“The figures published today show two million more private sector jobs. They show 1.4 million more people in work at the end of this parliament. They show unemployment falling every year.”
David Cameron, prime minister’s questions, 30 June 2010
Cathy Newman checks it out
The coalition government is poised to make the biggest cuts to public spending since the Second World War. And as today’s official figures from the Office for Budget Responsibility showed, that’s going to result in more than 600,000 public sector job losses. So to claim, as the prime minister did today, that unemployment will fall every year strikes me as chutzpah of the highest order. Over to the team to see if David Cameron might live to regret what he said.
Over to the team for the analysis
The OBR – the independent public finances watchdog – put out detailed forecasts today, setting out the likely jobs picture over the next five years.
As Cameron says, the figures show employment increasing. This year there are set to be 28.89 million people in work; by 2015-16 it’s increased to 30.23 million.
So that’s 1.34 million more workers – slightly fewer than the 1.4 million Cameron rounded it up to, but close enough.
But despite that overall increase, public servants are set to lose their jobs in droves.
The OBR figures show 610,000 state jobs will go over the next five years – reducing the government workforce from 5.53 million to 4.92 million.
So for employment to carry on increasing, private firms have to step in to fill the hole. And it’s a pretty big hole.
The OBR figures expect 1.95 more private sector jobs in five years’ time (again, Cameron rounds this up slightly, to two million).
This would mean a much bigger business boom than Labour ever managed.
According to the ONS, the private sector employee count went up by just over 1.8 million between 1999 and 2008. That’s slightly fewer extra workers than the OBR expects – and over twice as long a timescale.
Add to this the fact that the global economic conditions aren’t exactly rosy right now, and according to one leading economist, there’s not a “hope in hell” that it’s likely.
“You’ve got to offset not just for a lot of public sector job losses but also private sector job losses,” said John Philpott, chief economist at the CIPD (who predicted earlier this month that up to 725,000 public sector jobs would have to go).
“Against a backdrop where we’re going to be seeing hundreds of thousands of public servants losing their jobs, and hundreds of thousands of private sector workers who are dependent on the government for contracts, it’s clear there’s going to be a major challenge for the government if it’s going to meet its employment objectives,” he said.
Cathy Newman’s verdict
David Cameron accurately quoted official figures in parliament, so he gets a green light from the factometer. But his claim that unemployment will fall every year requires a big leap of faith. He’ll only be able to meet that promise if the private sector roars ahead.
If taxes and interest rates are kept low, that might happen, but it’s a big if. Research by the consultancy Oxford Economics just this month found that 2.3m private sector jobs were dependent on state contracts in areas like IT, defence and hospitals. As public spending falls, those employees are in jeopardy.
FactCheck will be watching the unemployment count with interest.