Office for National Statistics

Office for National Statistics oral evidence to the Business, Energy and Industrial Strategy Committee’s inquiry on UK plc 2050

On Tuesday 7 February, Mike Keoghan, Deputy National Statistician for Economic, Social and Environmental Statistics, Office for National Statistics, gave evidence to the Business, Energy and Industrial Strategy Committee for their inquiry UK plc 2050.

A transcript of which has been published on the UK Parliament website.

Office for National Statistics oral evidence to the Science and Technology Committee’s inquiry on Research and Development Statistics

On Wednesday 7 December, Mike Keoghan, Deputy National Statistician for Economic, Social and Environmental Statistics, Office for National Statistics, and Darren Morgan, Director for Economic Statistics Production and Analysis, Office for National Statistics, gave evidence to the Science and Technology Committee for their inquiry, ‘Research and Development Statistics’.

A transcript of which has been published on the UK Parliament website.

Office for National Statistics response to the Environment and Climate Change Committee’s report, ‘In our hands: behaviour change for climate and environmental goals’

Dear Lady Parminter,

I write in response to the Committee’s report, ‘In our hands: behaviour change for climate and environmental goals’. We welcome the report and its positive comments about the UK Climate Change Statistics Portal, and would be happy to contribute to fulfilling the Committee’s recommendation, that:

“The BEIS Public Attitudes Tracker or the Office for National Statistics (ONS) UK Climate Change Statistics Portal should regularly monitor whether people would like to or are making changes in how they travel, use energy at home and what they eat and buy, and the reasons behind people’s willingness to change. (Paragraph 63)”

Having launched a prototype in October 2021 ahead of the UN COP26 climate conference, we successfully launched a new version of the UK Climate Change Statistics Portal on 27 October, ahead of COP27 in November 2022.

A cross-government project led by the ONS, the Portal provides a valuable resource for policymakers and the public. As the Committee suggests, it also offers a useful place to bring existing and new behavioural change statistics and data together, an enable monitoring of changes.

Since our December 2021 evidence submission,[1] the ONS now collects and publishes statistics on individuals’ climate change concern and actions on a regular basis through our Opinions & Lifestyle Survey (OPN). This complements and supplements the larger quarterly BEIS Public Attitudes Tracker, and we regularly engage with BEIS on topics and questions for OPN.

On 28 October 2022, we published a synthesis of individuals’ climate change worries and actions, drawing on the several waves of OPN data that we have now built up and also Public Attitudes Tracker. Some of the key findings are:

74% of adults in Great Britain reported feeling (very or somewhat) worried about climate change, a similar figure to around a year ago (75%), with women more likely to report such worries (77%) than men (71%);
75% expected rising UK temperatures to affect them by 2030, up from 62% six months previously; and
75% reported making lifestyle changes to help tackle climate change, lower than the level found around a year ago (81%).

We are also using OPN statistics, including on behaviour change, in our new quarterly Climate Change Insights, which brings together a range of climate change-related official statistics. For example, the latest edition was published on 11 November 2022 and explains that 34% of adults in Great Britain reported reducing their meat and dairy consumption to help tackle climate change in the last 12 months. Additionally, August 2022’s Insights has a focus on homes and families.

The Committee’s report also looks at businesses. The ONS is now regularly gathering similar data as above for businesses, using our Business Insights & Conditions Survey (BICS).

The Climate Change Insights published on 6 October reports on respondents’ concerns about the impact of climate change on their business. The accompanying dataset contains several waves of data on business actions taken to protect the environment, including whether they have net zero or other emissions targets, climate change strategies and/or monitor climate risks, and whether they have sustainability reports. In December 2022, we are also planning to publish a similar output for businesses to that above for individuals, drawing on multiple waves of BICS data.

We already use the Portal’s “related links” section to refer to the individuals synthesis article and Climate Change Insights publications, and we will look to add the business synthesis article once published. We have also added some of the detailed OPN data to the Portal’s data store. As we further develop the Portal, we will seek to add further relevant OPN and BICS data in the future, as a way to improve access and use of these data.

We would be happy to consider further use of OPN, BICS and other ONS surveys and tools, such as potential innovative data sources to further inform policymakers and the public about behaviour change in the key areas which the Committee’s report identifies, including what people purchase and consume.

We would be happy to keep the Committee regularly updated on our work in this area.

Yours sincerely,

Grant Fitzner

Office for National Statistics follow-up written evidence to the Scottish Parliament’s COVID-19 Recovery Committee inquiry, Road to recovery: impact of the pandemic on the Scottish labour market

Dear Ms Brown,

Thank you for inviting me to give evidence for the Committee’s inquiry, Road to recovery: impact of the pandemic on the Scottish labour market. During that session, I agreed to follow-up with the Committee with the latest data detailing international comparisons of inactivity rates in Scotland.

Internationally comparisons are generally made based on 15- to 64-year-olds, rather than 16- to 64-year-olds as used in the UK. In the UK, all 15-year-olds are considered to be economically inactive. They are also often presented as participation rates, rather than economic inactivity rates, whereby economic inactivity is the inverse of participation. Although we do not calculate a rate for Scotland on a 15- to 64-year-old basis, the 16- to 64-year-old economic inactivity rate for Scotland has averaged around 1 percentage point above the UK rate over the last five years.

