Brown's “new jobs” boast is down to immigration
Wednesday, 10th September 2008
Gordon Browns boast of having created three million new jobs has always had to come with the major unspoken caveat that (according to the Statistics Commission) 81% of these new jobs in this working-age population are accounted for by immigration. Yet for my cover story on immigration tomorrow I asked the Office for National Statistics to do one further exercise for me: break it down by public and private sector. The results were as I expected. In the period Apr-Jun 97 there were 18.1m UK-born people working in the private sector. In Apr-Jun 07, it had actually fallen – to 18.0 million. So strip away immigration and state sector expansion and there are fewer British jobs, not more. The data for the respective period in 2008 is not out yet, but in the current environment it wont be upwards. The ONS kindly prepared the report for us on request, so I cant link to it. But Ive put it as a PDF here .
I say in the piece that immigration has allowed Gordon Brown not only to boast about new jobs but to avoid tackling the problem of UK joblessness. The DWP kindly sent me a recent study (another PDF ) theyve done comparing welfare caseloads right from 1979 (the previous series started only in 1999). Its important, as so much of data were given has a year zero policy which doesnt show how much progress was being made under the Tories. GCSE improvement, for example, has slowed under Labour. I was curious to see what work was made cutting the welfare caseload.
The DWPs data shows a decline from 5.06m in Nov97* to 4.18m in Nov07 a decline of just 17% for all out-of-work benefits. Pretty dismal progress, when you consider that Brown had what he describes as the longest period of economic expansion for a century. But what puts it into perspective is what was achieved the Lawson boom. Between May87 and May90, the same welfare caseload was cut by 19%. So Thatcher made a bigger dent in welfare dependency in her third term than Labour has managed in all three of its terms put together.
There is a rule with economic booms: its not the size thats important, its what you do with it that counts. Lawsons was shorter-lived, but he used it to tackle British joblessness and repay net debt (14.5% of GDP when Thatcher left office, on the OECDs measurement). Brown used his to ramp up debt – now 32.9% of GDP – then binge on foreign labour to avoid painful welfare reform which his government is trying to do only now, in the middle of a downturn.
One final point. As Liam Byrne likes to say, the millennial wave of immigration has indeed been global. But its impact on Britain was not unavoidable. France, for example, saw immigrants as a share of its workforce slip from 11% to 10% between 1997 and 2006 according to figures which Eurostat sent me. The UK figures went from 7% to 11%. Others: Denmark (from 4% to 6%) Finland (2% to 3%) Sweden (6% to 13%)
Where next for immigration? As an enthusiastic supporter of it, I was dismayed to be unable to find any concrete proof that its good for the rest of the economy. Depending on what you count (kids? proportion of defence spending?) you can argue its impact to Britain is plus 2.5bn or minus 5bn as Prof Bob Rowthorn has shown. Economists and think tanks wage war over this, and my verdict is that theres no clear answer. As Britain is one of the most tolerant countries on earth, all this has been a concern here without being a toxic issue (apart from in Westminster, where theyre been terrified of it since Enoch in 1968).
With more people now competing for fewer jobs, the migration debate might yet turn sour. Only a third of immigrants are Europeans, so while the Poles may go off to Dubai or countries which dont have bombed-out currencies, it wont necessarily stop the rest of the flow. If I were Cameron, Id have this down in the things that might blow up on my watch box. Thats why Frank Fields intervention with Balanced Migration is important. I wish I could find data to disprove him and Sir Andrew Green from MigrationWatch, with whom hes working, but I cant. Cameron will have to swallow his own instinct not to go near immigration, and tackle the issue head-on. When he does, hell find a country more than ready for the debate.
*I used Nov97 as my starting point as the only earlier year was May96. There is no May97 entry, and I suspect that what changes happened between May and Nov 97 couldnt be attributed to Labour policy.
P.S. The Thatcher years were, of course, ones of painful deindustrialisation and it was here that the error of lumping unemployed into incapacity benefit (sustained by Major and Blair) was first made. So her overall record is as the DWP figures show one of leaving 80% more on benefits that she found. But her tenure was one of recessions, economic wars and wholesale economic realignment. Brown had a golden legacy, and did a great job claiming credit for the economic upswing. As Warren Buffet says, only when the tide goes out do you see whos swimming naked.