Britain has reached its highest ever level of employment. According to new figures from the ONS, the employment rate has risen to 73.2 per cent — or close to 31 million people in work. This stands as the joint highest rate since records began in 1971. Unemployment is down to 1.86 million. The short-term jobless rate is also at its lowest rate since 1992. Pay is also increasing, with private sector earnings (excluding bonuses) up 2.1 per cent year-on-year at the end of 2014. Youth unemployment has increased slightly, something Esther McVey has described as a ‘tiny blip.’
But never in British history have there been so many job vacancies. Never have there been so many workers. These are just two facts from today’s job figures, loaded with good news for David Cameron. Normally when employment rises or falls, it’s part of a wider European trend. This time, Britain is the outlier. The Prime Minister was right to say that we are the ‘jobs factory of Europe’ — more jobs have been created here than the rest of Europe put together. As Barack Obama remarked, it does suggest we are doing something right.
So, what? Cameron’s answer should be: welfare reform and tax cuts, for both employers and employees. The corporation tax cut and the lifting of the income tax threshold has formed a pincer movement on unemployment, which is now plummeting. It hit 5.7 per cent in December and is falling three times as fast as the Bank of England expected. This is why it deserves the title ‘jobs miracle’ – jobs are being created at a far faster rate than experts expect by looking at economic growth. As Fraser has argued, there must be another factor – and that can only the change in government policy.
These employment figures help put the Tories on far firmer territory with the economy. The year began with spurious claims about reducing the deficit but there is no confusion about what a job is. Iain Duncan Smith welcomed the figures, saying ‘the jobs-led recovery is changing people’s lives for the better on a daily basis.’ All Labour can do is to welcome the figures but argue ‘five years of the Tories’ failing plan has left working people £1,600 a year worse off since 2010.’
Even the coalition’s critics must consider whether lower taxes on employers and employees are linked to the rising number of people in work. This still hasn’t stopped some in Labour promoting tax rises: today, Frank Field has proposed hiking up National Insurance to help plug the NHS funding gap. David Cameron fought the last general election on a pledge to ‘kill the jobs tax’ — yet the success of this has been barely mentioned in the campaign so far. It’s a rare instance of the Prime Minister following his word: he pledged, he acted and it worked. And voters need to be reminded of this.
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