Based on information held by the Organisation for Economic Co-operation and Development (OECD) for 2021, international economic inactivity rates ranged between 46% in India and 15% in Iceland. Across the OECD, the average economic inactivity rate was 28%, with the European Union at 26% and G7 countries averaging 25%. The UK rate of 22% was near the lower quartile mark, just below Lithuania and Malta, and just above Germany and Finland. Only Japan, New Zealand, Sweden, Switzerland, Netherlands, and Iceland have rates 20% or lower.

The latest comparison figures for Labour force participation, along with a number of other key measures, are available from the OECD Data website.

Kind regards,

David Freeman

Deputy Director for Labour Market and Household Statistics

Office for National Statistics correspondence with the Public Accounts Committee on use of evaluation and modelling in government

Dear Dame Meg,

I wanted to write in my role as Head of the Government Analysis Function regarding your Committee’s report and the subsequent Government response on Use of evaluation and modelling in government. For recommendation 5b, we gave a target implementation date of summer 2022. This was in error: it should have said summer 2023. We have revised this target implementation date in the latest progress update due to your Committee also.

Please do let me know if any questions.

Yours sincerely,
Professor Sir Ian Diamond

Office for National Statistics oral evidence to the Scottish Parliament’s Covid-19 Recovery Committee’s inquiry on the road to recovery: impact of the pandemic on the Scottish labour market

On Thursday 3 November, David Freeman, Head of Labour Market and Households, Office for National Statistics gave evidence to the COVID-19 Recovery Committee in Scottish Parliament for its inquiry, ‘Road to Recovery: impact of the pandemic on the Scottish labour market.’

A transcript of which has been published on the Scottish Parliament website.

Office for National Statistics oral evidence to the Public Administration and Constitutional Affairs Committee’s inquiry on the Civil Service People Survey

On Thursday 20 October, Sarah Henry, Director for Methodology and Quality at the Office for National Statistics, gave evidence to the Public Administration and Constitutional Affairs Committee for its inquiry, ‘Civil Service People Survey’.

A transcript of which has been published on the UK Parliament website.

Office for National Statistics written evidence to the Lords Economic Affairs Committee’s inquiry on UK labour supply

Dear Lord Bridges,

Thank you for inviting David Freeman and I to give evidence for the Committee’s inquiry on UK Labour Supply. During that session on 6 September, we promised to follow-up with the Committee on several topics.

Over-50s Lifestyle Survey

The latest iteration of the Over-50s Lifestyle Survey was discussed at many points during the session, and I am pleased to confirm it was published on 27 September 2022. In the period from 10 to 29 August 2022, based on adults aged 50 to 65 years in Great Britain (GB) who have left or lost their job since the start of the coronavirus (COVID-19) pandemic and not returned to work:

The majority (66%) owned their homes outright and were more likely to be debt free (61%) compared with those who left their job since the pandemic and returned to work (42% debt free).
Financial resilience varied by age: those aged 50 to 54 years were significantly less likely to be debt free, excluding a mortgage (49%), compared with those aged 60 to 65 years (62%), and more likely to have credit card debt (39%, compared with 24%).
Age was also a factor when considering whether to return to work; the younger cohort were more likely to say that they would consider returning to work (86% for those aged 50 to 54 years, 65% for those aged 55 to 59 years and 44% for those 60 to 65 years).
Adults aged 50 to 59 years were more likely to report mental health reasons (8%) and disability (8%) as a reason for not returning to work when compared with those aged 60 to 65 years (3% and 3%, respectively).
Adults aged 50 to 59 years (14%) were also more likely to be currently looking for paid work, compared with adults aged 60 to 65 (6%).
Among those who would consider returning to work (58%), the most important factors when choosing a paid job were flexible working hours (32%), good pay (23%), and being able to work from home (12%).
Around 1 in 5 (18%) said they were currently on an NHS waiting list for medical treatment; this rose to 35% for those who left their previous job for a health-related condition.

The Over-50s Lifestyle Survey is a cross-sectional survey. This means that different respondents have answered each wave of the questionnaire and therefore changes are not directly comparable.

Older people in the labour market

Separately, we released a publication on older people in the labour market using Labour Force Survey (LFS) data on 12 September, which found that from April to June 2022, people aged 65 and over in employment increased by a record 173,000 to 1.468 million. However, this increase was driven by rises in part-time work, and therefore the average hours worked for those aged 65 and over fell in the same time period.

Long-term sickness

We considered the increases in long-term sickness among the economically inactive, and the guidance we give field officers working on the LFS when asking this question. To explain further, the issue of long-term or chronic illness is addressed in two different parts of the LFS.

There is a section on health, that looks at whether people have health conditions or illnesses lasting or expecting to last 12 months or more. However, this section is looking generally at disabilities and health conditions, rather than being directly related to labour market status.

The long-term sickness series that was referenced during our discussion relates to people who give long-term sickness as the main reason why they are neither in work (employed) or searching for work (unemployed).

