The PM’s been fibbing and the Coalition’s labour market policies are ruled by prejudice

Forget the evidence, ministers know the answer that will buy them votes


Today is the day to stand up for the truth. I watched David Cameron at Prime Minister’s Questions last week tell big fat pork pies. He claimed, at least twice, that employment in the UK was now 1 million higher than it was compared to when the Coalition was formed. A nice soundbite, but sadly totally untrue.

The number of jobs created since the Coalition was formed is well below a million, so he needs to apologise for misleading the House of Commons. The table contains the official Office for National Statistics data, in thousands. Readers of this column will be familiar with how the official statistics are calculated as an average of the single month data. The latest estimate of 29,869 is the average of the three monthly numbers for June to August, which should then be compared with the equivalent numbers from April to June 2010 (given the Coalition was formed in May 2010).

So based on the three-month averages, employment was up by 891,000, not a million. The most recent estimate is to compare May 2010 with the latest data we have for August 2013, which implies an increase of 642,000. This is how every other advanced country – other than Latvia and Greece – counts employment growth, based on single month survey evidence. Again, well below Mr Cameron’s entirely false claim of 1 million jobs created.

In a Tweet to me, Tory Party Chairman Grant Schapps claimed that there was a million job increase from February to April 2010 even though these data relate to March 2010, well before the coalition took office in May.  So he wants to take credit for the 133,000 jobs created under Labour between March and May 2010.

Note too that the single month data suggests that employment is falling steadily. Moreover we have also seen a rise over the last three months in the unemployment rate from 7.4 per cent in June to 7.7 per cent in July and 8 per cent in the latest August 2013 survey. Plus wage growth continues to decline to 0.4 per cent on the month and has even became negative in the public sector: -1.6 per cent, which means rapidly falling real living standards.

There were a couple of papers published last week that also cast further doubt on Coalition spin and its non-evidence based policymaking around the labour market: forget the evidence, we know the answer that will buy us votes and appeal to people’s worst prejudices. It’s all the fault of scroungers and foreigners claiming our benefits. Except it isn’t.

The first was a paper from Rebecca Tunstall* casting doubt on the claims made by the Department for Work and Pensions (DWP) on the likely revenues from the bedroom tax. The tax reduces housing benefit paid to tenants deemed to be under-occupying their homes, with the main aim of reducing UK housing benefit expenditure. It is also intended to increase mobility among social tenants, to reduce under-occupation and overcrowding and to help house people on waiting lists.

A DWP model based on assumptions predicted savings of £480m in 2013/14; however, Professor Tunstall used real data obtained from four housing organisations, which does not appear to match key the assumptions about claimant behaviour underlying the DWP’s model. Of particular relevance is that she was able to obtain details of DWP’s model from a Freedom of Information request. She found, using real world data alongside regional variations in impact, the total savings the DWP’s model predicts is reduced by a third, or by £160m. Typically, rather than engage in a serious debate over the sensitivity of their estimates and the appropriateness of Professor Tunstall’s estimates and methods, the Coalition sent out an inexperienced DWP junior minister to shoot the messenger. Esther McVey in a car-crash interview on Radio 4’s The World at One dismissed the report as not credible, even though she could not identify a single thing of substance wrong with it. Oops.

Then there was a very important new report on the numbers of housing benefit seekers from the European Union** that suggested the Coalition’s claims of hundreds of thousands of benefit seekers from the EU are entirely unfounded.

The main finding of the study was that employment is the key driver for intra-EU migration flows and had little or nothing to do with seeking out benefits. Income differentials alongside employment opportunities were found to be the main drivers of intra-EU mobility: “The possibility of earning more money is currently the main reason EU unemployed citizens consider when moving to certain countries.” The study found little evidence to suggest that the main motivation of EU citizens to migrate and reside in a different member state is benefit-related as opposed to work or family-related.  This was also borne out by evidence gathered for the UK case study prepared for the report. Work was the main reason for migrants coming from other EU countries to move to the UK between 2002 and 2011.

The study found that non-active EU migrants represent a very small share of the total population in each member state. They account for between 0.7 per cent and 1 per cent of the overall EU population. On average EU migrants are more likely to be in employment than nationals living in the same country. This gap can be partly explained by differences in the age composition between EU migrants and nationals, with more migrants than nationals falling in the 15 to 64 age bracket.

