Unemployment and Britain’s missing million

There was plenty of miserable economic news in this week’s Budget: the highest taxes imposed by any peacetime government, the worst post-pandemic recovery in the G7, the most painful cost-of-living squeeze since records began. But there was also a statistic which, on the face of it, seems to herald a remarkable success. The official unemployment rate stands at just 3.7 per cent – less than half the rate of a decade ago, as low as it has been in half a century. In his Budget, Jeremy Hunt boasted that ‘Conservatives believe that work is virtue’.

Sadly, as this magazine revealed several months ago, there is rather more to the figures than meets the eye. There may be only 1.2 million people officially unemployed, yet figures also show the number claiming out-of-work benefits is 5.2 million. Many of these claimants are judged as too sick to work: there are more people on ‘incapacity benefit’ and its successors than under Labour. But 1.9 million are counted as being fit to work, yet in receipt of out-of-work benefits.

At any time in an economic cycle, this would be a tragic waste of human life and potential. But in the middle of a worker shortage – when shops, restaurants and companies are crying out for staff – such huge levels of worklessness suggest incompetence of historic proportions. In some of our great cities – Glasgow, Liverpool, Manchester – a fifth of working-age people are claiming out-of-work benefits. The Tories never talk about that, anxious not to draw attention to the problem. Labour has not yet cottoned on to the scale of the scandal.

No wonder economic growth has evaporated: how can any country prosper while keeping 13 per cent of its workforce on benefits? Mass immigration can be used to cover up this failure, but only up to a point.