Once establishing that someone is neither in work nor searching for work, they are asked:

May I just check, what were the reasons you did not look for work (in the last 4 weeks)?

Waiting for the results of an application for a job/being assessed by a training agent
Student
Looking after the family/home
Temporarily sick or injured
Long-term sick or disabled
Believe(s) no jobs available
Not yet started looking
Do(does) not need employment
Retired from paid work
Any other reason

Following this, they are asked which of these is their main reason for not looking for work, which is used for classifying them within the labour market framework. The only further guidance the respondent may be given relating to sickness is if they are unsure whether to classify their sickness as temporary or long-term. The interviewer would indicate that long-term would be one that has lasted, or is expected to last, 12 months or more.

The long-term time series for long-term sickness in the labour market can be found on our website. Figure 1 shows that the number of people who are economically inactive mainly due to long-term sickness has risen to a record high, but not a record proportion of the population aged 16 to 64 years.

Figure 1: The number of people who are economically inactive mainly due to long-term sickness

Graph showing the number of people who are economically inactive mainly due to long-term sickness

Source: Office for National Statistics – Labour Force Survey For a more accessible version, please visit our accessibility policy.

Due to sample size limitations, we do not routinely publish estimates of long-term sickness at a regional level from the LFS. However, using the Annual Population Survey (APS), we do publish estimates of long-term sick as the main reason for economic inactivity at a regional level. This dataset allows you to access estimates of economic inactivity by region by sex by main reason for inactivity.

Trends in self-employed

During the session, we discussed the movement of those who are self-employed to employed during the pandemic, and whether these were real changes in employment status rather than reclassification. It is difficult to put a figure on the numbers that fall into different reasons for changing from self-employed to employee status during the pandemic.

Even prior to the pandemic a significant number of respondents would report that they were an employee in one period and self-employed in another period, despite also reporting that they hadn’t changed jobs. In general, the net flow of this has been around 20-30,000 per quarter. Similarly, those who reported that they had changed jobs between interviews had a general net flow of around 10-20,000 per quarter prior to the pandemic.

During the pandemic, both flows shifted from a net flow from employee to self-employed, to people changing their status from self-employed to employee. In the case of those who hadn’t changed jobs, there was a net flow of around 350,000 from self-employed to employee for people who had not changed jobs, compared with around 100,000 for those who had.

We published an article in July looking at changes in self-employment in the UK from January 2020-March 2022, which noted that large increases in the number of self-employed workers remaining in the same job but reclassifying their labour market status to “employee” were observed between April and September 2020 (coinciding with the introduction of the furlough scheme), most commonly among business directors and partners, and those in high-skilled occupations. Self-employment had fallen across all industries, most notably in construction (although construction remained the largest self-employment industry).

Quality of employment

David mentioned in the session that we had previously completed analysis looking at quality of jobs, which we did by using APS data for 2018. Work is currently underway on a 2021 ‘Quality Jobs’ publication, expanding on the previous methodology to include more dimensions of job quality. For time series purposes, this year’s publication will reproduce the 2018 analysis with 2021 APS data (i.e., low pay, satisfactory hours & desired contract). It will also add new dimensions on career progression, employee involvement, overtime and zero-hour contracts.

In future, we plan to produce this report annually and make this a regular output. The current expected date for the 2021 publication is December 2022 and we will share with the Committee once published.

We also have information which reflects labour market status by highest level of qualification. It shows a positive relationship between qualification and likelihood of being employed, with those educated to degree level having a much higher employment rate than any other category and those with no qualifications having a much lower employment rate than any other category. Between those two extremes, there is still a positive correlation with higher level of qualification, but the spread is less marked than those two extremes.

Vacancies

Unfortunately, we do not produce estimates of the number of vacancies in the UK broken down into the public and private sectors. The closest approximation we can make is to look at estimates by industry, making assumptions around their public/private splits based on employment statistics which are available with a sector breakdown.

Table 1 summarises the overall position for the UK and for relevant industries both for the latest movements, as well as change since the pre-pandemic period.

	UK	Public Admin	Education	Health
Public Sector Share of Employees (BRES)	18%	99%	57%	48%
Vacancies in Jun-Aug 2022	1.266m	41,000	74,000	219,000
Quarterly Change	-34,000 -2.6%	+3,000 +9%	+3,000 +3.6%	+7,000 +3.4%
Change since Jan-Mar 2020	+470,000 +59%	+19,000 +86.4%	+25,000 +51.0%	+83,000 +61.0%

For Public Administration and Defence, 99% of employees were in the public sector therefore we can be confident that overall vacancy trends for this industry will also be in the public sector. In the latest period, June-August 2022, there were 41,000 vacancies in this industry, an increase of 3,000 (9%) on the quarter. The number of vacancies in this industry was 19,000 (86%) above its pre-pandemic level (Jan-Mar 2020).

The other two sectors worth exploring are Human Health and Social Work activities and Education, which respectively are comprised of 48% and 57% public sector employees. The more even public/private split within these industries makes it more difficult to interpret whether vacancy trends are more or less concentrated in one sector the other.

