The latest labour market statistics have indicated the largest quarterly rise in employment on record – mainly driven by the private sector – but this improvement has done little to get people off benefits, much to the DWP’s concern. DWP minister Chris Grayling maintained that full-time and part-time jobs were being created at record levels but admitted he was disappointed the number of people claiming unemployment benefits had remained high, underlining the need for benefits reform to get welfare claimants back into work.
The ONS figures[1] show that while the number of people in employment rose by 286,000 on the quarter, the total of nearly five million people claiming the three main out-of-work benefits has not improved significantly. In fact there was a slight increase this month in the numbers claiming Jobseeker’s Allowance.
Latest DWP figures show that the number of people claiming incapacity benefits (ESA/IB) is estimated to be 2.605 million in July, with lone parents claiming income support at 675,000. The DWP’s package of measures to reduce the claimant count is set out on its website.[2] These include Pathways to Work programme, measures to get over 50s on Jobseeker’s Allowance earlier help, the continuation of the current Work Capability Assessments and the new arrangements (which reduce the age at which a child is deemed to be in full time education) for lone parents claiming income support.
The broader measure of unemployment fell by 8,000 in the three months to July with unemployment now standing at 2.47 million, in other words 7.8% of the UK workforce is out of work. The figures also indicate that there were 142,000 redundancies in May to July – down 31,000 on the previous quarter and 90,000 on the previous year. The ONS’s vacancy survey estimates an average of 467,000 unfilled vacancies in the three months to August 2010, down 14,000 on the quarter and up 31,000 on the year.
Speaking at a charity investment seminar hosted by Rathbones, Economics professor Andrew Dilnot of St Hugh’s college Oxford reminded delegates that the recent recession was not nearly as bad as the previous two in 1991 and 1979 and followed an astonishingly long period of economic growth.
Nigel Meager, director of the Institute for Employment Studies, observed:
“While the employment data covering the period May to July were generally strong, with growing employment and a small fall in the broader measure of unemployment, there remain reasons for concern. The rise in claimant unemployment in August, although modest, is an unwelcome reminder of how fragile the labour market remains. And, as the most up-to-date indicator of what is happening, it suggests a weakening picture.
“The fall in the number of vacancies in the three months to August was driven entirely by the drying up of public sector vacancies, which was barely offset by limited growth in private sector opportunities. The figures highlight how delicate the balance will be over the coming months, and suggest that current private sector growth may not be adequate to ameliorate the impacts of reduced public sector employment.”
[1] http://www.statistics.gov.uk/pdfdir/lmsuk0910.pdf
[2] http://www.dwp.gov.uk/policy/welfare-reform/