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Wednesday, 10th September 2008

Brown's "new jobs" boast is down to immigration

Fraser Nelson 4:49pm

Gordon Brown’s boast of having created “three million new jobs” has always had to come with the major unspoken caveat that (according to the Statistics Commission) 81% of these “new jobs” in this working-age population are accounted for by immigration. Yet for my cover story on immigration tomorrow I asked the Office for National Statistics to do one further exercise for me: break it down by public and private sector. The results were as I expected. In the period Apr-Jun 97 there were 18.1m UK-born people working in the private sector. In Apr-Jun 07, it had actually fallen - to 18.0 million. So strip away immigration and state sector expansion and there are fewer British jobs, not more. The data for the respective period in 2008 is not out yet, but in the current environment it won’t be upwards. The ONS kindly prepared the report for us on request, so I can’t link to it. But I’ve put it as a PDF here .

I say in the piece that immigration has allowed Gordon Brown not only to boast about “new jobs” but to avoid tackling the problem of UK joblessness. The DWP kindly sent me a recent study (another PDF ) they’ve done comparing welfare caseloads right from 1979 (the previous series started only in 1999). It’s important, as so much of data we’re given has a “year zero” policy which doesn’t show how much progress was being made under the Tories. GCSE improvement, for example, has slowed under Labour. I was curious to see what work was made cutting the welfare caseload. 

The DWP’s data shows a decline from 5.06m in Nov97* to 4.18m in Nov07 – a decline of just 17% for all out-of-work benefits. Pretty dismal progress, when you consider that Brown had what he describes as the longest period of economic expansion for a century. But what puts it into perspective is what was achieved the Lawson boom. Between May87 and May90, the same welfare caseload was cut by 19%. So Thatcher made a bigger dent in welfare dependency in her third term than Labour has managed in all three of its terms put together. 

There is a rule with economic booms: it’s not the size that’s important, it’s what you do with it that counts. Lawsons’ was shorter-lived, but he used it to tackle British joblessness and repay net debt (14.5% of GDP when Thatcher left office, on the OECD’s measurement). Brown used his to ramp up debt - now 32.9% of GDP - then binge on foreign labour to avoid painful welfare reform which his government is trying to do only now, in the middle of a downturn. 

One final point. As Liam Byrne likes to say, the millennial wave of immigration has indeed been global. But its impact on Britain was not unavoidable. France, for example, saw immigrants as a share of its workforce slip from 11% to 10% between 1997 and 2006 according to figures which Eurostat sent me. The UK figures went from 7% to 11%. Others: Denmark (from 4% to 6%) Finland (2% to 3%) Sweden (6% to 13%) 

Where next for immigration? As an enthusiastic supporter of it, I was dismayed to be unable to find any concrete proof that it’s good for the rest of the economy. Depending on what you count (kids? proportion of defence spending?) you can argue its impact to Britain is plus £2.5bn or minus £5bn as Prof Bob Rowthorn has shown. Economists and think tanks wage war over this, and my verdict is that there’s no clear answer. As Britain is one of the most tolerant countries on earth, all this has been a concern here without being a toxic issue (apart from in Westminster, where they’re been terrified of it since Enoch in 1968). 

With more people now competing for fewer jobs, the migration debate might yet turn sour. Only a third of immigrants are Europeans, so while the Poles may go off to Dubai or countries which don’t have bombed-out currencies, it won’t necessarily stop the rest of the flow. If I were Cameron, I’d have this down in the “things that might blow up on my watch” box. That’s why Frank Field’s intervention with “Balanced Migration” is important. I wish I could find data to disprove him and Sir Andrew Green from MigrationWatch, with whom he’s working, but I can’t. Cameron will have to swallow his own instinct not to go near immigration, and tackle the issue head-on. When he does, he’ll find a country more than ready for the debate. 

*I used Nov97 as my starting point as the only earlier year was May96. There is no May97 entry, and I suspect that what changes happened between May and Nov 97 couldn’t be attributed to Labour policy. 

