The coalition government regularly claims that one million private sector jobs have been created since it came to office. Yesterday the Prime Minister claimed that 300,000 new companies had been formed in that time and that there were more companies in the UK than ever before.
An article in the Guardian this week casts doubt on the first of these figures and maybe explains the second. Government claims are based on surveys carried out by the Office of National Statistics. These indeed show one million new private sector jobs since the last election. However a study by Chris Williamson of Markit, the data company behind the closely watched PMI surveys of business activity, casts doubt on the ONS figures. He compares those figures with three separate and independent surveys carried out by purchasing managers, British Chambers of Commerce and the audit firm KPMG. All of these show limited growth in private sector jobs of about 250,000.
Could the answer to this discrepancy lie in my own experience? Ten years ago I was made redundant. I set up a company and employed myself. So I added one to the number of companies and created a private sector job. There was however one big problem – no income for six months. I am sure many people losing their jobs in the current slump have taken the same route. I know several ex-public sector colleagues that have done just that. The ONS may well include such company and job creation in their figures.
These new companies are, in the main, not potential Googles or Facebooks. They are individuals desperate to get some income by hiring themselves out as contractors, or driving taxis or decorating their neighbours’ houses.
There is another element in this trumpeted jobs growth that the Tories prefer to be swept under the carpet. Tens of thousands of public sector jobs have been privatised. Many of my ex-NHS colleagues found their service being put out to tender. Some of them got jobs in the new private companies. Some did not. In fact there was no net increase in the number of jobs. Public sector jobs were eliminated and a lower number of private sector jobs created. They were the SAME JOBS but with worsened terms and conditions. No doubt in the next few months Cameron will boast of the many new private sector jobs resulting from the sell off of Royal Mail.
I hope that someone more knowledgeable than me about government statistics can explain this so that we can expose Tory propaganda for what it is – spin and PR.