Monday, February 7, 2011


There is clearly a battle being conducted for the hearts and minds of the general public when it comes to which strategy should be adopted to deal with the economic problems currently facing this country as it emerges from the aftershocks of the last recession.

Whilst most of the business community is broadly supportive of the UK Government’s decision to focus on reducing the deficit, it is becoming clear that the trade union movement is quickly becoming the vocal opposition to the reductions in government expenditure.

Of course, the problem is that when political imperatives take over from the reality of the situation, it can result in some disputable and emotional claims being made by both sides of the argument.

Take, for example, a press release that was distributed by the GMB Union last week.

Quoting an analysis of the latest data on youth unemployment, it stated that Wales had proportionally more young people claiming benefit than any other region of the UK i.e. for Wales as a whole there were 70,065 claimants of all ages in December 2010.

Of these, 23,150 claimants were aged between 18 and 24 (which equates to 33 per cent of all claimants).
The fact that a third of all those claiming job seekers allowance were young people could be argued to be news in itself but the GMB then went on to claim that “young workers are the real economic victims of this banker’s (sic) recession with the government in denial that it is deliberately causing unemployment”.

That is a very bold statement to make but, unfortunately, just didn’t ring true.

So, I therefore went back to the Office for National Statistics to compare these figures with previous years for youth unemployment.

What I found was startlingly different to the claims of the GMB.
18-24 year olds as a proportion of claimant count May 1997-Dec 2010, Wales.
According to official government statistics, there has actually been a gradual increase in the proportion of young people in Wales that make up the claimant count register since 2005, reaching a peak of 38 per cent in September 2008 under the last Government.

However, it has been falling since the general election and the 33 per cent recorded in December 2010 is lower than for any month between December 2004 and May 2010.

The same trend can be seen nationally at a UK level.

There are currently 92,905 fewer young claimants than the peak of 491,925 recorded under the Labour Government in February 2010.

In addition, the number of young claimants in the UK has been falling since it rose briefly in the summer of 2010 and there are currently 23,455 fewer claimants in the UK aged between 18 and 24 than recorded three months ago.

Just in case these findings were a blip in the statistics, I also examined how many young people had been claiming benefit for more than six months in both the UK and Wales.

The statistics show that this reached a UK peak of 119,010 on February 2010 and, since then, this has been almost halved to 61,575. In Wales, 10 per cent of all those claiming benefit in March 2010 were young people although it has now been reduced to 5 per cent in December 2010.

What also was of interest was the claim by the GMB that "Rhondda Cynon Taff (RCT) tops Wales league with 37.4 per cent of unemployed claimants aged between 18-24”.

Whilst this is factually correct, the GMB does not mention that, for every month between December 2004 and December 2008, over 40 per cent of claimants in RCT were young people, peaking at 45.3 per cent in July 2007.

Given the way that their risk-driven strategies have partly led to the current economic situation, I have little love for some of the banks and their behaviour, especially over bonuses.

However, it has become all too convenient, in some quarters, to condemn them for all of our current economic ills.

Certainly, the statistics show that, unlike the GMB’s assertion, the proportion of young claimants was higher under the Labour Government for three years prior to the recession. Given this, who should the GMB blame for the higher levels of young claimants prior to the economic downturn?

In fact, an alternative headline could be that "Coalition Government halves youth unemployment in the UK" although I doubt if that will be on any press release in the future!

Despite being proportionally lower than at any time under the last Labour administration, it would be foolhardy of anyone to say that unemployment amongst young people is not a major issue within the economy.

And by trying to pin responsibility on the banks alone for this problem, all the GMB has done is taken the focus away from addressing the other key factors that have led to high levels of youth unemployment within some of our poorest communities.

There is still much that remains to be done to make sure that the private sector, hopefully in partnership with the trade unions, starts to create jobs for young people across the country.

If such a critical issue is to be resolved, then let’s at least have a rational debate based on the facts of the matter, and not on the selective use of statistics that have very little to with a solution to the problem and more about political grandstanding.