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No labour market miracle, but no doomsday yet

Stephanie Flanders | 17:54 UK time, Wednesday, 19 January 2011

Today's labour market figures were not far off expectations, but that may show how low expectations have become. Last spring, we were all marvelling at how quickly unemployment had started to come down.

With several months of flat or rising unemployment, it is fair to say that the excitement has now worn off. But total unemployment, at around 2.5m, is still lower than many expected in 2009. A 6% decline in national output had most economists expecting a similar-sized fall in employment; the actual fall over the course of the recession was closer to 2%, in large part because workers have proved so willing to take cuts in pay and hours, either in their existing job or a new one.

I've said all this plenty of times in this blog. I thought it worth repeating today, because the mood around the labour market has swung from surprised optimism, to deepest gloom. True, anyone who announced a jobs market miracle on the back of last year's falls in unemployment has been disappointed. (In truth, most were a lot more cautious than that.) But that doesn't make the doomsday scenarios any more correct.

For all the ups and downs, I'm struck that the unemployment rate in the three months to November was 7.9%. In the same period in 2009 it was 7.8%. That is to say, we are more or less back where we were in the last months of the recession, when most were still expecting the jobless total to continue to rise.

That said, there are three developments under the surface that are worth mentioning - one somewhat encouraging, the others definitely not.

The encouraging fact is that overall employment in the UK has risen by 184,000. The data on private and public sector employment is less timely, but in the year to September 2010, employment in the private sector grew by 184,000, or 0.6%. For part of that year, Britain was still in recession.

Over the same period, public sector employment fell by 77,000. So, last year, at least, the private sector is likely to have created more than enough jobs to offset losses in the public sector.

That doesn't tell us anything about the future, of course. And we do know there were more public-sector job losses in the last months of 2010. But bearing in mind that this was only the first year of recovery, and the OBR is forecasting a total loss of employment in the public sector of 330,000 over four years, it's not too dispiriting.

More worrying - though perhaps not surprising - is the rise in the number of young people unemployed, and the creep upwards in long-term unemployment.

Of the record 951,000 of 16 to 24-year-olds out of work, around 270,000 are in full-time education (but looking for part-time work). That has sometimes distorted the "headline" changes. But not this time. The rise in unemployment among this group in the three months to November was due to falling numbers in employment or education - and a big rise in the number not in work and not in school. Not many silver linings there.

The rise in long-term joblessness is also striking: during the recession, labour market experts at the Department for Work and Pensions were surprised and pleased to see that the "exit" rate out of unemployment had held up, even as the number losing their jobs was going up. It's difficult to tell for sure, on the basis of the published numbers, but the rise in long-term unemployment suggests that this is less true today. Or at least, there is a growing "hard core" of people who are not finding work.

One-third of people on the unemployment rolls have now been there for over a year. The share was a third when the recession began. As John Hawksworth, chief economist at PwC points out in the chart below, this is still far below the peak of 45%, reached in the early 1990s. But it is worrying all the same. No jobs market miracle there, either.

PwC chart showing the rising proportion of unemployment is long term

Comments

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  • Comment number 1.

    The fact that the private sector has taken up the slack has to be good news. But how many of these jobs are full-time, permanent jobs and how many are part-time/temporary jobs?

    More importantly what sectors were these jobs created in? Were they in sectors which are predicted to continue to grow such as manufacturers who export, or were they in parts of the economy such as retail which are predicted to struggle over the next few years?

  • Comment number 2.

    Is there any information anywhere that lets us know the "full time equivalent" employment number if we add up all the part time weekly hours and divide by 40 hours?

    I believe that in the USA they also publish a figure for part time workers who would rather be working full time. Is there a published UK figure for this as well?

  • Comment number 3.

    If the Govt wished to cut unemployment, they should raise the VAT threshold from the current level of £70,000 to £250,000.

    The Fed of Small Businesses said a rise from £70k to £90K would increase employment by 36,000. A far bigger rise in the threshold to £250k would be far more beneficial in cutting unemployment and the loss in revenue from VAT would be more than offset by the fall in Govt expenditute on unemploymnet benefit, and the increase revenue from income tax, national insurance and also increased VAT from purchases made by the previously unemployed.

  • Comment number 4.

    SF wrote :
    "More worrying - though perhaps not surprising - are the rise in the number of young people unemployed, and the creep upwards in long-term unemployment. "

    Equally concerning is the number of people taking part-time work through desperation, 1.16 million according to ONS figures, and the highest since records began.

    I'm not sure whether links work, but there is one here (and I'm sure if I had the time I could winkle out the page on the ONS site).

    https://www.hrmagazine.co.uk/News/MostEmailed/1050144/Unwilling-part-time-work-employment-goes-down-says-ONS/

  • Comment number 5.

    The radio reports stated that about 25% of adults are now not working. Clearly, many have withdrawn from the jobs market. More information is needed about this figure and what lies behind it, but it looks like the people are just giving up trying to find a job.

  • Comment number 6.

    SF: 'No labour market miracle, but no doomsday yet'
    -----------------------------------------------------
    Well, that's wondrously cheering ...

    SF: 'That doesn't tell us anything about the future, of course. And we do know there were more public sector job losses in the last months of 2010. But bearing in mind that this was only the first year of recovery, and the OBR is forecasting a total loss of employment in the public sector of 330,000 over 4 years, it's not too dispiriting.'
    ------------------------------------------------------------------------
    Unless you happen to be one of the 330,000 ...

    SF: 'One third of people on the unemployment rolls have now been there for over a year. The share was a third when the recession began. As John Hawksworth, chief economist at PwC points out, this is still far below the peak of 45%, reached in the early 1990s. But it is worrying all the same. No jobs market miracle there, either.'
    -----------------------------------------------------------------------
    For the older worker segment, it is also important to check the flow from the Unemployment to the Sickness registers. Both the Conservatives and New Labour used this tactic to reduce the unemployment stats as much as possible. A period of unemployment, even relatively short, can have a detrimental effect on health, particularly older workers.

    In their last term, New Labour took frit at the numbers as some back-benchers (and, no doubt, some in Cabinet) realised there was a massive problem there. They then set in train the measures, adopted by The Coalition, to have all those on the Sickness register reassessed.


  • Comment number 7.

    Stephanie,
    Please will you do a Blog on the effect of inflation on unemployment, perhaps setting out the historical views and how that related to unemployment in the period 1967 to 2007 and then adding thoughts from some economists, plus your own of course, on 2007 to the end of 2020?

  • Comment number 8.

    951,000 16-24 year olds out of work only gets one sentence?! I remember hearing on the radio that was roughly 1 in 5! These young people are very important to the economy, who do all these bankers and high earners expect to pay their pensions if there are not enough jobs for young people to take?

    951,000 - that figure is roughly the size of Birmingham. In addition the jobless total is only going to rise as the Coalition invariably fails even more people on sickness benefits.

    It's a poor time to live if you weren't lucky enough to be born into money like many (especially Conservative) MPs

  • Comment number 9.

    Unemployment is raising again, all thanks to the government. We are in a peculiar situation where government can practically choose what rate of unemployment it wants. And they have said: we don't care about the people, we don't care about young generations entering the labor force. At this course unemployment is going to rise, stay high for an extended period, became entrenched and deny wast masses of people chance to normal lives. And government is going to blame the victim: you are too weak, you are too lazy, you don't try hard enough and introduce some penalizing measures like having them participate in useless trainings and making them work for unemployment benefits.

    Unemployed can not control number of jobs available, they are determined by macroeconomic factors such as interest rates, exchange rates and fiscal policy.

    Interest rates are already about as low as they can go.

    Pound is at stimulative levels, although export sector is so small even a rapid growth can not provide enough jobs.

    Which leaves fiscal policy as the main determinant of unemployment. There is widespread misconception that the government have to borrow money from the financial markets in order to spend, when in fact it spends by crediting bank accounts. Government creates new money every time it spends, and therefore it can not go broke. Issuing bonds is separate operation and is done on-demand basis to drain excess reserves from the banking system.

    Sovereign government, which issues it's own currency, is not limited in ability to spend. That is what makes situation tragic: fallacy of the need to balance the budget, and that we have people in power who do not understand how the monetary system operates.

  • Comment number 10.

    'Last spring, we were all marvelling at how quickly unemployment had started to come down.'

    Er, no we weren't. At least not those with any sense. The employment figures came down so quickly because of the thousands of pubilc sector non-jobs created by Gordon Brown as part of his gerrymandering of economic stats just prior to the election. These were bound to disappear as soon as the election was over and the cuts began in earnest.

    Nothing marvellous about it. Just a bunch of New Labour cronies putting their own short term interests ahead of the long term interests of the country.

  • Comment number 11.

    Just one minor typo this time. The full stop after disappointed makes the sentence in brackets a bit confusing.

    "True, anyone who announced a jobs market miracle on the back of last year's falls in unemployment has been disappointed. (In truth, most were a lot more cautious than that.)"

    Should read (to be grammatically correct):

    True, anyone who announced a jobs market miracle on the back of last year's falls in unemployment has been disappointed (in truth, most were a lot more cautious than that).