The authors also found that the expenditures associated with healthcare provided to non-active EU migrants are very small relative to the size of total health spending in, or the size of the economy of, the host countries. Estimated median values of the costs are 0.2 per cent of the total health spending and 0.01 per cent of GDP. Of course these include pensioners, the children and spouses of EU-migrants. The Home Office response followed the regular pattern of denial and obfuscation – “We consider that these questions place too much emphasis on quantitative evidence.”

So prejudice rules OK? It’s hard for me to take seriously anything the Coalition has to say about the labour market.

*Rebecca Tunstall, “Testing DWP’s assessment of the impact of the social rented sector size criterion on housing benefit costs and other factors”, Centre for Housing Policy, University of York, October 2013

** Analysis of member states’ social security systems of the entitlements of non-active intra-EU migrants report, submitted by ICF GHK in association with Milieu Ltd, October 2013

React Now

Latest stories from i100
Have you tried new the Independent Digital Edition apps?
iJobs Job Widget
iJobs General

Tradewind Recruitment: Maths Teacher

Negotiable: Tradewind Recruitment: Our exclusive client in St Albans Hertfords...

Tradewind Recruitment: KS2 Primary Teachers

Negotiable: Tradewind Recruitment: Key Stage 2 Teachers needed in Hertfordshir...

Ashdown Group: Finance Manager - ACCA/CIMA - St Albans, Hertfordshire

£55000 - £58000 per annum: Ashdown Group: A truly exciting opportunity has ari...

Ashdown Group: Credit Controller - London, Old Street

£25000 - £28000 per annum + benefits: Ashdown Group: Credit Controller - Londo...

Day In a Page

Read Next
'The Archers' has an audience of about five million  

The Archers: how many sensational plot twists can it get away with?

Simon Kelner

Daily catch-up: winter crisis for the NHS – Miliband and Burnham don’t know how to fix it

John Rentoul
Isis hostage crisis: Militant group stands strong as its numerous enemies fail to find a common plan to defeat it

Isis stands strong as its numerous enemies fail to find a common plan to defeat it

The jihadis are being squeezed militarily and economically, but there is no sign of an implosion, says Patrick Cockburn
Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action

Virtual reality: Seeing is believing

Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action
Homeless Veterans appeal: MP says Coalition ‘not doing enough’

Homeless Veterans appeal

MP says Coalition ‘not doing enough’ to help
Larry David, Steve Coogan and other comedians share stories of depression in new documentary

Comedians share stories of depression

The director of the new documentary, Kevin Pollak, tells Jessica Barrett how he got them to talk
Has The Archers lost the plot with it's spicy storylines?

Has The Archers lost the plot?

A growing number of listeners are voicing their discontent over the rural soap's spicy storylines; so loudly that even the BBC's director-general seems worried, says Simon Kelner
English Heritage adds 14 post-war office buildings to its protected lists

14 office buildings added to protected lists

Christopher Beanland explores the underrated appeal of these palaces of pen-pushing
Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Scientists unearthed the cranial fragments from Manot Cave in West Galilee
World War Z author Max Brooks honours WW1's Harlem Hellfighters in new graphic novel

Max Brooks honours Harlem Hellfighters

The author talks about race, legacy and his Will Smith film option to Tim Walker
Why the league system no longer measures up

League system no longer measures up

Jon Coles, former head of standards at the Department of Education, used to be in charge of school performance rankings. He explains how he would reform the system
Valentine's Day cards: 5 best online card shops

Don't leave it to the petrol station: The best online card shops for Valentine's Day

Can't find a card you like on the high street? Try one of these sites for individual, personalised options, whatever your taste
Diego Costa: Devil in blue who upsets defences is a reminder of what Liverpool have lost

Devil in blue Costa is a reminder of what Liverpool have lost

The Reds are desperately missing Luis Suarez, says Ian Herbert
Ashley Giles: 'I'll watch England – but not as a fan'

Ashley Giles: 'I'll watch England – but not as a fan'

Former one-day coach says he will ‘observe’ their World Cup games – but ‘won’t be jumping up and down’
Greece elections: In times like these, the EU has far more dangerous adversaries than Syriza

Greece elections

In times like these, the EU has far more dangerous adversaries than Syriza, says Patrick Cockburn
Holocaust Memorial Day: Nazi victims remembered as spectre of prejudice reappears

Holocaust Memorial Day

Nazi victims remembered as spectre of prejudice reappears over Europe
Fortitude and the Arctic attraction: Our fascination with the last great wilderness

Magnetic north

The Arctic has always exerted a pull, from Greek myth to new thriller Fortitude. Gerard Gilbert considers what's behind our fascination with the last great wilderness