Tory job record underwhelms

When unemployment tumbles by more than a quarter of a million in 4 months, nobody believes it. So, itís no surprise to discover Ministers finally admitting that the JSA is throwing thousands of people off the dole. People who are still unemployed, but donít qualify for a benefit.

As we show in this issue, half the reduction since October was caused by the introduction of JSA. Whatís more, employment minister Eric Forth MP agrees. With the "33 fiddles" almost passing into folklore, even the Government disbelieves its own figures. Its own statisticians have got very uneasy about the claimant count and openly acknowldge that JSA distortions make it impossible to credibly describe the claimant count as a measure of unemployment.

So, unemployment will not deliver a "feelgood" phenomena coming to the Toriesí rescue in the remaining weeks of their Administration. If they donít believe it themselves, why should the public?

But the Government does think it has a stronger hand on other labour market data. And it is playing the "Euro-recession" card for all its worth. So are they right?

Firstly, jobs growth in Britain does not justify the Secretary of Stateís hubris that "Britain works". As we show on page 19, a million fewer men are working now compared with 1990 when the recession started. Admittedly, employment has been growing since the end of 1992. But two thirds of the additional jobs are part-time. Thatís fine for people who want it, but part-time work is a poor substitute for people who need full-time earnings. Our analysis of the Labour Force Survey shows that, compared with 1990, there are now 450,000 more people working part-time because they cannot get full-time jobs. This alone is the equivalent of 280,000 full-time jobs. Part-time work also hits the Exchequerís revenues. When a full-time job is split into two jobs, combined earnings which are tax-free come to £8,090 per year compared with £4,045 - and higher still including the married personís allowance.

Britainís record is not so great. But smeone has convinced the French Government otherwise. According to their Prime Minister Alain Juppe "everyone is struck with admiration at the British figures on unemployment". By the way, we havenít been trawling the French Newspapers, this is a quote proudly reproduced by Gillian Shephard whose minions obviously have been mining Le Monde for meaningless nuggets.

Admittedly, the French do have a problem, although it is one of their own making. On a properly comparable basis, the unemployment rate for Britain is 8.1% and France is 12.5%. If France had not maintained its Franc-fort policy (an overvalued currency in order to meet Maastricht criteria) and instead followed Briatin with its involuntary devaluation in 1992, things might not be so bad. Ironically it is the countries that are most obsessed with Euro-monetarism that have the worst unemployment. Like Germany.

But even Germanyís unemployment is being ludicrously exaggerated by the Tories and their compliant media accomplices. Last month saw a startling hike in German unemployment from 4.1m to 4.5m. Unlike Britain, Germanyís monthly method of counting the jobless has a very broad definition - simply all those people who want work and register with the national Employment Service. This is pretty similar to a definition which the UK Government dropped 14 years ago (it came up with too high a number). On a standardised basis, Germanyís unemployment rate is 9.0% compared with the UKís 8.1%, the USAís 5.2% and an average for the "G7" nations of 6.8%. So Britainís record internationally is not as brilliant as Ministers claim.

We also need to recall that Germany recently re-unified and bolted on the former Eastern Lander which was - in the opinion of most observers - a complete economic basket-case. Looking a bit below the surface reveals unemployment rates varying significantly across the whole of Germany. At the most recently comparable dates, in Rhineland Westphalia the unemployment rate was ?% compared with ?% in Lower Saxony and ?% in Greater London.

Unemployment is far worse in Britain than the Government pretends. Last month, we showed that Labour Force Survey data put the total number of people who want work at 4,470,000 by the September-November quarter of 1996. And taking into account the numbers of under-employed part-time workers plus those on Government schemes, we calculate that the total Ďslackí in the labour market is 5,333,000 which is an unemployment rate of 17.2%. By comparison the latest claimant figure (a rate of 6.5%) is a rather bad joke.

The Claimant Count is totally discredited and the Government should stop using it for anything other than small area statistics where its sole redeeming virtue can be seen: providing some useful micro level data. Because it is an exact count which is tagged down to postcode sectors, it has a vestigial use for local comparisons - providing you attach a suitable health warning (easy) and have local denominators of resident population (tricky) to calculate percentage rates.

As Ivan Turok argues Travel to Work Areas are pretty useless measurement geographies for analysts, planners and decision-takers in the urban and economic regeneration field. Why? Because they lump together large areas to concoct the fiction of a "self contained labour market area".