Gordon Clown .Com

A new study shows that the “low unemployment” which Gordon’s much heralded “miracle” economy has been built upon, is a mere sleight of hand, and that actually unemployment is much much higher than the government are willing to admit to.

Unemployment is almost three times as high as the Government’s official figures a new study has claimed.

A report by Sheffield Hallam University said 1.7 million “hidden jobless” should be added.

In particular, the report said that at least one million of the 2.7 million people on incapacity benefit should be classified as unemployed.

However, official unemployment has fallen by 15,000 to 1.68 million in the same period. The claimant count has fallen for eight months in a row, the longest continual reduction since the summer of 2003.

The claimant count, which covers people eligible for jobseeker’s allowance, fell by 9,300 in May to 880,400, the tenth time the figure has fallen in the past 11 months.

The claimant count has fallen for eight months in a row, the longest continual reduction since a run of 20 consecutive monthly reductions which started in the summer of 2003.

But the figures were overshadowed by a big increase in the number of people classed as economically inactive, which includes students, those looking after a relative, workers who have taken early retirement or given up looking for a job.

The figure increased by 77,000 in the latest quarter to 7.95 million, the highest figure since comparable records began in 1971.

The number of jobs in manufacturing firms also fell to a record low of 2.96 million after a fall of 49,000 in the latest three months compared with a year ago.

Today’s data from the Office for National Statistics also showed that the number of people in work fell by 10,000 in the quarter to April to just over 29 million.

The claimant count is now at its lowest total since September 2005 and is down by 71,500 on the year.

Average earnings increased by 4 per cent in the year to April, down by 0.4 per cent from the previous month.

Excluding bonuses, the figure was unchanged at 3.6 per cent. Wage growth was 4.2 per cent in private firms, down by 0.6 per cent on the previous month, compared with an unchanged figure of 3.1 per cent in the public sector.

There were 638,000 job vacancies in the three months to May, up by 21,700 from the previous quarter.

There were 2,000 days lost through industrial disputes in April, the lowest monthly total since January 2005.

The UK still has one of the lowest unemployment rates in Europe at 5.4 per cent, but the figure has increased by 0.2 per cent in the past year compared with an average European Union fall of 0.9 per cent.

Jim Murphy, Minister of State for Employment and Welfare Reform, welcomed today’s figures, saying: “Since 1997 the numbers on jobseeker’s allowance, incapacity and lone parents benefits have fallen by over 900,000 and they continue to fall. Today’s figures show that the number on jobseeker’s allowance has now fallen for 10 out of the last 11 months.

“Our welfare reforms, combined with a strong economy, are helping more people to come off benefits and look for work - but we are determined to go further still, and to break for good the cycle of poverty and dependency.”

Meanwhile the bond markets are making things uncomfortable for Gordon’s coronation, with long term interest rates rising by about 0.50% in the last week alone.  The market is doing the MPC’s job for them and there’s nothing Gordon can do about it.

Gordon has been desperately trying to keep under the radar this week, as his Budget of a week ago appears to have been exposed as a complete sham and nothing but a pack of spin designed to fool the electorate.  And then there was the horrendous nose-picking incident, the video of which has now had well over 70,000 viewings on YouTube.

But it seems the press just can’t keep away as it was revealed today that child poverty has begun to increase again after almost a decade of steady declines.  This will come as bad news to Gordon who has a target of reducing it by 1 million by 2010.

Opposition politicians and poverty campaigners said a core government policy was failing and warned that its 2010 target could be missed by a million children, in spite of measures announced by Gordon Brown in last week’s budget.

Official figures showed relative poverty - those living on less than 60% of average incomes - rose to 12.7 million people in 2005-06, from 12.1 million the year before.It brings to an end the longest period of falling poverty since records began in 1961. The number of children living in poor families rose by 200,000 to 3.8 million.

…

Mr Brown announced £1bn more in tax credits for poorer families in last week’s budget. Experts think that could lift 200,000 children out of poverty, but that would only be a fifth of the way to the 2010 target of one million. The IFS says the government would need to spend £4bn extra by 2010 on help for poor families to make its target achievable but Mr Murphy said the new strategy was about getting more parents into some of the 600,000 vacant jobs available. “People should never be better off on benefit.” The shadow chancellor, George Osborne, said the “depressing” figures showed “that poverty is increasing, inequality is rising, and the incomes of the poorest fifth are in decline. Gordon Brown made tackling poverty the great promise of his chancellorship, and yet he leaves the Treasury with poverty rising.” The Liberal Democrat work and pensions spokesman, David Laws, said: “These figures are dreadful for the government, with child poverty rising to almost a third of all UK children. Poverty in Britain is increasing again, and social mobility seems to have been falling. The government’s ambition to cut child poverty now looks in tatters.”

Not much good news around for Gordon at the moment, it seems.

Seems dear old Gordon has been caught out fiddling the figures once again, this time it’s unemployment statistics that’s the area of deceit-du-jour. Notwithstanding the creation of countless non-jobs within the civil service as a result of his “record investment” in public services, the masking of official unemployment statistics using various forms of incapacity benefit, single parents etc etc etc seems to be running out of control giving this country a figure of 5.29 million true unemployed, or 16% of the working-age population. Gordon currently doesn’t count single parents or those caring for family members as unemployed, despite the fact that they are of working age and do not have jobs. These conveniently excluded millions (over 4 million to be precise) very nicely spin the unemployment rates down and make it look like Gordon and Tony are doing a far better job than they actually are. They often love to remind us of the 3 million unemployed under the last tory government in 1986, which at the time amounted to 10.6% of the workforce, whereas today their figure for unemployment is running at around 3%, a remarkable achievement if you ignore the facts that have now been brought to our attention. Anything to keep confidence up in the economy and keep consumers spending, it would seem.