Focusing firstly on Education, the number of vacancies in Jun-Aug 2022 was 74,000, an increase of 3,000 (3.6%) on the quarter and 25,000 (51%) when compared with Jan-Mar 2020. Looking then at Health and Social Work there were 219,000 vacancies in the latest period, an increase of 7,000 (3.4%) on the quarter, and 83,000 (61%) compared with Jan-Mar 2020.

What can be seen across all three industries is that the latest quarterly change saw an increase in the number of vacancies, moving in the opposite direction to the overall UK picture and to the majority of other industries. Looking at the pre-pandemic comparisons, if we exclude the smallest industries which can often show large proportional changes, only Accommodation and food service activities had a larger percentage increase in the number of vacancies (97.6%) than Public Administration. The changes for Education and Health were more in line with the national average, though as noted above recent movements were not.

EU Exit impact

The Committee were interested in understanding the sectors that have had migration impacts. The fall in employment seen since 2016 have been largely driven by UK nationals as shown in the Changing Trends and Recent Shortages in the Labour Market publication¹. In the 12 months to September 2020, the number of EU workers increased by 119,000 when compared with the same period in 2016. The change on the year from October to September 2020 to October to September 2021 saw a fall of 91,000 EU workers, suggesting a possible pandemic effect.

Payrolled employment counts from HMRC showed the same signal of a fall in EU workers, indeed, the magnitude was higher using this measure, though comparing a longer time period. Between June 2019 and June 2021, payrolled employments held by EU nationals fell by 6% (171,100). This was offset by non-EU nationals, which increased by 9% (186,300) in the same period. There is a lot of variation at industry level, meaning changes in the makeup of migration could be affecting some industries more than others.

In the same period, the largest decline in total payrolled employments was seen in Accommodation and food services; this was driven by a 25% (98,400) fall in payrolled employments of EU nationals during the two years up to June 2021. There were also large falls by EU employments in Agriculture, forestry and fishing and Arts, entertainment and recreation. These sectors also saw falls in non-EU employments. Indeed, the three sectors that saw the largest growth of EU and non-EU employments were the same: Construction, Transportation and storage and construction and Health and social work.

According to the Business Insights and Impact on the UK Economy Survey, looking at why businesses are experiencing vacancies, a year ago (23 August to 5 September 2021) a quarter of businesses who were experiencing difficulties recruiting cited reduced numbers of EU applicants. This has gradually declined to 12 per cent (as of June 2022) as EU migrants have returned to the workforce.

International comparisons

During the session we discussed international comparisons. The latest data for this show that the UK has maintained relatively strong employment within the G7 throughout 2021 and into 2022. However, like the United States, the UK employment rate is still below pre-pandemic rates. We publish a monthly update on our website.

I hope this is helpful to the Committee, and please do let me know if we can assist further as the inquiry progresses.

Yours sincerely,

Mike Keoghan

Office for National Statistics written evidence to the DCMS Sub-committee on Online Harms and Disinformation’s inquiry on misinformation and trusted voices

Dear Mr Knight,

I write in response to the Digital, Culture, Media and Sport Sub-committee on Online Harms and Disinformation’s call for evidence for its inquiry, ‘misinformation and trusted voices’.

As the Committee may be aware, the Office for National Statistics (ONS) is the UK’s National Statistical Institute and largest producer of official statistics. We place an enormous value on being a trusted source of information. We work tirelessly to ensure that our engagement with the public is not only trusted, but actively combats misinformation by making our communications clear, and providing statistics with context.

The Office for Statistics Regulation complements our work. They assess official statistics against the Code of Practice for Statistics, assigning them National Statistics status if they meet the requirements. This makes the public aware which statistics can be trusted.

This submission goes into further detail on these points. I hope this is useful, and please do let me know if we can provide further evidence or discuss directly with the Committee.

Yours sincerely,

Sam Beckett

Second Permanent Secretary and Deputy Chief Executive of the UK Statistics Authority

**Office for National Statistics written evidence ‘misinformation and trusted voices’, September 2022**

Summary

It is of the utmost importance that the Office for National Statistics (ONS) is regarded as a trusted voice in the UK. The growing use of data in public debate in recent years has emphasised the need for official statistics and analysis that can be relied upon. As the UK’s National Statistical Institute, our role is to provide trusted and accurate data.
According to the Public Confidence in Office Statistics (PCOS) 2021 report, the ONS had high levels of trust from respondents (89%), which rises if they are a frequent user of our statistics (97%). The public trust us with their data and our statistical outputs, at 90% and 87% respectively. Compared to other institutions in public life, including Government and the media, we have the highest levels of trust.
With this trust comes a large responsibility to ensure firstly that we are meeting the data needs of the public, identifying and responding to any data gaps rapidly, and secondly, that our statistics are communicated well, to reduce the risk of misinterpretation.
On the latter point, we do this by proactively engaging with the public directly and through media to improve the clarity and messaging of analysis, building our own trusted social media presence, and using innovative engagement methods to increase the public’s use of our statistics, highlighted during the census and recently with our Personal Inflation Calculator.
Misinformation can still occasionally occur. We actively monitor media channels and respond rapidly to provide clarity where it is needed, for example during the coronavirus (COVID-19) pandemic regarding the number of COVID-19 deaths. We also have strong relationships with media outlets to ensure corrections happen swiftly.

