Thursday, 19 June 2008

The enduring Brown "porkie"

One by one Bottler's claims to economic mastery are disappearing - we are now going to have a bust made worse by excessive previous Government and personal purchase on credit. The Balance of Payments has lurched into record deficits on the Trade Account, as we kept inflation down by importing huge quantities of cheap foreign goods. Productivity is not rising as rapidly as that of our competitors, our education and training is deteriorating. While there has been growth in the economy, when calculated per head of population it is nothing very special. To a large extent recently the growth has been due to a rapid increase in the working population due to massive immigration.

There is one claim Bottler can make, and he did in Parliament in January this year, that under his management Britain has enjoyed "the best employment record in history." Record numbers are in work. This cannot be questioned In December last year 29.7 million were in work.

However, the absolute figure is less important than what is known as the participation rate, that is the percentage of the population of working age who are actually in work. It is silly to compare the absolute figure when we now have the largest population ever. Since 1997 82% of new jobs have been occupied by immigrants.

Bottler has concentrated on finding alternatives to work - welfare (- record levels registered as "disabled" rather than unemployed), and longer study to keep young people off the unemployment register.

So if we compare not absolute levels of employment, but percentage rates of participation, what do we find?

Since 1979, and apart from during labour market adjustments in the early 1980s, the participation rate has fluctuated between 78% and 81%. Under Bottler it has risen from 78.3% in 1997 to 79.3% in 2006. In December 2007, when Brown was able to boast of record levels it had fallen slightly to 79.1%.

So when was the peak participation rate? This was clearly between 1990 and 1991, at just short of 80.8%, and significantly higher than anything Bottler has achieved. At the time, the Chancellor was Nigel Lawson. The accolade should not be awarded by Bottler to himself!

In 1990/91 the number in work was 28.1 million. In absolute terms under Brown more people were in work than ever before, but as a percentage of the available working age population participation in 1990-91 has never been approached by Bottler.

He is at his usual dishonesty - very carefully presenting a partial and mistaken impression, without explaining the basis of his statement.

The Brown percentage peaked in 2006, and has since fallen off. If we experience more than a slight reduction in economic growth, with rising unemployment and some immigrants returning home his "economic record" will be shown to have been a mirage. (But all his claims will also have been shown to have been temporary and wrong!)

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