It does not, he argues, reflect any underlying change in the jobs market.The report goes on to argue that adding in people who are so discouraged they have stopped trying to find work could add another 2.5 million to the unemployment total, suggesting a “true” unemployment rate of more like 16 per cent of the workforce rather than the official 5.9 per cent.The inflationary impact of falling unemployment will also be limited to the extent that new jobs are part-time, short-term and low-paid. They point to the steady climb in average earnings growth, although today’s figures are expected to show it remaining at 4.5 per cent in April.However, Mr Nonis concludes that the pick-up in the number of people leaving the unemployment register is almost entirely due to the removal of fraudulent claimants. The Office for National Statistics is reviewing the possibility of replacing this unsatisfactory measure with a monthly survey, an option rejected last year by the Conservative government.Most economists have reckoned the JSA has cut the total by about 10,000- 15,000 a month, which would mean the underlying level of joblessness is still falling very rapidly.But the Nikko paper claims that half of the 420,000 decline in the number of claimants between October and April has been due to the introduction of the JSA. This estimate, based on unemployment figures from the more reliable Labour Force Survey available up to February, is twice as big as the accepted size of the JSA distortion.It runs counter to the consensus among City economists, many of whom believe the jobs market is already starting to overheat.

According to Edmund Nonis, an economist at Nikko Europe, the threat of inflation posed by falling unemployment is far less than widely feared.
Since its introduction last October the JSA has distorted the headline figures, which simply record the number of people claiming unemployment benefit. Both at the National Grid and National Power there is an unsurprising reluctance to see the case proceed any further. But woe betide them if they get caught putting pressure on the trustees to end the campaigners’ funding. That would make a mockery of all those post Maxwell changes in the law to give pension funds more independence from their corporate masters.. Fears that falling unemployment will fuel higher wages and inflation are wildly exaggerated, according to a new report. With new figures today expected to show a further big decline in headline unemployment last month, the report claims the Job Seekers Allowance (JSA) has distorted the official figures so much that they are an unreliable guide to the state of the labour market. Admittedly the surplus was used to fund very generous redundancy terms which might not otherwise have been available, thereby reducing the pain of the downsizing process, but it is hard to see how redundancy costs are anything other than an employers’ liability.Whether pensioners do take the case to the Court of Appeal rather depends on the trustees, who have so far been funding their legal costs.

Moreover, both National Power and the National Grid implicitly acknowledged that there were limits on the way they could use the surplus by tying it directly to the funding of redundancies, thus enabling them to claim that the money was a “benefit” to employees.Aggrieved pensioners will certainly want to appeal and it seems right that they should be given that chance. For one thing, the pensioners have already had a favourable ruling from the Pensions Ombudsman, and although he’s now being told he’s wrong in law, the pensioners will continue to hold the moral high ground, believing that right is on their side And for another, this is not a particularly good judgment. Most occupational pension schemes do, and while this invariably gives rise to controversy, there has always been a reasonable underlying case for it. After all, in most occupational schemes it is the employer which makes the bigger contribution to the fund, so by rights he should therefore be entitled to at least a share of any surplus.However, with these schemes the wording seems specifically to require that the surplus is used for the benefit of employees. The judge rehearses the arguments well enough, but he fails adequately to explain why he’s opted for one side over the other.The argument hinged on whether the terms of the pension schemes allowed the companies to use the accumulated surplus for their own purposes, or most of it anyway. Whether he’s prepared to pay the price is another thing, but he must draw some comfort from the game Granada has played over Yorkshire Tyne Tees Yorkshire once claimed it was worth pounds 17 a share.