Mixed messages on unemployment

2004

The number of people out of work in Britain has fallen once again, but both the claimant count and the number of people economically inactive are on the rise.

Headline unemployment in the UK fell by 67,000 to 1.38 million in the quarter from July to September, according to figures from the Office of National Statistics (ONS).

The number of Britons in work in the quarter hit a record 28.4 million, 232,000 higher than a year before, while unemployment as measured by the International Labour Organisation benchmark fell by 109,000 to 1.38 million, a rate of 4.6 per cent.

But the numbers claiming jobseekers benefits rose for the second successive month in October, increasing by 900 to 836,700.

The ONS cautioned that the downward trend in the jobless total could now be levelling off" after falling to the lowest rate since the mid-1970s.

The figures also showed that the number of "economically inactive" people of working age, which includes students, full-time parents as well as those claiming incapacity benefit, has increased by 102,000 over the past year to 7.91 million.

According to a Bank of England report earlier this year, half a million men of working age have quietly left the workplace over the past decade and are claiming long-term sickness benefit – and so not appearing in the unemployment statistics.

Meanwhile John Philpott, chief economist at the the Chartered Institute of Personnel and Development (CIPD), said the government could take some comfort from the fact that the rise in the economically inactive population in recent years was being driven primarily by an increase in the number of students, but he warned that the numbers of long-term sick were a cause for concern.

"The number of people classified as long-term sick remains very high - at more than two million - and has increased by 60,000 in the past year," he said.

"The chancellor must use next month's pre-Budget statement to set out specific proposals for helping more of the long-term sick back into work, including changes to the benefits system to encourage people on Incapacity Benefit to participate in the jobs market so that they become visible to prospective employers."

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