-term unemployed. It turned out her benefit level was substantially higher than what she could earn at Poundland. She was getting �460 per week on benefits, which was �40 higher than she could earn, even with the government's employment subsidy. So quite sensibly she jacked in the job and reverted to benefits. Now, I wonder if anyone can see the lesson for George...

Thank God For Mandy

Even the horriblest truths can't touch Mandy

On a morning when unemployment soared to a 14 year high, we listened to Mandy being interviewed by Evan Davis on BBC R4 Today. It reminded Tyler precisely why he must bust his gut to get Dave and co elected next May.

Yes, we do want Dave et al to be far more radical on public sector reform. And yes, we do think they should be much more ambitious on rolling back Big Government, tougher on crime, more focused on controlling immigration, etc etc etc.

But compared to another five years under the slithery Commissar Mendacity, Dave is offering the way, the truth, and the light.

There's something deeply unsettling about a man who can be quite so brazenly deceitful as Mandy. I mean, they all lie - we understand that - but only Mandy seems to thrive on it. The very act of lying seems to nourish him - he positively grows as the slings and arrows of outrageous truth bounce off his reptilian scales.

This morning poor Evan did his best to confront him with The Facts - the huge black hole in the public finances, the obvious reality that any future government will need to cut savagely, etc etc. But The Facts just fuelled His Lordship's dark powers:

"My dear Evan, your puny weapons cannot harm me. Soon I will be more powerful than you can possibly imagine. I am the Master now."

One issue that came up was the oft repeated claim that Labour's reflationary policies have saved 500,000 jobs - jobs that would have been lost had the evil Tories been in power. Davis did immediately challenge the second half of that claim, and he also pointed out that much of the reflation is down to the Bank of England's monetary policy not fiscal action by the government, but Mandy just pressed on regardless.

As it happens, this claim is something I've been meaning to look into anyway. So I've done some digging.

As far as I can see, the claim first surfaced in Brown's interview with the Times on 26 June. He said:

�That means we will return to growth more quickly and we will probably have saved up to 500,000 jobs that would otherwise have been lost. People will see we have made a difference to the path of the recession.�

Later at a press conference on 22 July, he turned up the gas:

"If we had not intervened and acted decisively, at least another 500,000 jobs would have been lost in this recession."

Needless to say, in Mandy's hands the claim has become even more grandiose. He now claims there would have been:

�...far in excess of 500,000 more jobs lost in the recession had it not been for the government and the Bank of England�s intervention.�

So in six weeks we've slithered all the way from "up to", to "at least", to "far in excess of".

But where did the half-million figure come from in the first place?

According to Mandy, it was the Treasury.

Is that even slightly true? All we can find on the HMT website is the following sentence in the Budget Report:

"5.23 Action the Government has taken from the 2008 Pre-Budget Report onwards has already had a critical impact in supporting employment. In addition to the fiscal stimulus and support for Jobcentre Plus, the January Employment Summit announced a further �500 million package, offering support for up to 500,000 jobseekers."

Could that be the original source of the figure? A pie-in-the-sky aspiration tossed out at one of those famous "summits"?

In the absence of some proper chapter and verse, we reckon that is precisely where the figure came from. It is complete and utter vapourware.

But as we say, at least this has served to remind us all why these corrupt black-hearted people must be thrown out.

They must join the swelling ranks of the unemployed they have done so much to create.

PS One question that arises from today's dreadful unemployment numbers is why the increase in the number of registered Jobseekers is so much less than the increase in the number of unemployed? There are now an estimated 2.43m unemployed, compared to "only" 1.58m registered and claiming Jobseekers Allowance. The answer of course is that many of the newly unemployed know that the JobCentres cannot help them. The experience of our acqaintances who've lost jobs is that JobCentres can help you fill in your benefit claim, but are next to useless in terms of finding a new job. You are much better saving your time to do your own job search. All you will get at a Job Centre is depression.

Update 13.8.09 - The Telegraph reports that the Treasury has disowned Mandy's employment claim (see here).