Just as the 2009 figures are distorted by out taking over the banks, so the previous figures are distorted by public sector outsourcing to the private sector, quangos and fake charities.

The point is that government spending continued to rise to over 50% of GDP- way beyond the proportion that J M Keynes predicted would cause Armageddon.

So an increase of 600,000 (by eyeballing the chart) public sector jobs followed by a fall of 100,000 public sector jobs is a decrease in public sector jobs now is it?

Me, I make that a 500,000 gain.

Tim – I was just thinking the same thing. Seems to me that a huge splashing out on public sector jobs before the recession was tempered by a comparatively tiny cutback during the recession. Now who’s twisting facts to fit a story?

@2

Presumably, what this shows is that years before the recession kicked in, the government was shedding employment.

It also rather wrongfoots the Tories by showing that the government was reducing public sector employment before the Tories even asked them to. Indeed, in 2006 and 2007 the Tories were calling for higher employment in a number of areas – including the police.

It rather highlights their agrement with pre-crash spending, in stark contrast to the fits and orgasms they have now at the mere mention of cutting spending and ‘the terrible mess the Labour government left the economy in’.

Why only tell part of the story about public spending?

Consider General Government Expenditure in OECD countries for the pre-crisis year 2007 as a percentage of national GDP – Table 16.1 in OECD National Accounts At A Glance 2010:
http://www.oecd-ilibrary.org/docserver/download/fulltext/3010161e.pdf?expires=1313407335&id=id&accname=guest&checksum=E44201F8B4F0C80222CBE4361899F809

For the UK, the percentage was 44.0

Compare:

Austria 48.5%
Belgium 48.4%
Denmark 50.9%
Finland 47.2%
France 52.3%
Greece 46.7%
Israel 44.9%
Italy 47.9%
Netherlands 45.3%
Sweden 51.0%

Euro Area 46.0%

We may observe that the government in a civilized country is much more expensive than in a barbarous one; and when we say that one government is more expensive than another, it is the same as if we said that the one country is farther advanced in improvement than another. To say that the government is expensive and the people not oppressed is to say that the people are rich. There are many expences necessary in a civilized country for which there is no occasion in one that is barbarous. Armies, fleets, fortified places and public buildings, judges and officers of the revenue must be supported, and if they be neglected disorder will ensue.

Smart man, if only people spent more time reading him and less time appropriating his name for their own malicious ends.

As Chomsky said of him; often revered, rarely read.

@5

The OECD must have it wrong, pagar wouldn’t lie just for the sake of lying.

Public spending in total and as a percentage of GDP since 1963 according to the treasury – https://spreadsheets.google.com/pub?key=phNtm3LmDZENC3I0s7AvHBQ

@ Disgusted

So the chart in the OP shows public sector employment falling over the last five years yet your own chart shows public expenditure as a proportion of GDP rising by 7%.

Solid.

Armies, fleets, fortified places and public buildings, judges and officers of the revenue must be supported, and if they be neglected disorder will ensue.

Must be missing something.

I thought we’d just had some disorder…..

The OECD data @5 are for “General Government Expenditure”, which includes public expenditure on investment as well as for consumption (pensions, healthcare, defence, civil service, QANGOs etc) and local government.

The point of the OECD publishing this data is that it makes an effort to clean up the data, as best it can, so the figures are comparable across OECD member states.

Among the reasons that the UK’s General Government Expenditure as a percentage of national GDP shot up after 2007:
- public spending increased because of higher spending on unemployment benefits
- GDP fell because of the recession

Try Martin Wolf: The economic legacy of Mr Brown
http://www.ft.com/cms/s/0/3074d7ba-5ec0-11df-af86-00144feab49a.html

Looking at the chart …

2000 : 80,000 increase
2001 : 90,000 increase
2002 : 110,000 increase
2003 : 160,000 increase
2004 : 120,000 increase
2005 : 100,000 increase

Total increase in those 6 years : approx 660,000 people

2006 : 40,000 drop
2007 : 60,000 drop
2008 : 20,000 drop

Total drop in those 3 years : approx 120,000

Now, we will exclude 2009, on the basis of the banks, but thats still a net increase of 540,000 people on the public payroll, over a period of 9 years

Richard, want to re-write your article to tell the truth ? I know its not very fashionable, but its nice to see in journalism from time to time.

Oh, but I just noticed. You aren’t really a journalist, are you. You’re a ‘policy officer’ for the TUC.

@5, Bob B;

For the UK, the percentage was 44.0

Compare:

Austria 48.5%
Belgium 48.4%
Denmark 50.9%
Finland 47.2%
France 52.3%
Greece 46.7%
Israel 44.9%
Italy 47.9%
Netherlands 45.3%
Sweden 51.0%

Euro Area 46.0%

Good point, well made.

