Research shows huge gulf in UK jobs estimates

THREE well-established surveys of the UK’s job market suggest that official figures may be overestimating UK employment by over a million jobs, according to research released by Markit last night.

The huge divergence between estimates made by the Office for National Statistics (ONS) and a number of other sources has opened up since 2010. The gauges previously tallied with each other closely.

Markit’s own surveys, as well as those conducted by the British Chambers of Commerce and KPMG, display a much less buoyant picture of job growth than the ONS.

Markit chief economist Chris Williamson said: “Analysis based on three entirely different business surveys… sends a consistent message that the ONS data may have substantially overstated employment growth in the private sector.”

The huge disparity might be down to tax changes: 86,720 extra firms were registered by the government between 2011 and 2013, partly due to changes to HMRC’s computer systems. Markit says the hypothesis is “speculation at this point”.

As well as fewer jobs, the private surveys similarly record far lower growth in hours worked, making the fall in the productivity of UK workers more easily explicable.

An ONS spokesman said part of the gap might be explained by the difference in the kind of data collected, and said its Labour Force Survey (LFS) is particularly well grounded as it surveys 100,000 people.

“LFS-based estimates of employment cover the full range of employment situations. In particular they cover the self-employed, employees working part-time and people on government supported training schemes, while other employment surveys may not cover these categories," he said.

“All of these categories of employment have shown strong growth in recent years, as well as employees in privately-owned organisations. This may explain part of the divergence of the official statistics from survey based measures that do not cover these categories.”