This week, the ONS's monthly labour market update was not published. Has the methodology for this vital estimate become untenable?

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Each month, I comment on the Office for National Statistics’ labour market overview for the IEA. The data provide insights into the UK's employment, unemployment, earnings, and other related metrics, influencing decisions by the Chancellor and the Bank of England.

These figures are primarily sourced from the Labour Force Survey, a respected and widely used voluntary household survey. However, this month, major problems have arisen, prompting the ONS to delay publication to address and recalibrate the data.

The response rate to the LFS has plummeted, dropping from over 60% a few years ago to 40% just before Covid to around 15% now. While a uniform decrease across the population would probably widen the margin of error without changing the trend, the decline has been uneven. Older individuals and those home all day have higher response rates, introducing sample bias and potentially skewing the overall picture. This bias is evident in the discrepancy between LFS employment figures and other sources like company payrolls.

Now I’m not telling you this because I’m a statistical nerd. Some of you might dispute the need for the LFS, perhaps echoing the great Sir John Cowperthwaite, who as Financial Secretary in Hong Kong famously refused to collect economic data in case it encouraged people to demand more public spending. Perhaps.

But it’s interesting for a couple of reasons. One is that our increasingly diverse society makes collecting reliable data on the population more difficult, with some communities less likely to reply to questions, possibly because they fear government acquiring information about them even though answers are anonymised. We saw this with the Census.

Two, it’s another example of the long-term fallout from Covid. Previously, the survey was first administered in-person (respondents are asked to repeat the survey four times over the next fifteen months). Someone came to your door, had a cup of tea and went through the questions with you.

Covid put the kibosh on this as we couldn’t let anybody in: phone calls had to suffice. This has continued post-Covid – no doubt welcomed by survey administrators who, like an increasing number of government employees, can now work at home rather than trudge round to people’s flats and houses. But relying on phone calls is difficult. Contacting people by phone is increasingly problematic, and those who are available and prepared to answer questions for up to an hour in this way are not typical of the population as a whole.

So, although there are no questions about this in the LFS, the problems that the ONS is having shed some unintended light on the way Britain is changing.

Len Shackleton

IEA Editorial and Research Fellow
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** IEA Primers ([link removed])
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Have you just started out in the world of liberal ideas? Need to refresh your understanding of key concepts? Look no further than the IEA’s primers and introductions ([link removed]) . Eamonn Butler has penned primers on essential scholars, including Adam Smith ([link removed]) and Ludwig von Mises ([link removed]) and key concepts like democracy ([link removed]) , entrepreneurship ([link removed]) , and public choice theory ([link removed]) . These short introductions take the wide-ranging cannons of liberal thought and distil them into a digestible and accessible format.
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Adam Smith - A Primer ([link removed])

The father of modern economics… For an introduction to liberalism and free markets, where better to look than where so much of it began?

The primer offers a concise introduction not only The Wealth of Nations, with Smith’s insights on trade and the division of labour, but also to less well known works, such as The Theory of Moral Sentiments, the lectures, and the writings on the history of science.

An Introduction to Capitalism ([link removed])

A term of abuse or endearment?… Very few words mean so little but carry so much weight as ‘capitalism’. This introduction cuts through the noise and provides an honest assessment of what capitalism is as well as its benefits and drawbacks.
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School of Thought: 101 great liberal thinkers ([link removed])

A broad Church… Liberal thinkers have diverged and converged on a plethora of issues throughout the movement’s history. Starting in 600BC, this introduction charts a history of liberal thought through the medium of some of its greatest thinkers, their contributions to the cannon, and where their thinking diverges from their fellow liberals.

Islamic Foundations of a Free Society ([link removed])

Familiarity improves understanding… Spreading the ideals of free markets and individual liberty to a global audience is fundamental to the IEA’s mission. Co-authors Nouh El Harmouzi and Linda Whetstone thought highlighting Islam’s historic links to liberal values was one of the most effective ways to introduce our ideas to the world’s 1.8 billion Muslims.
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Prime real estate… At student events and international conferences, our primers are often in high demand. At this year’s Durham University Freshers’ Fair, the Libertarian Society gained new readers and recruits.