  • Comment number 12.

    Half a million young people without work Dave, what are you going to do when you are old and these people wield the power ?

    The youth of today are not listening to what you say, you've had your chance now get out of the way.

    You treated them without any respect, what did you expect ?

    Dave, you are ancient history.

    The youth of today will have the final say.

    (and don't say you weren't warned)

  • Comment number 13.

    I have no faith in the NSO figures - the whole way that they collect unemployment data has been so manipulated as to make it hardly even valuable when looking at trends let alone actual numbers of those who are seeking work or are underemployed. The NSO has been extensively politicised under Major and Blair so why should we trust any months count?

    However, if we accept the figures at face value:

    What this means is that the UK is not in a period of recovery at all. Hence we must, I think, rightly conclude that the smoke and mirrors of absurd money pricing being operated by the 'Fools' has been a catastrophic failure and a complete waste of many hundreds of billions of pounds. Further I also think that these unemployment figures further supports the general argument that we can't get a recovery UNTIL the private debt is deflated and as that hasn't been done yet we don't get an employment recovery. Or we are just at the start of a twenty year Depression - as is predictable by historical analogy with the 1870's Depression.

  • Comment number 14.

    Let's not forget the awful mess that our economy was in back in 1997.
    Then we were all paying 5.2% of national income just to pay the interest on Government Debt. Plus huge amounts paid out in ill-health benefits and payments to unemployed workers.
    But it was still possible back in 1997-2000 to get the British economy into above average growth, and to create three million more jobs. That was the fastest rate of wealth and jobs growths ever achieved in the UK.
    Whilst it's flattering to think that any British Government could control the behaviours of Banks in the USA, we still act and talk as if those collapses were somehow originated in London. They weren't. British Bankers imported a few of them from Wall Street, because they relied on the credit ratings agencies. That's the ones who claimed that we're on the brink of bankruptcy even though that hasn't ever happened.
    The UK doesn't have a large accumulated debt problem that requires huge increase in unemployment to pay down those debts. What we have is a temporary slump in corporation tax receipts because our banks have forecast lots of bad debts and have had to make provisions for those future losses. As our economy recovers, those provisions will be written back into the banks portfolios of assets.
    If our transatlantic economy were to be allowed to recover from the shock of all those bank write-downs at a more measured pace, much of the slump in youth unemployment would be avoided. Youngsters would get a better start to their careers and the on-the-job experiences they so badly need.

  • Comment number 15.

    Can anyone give me a rational reason why we are taking in more culturally incompatible unskilled illiterate foreigners economically draining (and their dependents)into this powderkeg of a declining country ....when we can`t provide for the needs of those already living here?

    It`s like being on a political mystery tour with a deaf blindfolded driver!Nobody dare listen to the public over what amounts to aseriour injustice to people who were born here ....and (like Mrs Duffy) have had enough.

    When is there going to be a mainstream rational reasonable sensible approach taken to this issue that gives us a real sense that Westminster and our thought police at the BBC have any common sense?

    Or is it that our politicians CAN`T do anything because global financiers and the "markets" decide who has a right to live in Britain now?

    And let`s not pretend that the BNP is a reasonable way of catering for the growing disquiet ..please!It`s an establishment con and a cop-out for the other parties.

    We can`t go on like this....all our barmy American political/economic policies may work in a large prosperous nation with no welfare state like the the USA (though I doubt they do any longer)....but why should we work and pay taxes to have our homes jobs and services given away to foreigners while our livelihoods are exported to China?

  • Comment number 16.

    The real truth is in the final word of the title of this piece - YET.

    I note the conclusion of JFH in #13 "Or we are just at the start of a twenty year Depression" and would answer YES. We keep fooling ourselves that a recovery is possible when we have no stategic plans in place to either develop a more balanced economy or diminish the harmfull effects of globalisation.

    You may not share the conclusions of worcesterjim in #15 but it is easy to see the build-up of frustration at the total lack of any effort to address the need for work within our society.

  • Comment number 17.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 18.


    The time has come to bring back NATIONAL SERVICE for reasons clear everyone.

  • Comment number 19.

    Surely youth unemployment is the obvious result of raising the retirement age?

    Unless your economy is growing fast enough to absorb all the new extra workers (which it clearly isn't) you're going to have a lot more workers than jobs all of a sudden and those without any experience are generally the ones who are going to miss out.

    As every future government will be dead set on increasing the pensionable age to reduce the welfare bill we're all going to have to get used to permanent mass youth unemployment. Better find them something to do before they all start voting Labour eh Dave?

  • Comment number 20.

    The increase in private sector employment I suggest reflects the state of the economy 6 to nine months ago. The trends are obvious - decline in employment spreading to the private sector especially as the public sector is doing a slash and burn and has had the cuts front loaded by this government. The real problem of the economy are the millions in addition to the registered unemployed who could and in many cases are willing to work but for whom there is no prospect of getting a job. Perhaps we could all be volunteers in Dave's Big Society

  • Comment number 21.


    I am not opposed to immigration and immigrant workers. It is far from a given that young people in the UK would willingly take up the jobs that are currently being done by immigrants.

    You may remember when those Chinese workers drowned in Morcambe Bay some years ago. I recall observing, at the time, that I had more sympathy for someone who travels half way round the World to work in such conditions in order to feed his family, than for people sitting around here complaining that there are no jobs.

    That having been said, while I may disagree with his conclusion, Worcesterjim has a point.

    We do need to look at why it is that people appear to be coming here is droves to work while our young people can't find jobs. Maybe some employers are looking to bring in cheap labour from abroad (but there is a minimum wage which in theory limits the scope for that): maybe some young people are not interested in these jobs (even at the minimum wage) because they see better alternatives? Maybe, as consumers, we turn a blind eye to cheap immigrant labour (eg fruit pickers) when we buy fresh fruit in the shops?

    I don't have a simple answer (like putting up the barriers)but I do agree that answers are required.

  • Comment number 22.

    No doomsday scenario?

    How about for the younger generation
    University tuition fess @ £9,000
    UK unemployment rate for 16 to 24-year-olds is 20.3%.
    Unaffordable house prices

  • Comment number 23.

    #15 worcesterjim. I guess your question depends on how you define "rational." From the perspective of the ruling kleptocrats low skilled/unskilled immigration is all very rational.

    Firstly you need to make people want to leave their homes and come here. That is achieved by bombing, destabilising and overthrowing progressive regimes all around the world. (Something like 54 democratic or populist regimes overthrown by UK/USA since 1945).

    This has the happy effect of allowing the kleptocrats access to all sorts of natural resources and also throws up a lot of cheap labor - most of which remains in its country of origin.

    The cheap labor that migrates helps to drive down wage rates in the host country (look at all the guff about flexible labor markets and how wage rates are being held down). How else would you get cheap cockles out of Morcombe Bay without cheap labor?

    Sure there are adverse consequences for everyone both immigrants and non immigrants, but those consequences are not measured or valued so they don't count.

    People are kept under control by an education system that long ago mutated into a system of propoganda. Anyone that raises any issue related to immigration are immediately smeared as racists. Thus the virtous circle is completed the kleptocrats sit back and watch the exploited smear and denigrate each other.

    It is true that we can't go on like this - for the simple reason that all things that are not sustainable will not be sustained. Immigration is only one very small piece of the jigsaw of manifest unsustainability.

  • Comment number 24.

    #21 tFoth. Maybe you should ask yourself "Who gives you work and why should you do it?" I, and I strongly suspect you also, have no intention at all of risking my life to gather cockles in Morcambe Bay for around $1/day.

    Who do you think got to eat the cockles? It is a racing certainty that it was not the cockle pickers or their families.

    Instead of lionising these people ask what kind of system tolerates such grotesque abuse and allows people like you to elevate such abuse as being morally praiseworthy when compared to people that will not bend their knee to the alter of exploitation.

  • Comment number 25.

    Anybody who did not think there would be an increase in unemployment under the prevailing economic conditions is living in a parallel universe. New jobs just can't be magicked out of thin air.

    The simple truth is that outside the public sector and `investment' banking there has not been much creation of good jobs for a number of years even before 2007 when everything else started to go wrong.

    The really big worry in these figures is the number of unemployed between 16 and 24. Almost a million is a scary number and in the words of the late Duke of Windsor `something has to be done'. Yet youth unemployment was a problem before the crash: so this is structural.

    The only useful suggestion I can make is the one I am making all the time and that is the rebalancing of the UK economy towards value adding activity such as manufacturing. We have to find work for people and we can't pay them out of taxes or borrowings as that money has run out.

    I know there are an entire host of difficulties associated with executing this proposition but `something has to be done' and done soon. The current situation is quite unsustainable.

    What did happen to that category of potential employee called a `school-leaver'? Have they become NEETS and why?

  • Comment number 26.