Trusted data sources and institutions

As the UK’s National Statistical Institute, our outputs are regularly assessed by the Office for Statistics Regulation (OSR) against the Code of Practice for Statistics. If fully compliant, they are accredited as National Statistics, with the quality mark on all associated releases on our website to reassure users that they can be trusted.

Public Confidence in Official Statistics Survey

Since 2004, the UK Statistics Authority has commissioned research from the National Centre for Social Research (NatCen) on levels of trust in, and the awareness and use of official statistics in Britain. The latest results of this research were published in April 2022, in the Public Confidence in Office Statistics (PCOS) 2021 report.
Respondents reported high levels of trust (89%) in the ONS. Trust is high regardless of whether people were previously aware of the ONS or not. However, those who have used official statistics are more likely to trust the ONS than those who have not used them, with 84% of non-users saying they trusted the ONS compared with 97% of frequent users of ONS statistics.
In 2021, 87% of people surveyed said they trusted statistics produced by the ONS. 90% also agreed that they trusted the ONS with data the provided them, and that it would be kept confidential.
PCOS also asked respondents about their level of trust in the ONS compared to other institutions in British public life. Of the institutions listed on the survey, the ONS has the highest levels of trust, similar to that of the Bank of England and the courts system. Figure 1 shows a comparison of levels of trust in different institutions, as reported in 2018 and 2021.

Figure 1: Proportion of people that trust different institutions in British public life

Source: Public Confidence in Official Statistics 2021, National Centre for Social Research

Responding to data gaps

In line with the Authority’s five-year strategy ‘Statistics for the Public Good’, (launched in 2020), we are radical and ambitious in providing analysis in a timely way. For example, during the pandemic, we set up and adapted surveys at pace to inform policy decisions and the public: the Business Impacts of Coronavirus Survey (BICS) (now known as the ‘Business Insights and Conditions Survey’), the Opinions and Lifestyle Survey (OPN) and the COVID-19 Infection Survey (CIS). These assessed the impacts on the economy, businesses, society and on the UK’s health. More recently, we have set up new surveys to assess Over-50s in the labour market, and the experiences of Ukrainian nationals arriving in the UK.
Our agility to respond to emerging demands for evidence means we go some way in avoiding speculation, and therefore potential misinformation, on an issue.

Building trust and tackling misinformation

Proactive Communication – Media and Public Engagement

To avoid misinterpretation, each statistical publication from the ONS is expressed in clear, concise language with summarised findings. Contextual background and commentary are provided when they support wider public understanding of the data and its significance. In recent years, we have focused our efforts on ensuring key findings are reported accurately and lead the coverage, with an emphasis on the use of trusted ONS spokespeople.
We build relations with media producers, editors, lead reporters and subject matter experts in targeted media outlets to encourage clear reporting of our statistics and analysis. This also provides a direct channel back for media to confirm details for immediate deadlines.
The ONS identifies areas where insight could be misrepresented or misunderstood and mitigate through our presentation such as creating reusable and shareable social media posts and content.
The direct contact details of the statisticians are provided with each release so they can be contacted directly for guidance by any member of the public. Since the start of the COVID-19 pandemic, the ONS has answered more than 12,000 different queries from the media.
While the majority of audiences will engage with ONS content through media channels, we also raise the ONS profile directly with public audiences. Our main social media presence is the @ONS Twitter account with 343,000 followers, which achieves good comparable engagement and reach, with threads created to support outputs and to respond to specific trends on social media.
We have created a network of statisticians who converse in dialogue on particular issues, themes, and releases on social channels, providing clarity where discussions take place. In recent months, we have also trialled material and commentary on LinkedIn to better understand opportunities to reach out to business audiences.
We seek creative opportunities to increase the public’s engagement in ONS statistics and analysis as the trusted source, including personalised tools and data visualisations. For example, the ONS Personal Inflation Calculator, a collaboration between the ONS and the BBC, enables individuals to see how increases in the cost of living have affected them. This has resulted in ONS data being more accessible, as well as extending our reach to new audiences. For the first results of the 2021 Census of England and Wales, we developed interactive articles and a game to encourage individuals to actively engage with our data and to discover what the results meant for the population of their local area.

Reactive Communication – Challenging Disinformation

In response to the challenge of disinformation and misinformation on social media, we set up an online monitoring and reporting capability. This proved particularly effective during the 2021 Census. We monitored social channels, to identify misinformation and disinformation, and work directly with social media companies to remove content and accounts.
Where inaccuracy and misrepresentation of ONS statistics are spotted in the media we will seek to challenge them immediately whenever possible. News organisations are typically highly cooperative in amending their online articles or publishing corrections of ONS statistics and analysis. There have been no significant instances when a ‘mainstream’, regulated UK news organisation has refused to engage with us when factual inaccuracy has been drawn to their attention.
We are frequently consulted by both the Office for Statistics Regulation and fact-checking organisations outside of government when others use our statistics. Where there are false and misleading impressions of ONS statistics, we will rebut them: for example, in January 2022 we published a media statement and article explaining why some claims regarding the number of COVID-19 deaths were highly misleading. The rebuttal was itself reported in the news media and attracted wide engagement to social channels, illustrating the impact we can have.

