Long-term jobless figure at four-year high

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THE NUMBER of people out of work for 12 months or more climbed to a four- year high last month, but the rate at which long-term unemployment is increasing appears to be slowing down.

Some 905,300 people had been unemployed and claiming benefits for a year or more in July, the Department of Employment's quarterly figures showed yesterday. This was 64,000 up on April and the highest figure since July 1988.

A third of the 2.7 million unemployed in Britain have now been without work for a year, up from a quarter 12 months earlier.

The rise in long-term unemployment has steadily accelerated from its low- point of 508,000 at the end of 1990. But the increase between April and July was only 70 per cent of the rise in the previous three months.

The rise in the headline jobless total started slowing early last year, but it is normal for long-term unemployment to continue accelerating for several months afterwards. After the last recession, long-term unemployment peaked in April 1986 at 1,357,000, just over 40 per cent of the jobless total.

The rise in the number of people unemployed for six months or more also decelerated in the three months to July. The increase of 52,000 - taking the total to 1,491,400 - was about half that between January and April.

Long-term unemployment increased in all regions. In the South-east it has almost doubled in the past year to just over 250,000.

Long-term unemployment is recognised as both a social and economic problem. After months on the dole, people become demoralised and less attractive to potential employers. As a result they compete less effectively with existing workers and put less downward pressure on pay increases and inflation.

Some economists and politicians - including Michael Heseltine, the President of the Board of Trade - have argued for 'workfare', whereby people are guaranteed a job or training after a year on the dole. If they refused the offer, benefit would be stopped.