    Well those at the BBC may have cushy jobs but it is certainly doomsday for some!
    The PCS Union members on strike today as processing social fund emergency claims.
    Apparently, the last labour govt moved thousands of highly trained job centre staff into call centres processing emergency claims (for those who claim to have lost their purse/wallet etc) and have left the job centres unable to cope with the back-log of new unemeployment claims.
    This means that many thousands of new unemployment claims have not been registered and the unemployment statistics are set to deteriorate much further ... and the job centre staff have been incorrectly re-deployed to cope with demand from vulnerable people who need a lot of help.
    Is this why we pay our taxes for govt to mishandle the adminsitartion of baisc unemployment claims as people lose their jobs as a result of govt ineptitude.
    It is vital that the 'affected staff' are put back into the job centres where they are most urgently needed. It was strategic ineptitude that caused this on the part of the last Labour govt ... but it needs putting right very quickly.

  • Comment number 27.

    Last spring we were in Gordon Brown's La La land , built on the never , never of borrowed money....

    This year is going to be different ad unemployment will probably rise to 2.75 million.

    If anyone deserves more focus , its the 18-25 group who have been hit the hardest. A 5% transfer of spending from the over 65's should be made to above.

  • Comment number 28.

    Can I suggest that the BBC stops messing around trying to predict the behaviour of inherently unstable markets in our brave new global feudal system.... and call George Soros to account for the effects of his "open society" ideas please?

    Forty years ago I spent ages trying to understand the ramblings of Karl Popper..... and more recently I have been trying to understand George Soros` ideas....and I may be stupid but it all sounds like completely impractical rubbish!

    Yet Soros views seem to underpin so many developments in our globalising world.

    Could NN stop recycling prehistoric dynosaurs like Kissinger and Gilbert and George.....and get Soros to tell us what is going on please?

  • Comment number 29.

    Who are these 'most economists'?
    Here is Brad Delong blog, 'The Four Horsemen of the Teapocalypse':
    "Agreeing with Schumpeter was Herbert Hoover's Treasury secretary, Andrew Mellon. In his memoirs Hoover was bitter toward many, but bitterest of all toward Mellon, whom he called the head of the "leave it alone liquidationists." Hoover quotes Mellon: "It will purge the rottenness out of the system. High costs of living and high living will come down. People will work harder, live a more moral life. Values will be adjusted, and enterprising people will pick up the wrecks from less competent people." Hoover opposed Mellon's policies, he said, and worked to undermine them. But what could he do? He was, after all, only the president. And Mellon was Treasury secretary.
    Think Mellon is just an anachronism? Then consider current British chancellor of the Exchequer, George Osborne, and his claim that today's record-low interest rates in Britain are a sign of financial strength and not of anticipated prolonged depression: 'The emergency budget in June was the moment when fiscal credibility was restored. Our market interest rates fell to near-record lows.' That is pure Mellon. It is definitely not Keynes. It is definitely not even Milton Friedman."

    Again, who are these 'most economists'? Do they exist in the magical 'centre ground'?

  • Comment number 30.

    #25 stanilic. Maybe it you that is living in a parallel universe. No-one has any intention of creating any new jobs, and neither do they have any intention of allowing the "money to run out"

    Only yesterday the World Economic Forum in conjunction with McKinsey suggested that the world needs to double debt levels to $200 trillion by 2020. If you inject a fresh $100 trillion of debt then there is obviously no problem with money.

    How you gonna manufacture anything in the UK when the Chinese will make more than you can consume for mere pennies?

    You try raising the cost of finished goods and how are the people gonna service $200 trillion of debt?

    This is the world as it is, not how might want it to be. So loads of young people get shafted so what? No-one cares about them, and that situation will never change unless and until they give the powerful a reason to care.

    "All the power in the hands of people rich enough to buy it, while we walk the streets to chicken to even try it" - Think about it, do something about it.

  • Comment number 31.

    In the last few years many skilled people have been encouraged by Job centres or by the tax system to become self employed. Conveniently these do not show up in the jobless statistics, neither do those who have made sufficient pension provision to take early retirement. I would suggest that is a measure was taken that inclused those under employed in these groups the whole picture would look more like the 16 to 24 year olds. The only reason this goup stands out is that they dont yet have the skills or experience to sell their skills on a contractor basis and so register as unemployed.

    This country really dose have to get its head round changeing patterns of employment as failure to do so will impact on many aspects from tax revenue to funding pensions, allowing the option to work past 65 alone will not solve the hole in personal and public finances that is opening up.

  • Comment number 32.

    I'm surprised that no one has mentioned it yet ... the latest figures on UK employment take up, show that in the last year ... 2 out of every 3 new jobs has gone to an immigrant.
    We might as well all roll over and die ... as they're not taking jobs off British people, of course, as many of us are regarded as 'second class' citizens in our own country and do not have the necessary skills and are unable and not allowed to be given a job, by some, in our own country... so the jobs are given to those ... some with zero or bogus British qualifications.
    Hold that stiff upper lip!

  • Comment number 33.

    There are other concerns in these figures that readers may wish to take note of in additon to the ones mentioned in this article.
    "So whilst the unemployment rate remained the same there were unfavourable developments in the breakdown of the figures. Rises in economic inactivity translate into people giving up looking for work, part-time work is often on worse terms than full-time, and rising youth unemployment is hardly a good sign."
    I also see that there is a discussion from yesterday on whether there is a trade-off btween inflation and unemployment as many allege and base economic theories on.

    https://notayesmanseconomics.wordpress.com

  • Comment number 34.

    I'm remember when unemployment was some 900,000 and the tories' election campaign poster said "Labour Isn't Working".


  • Comment number 35.

    No surprise about the increase.
    Govt is spending less. It makes no secret that it refuses to replace private consumption to allow people time to pay down debt.
    As a result GDP will fall. More jobs will go and the economy will rebalance at an even lower level of employment.
    This has been going on since the 70s.
    Its just puzzling why people are not getting angry.

  • Comment number 36.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 37.

    24 Armagediontimes

    If you bothered to read my post, then you would see that I am not lionising the system: the system stinks and needs to be changed. That does not make a chinese immigrant less praiseworthy or a British layabout more admirable.

    The system of exploitation of immigrants sucks: consumers who fuel the system by buying cheap cockles (or whatever) need to examine their consciences: young people who think the World owes them a better living than they are willing to earn may have to think again.

    If that makes "people like me" offensive to you then so bo it!

  • Comment number 38.

    30. At 11:00am on 20 Jan 2011, armagediontimes wrote:

    How you gonna manufacture anything in the UK when the Chinese will make more than you can consume for mere pennies?
    ..................
    By applying carefully selected and targeted import tariffs where:
    1) British resources are underused
    2) regional resources are favourable
    3) the tariff is not excessive
    4) the tariff is not inflationery to those on low/average incomes
    5) skill surpluses in the target area
    etc
    The application of a strategic mindset to the untackled issue of GB's huge budget deficit.
    Hit the import spivs (supermarkets included)in the pocket where equivalent products are available in the UK... investment can be directed and margins created for local British business.
    Import Tax e.g. Dutch ham, Eqyptian potatoes grown in sand and dubiously sourced manure and all in season produce grown and available in the the UK.
    Import Tax foreign white goods, electrical cars ... big ticket items ...
    Import tax finished goods where British workers are unable to add process value i.e have a job.
    Vat income is 15-20 times import tariff income over the last 10 years with zero strategic thinking and application on import tariffs ... there are tens of billions of tax pounds going begging here for the want of a competent govt to tax the spivved imports and support British farmers, growers, business.
    Simples ... just need the right callibre of UK politician to gather in the easy money as we're bombarded with an avalanche of currency deflated imports that protectionise the exporter and put and keep millions of Brits on the dole.
    No country will dare retaliate if this is all done properly as all practising this kind of revenue raising and the WTO very rarely gets involved and ignores rampant protectionsism from US, BRIC, Germany etc ... just us Brits losing out all the time with this completely/ultra free market nonsense.
    Import tariffs generally paid by the importer who tries to pass on the cost to customers ... if an importer tries to pass on say a 30% import tax on a large luxury vehicle ... I couldn't care less as those with money will still buy the car ... and should be paying more tax anyway.
    This is not socialist policy ... it is raw market economics ... the market and its participants would adjust pricing and supply and demand to accommodate the tariff. Carefully used tariffs can create demand in the British economy for British based manufacturers to fill.
    In other words, in order to sell something in the UK ... most things would need to be made, finished or grown in the UK ... but not bananas ... leave my bananas alone!
    The result is that the UK gains respect worldwide for 'playing the game' ... lower inflation, lower unemployment, higher disposanble incomes and with some shortages of some items and mistakes would be made but can be rectified.
    Only another 'frightened rabbit syndrome' useless govt will refuse to do this and take in the much needed tariff money and rebalance the UK economy automatically without hardly trying.
    Someone out there can save their job at the March budget by taking this on board... failure to do this will likely mean another Labour govt within 1-2 years.
    How much revenue can be raised ... £5bn pa nothing ... £10-15 pa billion easy ...£30 billion pa fairly easy .... £40 billion pa trying a bit ... and more ...+ rebalancing effects that reduce costs, create wealth, jobs, growth ... demand and UK internal spending power. The overall effect is easily equivalent to the current UK structural defict when the rebalancing effects are achieved.
    Simples... but I know some will disagree ... but perhaps they can tell us why the very wealthy Chinese, Indian, Japanese are coming to Britain to buy luxury goods when the same goods are available in their own countries (which on the face of its is beneficial for the UK, but not enough by itself to take Britain out of its ongoing and deep 2-3 year (so far) recession)?
    This is strategic action instead of allowing the hedge fund pie fingered to wash UK plc down the plug hole... while millions of British people suffer the consequences.


