Comments: Britain weighed down in the race with the new giants

This article is an excellent wake-up call, but I think 0.25% on interest rates would have woken more of those sleep-walking into debt.

Still, pity the consumers - if interest rate rises donít get them then tax rises will.

But I donít think theyíll take it lying down, not at the beginning at least. Starting from a situation of full employment those that can strike for more pay will strike. Then the blame game between Treasury and BoE could become very nasty. (Just like Australia).

But thatís all ahead of us Ė first, Gordonís big day.

Posted by David Sandiford at March 13, 2005 11:52 AM

On the Today programme this morning, Gordon mentioned the £5bn (his figure) that is being saved through reductions in unemployment each year. By how much has the Incapacity Benefit bill gone up each year? My understanding was that the overall economically inactive is still about 3m.

Posted by Snafu at March 17, 2005 10:22 PM


Don't make the mistake of thinking that all the "economically inactive" are on invalidity benefit. Many aren't counted as either unemployed or incapacitated. If you have savings and your other half works, you will normally get precisiely nothing in benefits, hence people don't bother to sign on.

Posted by HJ at March 17, 2005 10:54 PM

HJ, thanks for the correction. I suspect my terminology was not totally correct. My understanding is that if you add the number of people receiving Incapacity Benefit to the unemployment claimant figure, the overall total has remained stubbornly high at 3m for a number of years.

Posted by Snafu at March 18, 2005 10:51 AM

Just to clarify: There are about 2.7m people on incapacity benefit, out of 7.8m people of working age who are economically inactive. The 2.7m figure has been pretty steady since 1997 but the 7.8m number is close to a record. Some of that is due to increased numbers of students but some undoubtedly reflects disguised unemployment. I also think that part of the rise is self-employment is involuntary - people being made redundant and having to set up on their own, not always successfully.

Posted by David Smith at March 18, 2005 11:31 AM

Estimates of use are readily available from the Labour Force Survey. I sourced this from NOMIS/ONS. I could look at the time series since 1992 but since its Thursday, before the easter bank holiday weekend and its 5.30pm its time I went home and cooked dinner for the wife.

What is interesting is the vast number of inactive working age people who do not want a job (nearly 6m). There is detailed information from the LFS on their socio-economic characteristics - i.e. whether they have a disability, or are early retired, or are students etc. I will dig this out and post it next week.

No. who are economically inactive - working age: 7,947,000
No. of working age economically inactive who want a job: 2,058,000
No. of working age economically inactive who do not want a job: 5,889,000
No. work age econ inactive, want job, reason not looking - discouraged worker: 36,000
No. work age econ inactive, want job, reason not looking - long-term sick: 640,000
No. work age econ inactive, want job, reason not looking - look after family/home: 548,000
No. work age econ inactive, want job, reason not looking - student: 243,000
No. work age econ inactive, want job, reason not looking - other: 390,000

Posted by Glenn Athey at March 24, 2005 05:25 PM
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