December 15, 2011 • 12:08 pm

 “The total number of people on [out-of-work] benefits in the summer of this year, the most recent statistics, was the same as it was in 2004”. Neil O’Brien, Director of Policy Exchange, Radio 4 Today Programme, 14 December 2011.

As news that unemployment had reached a fresh 17-year high hit the headlines yesterday with the release of new data from the Office for National Statistics (ONS), Radio 4′s Today Programme took a look at the causes and consequences of the rise in worklessness.

Neil O’Brien, the director of Policy Exchange, argued that the current problem of unemployment has added to an already large number of people who have been claiming out-of-work benefits for a long time, dating back to the ‘boom years’ before the recession kicked in.

This might suggest that the current highs in unemployment mask a longer term problem with worklessness. But is the claim accurate?

Analysis

Out-of-work benefits are defined by the Department for Work and Pensions as those claiming any of the following: Job Seeker’s Allowance; Income Support; Employment and Support Allowance; Incapacity Benefit/Severe Disablement Allowance; and Pension Credit.

When we contacted Mr O’Brien he told us that his statement was based on calculations from Nomis, a service provided by the ONS to offer access to the most recent UK labour market statistics.

The most recent statistics for benefit claimants refer to May of this year, which were compared to May 2004.

Using this database of working age benefit claimants, we have calculated the following table:

This shows that the rate for those on out-of-work benefits as a proportion of the total working age population at the time was 12.1 for both May 2004 and May 2011, the figure to which Mr O’Brien was referring.

Although there has been a slight increase in the actual number of claimants for out-of-work benefits, the rate offers a clearer picture of benefit claimants in relation to the total working age population.

The most dramatic increase revealed by the table is in the rate of those claiming Job Seeker’s Allowance from 2004 to 2011, which corresponds with a rise in unemployment.

Nevertheless, the rate of those on Income Support (lone parent) and ESA and incapacity benefits has decreased, which counteracts the JSA increase keeping the total rate steady.

Conclusion

Although Mr O’Brien compares “the number” on out-of-work benefits in his Radio 4 interview – which has increased slightly since 2004 – he has since clarified that he was referring to the rate, which does give a more representative measure of trends over time.

He is correct to say that this was at the same level in May as it was seven years before.

Photo attributed to Old Sarge on Flickr.

 

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