  • Comment number 39.

    #34. Eddy from Waring wrote:

    I'm remember when unemployment was some 900,000 and the tories' election campaign poster said "Labour Isn't Working".

    Eddy - 'they' have change the way of counting to reduce the count a number of times since. Including keeping kids at school so they are no longer on the register (by debasing education and calling things qualifications that are no such thing) etc. etc.

    My guess, and it can only be a guess as the NSO no longer collect the figures on the old basis, that the real unemployment (on the old basis) is upwards of 4 million. I share with you the surprise that the British people care so little about this today.

  • Comment number 40.

    @21
    "We do need to look at why it is that people appear to be coming here is droves to work while our young people can't find jobs. Maybe some employers are looking to bring in cheap labour from abroad (but there is a minimum wage which in theory limits the scope for that): maybe some young people are not interested in these jobs (even at the minimum wage) because they see better alternatives? Maybe, as consumers, we turn a blind eye to cheap immigrant labour (eg fruit pickers) when we buy fresh fruit in the shops?"

    The reasons are complex but some...
    a) An unemployed British worker taking a short term job picking fruit loses benefit NOW, and will take months to regain that benefit making it economic suicide to take the job.
    b) A worker from abroad is often illegal and paid less than minimum wage
    c) A worker from abroad - even if paid minimum wage - will have deductions for transport, food, accomodation taken from the wages at a much higher rate than the real cost - thus effectively meaning they are paid far less.

    The answer for (b) is to know who is and isn't coming into the country - we can do that.
    The answer for (c) is to make such deductions illegal and to ensure that we have a functioning market for accomodation and a functioning affordable public transport system (which we need anyway). This should be policed by using 'plants' and inspection of accounts.
    The answer for (a) is also simple...
    Pay EVERYONE legally in the UK a basic flat allowance that will keep them alive. Because this is a global flat rate benefit it is very easy and cheap to administer and difficult to defraud. Scrap ALL other benefits. Because everyone has a basic income all the tax banding and tax allowances can also go allowing us to have a basic single rate income tax for all (except bankers who should pay 99%). All other taxes should be scrapped.

    The answer for (a) has many many advantages over the current system...
    1) Something very simple is difficult to defraud
    2) Something very simple is cheap to administer
    3) Something very simple makes it difficult to hide things - remember Thatcher 'lowering taxes' by which she meant income tax while the tax take from everyone went up several percentage points?
    4) Something very simple is cheap and simple for all people and companies to work with
    5) Something very simple makes evasion difficult
    6) No one will starve or find themselves homelesss
    7) Everyone will always be better off if they work - whether part time, short term or normally
    8) Everyone gets greater flexibility about work and balancing work and life
    9) Employers are freed from minimum wages etc.
    10) Tax credits and other random miscalculated messes are avoided

    There are many more... but a list like that in such a short time is easy to come up with.
    Of course, it will never happen because those in charge don't understand, those working in the mess don't want a change, and the BBC and other journalists are incapable of thinking or accurately reporting.

  • Comment number 41.

    @15 and @21

    I worry that discussions over immigration aren't particularly helpful. The UK's borders are fairly secure and the immigration policy is actually quite sound, with the exception of EU immigrants, where the door is more or less wide open. That's a concern but the economic advantages of belonging to the EU balance that out and then some. Where workers are coming in from outside it's because they are needed.

    What we need is a much more strategic push in terms on educating young people to fill the gaps we have. There is an opportunity to do that now, if you identify core skilled jobs that are needed (e.g. anything to do with healthcare it seems) and drop tuition fees on education for those jobs I think we could kill 2 birds with one stone.

  • Comment number 42.

    @14
    "Let's not forget the awful mess that our economy was in back in 1997.
    Then we were all paying 5.2% of national income just to pay the interest on Government Debt. Plus huge amounts paid out in ill-health benefits and payments to unemployed workers.
    But it was still possible back in 1997-2000 to get the British economy into above average growth, and to create three million more jobs. That was the fastest rate of wealth and jobs growths ever achieved in the UK."

    Just look at the debt now its even worse! Partly because most of those 'jobs' weren't 'jobs' at all, merely artificial paper shuffling in government departments. I could create 15million jobs tomorrow if I could continue to borrow and make up 15 million stupid titles in local and central government, create thousands of fake police posts, double the complexity of the tax rules etc.

    The fact is we need desparately to reduce the number of civil servants and other government employees. Simplify everything - tax, benefits.. scrap local councils, halve police forces. Then we need to employ what the state needs - army, navy, airforce - it is there to defend us after all. We should equip these new posts with BRITISH equipment, fill ALL British tax payer funded purchases with BRITISH goods and services, scrap overseas monetary aid and replace that aid with BRITISH goods and services. This way we will create BRITISH jobs, reduce the problems for BRITISH companies and have a real healthy economy based on what we historically did very well - making things.
    Just because Chinese labour is cheap does NOT mean we can't make stuff. Most stuff these days is made on machines. I have worked on creating these machines. The last one I worked on could create a metal part in less than 15 seconds that took the previous machine 2 minutes and a man nearly half an hour.

  • Comment number 43.

    As I see it the creation of jobs has been due to a partial recovery of construction. This will not be a long term trend.

    Unemployment figures this year won't show the full picture. 2012 and beyond are the figures to watch. A lot of the jobs lost from the public sector will be via voluntary early retirement. These people won't necessarily go back into work because they will be receiving their pension. They definitely won't be able to sign on and therefore won't be shown in the official figures. The public sector job losses from this year will go in about 2 months, i.e. before next financial year's budget starts. The jobs going just before April 2012 will be different because the people who want to retire early will have already done so. Job losses in 2012 onwards will mainly be redundancies.

    Also, the follow on reduction in demand won't be as significant this year as in 2012.

  • Comment number 44.

    Statistics can paint whatever picture you wish to spin! If all those non-value adding public sector jobs were to disappear over-night, the much talked about private sector saviours stepping is myth and folklore! The USA dream, is going to be a UK nightmare!!

  • Comment number 45.

    30 armagediontimes

    You are happy to declare there is no hope and then demand that we go out and do something about it.

    Are you in senior management or something?

    There is far more hope than money out there, we just need to harness it to what it can do for us and stop worrying about the pronouncements of people who tell us they are important. This was going on long before The Clash wrote `White Riot': all we have to ensure is that it does not go on for that much longer.

  • Comment number 46.

    Stephanie
    As usual context is everything.
    Some of the detail of the statistics is very worrying.
    These figures are at best static and look likely to worsen, suggesting QE, interest rates held at rock bottom for best part of 2 years and a 20% exchange rate depreciation against most trading partners has had minimal effect. This is before the public sector adjustment happens and the subsequent reverse multiplier sets in. Those who advocate immigration controls miss the point again and again by focusing on the UK alone. You could argue that the employment/unemployment figures are irrelevant at best with open borders to other EU migrant workers. Given that there is no realistic choice about staying in the EU (no, really there isn't) we will always attract EU migrant workers, whether Irish, Latvian or Polish. What the UK government can do is make the safety net for UK unemployed (migrant and "domestic") much less appealing to all. That or make it more appealing for UK unemployed (migrant and "domestic") to travel elsewhere for work/benefits. This is entirely analogous with UK interest rates trying to control global commodity inflation - the UK government/central bank levers doesn't work in a global/euro context.

  • Comment number 47.

    Interesting article.

    Youth unemployment really needs to be addressed.

    Stephanie,

    Any chance of a blog on the impact of removing the default retirement age on younger workers prospects?

  • Comment number 48.

    #44

    So you have spotted the contradiction too.

    Why would the private sector be looking to employ anyone who has spent the last few years 'paper shuffling' in a 'non job'?

  • Comment number 49.

    16. At 01:09am on 20 Jan 2011, foredeckdave wrote:
    The real truth is in the final word of the title of this piece - YET.

    Exactly, unemployment is just one more factor that can be added to banks, rising tuition fees, rising tax, rising inflation, rising petrol prices and decreasing pay.

    All these issues are cumulative, and whilst any one is not triggering massive revolt (students excluded, but it was still pretty tame in comparison to past demonstrations) collectively it is only a matter of time. Like a wound up spring it is not going to take much more for it to snap and MP's voting not to take their 1% pay rise is not going to appease the masses.

    I predict June 2011. Why? The public sector lay offs will have kicked in but more importantly inflation will sky rocket. The spivs in the banks are speculating massively in the commodity markets and due to the lag time in the futures markets it has not appeared in shelf prices yet...but it will and it isn't going to be pretty when it does.

  • Comment number 50.

    #45 stanilic. Did I say there was no hope? No, is the answer. However delusion breeds hopelessness, just like all those people imagining that their problems will all be solved come Saturday when they have won the lottery.

