Election '97 : Jobs news fails to deflect Euro row

The economic news favoured the Conservatives once again. Government borrowing last year was well below the Budget target, while last month brought another big drop in the number of people claiming unemployment benefit, according to official figures.

The jobs figures reflected the booming economy. The headline unemployment rate fell to 6.1 per cent, the lowest for six years. Employment climbed by 135,000 in the three months to February, with just over half of it full-time.

More women are in work than ever before, now accounting for more than two-fifths of the workforce. But male participation in work has continued to decline.

Paul Gregg, a researcher at the London School of Economics, said: "Women will overtake men in the early years of the next century. We will have a female-dominated labour force overseen by male managers."

The latest fall in unemployment figures was at the centre of a dispute yesterday after opposition parties claimed a government report showed that large sections of the population were being left out of its calculations. As official figures recorded the number of people out of work and claiming benefit falling by 41,100 to 1,707,000 last month, Labour and the Liberal Democrats said many young people, women and older men had been excluded.

The Prime Minister had clearly hoped that the optimistic figures would divert attention from the row over Europe. However, the news attracted so little attention at yesterday's Tory party news briefing that he had to ask repeatedly whether anyone wanted to question him on it.

When he was finally asked about unemployment, the emphasis was on the dispute over how the figures were compiled. In its application for European Social Fund grants to tackle long-term unemployment last December, the Government suggested that levels among young people, women and older men were understated in its official figures. Those seeking work but not immediately available were also excluded.

Gillian Shephard, the Secretary of State for Education and Employment, said countries were allowed to submit claimant figures plus information on other measures such as disability.

Labour's treasury spokes-man, Alistair Darling, said the remark amounted to an admission that the government's figures did not tell the whole story. "The Government should now come clean and admit in public what they are saying in private, that the claimant count does not reflect the real level of unemployment," he said.

Don Foster, the Liberal Democrat employment spokesman, said that in addition to those who were out of work but off the figures, there were also many people on low pay, short-term contracts or in insecure jobs.

Kenneth Clarke seized on the the gap between spending and revenues was pounds 22.8bn, pounds 3.6bn below his target for 1996/97. The Chancellor said this was "evidence of the healthy state of Britain's public finances".

The figures were better than forecast thanks to below-target spending and higher tax revenues. The sale of the Ministry of Defence married quarters and the student loan book trimmed pounds 1.4bn from expenditure.