Office for National Statistics written evidence to the Work and Pension Committee’s inquiry on plans for jobs and employment support

Dear Sir Stephen Timms,

I write in response to the Work and Pensions Committee’s call for evidence for its inquiry, ‘Plan for Jobs and Employment Support.

This inquiry is of particular interest and relevance to the Office for National Statistics (ONS) as we are responsible for producing employment and labour market statistics and analysis for the UK.

Within this submission, we have provided analysis on the impact of the pandemic on the labour market; looking specifically at young people, people with disabilities and people who have migrated to the UK.

We have included the latest data on earnings and on the occurrence of vacancies, noting in which sectors they are concentrated. Finally, we have also provided analysis of inactivity in the labour market, with a focus the inactivity of people over 50-years-old and the inactivity as a result of long covid.

I hope this submission is useful for your inquiry. Please do not hesitate to let me know if we can provide anything further.

Yours sincerely,

Mike Keoghan

Deputy National Statistician for Economic, Social and Environmental Statistics

Impact of the pandemic on the labour market

Following a fall in employment at the start of the coronavirus (COVID-19) pandemic, the UK labour market has become increasingly tight, with the employment rate now close to its pre-pandemic level and nearly half a million more vacancies than pre-pandemic, albeit falling slightly from recent record highs.
The unemployment rate is one of the lowest we have seen in the last fifty years; however, inactivity remains higher than before the pandemic. The driving labour supply trend has been the increase in the number of economically inactive people since the start of the COVID-19 pandemic, particularly by those aged 50 and over.
During the first year of the pandemic, increases in inactivity were largely driven by younger workers entering education, but more recent increases are driven by those aged 50 to 64, with over 60% of the increase in economic inactivity during the pandemic being driven by this age group. Another defining trait of the labour market in the initial phase of the pandemic was the decrease in the number of self-employed workers, which was partly driven by workers flowing out of self-employment and into employee status doing the same job (‘reclassified’). Though levels of “reclassification” have since stabilised to more normal levels, we have yet to see much of a reversal back towards self-employment.
The ONS Business Insights and Conditions Survey (BICS) shows that in August 2022, 15% of businesses were experiencing a shortage of workers, although that proportion was over 40% among businesses in the ‘Accommodation and food service activities’ and the ‘Human health and social work activities’ industries.

Young people

Early in the pandemic, the unemployment rate of young people (aged 16 to 24) increased the most compared with other age groups and began to decline from Quarter 2 (April to June) 2021 onwards. The unemployment rate among young people is now lower than December to February 2020, before the pandemic began.

However, the Labour Force Survey (LFS) suggests that the reduction in unemployment among young people reflects movements to inactivity rather than employment. Comparing the latest period (May to July 2022) with the pre-pandemic period (December to February 2020), there were 86,000 fewer people aged 16 to 24 in employment, and 141,000 fewer in unemployment. In contrast, the number of those economically inactive increased by 178,000 over that period.

The rate of inactivity among people aged 16 to 17 has increased 2.1 percentage points as of May to July 2022, to 70.8%, compared with the pre-pandemic period (December to February 2020). The rate of inactivity among people aged 18 to 24 has also increased 2.6 percentage points over the same period, to 31.4%.
The increase of 178,000 people economically inactive among those aged 16 to 24, compared with pre-pandemic levels, makes up 27.8% of the total UK rise in inactivity levels (which was 642,000, as of May to July 2022).
The increase was similarly split among men and women aged 16 to 24. Of the total 178,000 increase in the number of people economically inactive, 52% are men and 48% are women.

Median pay among those aged 18 to 24 increased 12.4% between February 2020 and August 2022; less than older age groups. Median pay across all age groups increased by 13.7%.

People with disabilities

Comparing April to June 2022 with the same period three years prior, according to the LFS there has been 0.4 percentage point increase in the employment rate for both disabled people who meet the Government Statistical System (GSS) harmonised standard definition of disability (rising to 53%), and those who report having a health problem but do not meet the GSS standard definition of disability (rising to 81.9%).
Likewise, there has been a 0.5 percentage point decrease in the unemployment rate (as a percentage of economically active) and a 0.2 percentage point decrease in the economic inactivity rate among those who meet the GSS standard definition of disability (falling to 6.7% and 43.1% respectively). Among those who report having a health problem but do not meet the GSS standard definition of disability, there was a 0.3 percentage point fall in the unemployment rate, and 0.2 percentage point fall in the economic inactivity rate is seen (falling to 3.1% and 15.5% respectively).
Pay for disabled employees remains behind that of non-disabled people. The disability pay gap, the gap between median pay for disabled employees and non-disabled employees, was 13.8% in 2021. This gap has widened slightly since 2014 when disabled employees earnt 11.7% less than non-disabled employees.