    If there is to hope then it is necessary that delusion be exposed.

    Speaking of delusion none of this predates White Riot. There was no movement underway to off shore substantially all skilled (non military) jobs and there was most definitely no proposal to inject $100 trillion of fresh debt into the system in a 10 year time frame.

    No-one cares about young people - they don't care whether they have a job and they don't care whether they have anywhere to live. Once meaningless platitudes are stripped away then this becomes obvious. If the young can free themselves from delusion then they just might do something about it.

  • Comment number 51.

    #38 nautonier. You are only looking at one side of the coin. The world needs $100 trillion of new debt by 2020 so as to take the total to $200 trillion. We know this because McKinsey have told us.

    All that debt carries interest and has gotta be paid. Import tarrifs and protectionism does not pay the debt down. Only the full globalised model of getting people to work for around $1/day does the trick.

  • Comment number 52.

    But the private sector has not taken up the slack has it? Why? Because companies in the private sector do not want civil servants or people who have had Town Hall jobs

  • Comment number 53.

    #37 tFoth. Literacy is not your strong point is it.

    I have not suggested that you are lionising the system, rather that you seek to lionise the victims of systemic exploitation.

    Neither have I suggested that you are offensive - only you have done that.

  • Comment number 54.

    #38 & #42

    Protectionism doesn't work and throughout history has often led to war.

    However we are already at it, as are the Chinese, the US and most of the G20 to some extent.

    Just don't expect the results you are hoping for.

  • Comment number 55.

    41..Cameron...you share my mother`s surname...but the reason I wasn`t born on Islay in the Hebrides was that we were economically "cleared" by lack of opportunity/work .... and like millions of other people who were "disappeared" from the British Isles over the centuries.

    I accept that you are simply repeating the ideas we have been fed for years but it`s pitiful nonsense....and it`s time to stop repeating it before there is serious social unrest at the injustice of it all.

    What do you mean by suggesting that talking about immigration "isn`t helpful!"?

    Am I supposed to stand about "helping" global capitalists and half-witted liberals clear my family from Worcester now ....and replace us with a miscellaneous collection of foreigner so-called "workers" when there isn`t sufficient or decent work for British born people?

    Am I stand with my mouth open while "humanitarian" ninnies and crooked financiers give away the welfare state my parents and I worked to create to any foreign chancer who arrives here with his entire extended family?

    What other people in the world would put up with this?

    And don`t talk about the expanded borderless EU that America`s Mr Blair created. Any fool could see what that was about and why we weren`t consulted about it...as usual!

    Have we gone crackers?

    No ...we`ve been taken to the cleaners.

    But if you think the Coalition represent our interests you may be crackers......because they are just bailiffs and asset strippers ....here to finish us off before they join the Blairs in luxurious retirement far away from sink estate Britain!

  • Comment number 56.

    50 armagediontimes

    People do care: they are just bewildered as to what is happening in their lives. They have been led to believe that the recession is over and recovery is with us again. My view is that the economy is a badly wounded animal which is just starting to heal its wounds: always assuming it doesn't get another kicking.

    I was banging the drum the this morning that a vacancy which our HR department has still not advertised could be offered as a job-share to youngsters at the local college who are to lose their EMA. It isn't the best job in the world but it would be something and give some young folk a taste of real work and a start in life: something for the CV for future better job. I know the point didn't get through but I keep trying.

    As I said earlier something must be done: so eventually something will be done usually at the prosaic level of every day life without bells and whistles going off.

  • Comment number 57.

    #54 newblogger,

    "Protectionism doesn't work and throughout history has often led to war."

    And you evidence for that is?

  • Comment number 58.

    56 Stan...I sense that you are really decent hearted person but whenever I read your posts I am left wondering what medication you are taking? There`s something surreal and unworldly about Planet Stan ...where magical "bells and whistles" can be counted on to "go off" like the US cavalry used to rescue the hero at the end of Saturday morning pictures!
    We live in a cynical feudal global capitalist world...please get real!

  • Comment number 59.

    On the issue of protecting jobs there is little point being the only free trader in a world of protectionism unless of course you happen to have the most advanced technology in the world and are top-dog.

    The UK has not been top-dog for a long time and whilst some of our technology is cutting edge not enough is to provide full employment. We have to accept also that our significant proportion of our workforce lack the skills to participate in cutting edge technology: although in my view a lot more are capable than are given a chance. So we have to find value adding work for those who for whatever reason cannot engage in high value, high-tech production.

    This is where we have to think smart. Now we are a member of the EU which is a free trade area. Our international trade policy is managed by the European Commission. Now most countries in the EU have high employment so the concept of EU protectionist policies is not politically impossible. The Germans might cut up a bit rough but any policy can be tailor-made to suit all parties.

    The only argument against higher tariff barriers is that free trade has positive benefits in terms of global growth. This is the point which has to be debated. How far are we prepared to permit unemployment at home for the benefit of employment in other countries? Big question, I agree.

    Histroically free trade has benefited this country but our circumstances have changed so perhaps we should change as well. Also how far does free trade help the financial sector at the expense of the real economy?

    This is a discussion that needs to be had.

  • Comment number 60.

    #57

    Opium Wars
    American War of Independence
    Most of the 17th and 18th century wars in Europe.

    To a smaller extent,

    American Civil War
    WW2

  • Comment number 61.

    59. At 3:52pm on 20 Jan 2011, stanilic

    I agree with all your points.

    Its difficult to believe now that the UK signed up to Articles 55 and 56 of the Chater of the United Nations in 1945 which defines full employment as:

    ' a necessary condition for stability and well-being among people and required all members to commit themselves using their policy powers to ensure that full employment is achieved'

    How we got conned into giving all this up and, instead, into obsessing about inflation for the last 30 years I'll never know.

  • Comment number 62.

    All these figures being banded around about how many are now unemployed but less people are claiming jobseekers allowance(still dont know what the difference is)is so far off the mark its unreal.Does anyone actually consider the huge numbers of people in this country who are now not claiming benefits as its futile but are not paying tax either because they are in the growing black economy.I know loads of people,me included at times who float in and out of cash in hand jobs rather than go down the dole route.Theres plenty of it about if you look.Its cheaper for the employer,better pay on the whole for the worker as there is no tax and N.I,albeit a low pay rate but not much less than paye pay rates these days and as everyone clearly states the most satisfying thing about it is...the corrupt politicians who fleece us continually are not getting a penny from us to pay idle benefit cheats and illegal immigrants.Very safisfying i must say.

  • Comment number 63.

    #56 stanilic. Sure people care in that they say "oh my how sad" but they do not care to the extent that they will do anything at all about it.

    Look at house prices. How can exponentially rising house prices benefit anyone, least of all people that cannot afford a house? If you really care then the answer is simple: Don't buy a house. How many people are voluntarily refusing to participate in this particular ponzi scheme? Answer, not many. How many people are massaging their own egos by pretending that they are so clever for having bought a house (or houses) which tripled in value whilst they were eating breakfast? Answer, quite a lot.

    Why are people bewildered? Sure the mainstream media feeds the masses endless lies and non stories, but surely people have a responsibility to themselves to find out what is going on.

    Cancer rates in Fallujah now exceed anything ever recorded in either Nagasaki or Hiroshima. Why do you think this is? Why is this not news? Where is the outrage, where is the shame? It is not there because people do not care.

    How can the economy be "healing its wounds" when the problem was caused by excess debt, which not only still exists but is being actively increased.

    You get all kinds of people on here bleating that their savings are being destroyed by low interest rates. They think they are prudent, but anyone that saves money in a currency being actively destroyed by their own governments are manifestly stupid.

    Wake up, things are not OK. They are not getting better. They are getting worse and all but about 0.1% of the population are going to get economically wiped out.

  • Comment number 64.

    #60 newblogger,

    Strange view of history.

    Opium Wars. So a country is not allowed to prevent its infastructure beeing destroyed?

    American War of Independance. The base argument for this war was representation and not protectionism.

    17/18 Century European wars. Care to elaborate further?

    American Civil War. Now you are really scratching the barrel.

    WW2. Care to enlighten us which of the protagonists claimed that they had to go to war in order to overcome protectionist barriers?

    Now I suppose you will go on to say that The Great Depression was deepend and lengthened by US protectionist policies - despite all of the research that concludes otherwise.

  • Comment number 65.

