According to the latest figures from the Office for National Statistics, unemployment in the UK rose by 7000 to a little over 2.5 million in the last quarter of 2012. Despite this the overall unemployment figure remained unchanged at 7.8% and in February the number of people who were claiming Jobseeker’s Allowance fell by 1500 to just over 1.5 million, the lowest rate in over 19 months.
The official UK unemployment rate compares favourably to the 11.8% rate in the Eurozone, the highest figure for this region ever, while in the US the current rate is 7.7%.
While Chancellor George Osborne may be buoyed by a rise in private sector employment of 151 000, which helped to ensure that overall unemployment is still 152 000 lower than in the same period last year, he will be concerned by the continuing upwards trend in youth unemployment. The figures for 16 to 24 year-olds demonstrated a rise of 993 000 in the same period, bringing the youth unemployment rate to 21.2%.
The Real Unemployment Figure?
However the TUC (which represents trade unions in the UK) claims that its research proves that unemployment in the UK is actually in excess of 6 million if adults in part-time work are taken into consideration. Whereas official figures are currently based on adults who are out of work and have been seeking new employment for at least one month, the TUC argues that adults who are ‘under-employed’ (that is, those individuals who are in part-time employment because they are unable to secure full-time roles) should be included in the data. This additional measure is already implemented in the US.
The Impact of Tax Credit Reductions
It is anticipated that cuts in Tax Credits in the next two years will contribute to a rise in the unemployment rate as middle-income families register as unemployed in order to claim certain out-of-work benefits such as housing and council tax benefit. Since the introduction of Tax Credits in 2003 under the Blair administration, many adults have maintained close to full-time jobs as their incomes have been supported by the additional payments, a system which the current Government is committed to reforming.
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