We are not facing a jobless recovery

 
Allister Heath
IT is the story the doom-mongers don’t want you to hear. There are now 416,000 more people in work in the UK than there were a year ago. So much for a jobless recovery: it is a complete myth. The total number of people in work rose by 0.4 per cent in the first-quarter and 1.4 per cent year-on-year – the private sector has created over half a million extra jobs, easily compensating for reduced employment in the public sector (down 132,000 last year). There is little doubt that private firms would be hiring even more people were it not for the growing burden of red tape, some but not all EU-inspired, that is increasing the cost and risk of employing staff, contrary to the coalition’s stated aim.

Of course, the situation is far from ideal; vast amounts of people still cannot find the right or even any job. There are many tragic stories. Youth unemployment is falling but remains high. The number of UK born people in employment rose just 77,000 on a year earlier, while the number of non-UK born people in employment rose 334,000, suggesting that poor skills continue to plague a large chunk of the population, forcing many firms to look overseas for staff.

But none of this should detract from the improvements, which are becoming clearer by the quarter. The number of people in employment is still 332,000 lower than the pre-recession peak of 29.57m during the three months to May 2008 – but at this rate all the losses could be clawed back within the next 12 months, despite continuing state sector job cuts. It is of course impossible to predict whether job-creation will continue at this speed – but purchasing managers’ surveys for manufacturing, services and construction, while weaker, still suggest growth and job creation in the second-quarter. The Bank of England’s agents survey suggests firms’ hiring intentions remain better than a year ago in manufacturing and services, pointing to further job gains.

While some of the increase consists of part-time and self-employed roles, the number of full-time employees rose by 146,000 (0.8 per cent) quarter-on-quarter in the first three months of this year – the third biggest rise of the last 10 years, Citigroup calculates – and is up by 258,000 (1.4 per cent) over the year. This is a strong rebound and above the 1994-2007 average of 1.1 per cent growth a year. The facts are there for all to see. The private sector is recruiting. There is still a long way to go, and there are still huge problems – but it does nobody any favours to pretend that this is a jobless recovery. Excessive pessimism is just as dangerous as irrational exuberance.

KEN CLARKE MUST GO
IT is time for David Cameron to toughen up. Underperforming ministers should be fired, and fast, before they destroy the government’s reputation. The first to go should be Kenneth Clarke, the justice secretary. Clarke apologised for his ridiculous comments on rape yesterday – but the reality is that his entire approach to criminal justice is dangerously flawed. Being soft on crime, as Clarke is, doesn’t work and is extraordinarily unpopular. At a time when the government is taking tough but necessary measures on the public finances, it makes no sense for it to alienate most hard-working folk, for whom reducing crime and punishing villains is the government’s central task. Clarke must go – and so must his ludicrous approach to crime and punishment.

allister.heath@cityam.com
Follow me on Twitter: @allisterheath