    41. At 12:21pm on 20 Jan 2011, Cameron wrote:

    @15 and @21

    'The UK's borders are fairly secure'
    .............................
    Ha Ha Ha ... straight off monty Pythons that statement
    ............................
    51. At 1:43pm on 20 Jan 2011, armagediontimes wrote:
    #38 nautonier. You are only looking at one side of the coin. The world needs $100 trillion of new debt by 2020 so as to take the total to $200 trillion. We know this because McKinsey have told us.
    ..................
    A) I'm looking at the British perspective ... you're looking at wider issues from a global perspective which are valid points
    ...................
    All that debt carries interest and has gotta be paid. Import tarrifs and protectionism does not pay the debt down. Only the full globalised model of getting people to work for around $1/day does the trick.
    ....................
    A) We know about the debt ... import tariffs are very effective at helping paying down the debt ... but they have to be used properly in order to achieve this. Some of the global debt will be written off and some will just fade over the years with 'inflation' and 'fudge'.
    .....................
    54. At 2:02pm on 20 Jan 2011, newblogger wrote:
    #38 & #42
    Protectionism doesn't work and throughout history has often led to war.
    .....................
    A) Blair and Brown led us to war three or four times ... without protectionism and which does not cause war ... insane nasty people cause wars not everyday considered protection of vulnerable areas of an economy.
    Most countries now operate protectionsim and even the UK already has protectionism according to the following;
    https://www.globaltradealert.org/
    What is clear is that those countries with the strongest economies on 'growth' ... are applying the strongest protectionsist measures, although Britain's ability to protect itself and rebalance is limited by massive EU interference and red tape - but there are still opportunities with non-EU trade.
    The idea of protectionism is to use it strategically and make it pay revenues and rebalance the economy ... the problem for the UK is in not having a proper policy for making import tariffs effective by e.g. in not increasing inflation, by being fair and promoting fair trade, revenue producing, well targeted and rebalancing to the economy by telling those overseas that the UK is swamped with immigrants and we have 25% of the adult working population as economically inactive ... and rising.
    'Protectionsism' is 'rebalancing' using tariffs, subsidies and restrictions. We (the UK) use it and use it well and as a matter of urgency or we continue in strong decline until it is applied to our balance of payments deficit.
    Most are getting hung up over terminology without understanding 'tariff rebalancing' which is my preferred term for it ... the opposite of 'fair trade' is 'unfair trade' and tariffs can help combat unfair trade and promote Britain's 'fair-trade' interests and human rights position.
    In economic terms ... 'tariff rebalancing' is an obvious thing to look at and the lack of consideration for this by UK govt is very worrying indeed.

  • Comment number 66.

    63 armegediontimes

    I did not say the economy is getting better. I said it is repairing from the damage inflicted on it as if it were a beaten animal. I then went on to say that it could get another beating. This is not recovery: it is the natural mechanism of survival.

    Perhaps if you were less exciteable then you would be less dismal.

    There is general agreement that things have gone badly wrong in the economy and we didn't just get here overnight. This has been building for years. So we have to change. We can spend our time fulminating on what has happened and the foolishness and stupidity of people both in power and out but it gets us nowhere.

    My suggestion that we seek to find and create employment opportunities particularly for the young is perfectly valid. My other suggestion that we reassess the EU trade policy so that those employment opportunities are enhanced is also valid.

  • Comment number 67.

    I am no longer employed but I am economically active ...I am spending money all the time!Then there are all my timely and socially worthwhile contributions to blogs anddebating forums.I`m a hive of activity and a senior member of the Big Society....just like all those tax exiles who pontificate about building a better Britain!

  • Comment number 68.

    67. At 6:17pm on 20 Jan 2011, worcesterjim wrote:

    I am no longer employed but I am economically active ...I am spending money all the time!Then there are all my timely and socially worthwhile contributions to blogs anddebating forums.I`m a hive of activity and a senior member of the Big Society....just like all those tax exiles who pontificate about building a better Britain!
    .....................
    You're doing a great job ... keep up the good work as Britain needs you 'telling 'em as it is'!

  • Comment number 69.

    68 Merci Matelot!

  • Comment number 70.

    Perhaps there should be a daily comment limit on these blogs. Every one seems to be taken over by the same 4-5 tedious armchair revolutionaries.

  • Comment number 71.

    0. At 7:53pm on 20 Jan 2011, Nick wrote:

    Perhaps there should be a daily comment limit on these blogs. Every one seems to be taken over by the same 4-5 tedious armchair revolutionaries.

    .............

    Perhaps that's because killjoy whingers like yourself have nowt to say!

  • Comment number 72.

    #66 stanilic. What you describe is a survival mechanism for living organisms. An economy is not a living organism.

    Seeking to expose the foolishness and stupidity of people both with and without power is a necessary prerequisite for any meaningful change. After all why would anyone change anything if there is nothing wrong with what they are doing?

    Your suggestions are, from a theoretical or moral perspective, perfectly valid. From a practical perspective they are nothing at all, since the people with their hands on the levers of power are quite happy to disenfranchise an entire generation. Indeed a cursory knowledge of history reveals that they are more than willing to kill an entire generation.

    What is more dismal?; To sit by and watch well intentioned people try to support themselves by investing savings into a soon to be worthless currency, or to tell them that they are suckers and had better wise up and learn how to support themselves properly.

    You don't agree? Simple don't follow the advice, no problem. You think there might be something in it? OK well think about it.




  • Comment number 73.

    Stephanie,

    Have "most economists" not heard of Okun's law?

    For non-economists, it was originally stated as below (per Wikipedia, with figures taken from above article inserted in brackets):

    "a 3% increase (6% decrease) in output corresponds to a 1% decline in the rate of unemployment (2% increase); a .5% increase in labor force participation; a .5% increase in hours worked per employee; and a 1 % increase in output per hours worked"

    Do you have figures for hours per worker and participation?

    Secondly, it seems apparent to an outsider (like me) that having a Labour party in government over a decline lead to a (relatively) small fall in employment, but a Conservative-dominated (Chancellor and PM are both Tories) government presiding over a recovery that sees unemployment rise is an indication that Labour still lives up to its name. How much credit do they deserve?

  • Comment number 74.

    >>But total unemployment, at around 2.5m, is still lower than many expected in 2009.

    This is a bit like falling off a 100 storey tower and, on the way down at the 90th floor, saying "so far, so good" !!

    With the mammoth in the room being both the public and private debt levels, there's still a long way down to go !!

  • Comment number 75.

    #1 >>More importantly what sectors were these jobs created in? Were they in sectors which are predicted to continue to grow such as manufacturers who export, or were they in parts of the economy such as retail which are predicted to struggle over the next few years?

    Adding to your comment, have they also adjusted for the seasonal rush at the end of the year when shops and businesses stock up for Halloween, Christmas, etc. ?? Goods don't move by themselves. They have to be imported, broken down into orders and despatched to the shops. Storemen/women have to receive them, check them and store them. Shelf-stackers have to stack the shelves, and so on and so forth.

  • Comment number 76.

    #9 >>That is what makes situation tragic: fallacy of the need to balance the budget, and that we have people in power who do not understand how the monetary system operates.

    Then, there is the greater fallacy of a magical, endless pool of money to draw from which will pay for all the employment simply for employment sake !! Without international trade and businesses, there is *NO* real income for the country and simply printing money will devalue it to worthlessness very quickly !!

    The solution is to create more manufacturing and services for things and services that foreigners actually *WANT* !! Without balancing the budget, the economy weakens and FDI (Foreign Direct Investments) will fall.

    https://www.bbc.co.uk/news/business-12238793

    Take this case for example. Total production of cars and commercial vehicles was 1.39 million in 2010; of which more than a million was exported !! However, most of these vehicles were made by Japanese firms Honda and Nissan, BMW-owned Mini, and Jaguar Land Rover, which is part of India's Tata Motors. Excluding the production of these and other foreign-owned companies like Vauxhall, Ford, etc., how many vehicles were made by *British-owned* companies ?? It is said that currently the biggest British-owned makers (and exporters) of motor vehicles is London Taxis International (makers of those excellent London black(???) cabs) !! Even they are partly-owned by the Chinese !!

  • Comment number 77.

    #14 >>The UK doesn't have a large accumulated debt problem that requires huge increase in unemployment to pay down those debts.

    We don't ?? Have you counted in the PFIs and all the other off-balance sheet items yet ?? Have you counted in the great black hole in pensions yet ??

  • Comment number 78.

    #21 >>Maybe some employers are looking to bring in cheap labour from abroad (but there is a minimum wage which in theory limits the scope for that)

    Theory only works in theoretical situations. In reality, many of these illegal immigrants disappear into the black economy which totally ignores the minimum wage laws !! Look up all those BBC articles on pseudo-colleges and pseudo-students from the Indian sub-continent !! They are not the only ones. South East Asians, Middle Easterners and Africans are into this as well !!

    Meanwhile, the *LEGAL* immigrants get the backlash from all this nonsense !!

  • Comment number 79.

    #38 >>In other words, in order to sell something in the UK ... most things would need to be made, finished or grown in the UK ... but not bananas ... leave my bananas alone!

    Do you also grow oranges and pineapples ?? :-)

    >>but perhaps they can tell us why the very wealthy Chinese, Indian, Japanese are coming to Britain to buy luxury goods when the same goods are available in their own countries (which on the face of its is beneficial for the UK, but not enough by itself to take Britain out of its ongoing and deep 2-3 year (so far) recession)?

    Luxuary goods are in a class of their own in that they have value in their cachet rather than their actual function or composition. A Ferrari has a value far above that of a hunk of metal that transports you from point A to point B !! Very few people will look on or value a Trabant in the same manner !!

    However, few companies have managed to ascend those dizzying heights in the food chain. The rest will just have to slog on against any and all competition !!

