Nearly one million workers in Britain’s jobs market have been ‘lost’ because of poor data produced by the UK’s official statistics body, experts have claimed.
The Resolution Foundation think tank said the Office for National Statistics (ONS) had underestimated growth in employment since 2019 by 930,000 workers.
In a new report, they accused the ONS of misrepresenting trends in the jobs sector through inaccurate figures from its Labour Force Survey (LFS).
The Resolution Foundation said this produced an ‘overly pessimistic picture’ of the UK labour market since the Covid crisis.
Both Labour and the Tories have grappled with how to solve Britain’s inactivity crisis after the pandemic – but the think tank suggested this might have been overstated.
They created their own alternative estimate of employment across the UK, which suggested the employment rate could be around 76 per cent.
This is higher than the official rate of about 75 per cent, as reported by the ONS.
Last month, hundreds of civil servants at the ONS voted for all-out strikes in a dispute over being told to attend the office two days a week.
Staff have been continuing to work from home after refusing to spend at least 40 per cent of their time in the office.
In a recent ballot, they backed taking strike action if ONS bosses don’t back down on forcing them to return to their workplaces.
Nearly one million workers in Britain’s jobs market have been ‘lost’ because of poor data produced by the UK’s official statistics body, experts have claimed
The Resolution Foundation think tank said the Office for National Statistics ( ONS ) had underestimated growth in employment since 2019 by 930,000 workers
In a new report, they accused the ONS of misrepresenting trends in the jobs sector through inaccurate figures from its Labour Force Survey (LFS)
They created their own alternative estimate of employment across the UK, which suggested the employment rate could be around 76% – higher than the official rate of about 75%
The ONS has been warning over the accuracy of its main LFS data for some time, because of poor response rates to the survey since the start of the pandemic.
Economists have become increasingly reluctant to place any weight on the statistics.
The Resolution Foundation created its alternative estimate of employment using HMRC payroll and self-employment figures, as well as latest ONS population data.
Adam Corlett, the think tank’s principal economist, said: ‘Official statistics have misrepresented what has happened in the UK labour market since the pandemic, and left policymakers in the dark by painting an overly pessimistic picture of our labour market.
‘The ONS Labour Force Survey appears to have ‘lost’ almost a million workers over the past few years compared to better sources.
‘This has led to official data underestimating people’s chances of having a job, overstating the scale of Britain’s economic inactivity challenge, and likely overestimating productivity growth.’
The Resolution Foundation added that Labour’s target to reach an 80 per cent employment rate will be ‘marred by poor quality data’, making it harder to draw up policies.
It claimed that the response rate to the ONS’s jobs survey has slumped to just 13 per cent from 39 per cent between 2019 and 2023.
The survey also struggled to reflect the growing importance of workers from outside the European Union, the think tank added.
The ONS said it was aware of issues with the LFS data and has been placing more weight on other statistics, such as the more timely payroll data from HMRC.
It also stressed that recent improvements to increase response rates have seen the number of interviews carried out rise from 44,238 to 59,139.
An ONS spokesperson said: ‘We have been clear for some time that we believe the trends in employees produced from the HMRC tax information and our own separate survey of employers are likely to be painting a more accurate picture than that currently presented by the LFS.
‘Our ongoing work to improve the LFS estimates by increasing the sample, reintroducing face-to-face interviews, increasing incentives for those taking part and reweighting the data using the latest population information will all help to improve the quality of the survey.’
The ONS added it was ‘working with outside experts to assess if any further action may need to be taken’.