P.S. The Thatcher years were, of course, ones of painful deindustrialisation and it was here that the error of lumping unemployed into incapacity benefit (sustained by Major and Blair) was first made. So her overall record is – as the DWP figures show – one of leaving 80% more on benefits that she found. But her tenure was one of recessions, economic wars and wholesale economic realignment. Brown had a golden legacy, and did a great job claiming credit for the economic upswing. As Warren Buffet says, only when the tide goes out do you see who’s swimming naked. 

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Comments Post comment

Chuck Unsworth

September 10th, 2008 5:07pm Report this comment

Nice piece. Of course most of it will be ignored or go over the heads of many parliamentarians. But the voting public is by instinct far shrewder than that.

JimBob

September 10th, 2008 5:55pm Report this comment

The tories should shut up about immigration and tax cuts if they dont want a 'nasty' party narrative going

Ian C

September 10th, 2008 5:59pm Report this comment

Your emotional attachement to immigration is very touching Fraser. But the reality of 21st century Britain it needs more people inhabiting these islands like the proverbial hole in the head. We have to find a method of maintaining our economic competitivness while restraining popultaion growth.

It must be possible to calculate what this means in terms of how many children we want the existing population to have, what rate of economic growth, immigration and productivity improvements this requires.

All of this can then be converted into evidence based policy. The politics would then be about the assumptions not the principles.

Admittedly, the biggest initial headache is to get the benefit dependents into useful work. This is a 20 year project involving considerable but necessary restrictions of freedoms to those who are.

TrevorsDen

September 10th, 2008 6:52pm Report this comment

Why on earth do you think immigration is a good thing?

Is emigration from Scotland into England (ie England's immigration) a good thing for Scotland?

Is casting and keeping British people onto bogus benefits (as well as the numbers on genuine unemployment benefit) a good thing? That jobs are available for these people is indisputable since they are being filled by Poles etc.

If we have a shortage of Doctors (ie skills) then it might be seen as beneficial - in the short term.

But

Immigration good ?? It highlights a complete and utter failure of this government's economic, social, educational and training policies.

A good thing ??? !!!

Nicholas

September 10th, 2008 10:07pm Report this comment

Yes, JimBob, that's it. Shut up about two of the most significant issues facing Britain today in case the idiots of the Left tell lies about you.

I think that after 11 years of New Labour "government" (I use the term loosely) any doubt about which party is truly nasty has been well and truly settled.

Tiberius

September 10th, 2008 10:23pm Report this comment

A very important issue, but dealing with the numbers of future immigrants will be a subsidiary concern to addressing the problems caused by immigrants already in Britain who have not integrated.

Michael

September 10th, 2008 10:28pm Report this comment

You refer to welfare rolls goingup by 80% in the Thatcher years only at the end of the article - but to my mind this was the flipside of the Thatcherite miracle and our sink estates have never recovered from that era (i grew up on a Council estate - it;s deterioration from 81-83 in particular was marked). You underplay the benefits of immigation too - many Poles (for example) in particular have superb educational background and have progressed from warehouse work to more responsible positions throughout in many businesses. However, should you visit an MPs surgery you are more than likely to see them dominated in the major towns and cities by asylum seekers - Zimbabweans, Sudanese, Somalians and the like. These folks are now swelling the welfare rolls as the Govt gets tough on benefits claimants just as the economy turns sour. Immigration is a mixed picture - but Blairnstincts on welfare reform were consistently hampered by big Govt Brown. Truly, the man has been disastrous.

Austin Barry

September 10th, 2008 11:37pm Report this comment

Immigration may be good, it may be bad. Is Muslim immigration good when compared with East European immigration? Will your average Jihadist from Kashmir assimilate more readily than an Australian? Of course not. To think that all immigration is ipso facto good is just daft - a legacy of sixth form, Pollyanna, right-on, everyone-is-lovely thinking from about the 1969 summer of love. And the consequence of this sloppy let's-love-everybody, let's embrace every culture however objectively absurd and brutal, will be, indeed is, blood on the streets.

Charles

September 11th, 2008 9:38am Report this comment

Perhaps you could calculate GDP per head of private sector employees (ie, the productive part of the economy).

It might also be interesting to note that we could have been in recession for the past two years as private sector employment levels rose faster than GDP growth.

I'd be interested to see these figures.