    BTW Body Shop seemed to have done fairly well against competition from far cheaper Far Eastern competitors !!

  • Comment number 80.

    #40 >>The answer for (a) has many many advantages over the current system...
    1) Something very simple is difficult to defraud
    2) Something very simple is cheap to administer
    3) Something very simple makes it difficult to hide things - remember Thatcher 'lowering taxes' by which she meant income tax while the tax take from everyone went up several percentage points?
    4) Something very simple is cheap and simple for all people and companies to work with
    5) Something very simple makes evasion difficult
    6) No one will starve or find themselves homelesss
    7) Everyone will always be better off if they work - whether part time, short term or normally
    8) Everyone gets greater flexibility about work and balancing work and life
    9) Employers are freed from minimum wages etc.
    10) Tax credits and other random miscalculated messes are avoided


    Shock !! Horror !! Think of all those millions of "civil" servants and jobsworths who will be unemployed because everything is so simple !! Who will call the call centres if they can understand everything ?? :-)

  • Comment number 81.

    #61 >>Its difficult to believe now that the UK signed up to Articles 55 and 56 of the Chater of the United Nations in 1945...

    In 1945 there were more jobs than people to fill them simply because so many were killed in the preceeding years !! Now there are many more people than jobs and things have changed rather dramatically !!

    I believe that only the Ten Commandments were carved in stone in words of fire. All others have to change with the changing conditions or go the way of the dinosaurs !!

  • Comment number 82.

    Ishkandar makes some telling points.....and I am beginning to think that we can`t be the only people thinking this way.But is anyone in America ready to abandon the false god of Neo liberalism yet? It`s only when they crack that we will be able to criticise the myth...and not until then!

    As an older person I have watched the Neo Liberal Titanic sail majestically from port to port collecting it`s passangers/disciples for the long journey back to the new Jerusalem of New York where the entire world would worship at Wall Street`s feet for ushering in an age of prosperity for all and an end to boom and bust.

    And our entire British aristocracy of politicians and journalists and academics and businessfolk all still cling to the wreckage long after the icebergs of 9/11 and the Second Wall Street Crash Scam began the process of disillusionment that we are still in today.

    When will we wake up and stop trying to save capitalism`s face and realise that it`s institutionally unstable and "broke"....and we need a global peace and reconciliation process to hammer out a better fairer world?

  • Comment number 83.

    82. At 08:57am on 21 Jan 2011, worcesterjim wrote:
    Ishkandar makes some telling points.....and I am beginning to think that we can`t be the only people thinking this way.But is anyone in America ready to abandon the false god of Neo liberalism yet? It`s only when they crack that we will be able to criticise the myth...and not until then!
    ---------------------------------------------------------------------
    Ah, at last ...
    Maybe we will be really sensible and opt for true conservatism.
    People will misconstrue or misunderstand the name.
    What shall we call it?

  • Comment number 84.

    64. At 5:21pm on 20 Jan 2011, foredeckdave wrote:

    ‘Now I suppose you will go on to say that The Great Depression was deepend and lengthened by US protectionist policies - despite all of the research that concludes otherwise.’

    You assume too much.

    I could take all day arguing the economic policies which could lead to war. Do you think the great depression and WW2 were unrelated?

    It could be argued that US‘s isolationism/protectionist policies made it the strongest economy after the depression, but it ultimately meant no-one would trade with Germany.

    The Smoot-Holly Act protected the American economy by not purchasing other nation's goods, i.e. not purchasing German industrial products.

    This in turn caused Germany to lose export and thus income and thus they could not meet the demands of the Versailles Treaty causing economic collapse.

    This "protectionism" caused the rise of Hitler by creating the political and revolutionary hot-bed from a super-inflationary Germany.

    I am not suggesting WW2 was not going to happen anyway for other reasons though.

    From an economics point of view I believe that the protectionist policies of the day had to some extent, some influence on the build up to the wars I noted. They certainly didn’t help!

    Protectionism is the stupid means of solving this problem. By securing our economic power in one area, we ruin the economic growth that is available to other trading partners, thus collapsing their economies, once that happens there is revolutions and civil wars, we lose our trading partners and thus our economy collapses.

    Although I know most of the G20 are already practicing protectionist policies, if the UK were to go down this route in a big way as the original post I responded to suggested, we should expect a response and an aggressive one is not impossible.

  • Comment number 85.

    #84 newblogger,

    Thanks for the reply.

    "Protectionism is the stupid means of solving this problem. By securing our economic power in one area, we ruin the economic growth that is available to other trading partners, thus collapsing their economies, once that happens there is revolutions and civil wars, we lose our trading partners and thus our economy collapses."


    What is even more stupid is to slavishly continue to propound global free trade policies when it is transparent that they are not achieving their hoped for objectives but also have caused strategic damage to your domestic economy.

    I have always argued that free market globalisation is a myth. There have always been self-interest protectionist policies employed by governments. I have further argued that the internal imbalance in the UK economy is a direct and inevitable result result of the 'rush' to globalisation.

    Now the UK is to small and weak an economy to introduce protectionist policies inilaterally. It has to be a pan-European policy. At the present moment such a policy would be opposed by Germany. However, Germany's present position will I believe become understood to be flawed. Just look at the economic chaos caused to the German economy by the 'crash' of 2008 - an event more likely than not to be re-repeated as a result of the continuing global financial crisis.

  • Comment number 86.

    @36. At 11:51am on 20 Jan 2011, you wrote:
    Would love the moderators to mail with their reasons for removing a polite comment that might just happen to have suggested that a BBC journalist should do some real reporting, or worse still might just have pointed out that the BBC had lied, misrepresented or failed to report fact as provided by multiple other sources....

    [Personal details removed by Moderator]

  • Comment number 87.

    There's no reason for anyone in the UK to be sat at home doing nothing i.e. "unemployed". Does anyone believe this country has reached a state of perfection, where nothing needs fixing or improving? Do you walk down the street and think, yes I'm living in nirvana and absolutely nothing could be better?

    No, of course not. So why are millions of people doing nothing useful with their lives - because the capitalist system thinks that any effort they were to expend would not be "profitable" and therefore they are forced to sit at home all day doing nothing. Do you think ancient man sat around all day because a banker decided he wasn't "economically viable" - no, he got out, did things and improved his world.

    It is tragic for both the country and the individuals affected that these people are not able to contribute to the well-being of the country simply because of the say-so of a bunch of greedy sociopaths with too much money and not enough empathy for their fellow man. Just think of all that intellectual and physical capacity going to waste. It's a scandal.

    And by the way, I don't even like cockles.

  • Comment number 88.

    30% of the working age population aren't working (ONS statistic)
    Add to that the 20% of the working age population that work for the government
    And the 20% who are part time
    you are down to 30% of the working population working in something that might produce wealth. Then deduct those that work for the banks and other financial institutions that leach off those that do produce wealth
    And...
    You are down to around 15% of the working population working in industries that make product (wealth).
    This equates to around 7% of the whole population.

    And this is not a crisis?

    Get REAL!

    What is needed - and needed urgently is real useful actions:

    a) British government, councils, public bodies of all sorts must be instructed to buy British - this is because if I spend 25000 on a Jaguar it employs a British person, who pays tax and doesn't claim unemployment, generates demand in their local area and supports the economy. If I am stupid and buy a BMW - even if its only 20000 - instead then I don't employ anyone in the UK, pay benefit instead of receiving tax, lose demand in the economy (20,000 of it to be precise)... This leads to further unemployment and a continuing contraction of the economy. This can't always be masked by employing more civil service paper shufflers doin nothing useful or pretending that banks make money rather than steal it from others.

    b) Stop giving cash away as aid - give British products and services away - this creates employment in the UK, so giving products as aid doesn't cost as much for the UK tax payer.

    c) Use the fact we own two banks to force them to cut business charges to zero and interest rates on business loans to within 1% of the BofE base rate. This will allow business to invest. The public banks will 'make less money' but as that money is stolen from people who really make wealth (by making goods) this will allow the wealth creators to invest in creating the wealth required to get us out of trouble. Other banks will have to charge less as well, so we all benefit.

    d) The BBC needs to start thinking and reporting fact rather than typing press releases again and again. Taking the fact that those not working are not employed and are therefore by definition un-employed try reporting the 30% of the working population that are unemployed rather than the preferred statistic that hides the problem. Better still give the % employed by private money making business and further startle people. Its only when you realise and admit the mess you are in that it can be fixed. An alcohlic that doesn't realise he is will never be helped.

    e) Start realising that the EU us a HUGE drain on our economy leaching billions a year from us and using it to spread cheer elsewhere. Every penny taken from this economy means less demand, less jobs. Think Keynes - spend money IN YOUR ECONOMY to create demand, creating jobs, creating investment, creating wealth. Now reverse it - take money from your economy and spend it elsewhere, you'll reduce demand, reduce jobs, reduce investment, reduce wealth... Either cycle is pretty much self-fullfilling.

    Hopefully the moderators will not choose to remove this because it upsets the sensibilities of the BBC because I dare critise them, or perhaps by implication I also critise both Labour and Conservatives - both of whom are blind to reality and unable to think of the very simple routes out of the problem.