IEA Latest.
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** Competition is a force for good in business, so why not extend it to global regions? ([link removed])
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Director General Mark Littlewood, The Times

Voting with your feet… Competition for customers powers growth and innovation in the private sector. Decentralisation could create a similar effect in the quality of our governments.


** Government borrows less than expected in September ([link removed])
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Economics Fellow Julian Jessop, BBC News ([link removed])

Ready for tax cuts… Government borrowing came in at less than expected last month, does this leave room for some tax cuts?
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Is Wildlife Trade Sustainable? | IEA Podcast ([link removed])

Director of Public Policy and Communications Matthew Lesh and Director of the African Wildlife Economy Institute Dr Francis Vorhies, IEA YouTube

Trade gone wild… Could restrictions on wildlife trade hurt people in developing economies while damaging wildlife conversation and the environment?
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Inflation Stubbornly Stays At 6.7 per cent ([link removed])

Economics Fellow Julian Jessop, Guido Fawkes, The Guardian ([link removed]) , The Daily Express ([link removed]) , The Scotsman ([link removed]) , and Business Leader ([link removed])

Eyes on the prize… Inflation may have remained steady at 6.7 per cent in September, but with the money supply still shrinking, the Bank shouldn’t jump to interest rate hikes.
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Privatisation: What Worked? ([link removed])

Communications Officer and Linda Whetstone Scholar Reem Ibrahim and IEA Trade and Competition Fellow Shanker Singham, IEA YouTube

A word of warning… Privatisation has been a tremendous force improving service delivery. But if competition is absent, distortions can remain for decades.
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‘Sick man of Europe’ Germany’s fourth slump is just one of ‘many problems’ ([link removed])

Economics Fellow Julian Jessop, The Daily Express

Do the Germans do it better?… Failed energy and industrial policies have left Germany vulnerable.
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The bully state (w/ Christopher Snowdon) ([link removed])

Head of Lifestyle Economics Christopher Snowdon, The Critic

Enjoy it while you can… What underlines the public health lobby’s seemingly insatiable appetite to control our lifestyles?
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Should there be limits to free speech?

Communications Officer and Linda Whetstone Scholar Reem Ibrahim, GB News

Should there be limits to free speech?… Banning the expression of opinions that we dislike could lead dangerous opinions to be left festering underground and unchallenged.
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How zero-sum thinking leads to zero-sum policies ([link removed])

Communications Officer Harrison Griffiths, IEA Blog

A vicious cycle… Zero-sum policies breed economic stagnation, economic stagnation breeds zero-sum thinking, zero-sum thinking fuels demands for zero-sum policies.

IEA Insider.

The Monetary Policy Essay Prize ([link removed])
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Theory and practice… The annual monetary essay competition, in partnership with the Institute for Monetary Research and the Vinson Centre, is open until Friday 26th January.

This year’s question: What causes high inflation, and is the Bank of England responsible for the current inflation episode? If so, how would you make it more accountable?

To enter the competition, send one essay of no more than 2,500 words to [email protected] (mailto:[email protected]?subject=&body=) by the deadline.

Think you’re up to the challenge? Visit our website to learn more. ([link removed])

The End of the Age of Entitlement: A Decade Later ([link removed])

A warning from Down Under… In April 2012, then-Shadow Treasurer, Joe Hockey, delivered a speech to the Institute of Economic Affairs in London entitled “The End of The Age of Entitlement ([link removed]) “. Hockey spoke about the unsustainable nature of universal entitlements that have been ignored for years.

Just over a decade later, Hockey is returning to the IEA to revisit this thesis. In the context of the ongoing global economic challenges, Hockey will discuss the future of our global economy and the role of governments in the wake of recent events.

You can RSVP by email. (mailto:[email protected])
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** How can we conquer
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** cancel culture?
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On Tuesday 24th October, the Freedom Association are hosting a conference on cancel culture at a central Westminster venue. Speakers include Nigel Farage, Baroness (Claire) Fox the IEA’s Mark Littlewood. Learn more and purchase tickets. ([link removed])
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