73% of newly unemployed working again within 6 months

HAMISH_MCTAVISH

The Labour government has been hyper-aggressive in trying to cap the rise in unemployment. It has poured resources into the Jobcentre Plus network to increase its capacity. Even during a recession of this severity, the job centres learnt of 10,000 new vacancies a day; the effort has been focused on trying to get the newly unemployed to fill the vacancies: 55% of new claimants are leaving the register within three months and 73% within six months – only fractionally lower than in normal times. There has been the £1bn Future Jobs Fund, and then the guarantee that every 18- to-24-year-old receiving JSA will get a job or training after six months.

In total, £5bn has been spent – and it is working.

All of this puts a floor under the economy; consumption holds up as the fear of losing a job retreats.

But never underestimate the additional stimulus of a game-changing 30%-plus devaluation, again the largest since Britain left the gold standard in 1931.

Under Labour, deindustrialisation proceeded even faster than under the Conservatives as Brown's love affair with the City led to an astonishing influx of foreign banks and capital, all of which pushed the exchange rate up to unprecedented levels of uncompetitiveness. Honest-to-God British companies could not compete, as the City crowded out non-financial enterprise.

As the City has contracted, capital flows have shrunk and the pound has fallen.

Imports are relatively expensive and are dropping fast, while in 2010 exports will start to accelerate, especially as the world economy, led by Asia and the US, rebounds.

The industry we have left is highly competitive; it had to be.

Growth in Britain from the dark days of the 1991 recession to the end of a disastrous 2009 has still averaged a solid 2.1% – higher than any of the big economies in Europe and Japan. There is more to the British economy, thankfully, than financial services – despite the City propaganda.

Two more sources of vital stabilisation are the £200bn of cash printed by the Bank of England to flood the stricken financial system and the £178bn budget deficit. Again, these are unprecedentedly big, but faced by near banking collapse, no other response was possible. The Bank of England has had to be radical about avoiding a calamitous contraction of the money supply, and the government has had to be no less radical in maintaining public demand as private demand risked going into free fall. The banking system has been bailed out and is rapidly repairing its balance sheet.

Britain is emerging comparatively lightly from what could have been a second Great Depression.

For anyone who believes in government economic activism – and in the dangers posed by Big Finance – it has been a massive vindication. The government is still too deferential to City interests; for example, Alistair Darling should never have allowed the great banks to refuse to contribute to the proposed National Investment Corporation. They should have been told their refusal was unacceptable, but New Labour has little balls when it comes to bankers. Expect the bonus tax to be rescinded in three months' time.

The City has been overindulged and industry neglected for too long. Britain has some great companies – there are just too few of them. Much more needs to be put in place to support innovation and growth if the next decade is to be anything other than austere and hair-shirt.

http://www.guardian.co.uk/commentisfree/2010/jan/03/uk-economic-recovery

I am really (but pleasantly) surprised at these statistics....

Even during a recession of this severity, the job centres learnt of 10,000 new vacancies a day;

55% of new claimants are leaving the register within three months and 73% within six months

I dislike Labour.....

But I cannot argue that their response to the crisis was anything other than exactly the right thing to do.

I would argue that they should not have got us into this mess to begin with, but thats a different argument entirely.

ben500

Nice to see someone actually acknowledging some of the good to come out of this government, a Tory government would going on past performance have left them there to rot.

HAMISH_MCTAVISH

ben500 wrote: »

Nice to see someone actually acknowledging some of the good to come out of this government, a Tory government would going on past performance have left them there to rot.

I rather suspect a Tory government under Cameron would have done pretty much the same, and spent what it takes to keep unemployment down. Despite all the sound bites about the deficit.

aah

Don't vote Tory. We cannot afford to lose the tax revenues and increase benefit payouts that would be demanded by their decimation of the public services we need. And that includes the NHS.

abaxas

aah wrote: »

Don't vote Labour. We cannot afford to lose the tax revenues and increase benefit payouts that would be demanded by their decimation of the public services we need. And that includes the NHS.

Corrected for you. You socialist thief.

HAMISH_MCTAVISH

aah wrote: »

We cannot afford to lose the tax revenues and increase benefit payouts that would be demanded by their decimation of the public services.

You're right.

Guess we'll just have to cut public services jobs for the boys, AND cut benefits too.

And about time.

Pobby

HAMISH_MCTAVISH wrote: »

I rather suspect a Tory government under Cameron would have done pretty much the same, and spent what it takes to keep unemployment down. Despite all the sound bites about the deficit.

Ah so that might be a change to the way that Thatcher played it. It was up yours, I want to get inflation down, oh yes, let`s get into the ERM and when the UK was in the grips of the last recession we just had interest rates going higher and higher.

ManAtHome

Is "leaving the register" the same as getting a job (full-time non-seasonal)? Don't you "leave the register" after 6 months if you have savings (change from contribition-based to JSA to income-based)?

Good news if permanent full-time employment is picking up, but "leaving the register" just seems a strange way of phrasing it.

Entertainer

Pobby wrote: »

Ah so that might be a change to the way that Thatcher played it. It was up yours, I want to get inflation down, oh yes, let`s get into the ERM and when the UK was in the grips of the last recession we just had interest rates going higher and higher.

Actually Thatcher was against the ERM- it was one of the things she got right- it was the Europhiles in her party who insisted on entry. She was probably right but for the wrong reason. And the entire political class was in favour of the ERM- Labour, Lib Dems, Unions, broadsheet newspapers. For reference, this was the most recent time when politicians showed how useless they are with macroeconomics before the current debacle.

sjaypink

ManAtHome wrote: »

Is "leaving the register" the same as getting a job (full-time non-seasonal)? Don't you "leave the register" after 6 months if you have savings (change from contribition-based to JSA to income-based)?

Good news if permanent full-time employment is picking up, but "leaving the register" just seems a strange way of phrasing it.

Exactly. The figures are often reported like this, it really annoys me!

Also, alongside savings, might be because you have a working partner