David C

September 11th, 2008 10:18am Report this comment

'The migration debate may yet go sour'

In spite of nearly universal 'sensitive' reporting, judging by the rise of the BNP, the debate is already on the turn.

Ian C: Thatcher achieved economic growth with no net immigration ( I remember this from a BBC piece on Labour policies on immigration, and was somewhat surprised).

C Powell

September 11th, 2008 12:41pm Report this comment

The immigration debate will only really be worthwhile when it deals with the question of who should be allowed to come here and not just numbers, as Austin Barry says. Allowing in a highly qualified engineer who has a job, speaks English and is prepared to integrate while here is good; I fail to see, however, what advantage to Britain there is in allowing an illiterate woman from a remote part of Pakistan who does not speak English or of allowing in Somalis - 80% of those here are on benefits. How can that sort of immigration be good? And there is considerable evidence that allowing these sorts of immigrants in causes harm: 7/7 (& the various plots since then) is proof of that. People were able to make the connection between immigration/failed multiculturalism and blood on our streets, even if the political class try to pretend otherwise. We should not repeat the mistake now and be prepared to face down the inevitable squeals from those who pretend, in the face of all the evidence, that all cultures are equal. Our immigration policy needs to be based on what is good for Britain, must take account of cultural factors and, above all, it must have the consent of those who live here.

We should also be much more discriminating in who we give asylum to - and if that means withdrawing from the relevant Convention so that we make the decision so be it. Our current asylum policy is neither effective nor fair nor humane.

Jeremy Poynton

September 11th, 2008 12:57pm Report this comment

No the Tories MUST discuss immigration as it is a vitally important topic. And anyway - New Stasi are WAY ahead in the nasty party stakes these days, and the electorate know it. Witness Crewe and Glasgow.

HJ

September 11th, 2008 1:36pm Report this comment

Fraser - You say that: "The Thatcher years were, of course, ones of painful deindustrialisation"

This really is a myth that is commonly repeated on the pages of the Guardian. It is fairer to say that employment in manufacturing industries declined rapidly (and, of course, this produced much pain), but the output from manufacturing industry grew pretty steadily, if unspectacularly, due to fast-rising productivity.
For example, in the ten years to 1997, industrial output increased by around 20%, whereas since 1997, output has been almost completely flat (in fact there was a rise for 2-3 years after 1997 and since then it has generally declined). Employment in manufacturing industry had started to rise again by 1996, but since 1999, over a million jobs have been lost in manufacturing. By contrast, manufacturing output has risen over 30% in the US in the last 10 years and there has also been a big rise in every other G8 country (except Italy). The poor performance of the UK in this respect largely accounts for the trade deficit.

So it would be more correct to refer to deindustrialisation under New Labour

Fraser Nelson

September 11th, 2008 9:25pm Report this comment

HJ, you have a good point. But in the Labour years it was less painful because the service industry jobs created outweighted the mnfr jobs lost. With Thatcher there was a (yes) painful lag. Under Thatcher, the IB problem started - Labour's sin was not to use the boom years to address it. Both have culpability for the 5.2m on benefits today.

Neopeitha

September 11th, 2008 11:25pm Report this comment

Fraser,

The way for the Tory party to address the issue of immigration is through the related matter of population. Everyone can feel that class sizes, infrastructure, housing stock, etc., are being squeezed by population growth, and steering the debate towards this enables immigration to be divorced somewhat from race. After all, there's little point in the government setting targets for new housing build without concomitant targets for population growth.

Moreover, population is a natural extension of the environmentalist debate which Cameron has rightly tried to reclaim from the Left. For instance, most people are now familiar with the 'hockey stick' chart of CO2 levels, but if this is resolved into the two components of population and per-capita emissions, it is clear that the former is by far greater contributor. It is thus absurd to spend such effort on climate change and *not* simultaneously talk about population.

Verity

September 12th, 2008 7:51pm Report this comment

Austin Barry - I don't agree with your analysis. I believe it is much more malign and destructive than that.

Verity

September 12th, 2008 7:53pm Report this comment

Jim writes: "The tories should shut up about immigration and tax cuts if they dont want a 'nasty' party narrative going."

I agree! It's always a good idea to give in to verbal bullying! That is what speech fascism is for!

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