  • Comment number 89.

    We as a population should be looking to support our own manufacturing, farming industries Etc. The easiest and most effective way of doing this is to buy British. This by no means can be considered protectionist and as the majority of our trading partners populous already practice this. As I have said in the past one only has to cross the channel to see this as the norm.

  • Comment number 90.

    @79
    #38 >>In other words, in order to sell something in the UK ... most things would need to be made, finished or grown in the UK ... but not bananas ... leave my bananas alone!

    Do you also grow oranges and pineapples ?? :-)

    Not what was said, but in answer, we can grow these things in the UK, my greatgrandfather supplied grapes to the Queen grown in huge glasshouses just on the edge of London. Certainly though the government should be buying local, taking your money from you and spending it abroad gives the foreign countries lower unemployment, lower taxes, more demand, more profit, more ability to invest while destroying local jobs and industry and causing greater polution.


    >>but perhaps they can tell us why the very wealthy Chinese, Indian, Japanese are coming to Britain to buy luxury goods when the same goods are available in their own countries (which on the face of its is beneficial for the UK, but not enough by itself to take Britain out of its ongoing and deep 2-3 year (so far) recession)?

    They aren't in anything like large enough numbers. There is a large choice of 'luxury goods' and a very small market. You can see clearly from the relative growth rates which is the better market to be in - high volume consumer goods as the Chinese, Indians and Germans produce, or small volume luxury goods that we do (I added the Germans into the hgh volume consumer goods list because they ARE in the market producing high volume goods and are a VERY GOOD example of why high volume goods CAN be made in a well paid european economy.




  • Comment number 91.

    @84
    This "protectionism" caused the rise of Hitler by creating the political and revolutionary hot-bed from a super-inflationary Germany.


    No, not at all true. What caused the problem in Germany was the huge amount of money sucked out of the German economy to pay 'reparations'. This compounded on top of a very damaged economy (lack of fit labour, too many injured people, not enough workers, factories set up to make munitions instead of saleable products etc.) and the collapse of global trade opportunities.
    The whole world suffered in the recession after the 1st World War, the suffering and problems weren't particularly German APART from the reparations. The French, British and to some extent Americans benefitted by sucking the life from the German economy as part of the repartaions while the German economy collapsed. This led to the rise of anyone who claimed an ability to put it right - Hitler saw that and took advantage. He may have been an extremely unpleasant guy surrounded by a bunch of even less pleasant people but he was a clever opportunist.

    One thing here you could bear in mind, the EU has for many years been sucking the lifeblood out of the British economy (billions of pounds a year), while imposing ever more onerous rules which only we obey which cause us more suffering, the banks also suck billions out which they then give away to each other in huge bonuses... this has led to 30% unemployment (check the ONS - I'm not lying, only 70% of the working age population are working) - a fact covered up by government, bbc and other media for many years, also the massive taxes needed to pay for the 'benefits' and the huge national debt caused by our lack of productivity - eventually this will lead to a collapse - there really is no other long term option, then we (as in the UK) could end up with someone just as bad!

  • Comment number 92.

    #85

    You say free-markets aren't working (which I agree with) because we already have nations practicing protectionism, (which I agree with) but you think the solution is more protectionism?

    The EU throughs up trade restrictions against the US, Japan and China and we will all live happily ever after?



  • Comment number 93.

    #91

    "....and the collapse of global trade opportunities. "

    This is what I was trying to suggest. I didn't mean to say it was the only reason, but did have an influence.

    I think the debate is now what you would call protectionism?

    Is squeezing money out of another nation (for whatever reason) exactly that?

  • Comment number 94.

    SleepyDoremouse: The break down of the employment/not employed population are (% of population aged 15+):
    Working - 54.77%
    Retired - 23.58%
    Full Time Student - 6.39%
    Housewife - 6.16%
    Unemployed and Seeking Work - 4.59%
    Unable to work - 2.43%
    Not in Paid Work - 1.55%
    Still at School - 0.53%

    The figures are for the three months to December 2010 (so a month more up to date than the ONS figures) and come from The British Population Survey.

  • Comment number 95.

    John from Hendon: There is an alternative source to the ONS figures. The British Population Survey, their figures collected in a similar way and are published without Seasonal Adjustment. They are publishes about 6 weeks ahead of the ONS figures (the December 2010 figures have been out for over two weeks)
    However, don't get too excited, their figures are remarkably similar to the ONS ones.

  • Comment number 96.

    One thing we are in desperate need of is a reform of the support given to job seekers. I'm not talking about allowances, I'm talking about the sheer lack of professionalism and indifference shown by job centre 'advisors' who take no interest and make no effort on behalf of those they are supposed to be advising.

    They ought to be providing assistance and encouragement, should be experts in career planning, looking for options of appropriate training, specific skills coaching, getting out there and finding suitable positions for job seekers to consider...

    ... instead you need to use carefully chosen phrases to elicit a 'Good luck' when you tell them that you have, solely by your own efforts and with no assistance whatsoever from them, have secured an interview with a potential employer.

    I'll get back to work, but DESPITE Job Centre 'advisors' not due to them!

  • Comment number 97.

    Here's some 'crisis rules' folks.

    1) When a Government says "we're keen not to revert to protectionism" - it just means they've found new ways of doing it. They will eventually revert to this when they realise nothing else is working and it becomes politically heated at home
    2) A Government would tell you that you were in recovery just to shut you up. It doesn't mean you are in one
    3) Governments never learn (economically) but consistently tell you that they're brilliant.
    4) Most people wil accept any fiction they're told - as long as it gives them a sense of safety and wellbeing.
    5) You can't have a jobless recovery.

  • Comment number 98.

    If unemployment is only 2.5 mill I will eat my hat. How many are on incapacity benefit or similar? How many cant sign on as they have too much in savings? How many have been shuffled to one training course or another to cut the unemployment figures? How many are underemployed? How many are working but on zero hour contracts?
    I live in one of the more affluent areas of Outer London yet almost everyone I know is either out of work or is working part time when they wish to be working full time and this is an area of the country that supposedly is among the easiest to get a job in.
    I have thirteen 'O' levels and three 'A' levels at grade A taken in the late eighties before GCSE's were brought in and standards in education started to come down. My A levels are the three science subjects. My IQ is rated by MENSA as being 150+, in the top 0.25% of the population. I program computers as a hobby as without a degree its impossible to work these days in software engineering. I can do anything with computers except web design, ie I can build them, program them, administer them. I have MCSE2003. I am an MCP. I apply for upwards of 50 jobs a week and have not had a single interview in over 3 years of unemployment. I can count the replies I have received to applications on one finger.
    I am now competing with people who have degrees but as I have a family and rely on housing benefit to pay the rent I cant improve my qualifications. The job centre will not help me retrain as I have level 3 qualifications. The only jobs available here are on minimum wage which at the moment I would be happy to work for even though this would not pay the living costs of London.
    And yet you claim we dont really have a problem as of now with unemployment. You must be pulling our legs.
    Admittedly the blame lies with employers who seek to outsource every possible job to Asia and fail to train new members of staff expecting them instead to be job-ready straight from university which of course is never the case so for those jobs that are still here foreigners are often preferred to natives perpetuating the myth of skills shortages and the need for immigration.
    This country is FUBAR now and we have not even really started on the coming cuts yet.
    Please Stephanie remove those rose-tinted specs of yours and see the real picture.

  • Comment number 99.

    72 armagediontimes

    An economy is a part of society and societies are indeed living organisms.

    There are those whom I choose to call gnostics who consider themselves cleverer than the rest of the collective but are really prisoners of their own elite values.

    History is full of stupidity, ignorance and foolishness but nothing is deliberate. The trouble has often been that nobody says stop the madness or if they do nobody listens. I recommend the parable of the Gadarene swine. There is no conspiracy as you seem to enjoy implying. Human weakness is the problem not individuals engaged in conspiracies.

  • Comment number 100.

    #92 newblogger,

    In the existing depression then the answer to your question has to be a resounding YES.

    You have to ask yourself why the theory (and it is a theory) of globalisation was implemented. Why were so many jobs off-shored? Who actually benefited from the process and why are we in our present precarious situation?

    If the answer is related to low prices then ask yourself where were the riots and demonstartions that forced retailers to look overseas for goods? Why did they do it? The standard answer is because they had a duty to increase profits for their shareholders. So where did these profits go? Were they re-invested in increased profitability in our domestic economy? We now have an unprecedented time-bomb wherein the world is suffering from too much liquidity and yet nobody has any money!

    Protectionism does not run contrary to international trade. What it does do is to attempr to make that trade more equitable and regulated. There is little or nothing in Chinas exports that is inately Chinese. The only advantage lies in their manipulation of labour cost. Hence a tarrif policy that adresses that imbalance will allow both parties to compete on an equal footing. If the Chinese can make a better product then so be it.

    I have to agree with point 5 of writingsonthewall's #97. Whilst the world does not owe us a living, neither do we owe the world the skin off our backs in terms of higher debt and unemployment levels.

 

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