Are 500,000 jobs being lost in the City?
Stuart Fraser: "We lost 270,000 jobs last year. We will probably lose another quarter of a million this year."
Evan Davis: "So you're talking about over two years half a million jobs?"
Stuart Fraser: "That's right".
BBC Today Programme, 10 February 2012
Last week Stuart Fraser, Policy Chairman of the Corporation of London, appeared to claim on the BBC Radio 4 Today programme that over the course of 2011 and 2012 half a million jobs will be lost in the city.
He commented that "we lost 270,000 jobs last year and we will probably lose another quarter of a million this year". When questioned by the presenter he went on to state that "even the Confederation of British Industry (CBI) was saying it was about 200,000 they expect this year".
However the presenter, Evan Davis, later expressed doubt about the figures:
The Corporation of London later contacted the BBC to correct the figures, clarifying that job losses in the city were in fact 27,000 rather than 270,000, and that the suggested 200,000 figure from the CBI was in fact 20,000, thereby adding up to nearly 50,000 rather than 500,000. Evan confirmed:
So are these revised figures correct?
Analysis
The 27,000 job losses mentioned by the Corporation of London are mentioned in the latest issue of London, City and Regional Prospects in which the Centre for Economics and Business Research (CEBR) forecasted a loss of 26,775 city jobs over the course of 2011.
The forecasts themselves confirm that 315,000 jobs were forecast in the city in 2010, falling to 288,225 in 2011 - a drop of 26,775.
Full Fact then investigated figures from the Quarterly PricewaterhouseCoopers and CBI Financial Services Survey, which suggested that 9,000 jobs were lost in the last quarter of 2011 and predicted a further 11,000 being lost in the first quarter of 2012. This would take the toll for unemployment up to 20,000 for the six months preceding March 2012.
The City of London Corporation indicated to Full Fact that it was the addition of these two sources that added up to the 50,000 figure.
While Mr. Fraser's initial claim that 27,000 jobs were lost in the city last year is clearly supported by the CEBR's forecasts for 2011, the use of two differing surveys suggests a note of caution is necessary.
Firstly, the two surveys adopt different timeframes. While the CEBR forecast annually, the CBI and PwC's figures were based quarterly. Methodological differences in addition to this means the two sources could come to different conclusions.
For instance, while the CBI predicted a decline of 11,000 jobs in the first quarter of 2012, CEBR had forecasted very little change between 2011 and 2012 figures for job losses in the city. Both could still hold true but suggest different directions. Moreover, CEBR informed Full Fact they may revise their initial forecasts.
In addition, it should be noted that the 20,000 figure spans across the last quarter of 2011 and into the first quarter of 2012 and so involves some overlap with the CEBR data, so this further brings the addition to 50,000 into doubt.
Conclusion
Mr Fraser and the City of London Corporation rightly corrected their initial claims to 27,000 rather than 270,000 (and similarly with the 50,000 figure).
However, while the CBI's figures argue that 20,000 jobs have been lost in the city in the last 6 months and CEBR's annual total for job losses in 2011 are 27,000, the merits of adding together these two sources could be problematic when all the figures are considered.
It would also have been more useful had the distinction been made clearer between jobs already lost and jobs projected to be lost, and in turn that the 27,000 is based on a forecast in the first place.
Full Fact acknowledges that mistakes happen during live interviews although it is still necessary to correct errors when they are made. We are pleased that such a correction was offered so swiftly in this case and hope that others in the same situation will do likewise in future.
