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[Image: ONS.]

[Image: ONS.]

It is sad that many people are likely to see this month’s headline increase in employment and take it as a sign that the British economy really is on the mend, as the Coalition keeps claiming.

Silly, silly people.

Exactly one week ago, the Department for Work and Pensions announced “the steepest annual fall in unemployment in a quarter of a century“, adding that “unemployment fell by 437,000 over the past year – and 132,000 in only the past three months – which is the biggest annual fall in 25 years”.

This blog has already pointed out that it is possible to account for all of the drop in unemployment over the last three months as being due to sanctions placed on jobseekers by the Department for Work and Pensions. The figure is meaningless.

The DWP also stated that the number of people in work was continuing to rise, “with 820,000 more people in a job compared with 12 months ago”. This masks an inconvenient truth that ministers would rather you didn’t know – about self-employment.

Self-employment, the government would have you believe, is one of the great success stories of the Coalition. More people are self-employed now than at any point over the past 40 years – with the total number of people in self-employment rising by 408,000 in the last year, to 4.59 million according to the Office for National Statistics.

The ONS also tells us that the rise in total employment since 2008 is mostly among the self-employed, which may – on the face of it – seem good.

Here’s the hammer-blow: Average income from self-employment has fallen by 22 per cent since 2008-9.

Self-employed people are a lot worse-off than they used to be.

It seems Flip Chart Fairy Tales was absolutely right to say fewer people were leaving self-employment (the ONS confirms this), and we may conclude that FCFT is right in its belief that this is because people have not been able to reach their target in terms of pensions (the number of over-65s who are self-employed has more than doubled in the past five years to reach nearly 500,000), or there is no employed work available for people of their expertise or experience.

These are people who are seeing their business shrink but have nowhere else to go. For them, there has been no economic upturn at all.

Figures also show an increase in the number of self-employed tax credit claimants. This is because claiming self-employment and taking tax credits is easier than signing on the dole and living in fear of being sanctioned.

More people are in work – those figures aren’t wrong, but the reasons behind them are not what the government would have you believe.

Self-employed people are remaining in business, despite dwindling returns, because they simply cannot afford to stop.

Those who are claiming tax credits are not contributing to the economy – quite the opposite, in fact.

So the latest employment figures are nothing to shout about and the government is deceiving you in doing so.

A better indicator of our economic well-being would be to measure the number of people who contributed to the Treasury by paying income tax.

The government does not provide that figure.

Quelle surprise.

Follow me on Twitter: @MidWalesMike

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