Tories in row over dole figures 'fiddle'

The debate over "bogus" unemployment statistics will come to a head in October, when Chancellor Kenneth Clarke will announce whether a new version of the monthly unemployment figures should be introduced.

Any change faces tough opposition from Treasury officials and Gillian Shephard, Secretary of State at the Department of Education and Employment.

They are against a proposal to bring in a monthly labour force survey (LFS). The Office of National Statistics (ONS) produces a quarterly LFS, two months in arrears, which is seen by many as a more accurate picture of unemployment, even if hopelessly out of date by publication.

The debate over unemployment statistics has drawn together an unlikely band of supporters for reform, ranging from City economists to left-wing pressure groups.

Advocates of a new methodology want to see figures that more accurately reflect the underlying reality. At present, the unemployment figures are based solely on dole office claims - the so-called claimant count. These figures present big distortions of the labour market. Simon Bris- coe, an economist at Nikko Europe, said: "It effectively ignores the bulk of white collar workers, who when they are sacked are usually ineligible for benefits because of their redundancy packages or assets."

Labour has long claimed that the figures are fiddled. The party says it wants to "take the politics out of statistics".

Earlier this year, a report for the ONS recommended a monthly version of the LFS be set up at a cost of pounds 7m to pounds 8m.

Current figures have shown strong declines in unemployment over the past six months. The quarterly LFS offers a far more complicated picture, however. Although unemployment has been falling, the total number of people in employment has also fallen.

There is also a debate over costs. The ONS report says a monthly LFS would cost up to pounds 8m a year to implement. Treasury officials argue that the money should come out of the ONS's existing budget of pounds 100m a year - forcing cuts in other areas.