Why these extra hurdles for the jobless to jump are only fair

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The Independent Online
If the economy is going to be the main front in the election campaign, the Conservatives reckon that falling unemployment is their best weapon. Yesterday's figures brought the Government more good news, with an enormous drop in the headline total for the sixth month running. The February decline follows a fall of nearly a quarter of a million between October and January, taking claimant unemployment to 1.75 million.

Labour points out, rightly, that nobody trusts the benefit claimant count as a genuine measure of unemployment. The definition has changed too often, almost always tending to reduce the total. The most recent change has been the introduction, last October, of the Job Seeker's Allowance.

This will have affected the official claimant total in several ways, some permanent, some temporary. The JSA seems to have increased the length of time it takes to process claims, and has required the introduction of a new computer system. The Office for National Statistics estimates that changed office procedures have depressed the claimant total by a few thousand, temporarily.

There has also been a one-off reduction of about 15,000 due to the means testing rules change. Claimants are now means tested after six months rather than a year.

What the statisticians are unwilling to put a figure to is the permanent effect the JSA is having on the headline unemployment total via changes in people's behaviour. These will be operating through various channels. Fraudulent claimants will be scared off, and some genuine ones simply deterred by the new procedures. For example, two-thirds of those who used to be able to sign on by post now have to claim in person. Some people will be pushed into jobs faster than before, and some previously eligible people will be struck off the claimant register - if they cannot undertake the job search required by the JSA, for instance.

Putting a figure on this is tricky, partly because it is difficult to separate out other influences such as the strong economy creating job opportunities, or the benefit cheats hotline. The ONS reckons it will not be until next July that there is enough information available from the Labour Force Survey - the more reliable, quarterly set of information on unemployment and jobs - to have a stab at estimating the size of the JSA effect.

The ONS had put the previous downward trend in unemployment at 15,000- 20,000 a month. The economy has built up steam since then, and the statisticians say the trend has increased. They have not put a figure on it, but at a guess the raw trend might have doubled to 40,000 a month between September and February.

A reasonable guesstimate therefore is that during its first six months the JSA will have reduced the number of unemployment benefit claimants by between 120,000 and 250,000 - or 5-10 per cent of the initial jobless total.

Before writing off this dramatic reduction as a Tory con trick on some of the most vulnerable members of our society, it is worth thinking about the implications. The scheme certainly bullies some claimants into courses of action they would not have otherwise chosen. That is its point.

Some of them will be getting jobs - the LFS indicates that employment is rising reasonably strongly. Some of them might be bad jobs, but it is crazy to imagine that all the unemployed can re-enter the labour market in well-paid, satisfying jobs.

Forthcoming research by Paul Gregg and Jonathan Wadsworth at the London School of Economics indicates that "entry" jobs for the unemployed are overwhelmingly part-time and temporary, but it is possible to move up the jobs ladder - once you are on it. The entry jobs are very unstable. Most people will have moved either up or down within nine months, and the typical job lasts less than a year. But getting people into any job is the key to keeping them employed and progressing to better jobs.

A large number of those weeded out by the JSA will turn out to have had work already and be claiming benefit on the side. Limiting the opportunity to sign on by post will eliminate those claimants who have been cheating the system. It is hugely politically incorrect in some circles to talk about scroungers and benefit cheats, but the indications are that it is more widespread than the woolly liberals among us would like to think. The Labour MP Frank Field believes the extent of benefit fraud is one of the reasons there is a crisis of confidence in the welfare state. It undermines the willingness of the rest of us to pay the necessary taxes.

The other category must, by definition, be people who are not bothered enough about either getting their benefit or finding work to struggle over the extra hurdles set by the JSA. It is not clear that there are all that many of them; the LFS shows that there has been an increase rather than a decrease in participation in the jobs market in the latest six months it covers. Besides, rather than moaning about the Government discouraging workers so much that they even give up claiming benefit, it is worth asking why they should not be compelled to make the choice.

Everybody agrees that unemployment remains one of the main challenges for Britain. Should a huge public policy effort be directed towards the claimant-unemployed discouraged by the JSA? Or should it be directed towards those who remain, who will, by definition, need expensive and high-quality counselling and training? If priorities have to be set, the extra hurdles seem a very fair way of setting them.

If the headline unemployment total, however flawed, carries on nosediving in the same startling fashion, it will not be long before politicians on the Continent start to ponder their own relatively generous benefits culture. The French and Germans must be totting up how much they might save on government spending if they could introduce a scheme that would reduce their record levels of unemployment by one-tenth within six months.

The moral of the tale for governments everywhere is that if they have to sacrifice some bits of public spending for others, something like the JSA is a reasonable means of sharing the burden.