Chris Giles is right that UK labour market statistics are no longer fit for purpose (“‘Official’ UK labour data is becoming a nonsense”, Opinion, October 26). As the Office for National Statistics acknowledges, labour force survey response rates are too low to be reliable.
The UK should rely instead on pay as you earn (PAYE) data. But that data is not as timely as people think. The government only learns that someone is employed sometime after they are paid. A new employee might join too late in the month for that month’s payroll, leading to more than two months between starting work and HM Revenue & Customs knowing that fact.
Government should mandate companies to tell HMRC when they hire someone, when they are placed under notice of redundancy, and when that person leaves voluntarily, involuntarily or for retirement.
Surveys would be limited to trying to understand flows into and out of self-employment.
Better data means better decisions — on interest rates, taxes and so on. The small additional piece of red tape is entirely warranted.
Professor Tim Leunig
School of Public Policy, London School of Economics and Political Science London WC2, UK
