Sunday , July 14 2024

Celebrating Britain’s Jobs Boom

Statistics can often come across as dull, but when it comes to discussing the British job market in recent years, it is unavoidable not to use them. 3.8 million jobs created since 2010. Unemployment fallen from 8% to 4% (lowest since 1975). A record 32.5 million people in work. 750,000 more people in work since the Brexit vote (remember the treasury forecast!?). More women, young people, single parents, ethnic minorities, disabled people and pensioners in work than ever before…with the media constantly focusing on negative stories this is something the Conservative Party can be proud of.  

How has employment increased so dramatically since the Conservatives entered into government back in 2010? There are three major reasons for this. First, business incentives were put in place by the Conservatives to attract big businesses and higher earners to invest in the UK. This in turn has partly led to over 3.8 million more private sector jobs being created in the last eight years. Corporation tax was cut from 28% in 2010 to 19% by 2017. This means we have the most competitive tax rate out of all major industrialised countries which has resulted in a jobs boom in recent years. Additionally, more revenue has been collected in corporation tax because of this competitive tax rate. In 2009–10 corporation tax raised £36 billion at a rate of 28%. By 2016–17 over £50 billion was raised with a lower rate of 20%. These figures are self-explanatory and this is why I am incredulous when I hear that the Labour Party are planning to abolish tuition fees at a cost of £11.2 billion a year with a 7% rise in corporation tax. Never mind fake news this is the definition of fake maths.

As well as big businesses being incentivised to invest in Britain, the evidence shows that cutting the top rate of tax from 50p to 45p has encouraged many individuals who run medium to large businesses to invest in Britain. In 2010, 24.4% of all income tax was raised by the top 1% of earners, this rose to 28% by 2018. Having an additional rate of less than 50% means investors see Britain as a refuge from higher income tax rates.

The second reason for the jobs boom and low unemployment has been the tax, minimum wage and welfare changes under the Conservatives. Put simply, the government have made it much more attractive to be in work rather than be on welfare. Cutting income tax by raising the tax free personal allowance has meant that many lower wage families have been able to keep more of their hard-earned money in the first place. Alongside people being able to keep more of their own money, the introduction of the National Living Wage has been another great incentive for people to get into work. The lowest paid 20% of workers have seen a £2,000 pay increase in the last two years. Since April 2016, those on the lowest wage have had an increase of 11% in pay after inflation is taken into account. This has been a significant achievement as the government strives to create a high wage, low income tax society.

Under Labour, wages were kept low and taxes high as welfare subsidised many people to not work or work less hours. Benefit freezes and the overall benefit cap have encouraged many people to seek a job. I found this during my time working as an employability project worker in inner city Nottingham. Last year the Office for National Statistics (ONS) released figures showing the number of children in UK households where no adult was in work had fallen to its lowest level since records began two decades ago. The government’s overall welfare changes have been crucial in this achievement.

The third major reason for the rise of employment since 2010 has been the explosion in self-employed workers. The general narrative from the media is that self-employment has largely been driven by the so called ‘gig economy’, where people are working in low wage jobs with no benefits or work entitlements. Clearly, there are many issues arising from the gig economy which need to be debated and discussed however research shows that the rapid growth in self-employment has been driven by people in higher paid jobs, not the lower end. The Resolution Foundation has found that 57% of the growth in self-employment since 2009 has been amongst educated people working in law, accountancy, health services and management consultancy. They are generally earning £45,000 to £65,000 a year. Many enjoy the flexibility of self-employment and the chance to ‘be your own boss’.  

Britain’s jobs boom has undoubtedly been a major success since 2010 but the rise of the gig economy has been a challenging side effect for the government to deal with. As well as the positive stories of self-employment throughout the last seven years there has been a surge in bogus self-employment. It is estimated that out of the 5 million self-employed workers in the UK, about 500,000 (10%) are in bogus self-employment. This includes companies who have complete control of their workers but seek to classify them as self-employed. This means that workers miss out on holiday pay, the government miss out on tax revenues as less National Insurance is paid and responsible businesses are undercut. These sorts of unscrupulous business practices have been on the rise in recent years.

With the perpetual talk of Brexit destroying jobs in our country, we need to be celebrating the fact there are so many people in work. When I was working for a charity in Nottingham helping young job seekers into work, I was informed of a statistic by one Jobcentre which I will never forget. Back in 2010, there were over 2,000 claimants on their books and by 2016 this had dropped to 400 claimants. An 80% decrease. There are still many issues within the jobs market but this governments record is an overwhelmingly positive one.

The author is a Conservative Party member, and author of The Return of Meritocracy: Conservative Ideas for Unlocking Social Mobility.

About Paul Maginnis

Paul Maginnis is a Conservative Party member, and author of The Return of Meritocracy: Conservative Ideas for Unlocking Social Mobility.

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