Real level of unemployment almost 3.5million - new report

The real level of unemployment across Britain is nearly 3.5 million – almost a million more than the highest official estimate and two million more than the number claiming Jobseeker’s Allowance.

The new report published today by Sheffield Hallam University.documents the scale of ‘hidden unemployment’ among men and women who fail to qualify for Jobseeker’s Allowance or are diverted on to other benefits.

The report presents an alternative set of unemployment figures for April this year for every local authority in Britain, exposing the extent to which hidden unemployment is concentrated in the weakest local economies.

The differences in unemployment between the best and worst parts of the country are far bigger than official figures have led us to believe, the report finds.

In Knowsley in Merseyside, for example, the real rate of unemployment is estimated to be nearly 17 per cent, compared to just over three per cent in Stratford on Avon.

The older industrial areas of the Midlands, the North of England, Scotland and Wales are particularly badly affected.

The figures do however show that despite the recession, unemployment in much of southern England outside London remains modest.

The new report from the Centre for Regional Economic and Social Research (CRESR), is the fourth in a series dating back to 1997. Earlier reports provided the first systematic evidence on the scale hidden unemployment across Britain and challenged government complacency about falling numbers on Jobseeker’s Allowance.

Comparisons with the data for earlier years shows that Britain was still a long way off full employment before the 2008 financial crisis, but that full employment is now further away and the real rate of unemployment is higher than at any time since 1997.

Professor Steve Fothergill, who led the research, said: “For more than 20 years successive governments have hidden the true scale of unemployment, especially by parking vast numbers on incapacity benefits.”

“The health problems and disabilities of these men and women are real, but we estimate that as many as 900,000 of the 2.5m on incapacity benefits would have been in work in a genuinely fully-employed economy.”

“Our figures on the real level of unemployment cast serious doubt on the likely impact of government reforms such as the Work Programme and Universal Credit, which are founded on the assumption that unemployment can be brought down simply by encouraging the unemployed to look for work.”

“The evidence points to large and continuing shortfalls in job opportunities away from the most prosperous parts of southern England.”

Download the report here

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