Migrants

The fall in employment seen since 2016 have been largely driven by UK nationals as shown in the Changing Trends and Recent Shortages in the Labour Market publication. In the 12 months to September 2020, the number of EU workers increased by 119,000 when compared with the same period in 2016. The year change from October to September 2020 to October to September 2021 saw a fall of 91,000 EU workers, suggesting a possible pandemic effect.

Payrolled employment counts from HMRC showed the same signal of a fall in EU workers, indeed, the magnitude was higher using this measure, though comparing a longer time period. Between June 2019 and June 2021, payrolled employments held by EU nationals fell by 6% (171,100). This was offset by non-EU nationals, which increased by 9% (186,300) in the same period. There is a lot of variation at industry level, meaning changes in the makeup of migration could be affecting some industries more than others.
In the same period, the largest decline in total payrolled employments was seen in Accommodation and food services; this was driven by a 25% (98,400) fall in payrolled employments of EU nationals during the two years up to June 2021. There were also large falls by EU employments in Agriculture, forestry and fishing and Arts, entertainment and recreation. These sectors also saw falls in non-EU employments. Indeed, the three sectors that saw the largest growth of EU and non-EU employments were the same: Construction, Transportation and storage and construction and Health and social work.
According to the Business Insights and Impact on the UK Economy Survey, looking at why businesses are experiencing vacancies, a year ago (23 August to 5 September 2021) a quarter of businesses who were experiencing difficulties recruiting cited reduced numbers of EU applicants. This has gradually declined to 12 per cent (as of June 2022) as EU migrants have returned to the workforce.
The Migration Observatory (based at Oxford University) published research on 15 August called, “How is the End of Free Movement Affecting the Low-wage Labour Force in the UK?” Their analysis looked at many of the same data sources reaching similar conclusions to ONS research, emphasising how the industries that have driven the increase in non-EU citizen employment are not the same ones that drove the decrease in EU citizen employment. They concluded there is some evidence that EU Exit has contributed to shortages in the UK labour market, although it is by no means the only driver of recruiting difficulties and some other countries have experienced similar problems without a major change in immigration policy. ONS analysis on specific industries where employment has reduced (including HGV drivers) showed that there has been a reduction in the number of EU-nationals but the impact of this was smaller than the reduction in UK nationals.
The latest estimates of international migration levels produced by the ONS are experimental and provisional. They are based on administrative data and supported by statistical modelling. There is a degree of uncertainty around them that we are unable to quantify at this time.
These latest statistics are produced using a new method that relies less on International Passenger Survey data, which we have long acknowledged has been stretched beyond its original purpose, and statistical modelling and makes greater use of administrative data.
Observed migration activity, from early insights of provisional census results, provide some confidence that these estimates derived from administrative data sources are more accurate than those derived using previous methods. Additionally, using these data and methods produces estimates that are more comparable with the latest Home Office statistics on the operation of the immigration system.

Vacancies

In June-August 2022 there were an estimated 1.266 million job vacancies in the UK after falling by 34,000 (2.6%) when compared with the previous quarter. Despite the falls seen in recent months, the number of vacancies remains 470,000 above the level seen in January-March 2020.
All industries are above their pre-pandemic levels, with the largest increases seen in Accommodation and Food Service Activities, and Human Health and Social Care activities, both of which have increased by 83,000 since January-March 2020.
As at the UK level however, many industries have begun to see falls in the most recent data, with 12 of the 18 industry sections seeing falls in June-August 2022 when compared with the previous quarter. The largest fall was seen in Information and Communication which fell by 11,000 (14.0%).
Between 2001, when comparable vacancy statistics were first produced, and the start of 2022, our data had never estimated that there were more vacancies than unemployed people. Of the five 3-month periods between January-March 2022 and May-July 2022, the number of vacancies has been higher than the number of unemployed people on four occasions, highlighting a historically tight labour market.

Sectoral/Industry Trends

According to our Business Insights and Conditions Survey (BICS), businesses in the accommodation and food service activities industry continue to report the largest percentage of businesses experiencing worker shortages. They are also most likely to report recruitment difficulties.
Estimates from BICS show that in mid-August 2022, 15% of businesses reported that they were experiencing a shortage of workers, up from a low of 13% reported in mid-January 2022. However, for businesses with 250 or more employees, the percentage that reported worker shortages in mid-August 2022 was 42%.
In mid-August, the accommodation and food service activities industry continued to report the largest percentage of businesses experiencing worker shortages, at 42%.
In the accommodation and food service industry, 61% of businesses reporting worker shortages said that ‘employees working increased hours’ in mid-August, while 31% ‘had to recruit temporary workers’ or were ‘unable to meet demands’. In construction, 75% of businesses reporting shortages of workers reported that they were ‘unable to meet demands’ in mid-August, while 27% reported ‘employees working increased hours’.
Since March 2022, when the question was first introduced, more than 1 in 10 businesses reported to have experienced difficulties in recruiting employees, rising to more than 4 in 10 among larger firms (with 50 or more employees). Accommodation and food service activities (39%), Human health and social work activities (35%), and Real estate activities (24%) had the highest percentage of businesses reporting difficulties in recruiting employees in July 2022.
In June 2022, across all businesses not permanently stopped trading and had difficulty recruiting employees, 47% reported they had difficulty recruiting skilled, manual, or technical employees, followed by 36% reporting difficulties in recruiting semi-skilled or unskilled employees. Lack of qualified applicants for the roles on offer and low number of applications for the roles on offer and were the most common reasons given (approximately half) for experiencing difficulties in recruiting employees.
Since early June 2022, the arts, entertainment and recreation industry and the information and communication industry have continued to report one of the smallest percentage of businesses experiencing worker shortages, with 4% of businesses in each industry reporting work shortages in mid-August.