I would be interested to know if these are just raw figures what the effect of healthcare is on these percentages. Somewhere around 95% of healthcare spending in the UK is government spending as opposed to a much lower percentage in other countries. (Although it’s never as low as one might suppose because even if you have a fully privatised (well regulated or not well regulated) insurance system the government still has a big chunk of the bill.)

Given that one has to pay for healthcare regardless of whether that comes under the auspices of public or private spending, I for one would argue, that unless you can demonstrate that taxation for healthcare spending is somehow a bigger drag on growth than insurance premiums* it is not a fair comparison of public sector as a proprotion of GDP. Therefore the UK public sector was demonstrably small by international standards prior to 2008.

AFZ

*Please anyone want to show me evidence for this, I’d be fascinated. This is quite apart from any debate about whether one gets the best healthcare by one mechanism or another…

@6 Disgusted.

Good point. I think it worth noting that despite the biggest economic shock in two generations, the public sector still only reached less that 48% of GDP… Anyone else notice what it was in 1982-3?

No, just me then….

AFZ

I don’t think total headcount of public sector employment is particularly revealing. We could privatise all public services and still be spending too much. Rising population and things like job share can change the headcount even though the share of national income devoted to public spending is steady. What matters is how much are we spending and how are we paying for it. For example, in 2008, 19.6 per cent of all jobs were in the public sector. At the beginning of the Labour government in 1997, it was 19.5 per cent. Because private sector employment had also expanded that percentage hardly at face value looks excessive. However, lots of public spending is not counted as public sector employment. For instance, universities and further education colleges aren’t classified as public sector jobs. Yet, the Royal Mail who get more than half their income from consumers are counted as the public sector.

Under the last Conservative government 23.1 per cent of jobs were in the public sector at the end of the early nineties recession, compared with 21 per cent at the end of the latest recession. We shed around 800,000 public sector jobs between 1991 and 1997, while the private sector created around 1.7 million. So headcount alone can be misleading if it is used interchangeably with percentage of the workforce and public sector total number of employees. Therefore, it is better just to concentrate on how much of GDP is being spent by the government. Clearly, Mr Brown increased public spending after the millennium and he did not pay for it through taxes. The gap between the two lines had to be filled with borrowing and the gap still has to be filled with borrowing. The large increase in 2008 is not just increased public spending, it is the fall in GDP.

http://4.bp.blogspot.com/_tvshDVnXSLc/TCEv3wUZBDI/AAAAAAAAC8Q/yxIx22x-5io/s1600/balance+budget.jpg

@10: “I would be interested to know if these are just raw figures what the effect of healthcare is on these percentages. Somewhere around 95% of healthcare spending in the UK is government spending as opposed to a much lower percentage in other countries. ”

The OECD tidies up the data, as best it can, to put all national data on the same basis so international comparisons can be made. The important aspect is that “General Government Expenditure” includes public investment spending as well as public spending on consumption, whereas not all “public spending” figures do. The reason for this is the difficulty that can arise in distinguishing between spending on public consumption and spending on public investment.

In nominal money terms, spending on the NHS about tripled between 1997 and 2010. You are right that private spending on healthcare in Britain, as a percentage of national GDP, is relatively small beer.

Digging out OECD is becoming increasingly nightmarish but you can just about reach comparable figures on national healthcare spending as a per cent of nation GDP via this link:
http://stats.oecd.org/Index.aspx

The data are not as conveniently displayed as they were just a couple of months back but it’s clear the Britain has been spending a smaller percentage of GDP on healthcare than most other west European countries.

By reports, the big increases in public spending by the Labour government were on healthcare, education and welfare benefits.

Btw a lot of official UK data has become more difficult – or costly – to access, including UK National Accounts. Regular, annual publications which could be downloaded in PDF format for free online are now costing £55 or so for private citizens although journos and academics usually have access through their work libraries. I doubt this is accidental.

So the chart in the OP shows public sector employment falling over the last five years yet your own chart shows public expenditure as a proportion of GDP rising by 7%.

Solid.

Are you being facetious and it’s not coming across?

RobieP @9 hasn’t read the article.

The author specifically emphasises the three years prior to 2008.

The impression I think the author is trying to dispel is that all Labour did was to ramp, ramp and ramp up again public sector employment right up to the cusp of the crisis.

As can be seen, in the three years immediately prior to the crisis, Labour was reducing public sector employment.

So RobieP (and, characteristically, the know-nothing Tim Worstall) is inferring completely the wrong meaning from the article.

I blame Grammar Schooling.