Opinion
4 Feb 2013 12:44pm

Employment and benefits figures that don’t add up

I have a sneaking suspicion that somewhere in the bowels of Downing Street there are binders full of women. At least that’s the impression I got at the first prime minister’s questions of the year, when David Cameron made a none-too-subtle overture to the women of Britain

Ed Miliband had been taunting him about the raw deal they got in the Autumn Statement, saying the benefits squeeze was hitting women “three times as hard as men”. But the PM had his answer ready. “There are,” he claimed, “more women in work than at any time in our history.

“Our pensions reforms are helping women, our public sector pay freeze, which excludes the lowest paid, is helping women,” he went on. FactCheck decided to investigate whether he’d got his information from binders or a briefing from officials. On the face of it, Mr Cameron is broadly right. The number of women in work has been rising steadily for the past two decades. There are now 13.7m women in work.  

If you look at the rate of female employment, all is less rosy in the garden. Let’s face it, there are more women out there

Not so fast, though. If you look at the rate of female employment, all is less rosy in the garden. Let’s face it, there are more women out there – almost 2.5m more than in March 1992 – so the hard numbers are less telling than the percentage of women of working age in employment. Employment rates for women rose throughout the 1990s and the decade after. But since the 2008 economic crisis, the figures have nosedived. From October to December 2010 the rate dropped to a low not seen since the late 1990s – 65.3%.

From employment to the lack of it. The big row of the new year was over benefits. To tee up the Commons tussle over the welfare cuts secretary of state for work and pensions, Iain Duncan Smith made some eye-watering claims about the size of the tax credits bill.

Labour, he said, “spent a staggering £171bn on tax credits, contributing to a 60% rise in the welfare bill. Far too much of that money was wasted, with fraud and error under Labour costing over £10bn.”

Big claims, even bigger numbers. Are they right? The total amount spent on tax credits from 2003 until 2011 was £175.6bn, according to the bean-counters at the HMRC. But because that includes the first year of the coalition government – and Mr Duncan Smith’s claims related to Labour – it makes more sense to eliminate the final year, 2010/11, when £28.5bn was spent. So under the last administration £147bn was spent, not £171bn.

And as for the amount lost on fraud? Well, the work and pensions secretary isn’t quite so far wrong. It was £11.16bn, not £10bn.

Mr Duncan Smith didn’t stop there though. He hinted that Labour had tried to offer voters a pre-election sweetener, ramping up spending before the 2005 and 2010 elections by 58% and 20% respectively. In actual fact, before the 2005 poll, the increase in tax credit spending was 8% not 58%. And before the 2010 election, it was 8.8% not 20%.

What did the department have to say for itself? Well, a spokeswoman told FactCheck: “It’s calculated on the basis of tax credits deflated by earnings. I can assure you it’s correct.” Convinced? We’re not sure.

Just a few days later, Mr Duncan Smith returned to the fray, saying: “Many working-age benefits have risen by 20% since 2007, easily outstripping a 12% rise in private sector pay.”

He’s right that Jobseekers’ Allowance (JSA) has gone up by 20% over the past five years and private sector pay has, according to the Office for National Statistics, risen by only 11.4% during that period. But if you go back a decade – before the financial crisis in other words – JSA went up by 30% while private sector pay outstripped that increase, going up 33%.

So while the work and pensions secretary is right for the timescale he’s cited, arguably it’s as much if not more because private sector pay was hit so badly during the recession rather than because benefits have soared. For the full low-down, visit the Factcheck blog.

Employment or unemployment: the devil’s in the detail. And that devilish detail has kept FactCheck gainfully employed.


Cathy NewmanCathy Newman presents Channel 4 News and runs the FactCheck blog which can be found on channel4.com/factcheck


 

 

Topics