Inactivity in the labour market

The rise in economic inactivity since the start of the pandemic has been the main driver in the reduction in UK’s labour supply.
Overall, total employment levels were 327,000 below pre-pandemic levels as of May to July 2022. There were 642,000 more people aged 16 to 64 years inactive, with three-fifths of those (60%, or 386,000) aged 50 to 64 years.
The share of the economically inactive population who want a job has also been declining. Of those aged 16 to 64 years and inactive, 19.2% wanted a job as of May to July 2022, compared with 22.1% before the start of the pandemic (December to February 2020).
Long-term sickness is currently the main reason for inactivity among those aged 16 to 64 (27.3%), followed by studying (26.3%), looking after family or home (19.1%), and retired (13.3%). However, increases in long-term sickness predate the pandemic, starting in 2018.

Over 50’s focus

There are 521,000 more people aged 16 to 64 years who are economically inactive, with almost two-thirds of those (64%, or 334,000) aged 50 to 64 years.
In the period 8 to 13 February 2022, the ONS conducted the Over 50s Lifestyle Study looking at adults aged 50 to 70 years who left work or lost their job during the COVID-19 pandemic in Great Britain from March 2020 and had not returned to work at the time of the survey. This included asking why they left and whether or not they intend to return.
The most frequent reasons given for leaving work were to retire (47%); because of the COVID-19 pandemic (15%); because of illness or disability (13%) and because they did not want to work anymore (11%).
Nearly 6 in 10 said they would not consider going back to paid work in future. Although the majority of these (79%) said nothing would encourage them back to work, 10% said they would be encouraged to return if they were able to work from home; 9% said they would be encouraged by flexible working hours and 4% said they would be encouraged if the job fit around caring responsibilities.
Nearly 4 in 10 said they would consider returning to paid work in the future with over half (54%) saying it would be for the social company or a job they would enjoy; around a half (52%) saying they would be encouraged by the money; and under a half (45%) saying they would be encouraged to return to work for a job that suited their skills and experience.
The ONS plans to publish new insights later this month into the reasons and factors for older workers leaving the labour market, and what may encourage them to return. The ONS is happy to send a copy of the new insights to the Committee once published.

Long COVID

Data suggests that some of the increased inactivity could be due to long COVID. In July 2022, 1.8 million people reported suffering from long COVID in the UK, with 369,000 “limited a lot” by their symptoms.
The impact of long COVID is felt unequally. As a proportion of the UK population, the prevalence of self-reported long COVID was greatest in people aged 35 to 69 years, females, people living in more deprived areas, those working in social care, those aged 16 years or over who were not students or retired and who were not in or looking for paid work, and those with another activity-limiting health condition or disability.
Research on the prevalence of long COVID shows that the employment status with the highest prevalence across the UK is the ‘inactive and not looking for work’ group; with 6.43% of that population estimated to be living with self-reported long COVID of any duration. This compares with 3.81% among those employed, and 3.41% among those unemployed.
The ONS is currently working on an analysis of the association between SARS-CoV-2 infection / long COVID and changes in employment status (working or not working) using data from the Coronavirus Infection Survey. However, it is not possible to identify long-term sickness absence from the survey data. We anticipate being able to publish results from this work later this year and will share these with the Committee.

Earnings

After falling at the start of the pandemic, partly as a result of furlough, growth in total earnings has remained strong in recent months with particularly high bonus payments, especially in March 2022. However, even with bonuses considered, pay has struggled to keep pace with inflation. Ignoring bonus payments, regular pay growth, though also strong (but more subdued than total pay) has seen record falls in real terms (that is, when adjusted for inflation).
Growth in average total pay (including bonuses) was 5.5% and growth in regular pay (excluding bonuses) was 5.2% among employees in May to July 2022.
Growth in total and regular pay fell in real terms (adjusted for inflation) on the year in May to July 2022, at 2.6% for total pay and 2.8% for regular pay; this is slightly smaller than the record fall we saw last month (3.0%), but still remains among the largest falls in growth since comparable records began in 2001.
Average regular pay growth for the private sector was 6.0% in May to July 2022, and 2.0% for the public sector; outside of the height of the pandemic period, this is the largest difference we have seen between the private sector and public sector.
The wholesaling, retailing, hotels and restaurants sector saw the largest regular growth rate at 7.0%, followed by the finance and business services sector at 5.9% and construction sector at 5.4%.