Unemployment Falls As ‘Economic Inactive’ Hits Record

(Telegraph) – THE NUMBER OF UNEMPLOYED PEOPLE in Britain dropped to 2.45 million, however the good news was dampened by the number of people out of the workplace hitting a record high.

Unemployment fell for the third month in a row, dropping by 33,000 between November last year and January. It has yet to breach the symbolic 2.5 million mark, let alone the 3 million barrier that haunted the recessions of the early 1990s and 1980s.

However, economists immediately expressed caution about the monthly figures from the Office for National Statistics.

Though there were 33,000 fewer people out of work, they were trumped by a significant jump in the number of so-called “economically inactive” adults – those that have either chosen not to or given up looking for a job. They include students, parents staying at home to look after children, long-term sick, and the “discouraged”, a euphemistic term used by the ONS to describe those that have given up the struggle to find a job.

In all, those economic inactive jumped by 149,000 over the last three months to hit 8.16 million, the highest since the ONS started recording this measure in 1971.

The biggest rise is down to the increase in students, with nearly 100,000 deciding to study in the last three months.

John Philpott, the leading employment economist, at the Chartered Institute of Personnel and Development said: “Unemployment is sharply down, however you measure it. Yet there are also 54,000 fewer people in work, with full-time jobs particularly hard hit. The apparent paradox is explained by a very sharp rise of 149,000 in the number of economically inactive people, with the number of students surging by 98,000. Jobless young people are thus turning to study in their thousands to avoid the dole.”

Added to the economically inactive, were a further 1.04 million part-time workers that were on reduced hours because they could not find a full-time job.

Experts also pointed out that the only jobs being created were in the public sector, with 22,000 created by central government, mostly in the NHS. Ironically, one of the biggest institutions hiring new workers are Jobcentres, which took on 2,250 new workers in the last three months.

In contrast, employment in the public sector fell by 61,000.

Mr Philpott added: “Whether or not benign headline jobless figures limit the potency of unemployment as a vote clinching issue in the forthcoming General Election campaign, whoever forms the next Government will face a Herculean task in its efforts to return the UK economy to full employment within this decade.“

Yvette Cooper, the Work and Pensions Secretary, said: “The fall in unemployment for the third month in a row is very welcome, but we should remain cautious.

“We’re not out of the woods yet and we are still determined to do more to support jobs and help the unemployed this year.”

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Unemployment Claimant Count Rises Again

(Guardian) – GORDON BROWN’S EFFORTS to win the next general election received a blow today after official figures showed that the number of Britons claiming unemployment benefit rose unexpectedly in January to the highest level since Labour came to power.

The Office for National Statistics (ONS) said that the number of people claiming jobseeker’s allowance (JSA) rose by 23,500 in January, compared with a fall of 9,600 in December. This is the largest monthly rise in the claimant count since last July, and takes the total number of people receiving unemployment benefit to 1.64 million, the highest figure since April 1997.

Economists had expected the claimant count to fall by 10,000 in January as the UK economy struggled out of recession, after falling in November and December.

The ILO – the wider measure of unemployment – fell by 3,000 in the three months to December to 2.457 million. The jobless rate now stands at 7.8%.

Howard Archer, economist at IHS Global Insight, said the rise in the claimant count was a “reality check” that dashed any hopes that unemployment had peaked.

“The economy is just not strong enough at this stage to prevent further job losses and the fall in unemployment late in 2009 had masked the fact that full-time employment was still falling appreciably,” said Archer.

Ross Walker, an economist at RBS Financial Markets, agreed.

“The fact that the claimant count was falling in recent months was the huge surprise. The fact that we have got a rise is not particularly surprising. It seems to fit more with the underlying reality,” Walker said.

Yvette Cooper, the work and pensions secretary, said that the government’s actions have helped to keep the unemployment total almost half a million lower than the National Audit Office predicted last year.

