Jobless total hits two million for first time in over a decade

Published on Wednesday 18 March 2009 09:44

UNEMPLOYMENT in the UK surged past two million for the first time in 12 years today, while the number of people signing on for benefit soared by a record 138,000 last month, grim new figures showed today.

The Government was hit by a raft of gloomy news, with redundancies reaching a record high, jobs and vacancies falling and more people claiming jobseeker's allowance.

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

Compared with other parts of the UK, the figures for Scotland were not quite so alarming, but the total unemployed did climb to 135,000 in the quarter, a rise of 5.1%.

The quarterly rise for the UK as a whole was the highest since 1991, and the total has now increased by 421,000 over the past year, said the Office for National Statistics.

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.

The new total of 1.39 million is almost 600,000 higher than a year ago and is the highest figure since 1998.

A total of 266,000 people became redundant in the three months to January, the worst figure since records began in 1995 and up by 86,000 on the previous quarter.

The number of jobs fell by 203,000 to 31.3 million in the quarter to December, the largest slump since 1992.

Vacancies fell by 74,000 to 482,000 in the three months to February, the lowest total since comparable records began in 2001.

Other figures showed that average earnings increased by 1.8% in the year to January, the lowest since records began in 1991, while for the month of January alone wages fell by 0.2% – the first time this has ever happened.

The unemployment rate is now 6.5%, an increase of 1.3% over the year, the highest figure since the end of 1997.

The number of people employed in the public sector was 5.78 million in December, up by 15,000 over the quarter and by 30,000 over the year, while employment in private firms fell by 13,000 to 23.6 million over the quarter and by 105,000 over the year.

The only piece of good news for ministers in today's figures was a 102,000 fall in the number of people classed as economically inactive, to 7.8 million, the lowest for almost three years.

The figure includes people looking after a relative, those on long-term sick leave, students and people who have given up looking for work.

Manufacturing productivity fell by 5.6% in the quarter to January, the biggest cut since 1985.

TUC general secretary Brendan Barber said: "This is another milestone in the return of mass unemployment to the UK, and it will get worse before it gets better as unemployment always persists even after a recovery starts.

"But this unemployment has not just been made in Britain, and requires an international response. It is beginning to look like the G20 summit may not agree the co-ordinated boost to the world economy called for by Barack Obama and Gordon Brown.

"International summits may seem a long way from the dole queues, but without such a stimulus unemployment will go higher and last longer.

"We need to put every pressure on world leaders to work together to fight the recession."

Paul Kenny, general secretary of the GMB, said: "As well as the misery for the two million on the dole, add the fear of millions of others who know that they too are at risk of redundancy. We do not know who the next million to lose their job will be.

"The harsh reality is that capitalism is revealed as anarchy writ large. Voters are not known to vote for anarchy. This could impact on voters at the next election."

Peter Mooney, of Employment Law Advisory Services, said he believed the figures may be an under-estimate of the true level of unemployment.

"This is a huge psychological blow to British business. While the figures seem shocking, we are not in the least surprised. The number of firms seeking help in making redundancies has sky-rocketed, and that is continuing, shooting up week on week.

"These figures are at best a fuzzy picture of what was true up to January – but things have worsened considerably since then.

"We are seeing jobs slashed drastically – especially in the North East, West Midlands, North West and parts of London."

Alan Tomlinson, partner at licensed insolvency practitioner Tomlinsons, said he had never been so busy, adding: "Companies of all sizes, and in all sectors, are folding by the day, putting more and more people out of a job.

"The CBI's prediction, last month, that unemployment will peak at just over three million in the second quarter of 2010 could prove to be wildly optimistic."