Jobless total breaks 2m barrier for first time in 12 years

Published on Wednesday 18 March 2009 21:39

THE unemployment total burst through the two-million mark for the first time in 12 years yesterday, with experts predicting the figure could climb as high as 3.3 million next year.

Gordon Brown, the Prime Minister, expressed "personal regret" for everyone made redundant, as the number signing on soared by a record 138,000 last month.

In the quarter to January, the total number out of work, including those not eligible for benefit, jumped by 165,000 to 2.03 million, the highest since Labour came to power in 1997.

The quarterly rise was the biggest since 1991 and the total has now increased by 421,000 over the past year.

In Scotland, however, the picture was more encouraging. The jobless figure rose by only 1,000 in the three months to January to 135,000, giving Scotland an unemployment rate of 5.1 per cent – the second-lowest of any region in the UK and well below the UK average of 6.5 per cent.

Alex Salmond, the First Minister, said some sectors of the Scottish economy – notably oil and gas, forestry and construction – were doing well, and this was helping Scotland avoid the worst of the recession.

But UK union leaders said it was another milestone on the road back to "mass unemployment", while business groups warned that the outlook was worsening.

Howard Archer, the chief economist at Global Insight, said: "With the economy seemingly set to contract through 2009 and very possibly beyond before starting to recover gradually, we expect unemployment to rise to a peak of 3.3 million on the International Labour Organisation measure around late 2010 to early 2011. This would give an unemployment rate of around 10.5 per cent."

The Prime Minister told MPs he had entered politics to tackle joblessness and poverty, adding: "Any person who loses their job or fears losing their job – this is a matter of personal regret for me and for the whole government.

"I don't regard unemployment as a statistic. I regard it as one person, a second person, a third person, who needs our help. And that's why we've announced more apprentices, that's why we've announced more help with training, and that's why we've announced that, from April, there will be help for people who have been unemployed for six months."

David Cameron, the Conservative leader, said the unemployment figures proved it had been "simply nonsense" for Mr Brown to claim Britain was one of the best-placed countries to withstand the recession.

Yesterday's figures showed the number of Jobseeker's Allowance claimants increased by 138,400 in February, the 13th consecutive monthly rise and the largest monthly increase since records began in 1971.

James Purnell, the Work and Pensions Secretary, admitted: "These are bad figures. There is no gloss that anybody is going to try to put on them. We are dreadfully worried for the people who are behind these numbers."

But there were also big differences across the UK. The West Midlands experienced a massive 29,000 rise in unemployment, taking its jobless rate up to 7.9 per cent.

In contrast, unemployment in London fell by 1,000.

David Kern, the chief economist at the British Chambers of Commerce, said: "The outlook for unemployment is worsening and there is an urgent need for action."

Theresa May, the shadow work and pensions secretary, accused the government of "sleepwalking" through what she called the "unemployment crisis". She added: "This is a grim milestone that no-one wanted to reach."

Steve Webb, the Liberal Democrats' work and pensions spokesman, said: "These figures are proof that government forecasts for unemployment are pure fantasy."

And Labour's Frank Field said the claimant-count figure was probably an underestimate.

John Philpott, the chief economist at the Chartered Institute of Personnel and Development, said: " Full employment is not just slipping away, it is sinking without trace." Mark Serwotka, the leader of the Public and Commercial Services union, said Jobcentre staff were working around the clock to help the unemployed, adding: "Over the past five years, many communities have lost their Jobcentres. The government needs to start opening Jobcentres."

MORE FOOT-IN-MOUTH DISEASE

ANOTHER government minister has waded into controversy over her economic forecasts after predicting the "green shoots" of recovery would appear in Britain before long.

Vera Baird, the Solicitor General, made the remark as official figures showed unemployment in the UK had exceeded two million. Ms Baird said the fiscal stimulus was working and the UK was not "anything like as bad" as in other leading industrialised countries. Downing Street distanced the Prime Minister from the rosy forecast.

The Conservatives said her comment "beggars belief" on the day the IMF also warned the UK would fare the worst out of any G7 country.

Figures throw up a mixed blessing for Scotland

AS WITH most statistics, yesterday's unemployment data appeared to reveal a lot, but actually hid much more.

The bald facts seemed clear: unemployment in the UK was rising at its steepest rate for at least a decade, workers were being thrown on to the dole queues in increasing numbers.

In Scotland, the situation was, apparently, much better – with only 1,000 people added to the unemployment figures in the past quarter. So Scotland is riding out the recession while England is suffering, then? Well, almost, but not quite.

Hidden in the hundreds of tables and graphs was a breakdown of employment in Scotland by sector, and it was very instructive. It showed that the recession had hit some industries in Scotland and hit them very hard indeed.

The Scottish finance, business and distributive sector – which includes the banking industry – lost 24,000 jobs during 2008. But there was a corresponding rise of 8,000 in employment in forestry and agriculture and 9,000 in the public sector and other administrative jobs.

This latest figure is the key. Scotland is measured in the UK statistics as a region, so it compares to the north-west and the north-east of England. Yet Scotland has a government system and a bureaucracy to rival many small countries, not English regions. What is happening is that the public sector, which for so long has been a drag on the performance of the private sector in Scotland, is now providing the cushion to soften the worst effects of the recession.

That is the good news. The bad news is that, with a smaller private sector, Scotland may not fall as far as other areas of the country, but it will not be able to bounce back as quickly or as far when the recession starts to lift.