Cameron misleads parliament on jobs figures

The PM falsely claimed that 500,000 private-sector jobs had been created since the election.

One of David Cameron’s favourite myths is that half a million private-sector jobs have been created “since the election”. He repeated it at today’s PMQs. Unfortunately for the Prime Minister, the data tells a different story.

Since March 2010, private sector employment has risen by 575,000 but Cameron’s use of the phrase “since the election” means that any figures from before 6 May are irrelevant. However, to complicate matters, the Office for National Statistics figures in question straddle the election, covering 1 April to 30 June. But the fact that private-sector employment has risen by just 264,000 since June 2010, means that, as Channel 4’s Cathy Newman has previously noted, Cameron’s claim only holds good if we assume that 236,000 jobs were created between 6 May and 30 June. The ONS doesn’t publish month-by-month figures but the data that we do have suggests that the majority of job creation in Q2 2010 took place before the election. The ONS’s “experimental” labour force figures show that 129,000 jobs were created in April 2010 but that 89,000 were lost in June.

Cameron and George Osborne have consistently claimed that private-sector job creation will “far outweigh” the job losses in the public-sector. But in the last year, 240,000 public-sector jobs have been lost and 264,000 private-sector jobs have been created, a net increase of just 24,000 [see graph]. Worse, the Chartered Institute of Personnel and Development [CIPD] has predicted that 610,000 public-sector jobs will be lost by 2016, 210,000 more than forecast by the Office for Budget Responsibility [see Box 3.6 on p. 73 of the OBR’s Economic and Fiscal Outlook].

You don’t need to be a statist social democrat to be troubled by this prediction. Every public-sector job that is cut costs the state around £8-10,000 in benefits and lost taxes. The CIPD, hardly a hotbed of radicalism, has called for the government to halt its public sector job cuts until the private sector has recovered. If Osborne wants to avoid even worse unemployment figures, he should follow their advice.

P.S. Don’t miss our special Plan B package in tomorrow’s issue. Nine of the world’s top economists, including Noble Prize winner Christopher Pissarides, Jeffrey Sachs and Robert Skidelsky present George Osborne with their alternatives to austerity.