“We always knew it would be difficult in the new year, and said that we expected unemployment to keep rising,” Cooper told the BBC.

Separately, the ONS said yesterday that underemployment has risen sharply during the recession, according to separate ONS figures.

About 2.8 million people were officially underemployed – defined as working fewer hours than they want to – between July and September 2009, which equates to nearly 10% of those in employment. The number went up by 700,000 from a year earlier. This is in addition to the 2.6 million out of a job.

Lavish Housing Benefit Payouts To Be Axed

(Telegraph) – LUXURY APARTMENTS AND LARGE HOMES in sought after areas will be ineligible for housing benefit claims under new rules designed to crack down on lavish pay outs.

The changes which will see top rents excluded from claims are part of a wider shake-up of the benefits system aimed at making work pay, and follow a series of high profile instances where claimants had their rent paid while living in houses worth millions of pounds.

Ministers are said to fear that the current system is seen as unfair, because people on benefits in some areas, particularly in the Capital, have been able to have rent paid on homes which most “hardworking families” would not be able to afford.

At the weekend, it emerged that a single mother of eight was living in a £2.6 million mansion in Notting Hill, north London, at a cost to the taxpayer of £90,000 a year in rent.

The Government is set to consult on the best way to limit claims for top rents, with proposals including barring the top five to 10 per cent of rents, or banning claims from the most exclusive areas, such as Canary Wharf in London.

As well as the housing benefits reforms, the Department for Work and Pensions is also unveiling a jobs white paper, including plans to ensure that people on benefits will always be better off if they get a job.

Yvette Cooper, the Work and Pensions Secretary, said: “Housing benefit needs to help people into work and it also needs to be fair.

“We want to make sure that families have a decent place to live and that they are encouraged to move off benefits and into jobs.

“That means going further with benefit reform to give people more support and certainty in work.

“But it also means tackling the problems caused by a small proportion of very high rents to make the system fairer too”

As part of the proposed reforms, housing benefit will continue to be paid at the same level for the first three months after a claimant gets a job to allow them to “settle in” to work.

The plans also include a proposal that the partners of those claiming benefits be forced to seek work if they are fit.

But Theresa May, the shadow work and pensions secretary, said: “It is totally unfair that families on benefits can afford better housing then those in work.

“Labour’s had 12 years to get to grips with welfare reform.

“Now in the dying days of Gordon Brown’s government they are rushing out a series of policy announcements aimed at grabbing votes as the election looms”.

Government To Create 47,000 New Jobs

(Press Association) – THE GOVERNMENT HAS LAUNCHED a campaign to create thousands of jobs and work experience places to help young people through the recession, with the first new posts including sports coaches and education assistants.

Around 10,000 internships and work placements will be made available for 18 to 21-year-olds who have not been to universities, while other measures will include job clubs and a mentoring network.

Work and Pensions Secretary Yvette Cooper said 47,000 new jobs will be funded by the £1 billion Future Jobs Fund, targeted at young unemployed people, with a variety of places in green and social care sectors as well as education, tourism and sports.

‘We are determined not to lose a generation of talent because of the recession. Many young people were denied the help they needed in the recessions of the 80s and 90s ending up out of work for months and years. Too many never got a start in the jobs market.

‘We are determined not to let that happen again. This is why we are announcing 47,000 new jobs for young people… and, with business and charities, we are launching a national call to action to our fellow employers to join us in Backing Young Britain — to give every young person a job, a training place, skills or work experience.’

To mark the campaign, the Government will launch a graduate talent pool website, with more than 2,000 internships available to graduates, with 4,000 more due to come on stream in the next few weeks.

Firms were urged to offer work experience, internships, work trials or jobs, as well as providing mentors to schools and universities to help young people in their search for work.

Yvette Cooper Is New Work And Pensions Secretary

YVETTE COOPER FILLS THE VOID left by James Purnell’s resignation and becomes the new Work and Pensions Secretary.