Unemployment and Osborne: the crisis deepens

On 14 September the horror of this government’s austerity policies was brought into sharper relief with the publication of unemployment statistics showing unemployment has breached 2.5 million again.

But that figure hides more worrying underlying trends: in addition to the 2.5 million unemployed are nearly 1.3 million working part-time who want full-time jobs (up 15% in the past year) and over half a million working temporary contracts who want a permanent job. In effect therefore 4.4 million people are looking for work (aside from anyone in work looking to change job). Youth unemployment is the highest on record, while women’s unemployment is at its highest since 1988.

To compound this misery further the number of vacancies sank to just 453,000 – meaning there are about 10 people chasing every job. In the areas of highest unemployment (the north-east and London) that figure is likely to be considerably higher.

Despite Osborne’s rhetoric about the white knight of the private sector coming to the rescue, Tory cuts and austerity are damaging private sector jobs too. On 15 September retail sales data for August showed a further contraction. With unemployment rising, wages falling in real terms and benefits and tax credits being cut, how could the service sector expand?

The unemployment rise was entirely due to the government’s cuts programme as data showed the public sector had shed 110,000 jobs in the last three months alone. Ironically despite rising unemployment, the government is shedding jobcentre staff and even embarking on another round of jobcentre closures – including in Camberwell, south London.

The attack on welfare is not just on the staff who administer it though, but on people trying to claim and maintain a claim for jobseeker’s allowance (JSA). On 15 September, the National Audit Office showed that the take-up rate for JSA is just 53% - meaning there are over a million people entitled who are not claiming. Many will be too proud or ashamed to claim, given the stigma successive governments have heaped on welfare, or they might have been pushed out of the system by the increased conditionality applied.

Osborne and the Tory-led government are in turmoil. Increasing unemployment means rising welfare bills and falling tax revenues, exacerbating the deficit crisis they pledge to be resolving. Their solution will be to cut more, and the downward spiral will accelerate – sucking in thousands of wasted lives as collateral damage in Osborne’s failing economic experiment.

A version of this article will appear in the October issue of Labour Briefing

LEAP calls for radical policy shift to tackle unemployment

UK Unemployment has risen to 2.26 million today, with the number of people in work down 271,000 in the last month - the highest quarterly decrease since records began.

John McDonnell MP, LEAP Chair, said:

"These shocking figures demonstrate that all the talk of 'green shoots of economic recovery' is absolutely meaningless for the nearly hundred thousand people joining the dole queue every month.

"The onus is now squarely on the shoulders of the Government to act decisively to halt the rising unemploymenbt and offer, particularly the young, real alternatives of meaningful employment and training.

"The Government needs a three-pronged policy response:

1. Direct intervention in companies and sectors where job losses are moutning, with subsidies to keep people in work in return for a stake in the business;
2. Stepping up the direct Government investment in Green New Deal infrastructure projects to stimulate new employment;
3. Guaranteed training and education places based on living wage grant for the unemployed".

The claimant count is now at its highest for 11.5 years - since November 1997 - but it only rose by 39,000 in May, less than expected. This is explained by two factors:

1. As LEAP has pointed out before, Jobcentre Plus is struggling to process the new claims, and each month the previous month's figures are revised up; and
2. The increased conditionality in the Jobseeker's Allowance regime means more people are being excluded from claiming

It's also worth reminding people that unemployment benefit is just £64 per week, dropping to £50 if you're under 25.

LEAP comment on rising unemployment

New unemployment figures released today show that those claiming Jobseeker's Allowance rose to over one million, with the claimant count growing at its fastest rate for nearly 18 years. As Graham Turner points out below, this figure is likely to be even higher once the benefit office backlog is cleared. ILO unemployment rose to 1.86 million - an unemployment rate of 6%.

John McDonnell MP, LEAP Chair, said:

"Rising unemployment will have disastrous consequences, ravaging communities and destroy hope for individual lives.

"Today's figures show that Brown and Darling's package is not working. The banks are still not co-operating, and we should nationalise them now.

"Instead of attacking and stigmatising those out of work, we need a huge capital investment programme of public works to create jobs - including on rail, alternative energy and council housing."

Graham Turner said:

"The claimant count accelerated up sharply in November. The October figure was revised up from 36.5k to 51.8k. This has been a persistent pattern since the labour market started to deteriorate. The lack of staff in benefit offices due to ‘efficiency drives’ means not all the claimants are processed in time. And the backlog appears to be growing.

"The upward revision for October was the largest yet. That suggests November could be nudged up significantly, even though it was already the biggest rise since March 1991. And predictions of a rise in unemployment [on the ILO measure] to 3 million look more than realistic."

Download Graham's briefing on UK unemployment in full.

It's worth noting that since 2004, the DWP has sacked 30,000 staff in 'efficiency savings'. In November 2008, the Secretary of State James Purnell announced that DWP would be hiring an additional 6,000 staff to work in Jobcentre Plus . . . See PCS's take on today's unemployment figures