Robert Jenrick says Britain has a welfare problem. He wants millions of people receiving sickness and disability benefits to move into work.

But there is a fundamental problem with that argument: where are the jobs?

UK unemployment is already around five per cent, youth unemployment is higher, vacancies have been falling, and there are substantially more unemployed people than available jobs.

You cannot solve an employment shortage simply by increasing the number of people required to look for work.

There is an even bigger contradiction. The Bank of England has been using high interest rates to suppress demand in the economy. Weaker demand means less investment, lower consumption and, ultimately, reduced demand for workers, as a result of deliberate government policy.

At the same time, just when Reform UK wants to push more people into the labour market while cutting the incomes of those who cannot find work, those benefit cuts would themselves reduce spending and demand, potentially destroying still more jobs.

None of this makes any macroeconomic sense. Getting someone, let alone millions of people, off benefits is not the same thing as getting them into employment. If Reform wants millions more people to work, it needs to explain where those millions of jobs will come from.

Until it does, one question remains unanswered: where are the jobs?

This is the audio version:

The Debate Ammunition for this video is available here.

This is the transcript:

Where are the jobs for the people that Robert Jenrick, on behalf of Reform UK, says should work?

Robert Jenrick has said Britain has a welfare problem. He wants to take maybe three million people off sickness and disability benefits.

He wants those who are not at work to go to work, and the problem is that actually there are no jobs for these people to do.

The truth is that we do not have a welfare problem, as he would put it in the UK. We have an employment problem.

He's right to say that work can provide some people with an income, purpose, structure, and social life, as long as they aren't working in the hostile environments that many people on minimum pay now suffer. But encouraging someone to work does not create a job for them, and there are no jobs for those people who are already unemployed in the UK.

So, isn't Robert Jenrick pointing his finger in the wrong direction when he says we have a welfare problem? We don't have that problem. We do have an employment problem, and he's ignoring it.

There are already too few jobs in the UK for everyone who wants one. UK unemployment is now running at around five per cent. That's one in twenty people in the UK who want a job, can't get one. That does not include some of those people who are now receiving the benefits that Robert Jenrick wants to cut, and youth unemployment is more than 10%.

At the same time, vacancies have been falling as unemployment has risen. That's what happens when you are running an economy that is heading towards a recession, as the UK is doing.

And there are now 2.5 unemployed people for every single vacancy inside the UK economy.

Reform will potentially want to add up to three million more people to that queue. Well, maybe a bit less than three million, because some of the people who they would cut benefits from are already working, but some of them would not be able to work if the benefit is cut because they wouldn't be able to afford to get there. So the point is he would be adding very large numbers of people to that queue, and he is not going to support them with any benefits when they're looking for a job because that is part of his penal attitude as well.

Jenrick is a deeply confused man.

He is confusing individual circumstances with economy-wide employment.

He's blaming people for not being able to find jobs, but there are no jobs to be found.

Forcing people to chase jobs that don't exist cannot create new employment. The economy must generate sufficient demand for labour before those jobs are offered. That's a lesson that Lord Keynes taught us nearly a century ago, and this is the macroeconomic problem that Robert Jenrick is ignoring.

And he's ignoring something else as well, and in this regard, he's like every other politician. On this occasion, I have to admit, there is nothing unique about Jenrick.

He is blaming people for not finding work, and he is not suggesting how employers will create work. But what he is ignoring is the fact that the Bank of England is, on behalf of the UK government, pursuing policy that it is allowed to undertake, deliberately suppressing demand in the UK economy.

The high interest rate policy that it has put in place is deliberately designed to reduce demand in the UK economy to discourage investment and, as a consequence, to reduce disposable incomes and to constrain consumption and all of that is designed to weaken demand for employment in the UK by reducing the number of people that UK businesses want to employ because they haven't got the demand to justify taking workers on.

A weaker labour market is part of this deliberate policy created by the Bank of England to supposedly tackle inflation. The policy fails to tackle inflation, but it is very effective at reducing the level of employment in the economy. The reason why we have exceptional rates of unemployment at this moment is precisely because the Bank of England is destroying our economy by choice and making us worse off than equivalent nations across Europe.

Government policy is therefore helping create the job shortage that we face in the UK economy at present, and Robert Jenrick is ignoring that fact. One part of the state is suppressing jobs, while politicians are demanding that people find them.

The Bank of England is weakening the demand for labour, and Robert Jenrick wants more people to be compelled to seek employment.

Without Reform changing its policy on macroeconomics, there is nothing to resolve this contradiction, and there is, as far as I can see, nothing in their macroeconomic policy that recognises that this problem exists.

In fact, what Jenrick is proposing would make the macroeconomic situation of the UK very much worse.

People losing their benefits would not find jobs. They would lose income. They would therefore spend less. Their local economies would suffer as a consequence. Lower spending would mean weaker demand in shops and for the businesses that supply them. Weaker demand can result in businesses employing fewer people, and Reform's policies on removing disability and other health-related benefits could therefore make the employment situation very much worse in the UK rather than improving it, whilst tipping the whole of the economy into a deeper recession than that, which I think it is already facing.

This begins to look like an outright austerity policy in that case. Jenrick must therefore explain where he thinks the additional jobs that will support his policy will come from.

How many new jobs does Reform think that the economy can create?

Why does it think it will generate those new jobs when Reform is doing nothing to stimulate demand?

And how will deep government spending cuts create more employment, because that is what Reform is proposing as well?

Where will these jobs be located, and what will they pay? Those are questions that Jenrick is not answering.

And what macroeconomic policy supports Reform's microeconomic culture?

These are the issues that Jenrick has to answer, but he isn't. He is instead talking about people in isolation and benefits as if they are a problem, when they are, in fact, the solution that is keeping our economy going and supplying claimants with the support that they need.

Getting people off benefits is not the same as getting them into work. That is the false claim that Jenrick is implicitly making.

People who can and want to work should be supported to do so. I do not argue with that. That is a perfectly fair and reasonable objective for any government.

But you cannot solve unemployment by adding more jobseekers, and that is what Jenrick is proposing to do.

Threatening incomes at the same time does not create suitable employment opportunities. Instead, it destroys them.

Reform must explain then how it is going to create the millions more job opportunities that will be required for its policies to make any sense. Until then, the essential question remains:

• Where are the jobs that Robert Jenrick thinks people should be taking?
• And why is he going to penalise the most vulnerable unemployed people who are least likely to get a job with his policy?

These are the questions that Robert Jenrick needs to answer, and so far we have no clue at all from him, or anyone else within Reform, that they even recognise that these questions exist, let alone have made attempts to answer them.

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