Unemployment time bomb is ticking inside list of benefit claimants

University team says dole queue is far longer than ministers claim

Peter Hetherington, regional affairs editor
Saturday May 22, 2004
The Guardian


Jobless levels in Britain would double if the government included in its official figures those people diverted from the dole queue into a hidden category of people claiming incapacity benefit, according to a new study which could embarrass senior ministers.

Debunking the theory that the problem of unemployment is all but solved, it reveals that about 2.5 million people are out of work - compared with the 1.4 million classed as jobless under the broader definition of the International Labour Organisation. Official government figures, based on people receiving job seekers' allowance (JSA) put the level at about 900,000.

The study calculates that more than a million people claiming sickness benefit have been diverted from receiving JSA. "The true level of unemployment is much greater than official figures indicate."

After research over several years, a team from Sheffield Hallam University warns that the government is sitting on a statistical time bomb that could soon explode as rules controlling access to incapacity benefit are tightened - and jobless figures consequently rise. Although the team stresses that there is nothing fraudulent about sickness claims, it says take-up of long-term benefit has grown from 570,000 in 1981 to a "truly astonishing" 2.1 million last year. Of that total, the team estimates that up to 1.2 million would be in work if the economy were stronger in older industrial areas such as the north-east, south Wales, and Clydeside.

While not disputing that the UK labour market has improved since the depths of the early 90s recession - particularly in the south and east of England - it warns that "continuing and large scale" joblessness has been in effect obscured by maintaining a policy that began under the last government.

Professor Steve Fothergill, one of the study's authors, said yesterday that the exclusion of so many people from official figures was "a peculiarly British phenomenon on this scale". He was alerted to the problem after studying the impact of the pit closure programme in the early 90s that ravaged the British coal industry "but had virtually no impact at all on recorded unemployment in the coalfields".

By 1995, responsibility for authorising long-term claims had been transferred from local GPs to doctors working on behalf of the Benefits Agency with new, standardised assessment procedures. The total might have been expected to fall when the long period of economic growth began in 1993, the study says. But this made "absolutely no dent" in the numbers claiming incapacity benefit. "It is highly unlikely that there has been a fourfold increase in the level of long-term, incapacitating illness in the UK workforce over the last 20 years," the study adds. "The increase has happened at a time when general standards of health are known to be showing a slow but steady improvement, admittedly with the slowest improvement among the most disadvantaged groups."

The Sheffield team in effect divides Britain into two halves, with the greater south-east motoring ahead and the older industrial areas lagging badly.

The head honcho that originated the apocalypse in the UK:

Listing top 20 "hotspots" of worklessness, it puts the old colliery town of Easington, Co Durham, at the top, with more than 21% of the working population claiming incapacity benefit, closely followed by similar towns in south Wales, with Glasgow and Liverpool close behind. Tony Blair's Durham constituency of Sedgefield comes in at 18 with more than 13% claiming benefit. At the other extreme, parts of Surrey, Buckinghamshire and Cambridgeshire - where there is full employment - register sickness levels under 3%.

On a region-by-region comparison, the north-east tops the league with 95,000 people, or more than 6% of the workforce on benefit, followed by Wales, the north-west and Scotland. The eastern and south-east regions have 1.4% and 0.9% respectively. As a result, the report says, regional imbalances in labour markets are glaring -"far more severe than has generally been recognised, and certainly far worse than claimant unemployment figures suggest".

Large numbers of people had been diverted from unemployment to sickness benefits in old industrial areas "because there have not been enough suitable jobs in these places". On the other hand, in the south - where diversion is minimal - it says there is "unquestionably a strong demand for labour".

The Diversion from "Unemployment" to "Sickness" across British Regions and Districts. Christina Beatty and Stephen Fothergill, Centre for Regional Economic and Social Research, Sheffield Hallam University


Ask Aristotle
Gordon Brown

Special reports
Economics
Budget 2004

Useful links
HM Treasury
Who's who at the Treasury

Political Alerts
Get the day's headlines straight to your mobile

Sign up for the Backbencher
Our weekly insider's guide to Westminster

What do you think?
mailto:politics.editor@guardianunlimited.co.uk

Economic Straits