16 September 2009 – Knight: we must keep investing in people

Help, support and investment to get people back into work must continue, said Employment Minister Jim Knight today, as new figures published by the Office for National Statistics show that unemployment is rising at a slower rate, following the extra help the Government has brought in.

The number of people on Jobseeker’s Allowance has gone up by 24,400 to 1.607 million. Around 70% of claimants are leaving Jobseeker’s Allowance within 6 months. The number of people who are ILO unemployed has risen by 210,000 on the quarter to July 2009, which is 20,000 less than the increase in the previous quarter.

The Government has made clear that help for young people to get into work must increase as part of the Backing Young Britain campaign. The claimant count for 18 to 24 year olds has risen by 9,500 in the last month to 483,200, a lower increase than in the previous month. The majority of young people are still finding work or training to go to and over 50% of young people are leaving the claimant count within three months and over 70% within six months. However the Government is determined to deliver help for all young people. The wider ILO unemployment figure which includes 16 and 17 year olds as well as 261,000 people in full time education has gone up by 59,000 over the last three months. This increase includes an additional 34,000 16-17 year olds who are in full time education.    

Employment Minister Jim Knight said:

"We will not let people down in these tough times. Today’s figures show that families across Britain are still being affected by the world recession and make clear how important it is to keep up the investment to get people back into work. The actions we have taken in recent months are starting to pay off. The number of people who have been claiming Jobseeker’s Allowance for up to six months has been declining in recent months, and around 70% of claimants are leaving benefit within that time.

Today’s OECD Employment Outlook shows that the UK is doing well compared with other developed nations such as the US and France with lower than average rates of unemployment than the G7, EU and OECD average.

Jim Knight said:

"However, we know things will still be tough for some time and unemployment is likely to keep increasing even once the economy starts growing again – that’s why it’s critical that we continue investing in people’s future and don’t just abandon them.

"We must all play a part in making sure we don’t lose a generation.  Through the Backing Young Britain campaign we are bringing together employers across the country to give young people work and training opportunities.   We are investing £6.9 billion to deliver more than one and a half million learning opportunities for 16-18 year-olds, provide an expansion in apprenticeship places and offer more than 100,000 jobs for young people through the Future Jobs Fund."

Yesterday, the Government announced 7,500 new jobs under the Future Jobs Fund – 2,000 of them in the sports sector.

In total, the Government has already announced over 50,000 new jobs through the £1bn Future Jobs Fund, which provides money for 150,000 jobs - 100,000 of which have been targeted at young people and 50,000 at unemployment hotspots.

Notes to Editors:

Background to labour market statistics: September 2009

This month’s Labour Force Survey covers May 2009 to July 2009.  The claimant count and Jobcentre Plus vacancy count dates were 13th and 7th August respectively.

The number of people in work fell this quarter

• but nearly 29 million people were in work in May to July.
• employment level in May-July was 217 thousand lower than in February-April and 600 thousand lower than in the same quarter last year.
• the employment rate is 72.5%, down 0.8 percentage points on the quarter and down 2.1 percentage points on the year
• Number of workforce jobs is 30.9 million in June 2009, down 163 thousand on the quarter and 664 thousand on the year.

The number of people claiming JSA has risen again this month

• claimant unemployment was 1,607.4 thousand in August 2009, up 24.4 thousand on the level in July, and up 693.7 thousand on the year. 
• the claimant unemployment rate, at 5.0%, is up 0.1 percentage points this month and up 2.1 percentage points on the year.
• inflows to JSA were 349.6 thousand in August, down 4.3 thousand on the month and up 94.2 thousand on the year. The number of people leaving JSA dropped to 331.1 thousand, down 3.9 thousand on the month and up 111.6 thousand on the year.
• In the year to February 2009, the number of people claiming employment support allowance/incapacity benefits fell by 14,300 to 2.6 million.  More recent provisional estimates suggest that there were 2.63 million claimants in July 2009, unchanged on the month but up slightly from the level a few months ago.
• in the year to February 2009, the number receiving lone parent benefits fell 5.700 to 736,000.  Provisional figures for July 2009 suggest a continued downward trend in the number of lone parents on benefit (driven by the recent conditionality reforms)

ILO unemployment has risen this quarter

• 2.47 million people were ILO unemployed in the May to July quarter, up by 210 thousand on the February to April period and up 743 thousand on the same quarter last year. 
• the ILO unemployment rate is 7.9%, up 0.7 percentage points on the quarter and up 2.3 percentage points on the year.

The level of economic inactivity is up on the quarter and up on the year

• the economic inactivity level is 7.986 million, up 97 thousand on the quarter and up 125 thousand on the year.
• the economic inactivity rate is 21.1%, up 0.2 percentage points on the quarter and up 0.2 percentage points on the year.
• excluding students, inactivity as a proportion of the working age population is up 0.3 percentage points on the quarter but down 0.2 percentage points over the last year, at 15.4%.

There are still many vacancies available, and the number of redundancies has fallen back this quarter:

• There were 246 thousand redundancies in May to July, down 55 thousand on the previous quarter and up 107 thousand on the previous year.
• ONS’s vacancy survey estimates an average of 434 thousand unfilled vacancies in the three months to August 2009, down 12 thousand on the quarter, and down 174 thousand on the year.
• In the last month Jobcentre Plus has taken on average over 10,000 new vacancies every working day and many more come up through other recruitment channels

Earnings growth in the year to June was 1.8%, up 0.4 percentage points from the May figure:

• excluding bonuses, average earnings growth was 2.2%, down 0.2 percentage points from the June figure.

ILO unemployment

ILO unemployment in the UK stands at 2.47 million (May-Jul 09), 418,000 (20.4%) higher than in 1997.  The ILO unemployment rate is 7.9%, 0.7 percentage points higher than in 1997.

Long-term (12 months plus) ILO unemployment is 567,000, 217,000 (27.6%) lower than in 1997. 2 year plus ILO unemployment is 243,000, 251,000 (51%) lower than in 1997.

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