Video Summary

In this video, the speaker critiques comments made by Rachel Reeves and other government ministers regarding the employment situation in the UK. They argue that there is a clear link between the increase in employer national insurance rates and rising unemployment figures. The speaker emphasises that while Reeves claims there is no connection, the statistics indicate otherwise, showcasing a significant decline in the workforce and a troubling employment context. Key points discussed include how increases in business costs lead to fewer hires and staff layoffs, and the confusion surrounding employment statistics that do not necessarily reflect true job creation. The speaker concludes that it is absurd for Reeves to deny any correlation between her party's tax policies and the rising unemployment rate, calling for greater accountability and transparency from government officials regarding the realities facing workers and businesses.

Transcript

Rachel Reeves and many other government ministers must think we are absolutely stupid because some of her comments defy all logic and common sense. I'm going to explain why. Some of the comments that she and other ministers make try to convince you that things are fantastic and that what they're doing is not devastating this economy and the country. But I'm going to prove otherwise. The statistics prove otherwise. It's not just my opinion; it's what the raw data shows. So, if you like this analysis, please do subscribe to the channel.

Let’s take a look at this latest article as Rachel Reeves suggests that there is no link between Labour increasing the rates of employer national insurance and high unemployment figures. Even before the employment figures plummeted and job vacancies disappeared, I stated that this would happen if they were to increase employer national insurance. Just a few years ago, Rachel Reeves herself criticised the Conservatives for suggesting they might do the same thing, saying that would obviously not work. Sure enough, in my view, it has resulted in a catastrophic decline in the workforce.

Now, why can she get away with saying such things? I’ll explain broadly why I think that is. First of all, she asserts there is no link between Labour imposing higher employer national insurance and rising unemployment figures. I’ll challenge that and explain what she relies on, which is misleading. Even if her claim had a basis in fact, it would still be at best a guess.

If a business faces an increase in costs, it stands to reason that if it isn’t profitable, it will do less of it. So, if it's more expensive to hire more staff, it will hire fewer. If it's much more costly to continue employing existing staff, some will be let go. This is why those on lower incomes and those in retail and hospitality have suffered most, as they have the most staff on hand. If the costs rise for businesses that need to take on staff, it’s logical they will reduce numbers.

However, Rachel Reeves does not say this. She relies on what Pat McFadden has stated, repeating that the number of jobs increased by 329,000 this year. This is apparently a record of this government in getting people back to work. Let's examine that claim. She refers to Pat McFadden, who says over 329,000 more people have moved into work this year. However, this claim is misleading. What I believe she and McFadden are referring to is the movement from unemployed or economically inactive individuals into employment, which does not equate to the creation of new jobs, despite how it's portrayed.

You have probably seen headlines like, 'Employment slumps to a 14-year low.' Some have checked the unemployment rate from 14 years ago and concluded this is not accurate. This headline refers to employment overall, considering the unemployment rate, vacancy rate, and the Payroll Employment (PAE) rate—the number of people on payroll. This number is also misleading, but I’ll return to that.

The reality is, as shown in charts, things are as dire as they have been since the pandemic, with unemployment significantly up and vacancies significantly down. The actual payroll figures from HMRC fell by 180,000 in the year up to October, with over 30,000 lost between September and October. Additionally, total estimated vacancies have decreased by around 100,000 from last August to October compared to the previous year. If actual payroll numbers have declined and vacancies are down whilst unemployment is up to about 5%, why is there an effort to spin this positively?

One reason is that they may be using net flow movements from surveys conducted by the Office for National Statistics, which sample a small data set and extrapolate for the wider country. This flow shows those moving from unemployment to employment but does not indicate job creation. Even if they were discussing payroll statistics, this might not provide an accurate picture; government ministers favour payroll statistics as they often present a brighter outlook.

Furthermore, the payroll stats might include individuals who transitioned from one job to another, meaning they were added to a new payroll without an actual increase in employment. There are also instances where individuals moved from minimal hours to taxable pay, thus creating the appearance of payroll when they may not be genuinely new jobs. Those returning from maternity leave or sickness may also count in these totals, thus presenting a distorted view.

In light of all this, it is clear that we have 180,000 fewer people on the payroll, unemployment rising to about 5%, and wage growth slowing. The youngest and those on the lowest salaries have been hardest hit, making this one of the worst employment periods in 14 years and since the pandemic. Given all this, how on earth can Rachel Reeves claim there is no link between Labour's tax increase on employers and rising unemployment?

It is absolutely farcical, and none of them seem to possess real-world business experience. Those who run businesses understand these costs have a real impact. Meanwhile, welfare spending is completely out of control. Let me know your thoughts in the comments below. I had to call this out because it is utterly ridiculous. Thank you for watching and I’ll see you in the next one.