The Guardian’s headline about the jobs that will be destroyed by the Budget is slightly disingenuous- it only focuses on the cost side rather than the job creation side. However, once you do delve into the job creation stats an interesting picture emerges. By 2015, HM Treasury is assuming the creation of 2.5million jobs. This seems very unlikely to me.
Let’s take a look at what has happened in the last decade with regards to job creation (source: Labour Force Survey):
Let’s take 1999-2007- pre-credit crunch/ recession and boom time. In that time the UK private sector economy only created 1,520,000 private sector jobs. So what hope is there that it will create 2.5million by 2015 in a period of slow growth, fiscal consolidation, potentially rising interest rates, and while the European economy is stagnant? Not very high would be my guess. This is a Budget that will not create jobs at the very best.
My LabourList column on ‘unavoidability’ in recent-ish political history- it normal precedes disaster- is now online.
June 30th, 2010 at 13:35
1,520,000 is the net change in private sector employment, not the number of jobs created by the private sector.
The equivalent figure for 2010-15 implied by the HMT figures reported by the Guardian is 1.8m (= 2.5m – 0.7m). Still, this looks optimistic.
One way the figure of 2.5m may be realised is if public sector jobs are transferred to the private sector – i.e. through privatisation/moving public services to private sector providers. Would this mean the private sector has “created” these jobs though? No.