Fresh jobless estimate will provide a truer picture

Official unemployment figures will in future give a truer picture of how many people cannot find work. The Government's statistics office is to downplay the discredited figures for the number of benefit claimants in favour of a measure in line with international standards. Diane Coyle, Economics Editor, reports.

Starting in April, the headline jobless total will appear to jump by some 500,000 to about 1.9 million as the result of a decision by the Office for National Statistics (ONS) to emphasise an alternative measure of unemployment conforming to international standards, and downplay the current total.

The decision - first reported in The Independent last October but delayed by last-ditch resistance within Whitehall - does not go as far as some critics would like. The ONS is to base a monthly estimate of the number of people seeking jobs and available to work on the quarterly Labour Force Survey (LFS).

Like the critics of the many "fiddles" which helped reduce the headline claimant count over the years, the ONS would have preferred to switch to a full monthly survey of the jobs market. But the cost of at least pounds 10m a year was prohibitive. The compromise will cost about pounds 250,000 a year.

Tim Holt, director of the ONS, said: "There has been a lack of confidence in the labour market figures and this has affected public confidence in statistics at large."

He added he expected the Government would soon be holding consultation on its commitment to create an independent statistical service.

The ONS will continue to publish the number of claimants, as this is readily available from benefit offices.

John Philpott, director of the Employment Policy Institute, an independent think-tank, said: "This is a step in the right direction."

But he added that even the new, internationally comparable measure left out some unemployed people such as lone parents who might not be actively looking for work but whom the Government was keen to get into jobs.

The two measures - the claimant count and the existing quarterly LFS unemployment total - have tended to move in the same direction. Both have fallen rapidly in the past two years and the gap is now as wide as it has ever been.

However, at least 10 changes to benefit rules since 1979 have all helped to reduce the number of claimants by far more than what most economists would take as a "true" measure of unemployment.

As a result, the headline jobless total became one of the most discredited and politicised of all official statistics. It was criticised by the Royal Statistics Society, the House of Commons Employment Committee and even the former head of the Office for National Statistics, Bill Maclennan.

In future, the ONS will present a more detailed monthly picture of the jobs market, such as an analysis of full and part-time employment, temporary and permanent jobs, and reasons for "economic inactivity", such as being in full-time education.