Media centre

15 September 2004 - Welfare reform is working - Kennedy

Minister for Work, Jane Kennedy, today welcomed two sets of statistics showing that welfare to work policies are helping to bring down the number of people claiming out of work benefits. She said:

“These figures demonstrate the continuing success of the government’s economic and labour market policies. With employment growing, more people are moving from welfare to work and unemployment has fallen to its lowest level for almost thirty years.”

In May-July 2004 the number of people in work in the UK was 28.3 million, up by 170 thousand on a year ago. Over the same period the number of people unemployed on the ILO definition fell by 87 thousand to 1.41 million.

Jane Kennedy continued: “We are extending employment opportunity to all. The last year has seen fewer lone parents on benefit as well as a fall in unemployment. In addition, the number of people claiming incapacity benefits has peaked after decades of growth.”

Of the number of people claiming benefits:

"These improvements have not come about by chance. The success of our economic policies means the UK now has the highest employment and lowest unemployment of the major world economies," Jane Kennedy said.

"The success of Jobcentre Plus and the New Deal has contributed to a significant fall in unemployment and is increasingly making a difference for our hardest to help customers. Evidence shows that the New Deal for Lone Parents significantly improves the employment chances of participants, while the ground-breaking Pathways to Work strategy is showing extremely positive early results."

Pathways to Work pilots are operating in seven Jobcentre Plus districts, offering personal adviser support for those claiming incapacity benefits, combined with financial assistance, help with rehabilitation and strong local partnerships with the New Deal for Disabled People. In the pilot areas more people are taking up offers of help and more people are moving off benefit and into work.

Notes for editors

Background to labour market statistics: September 2004

Compared to this time last year there are more people in work and unemployment has fallen. The overall number of people on out-of-work benefits has also fallen: this reflects fewer lone parents on benefit as well as lower unemployment. In addition, the number of people claiming incapacity benefits has peaked.

This month’s Labour Force Survey covers May to July 2004. The claimant unemployment count date was 12th August and the vacancy count date was 6th August.

In May to July 2004, employment fell by 1 thousand on the previous quarter but rose by 179 thousand on the year. ILO unemployment was down in the latest quarter and on the year. Claimant unemployment was down in the latest month and on the year.

The labour market is in a strong position

  • There were 28.301 million people in work in May to July.
  • The LFS employment rate is 74.6%, unchanged from the previous quarter.
  • On both measures, recent unemployment rates are the best since 1975.
  • Both the ONS and Jobcentre Plus series show a rise in vacancies over the last year.
  • Over the last year the redundancy rate per thousand employees shows a fall of 0.5 to 5.9 per thousand employees. This is one of the lowest figures on record.

Employment is up on the year and unemployment is down

  • Employment is up by 179 thousand over the last year, but down by 1 thousand over the previous quarter. The underlying trend in employment remains upwards.
  • The level of ILO unemployment in May to July was 1.41 million, down 16 thousand in the last three months and 87 thousand on this time last year. The ILO unemployment rate remains unchanged from the previous quarter at 4.7% but is 0.3 percentage points lower than a year ago.
  • The latest claimant count figures show 830.2 thousand claimants in August 2004, a fall of 6,100 on the month. The level of claimant unemployment has fallen by an average of 10 thousand a month over the last three months. The claimant unemployment rate, at 2.7%, is down 0.3 percentage points over the last year.
  • The proportion of the population who are economically inactive – those who do not have a job but are not actively seeking or available for work – is 21.5%, up 0.3 percentage points over the last year.

The number of people on out of work benefits is falling

  • The number of working age people on out of work benefits in May 2004 was 4.6 million, down 117 thousand over the last year. This is greater than the fall in unemployment-related benefits over the same period.
  • The number of lone parents on benefit in May 2004 was 788 thousand, down 38 thousand over the last year.
  • The number of people claiming incapacity benefits in May 2004 was 2.7 million, down 4 thousand over the last year.

The number of vacancies remains high

  • ONS’s vacancy survey estimates there were 659.2 thousand unfilled vacancies in the quarter to August 2004, up 73.4 thousand (12.5%) on the same period last year.
  • Information on the new vacancies reported to Jobcentres each month is available on Nomis (http://www.nomisweb.co.uk/). Jobcentre vacancies in August 2004 were 349,874 compared to 332,520 in the same month in 2003. This increase may partly reflect the success of Jobcentre Plus in attracting vacancies from employers. More than 10,000 new vacancies are placed at Jobcentres every working day. Evidence suggests up to twice this number come up through other recruitment channels.
  • Earnings growth in the year to July was 3.8%, down 0.5 percentage points from June.
  • Excluding the effect of bonuses, average earnings growth was 4.2%, unchanged from June.

Press office: 020 7238 0866
Out of hours: 07659 108 883
Public enquiries: 020 7712 2171
Website: www.dwp.gov.uk

 

top of page