The reality behind George Osborne’s job creation claims

8:33 am - March 21st 2013

by Richard Exell    

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In his Budget speech, George Osborne said: “We’ve helped business create not a million new jobs, but one and a quarter million new jobs.”

The reality is that private sector job creation has been good, but not that impressive.

As it happens, new statistics on public and private sector employment were also published yesterday, so we can look in some detail at this claim.

Budget 1

Firstly, 196,000 jobs in further education were re-classified from the public sector to the private last year; to take account of this we need to reduce the public sector losses and private sector increase by this amount:
Budget 2

Secondly, it isn’t reasonable to include all the gains in between March and June 2010.

For one thing, the new government hadn’t had sufficient time to have much effect on these figures and in any case they weren’t elected till May. This sounds like a niggle but it isn’t: March – June 2010 was a very good quarter for employment, with 293,000 private sector jobs added, and just 17,000 public sector jobs lost, a net increase of 276,000.

Yesterday’s monthly employment figures indicate that since the three months April – June 2010, total employment has grown 757,000 – substantially less than the 890,000 figure in the tables above. The increase in private sector employment that could possibly be the result of the current government’s policies is almost certainly more like a million than a million and a quarter.

And even this figure rather over-states the improvement. 40% of the overall (public and private sector) increase in jobs has been in self-employment, government schemes and other unpaid work and 30% has been in part-time employment – the increase in the number of employees working full-time has been just over 400,000:

The irony of all this is that if the government and its defenders could have avoided the temptation to over-egg the pudding, they would actually have quite a good story to tell: an increase in private sector employment of about a million, total employment up more than three quarters of a million, 400,000 extra employees working full-time – these are all reasonable results at a time when growth has stalled.

But a decent picture wasn’t good enough, it had to be a masterpiece; unfortunately, the reality simply isn’t as rosy as they want us to believe.

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About the author
Richard is an regular contributor. He is the TUC’s Senior Policy Officer covering social security, tax credits and labour market issues.
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Reader comments

I would like someone to look into the number of public sector NHS jobs that are being reclassified as private sector jobs as employees are forced to move from the public sector NHS to the private sector as companies such as Richard Branson’s Virgin Care moves in to take over large swathes of NHS care. If employees protest they are told if they don’t like it they can resign!This is happening all over the country.

I can see that you are comparing total employment with the jobs created claim, but am wondering why when they are two very different things. There is a tenuous link, but that’s all.

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