The reported July budget surplus of £8.4bn appears to be another area where the figures are not telling the full story at the moment, although these numbers could probably be placed under the category of spin as opposed to outright lying. Seems like the press are becoming more careful when reporting figures that come from Gordon, at long last.

More stories in the press have appeared this weekend about the true rates of inflation being far removed from official government figures, with the Telegraph and the Daily Mail among others running a story stating that CPI is “meaningless” and true inflation for the British middle class is around 10%, which incidentally is 4 times the official CPI figures. A university professor, this time, has joined ever increasing numbers of other independant statistical sources, the E&Y item club etc, and worked out that Gordon’s measure of inflation is meaningless for most people because it excludes increases in council tax, household insurance and more alarmingly school fees and domestic help. Though whether private schools and nannies are exactly essential items for middle class Britain is open for debate. A pensioner near Cambridge has also referred to the CPI calculation as “beyond a joke”.

As if the above dodgy dealings were not pain enough for Gordon it seems that the housing market, which has played a large part in recent times in keeping spending in the economy afloat by way of large amounts of mortgage equity withdrawal on the back of high inflation in house prices, is suffering a small blip. In fact the front page of Rightmove is currently bearing the headline “housing market runs out of steam”, after a fall in their ever-noteworthy asking price index of 1.6% last month. Not exactly headline news in reality (although the Guardian seemed to think so), but sentiment is key, and any sustained downturn could make Gordon’s stay in Number 10 a very short one indeed.

At first glance it would appear that the August MPC minutes, published today, show that the voting for a 0.25% interest rate increase went with a landslide win for the hawks, the votes being 6-1 in favour. However it seems that some news organisations have taken the wording of the minutes to mean that further rises are all but ruled out in the near future, the FT choosing to predict that “the last Bank of England monetary policy meeting revealed little possibility of another rate increase in the near term.” The sagely newspaper with the crystal ball obviously will have further scope to report that the next rate rise is a “huge shock” based on these obvious dovish noises coming out of the Bank. They have of course chosen to ignore last weeks inflation report, in which the Bank virtually spelled out its plans on interest rates, indicating that future rises were inevitable. Bloomberg chose a slightly more sensible line, their chosen interviewee commenting that “we’re going to have to see a lot softer data to dissuade the monetary policy committee from raising again”. Interestingly the only MPC member to vote against the August hike was David Blanchflower, the most recent member to have been recruited by Gordon Brown, and therefore obviously the member most keen to impress his new boss (Brown, not Mervyn King).

Elsewhere the doom and gloom for Brown’s miracle economy seems to continue on a daily basis, with the news that Gordon’s fiddled unemployment figures (which have widened the definition of “unable to work” to encompass more people than ever before) have hit a new high of 5.5%, the highest in six years. Previously the remedy to this situation would have been to add more civil service jobs to absorb the rise in genuine unemployment, but unfortunately the cash to support this tactic is fast running out, so Gordon will have to sweat a little more on his coronation instead.

It is also starting to look like recent news that CPI has actually fallen by a miniscule amount may be about to backfire on Gordon, as the Telegraph questioned how this could ever be possible given the rampant way in which energy prices continue to rise and rise. The article spells out the blatant inconsistencies in the clearest possible way without pulling any punches whatsoever:

But despite the increase in the cost of energy, the weighting given over to gas and electricity bills in the CPI have not risen by the same degree. The breakdown of the official “basket” of goods in the inflation measure shows what we spend on gas bills is up by 17pc and our spending on electricity is up by 7pc since 2003. But, the ONS’s own numbers show the cost of these bills has risen by 64pc and 45pc respectively in the same period.

Hmmm .. surely some mistake Gordon?

Not been the best week for Mr. Brown. Approximately 6 months after Project Gordon disasterously failed to “put a more human face on the Iron Chancellor”, Blair has come out and said that he will remain in office for “at least another year”. UBS have predicted that CPI is about to hit 2.8%, which means more rate hikes are on the way, which is unlikely to impress Britain’s over-indebted population of Labour Voters, as they see their mortgage repayments hit heights they never expected. The economics editor of the Guardian summed up the situation nicely today, reiterating the fears that people appear to be facing, after one tiny measly 0.25% rate rise:

We will see in the coming months just how many individuals in Britain are living on the edge, with only modest increases in rates enough to tip them over the edge. My guess is that the economy is far more sensitive to a quarter-point rise in borrowing costs than it was, especially if there is a threat of further moves from the Bank. The fact that insolvencies were 66% higher in the second quarter of 2006 than in the second quarter of 2005 is a sign of just how tough many people are finding it to meet their financial commitments; add in spiralling energy costs, rising unemployment and higher interest rates and you have the recipe for extreme difficulties for many households.

So, despite being listed in Time Magazine’s 100 most influential people in the world (Blair was excluded) last year, things are not looking too good for Gordon. He may not be facing serious competition for the succession (John McDonnel notwithstanding), but the real question is: if and when Gordon hits Number Ten, how long is he expecting to remain?

Betfair Odds for Gordon as Next Labour Leader: 1.42
Betfair Odds for Next General Election: Labour 2.1, Conservatives 1.93