Job losses 'will keep rising for another year'

Unemployment will continue increasing until the end of next year, long after the economy has started to recover from the recession, a new report predicted today.

The Trades Union Congress (TUC) said that although some economists were saying that the end of the recession may be in sight, unemployment will carry on rising for many months even after the UK economy has begun to pick up.

Using official figures and comparing the current recession to the economic downturn of the early 1990s, the TUC predicted that the number of people losing their jobs will carry on increasing until at least the autumn of next year.

The gloomy forecast came ahead of new figures tomorrow, which are expected to show another big increase in the jobless total.

The number of unemployed people increased by 244,000 over the three months to March to reach 2.22 million, the biggest quarterly rise since 1981.

The claimant count was 1.51 million in April, up 57,100 over the previous month and up 710,700 over the year to reach the highest since August 1997.

Officials at the TUC said there had always been a delay between the economy starting to grow and unemployment beginning to fall, as cautious employers make use of capacity among existing staff before recruiting new employees.

In the last recession, economic output began to grow in the autumn of 1991, but it was 18 months later before unemployment started to fall, said the report.

The current recession was already proving to be much worse than the 1990s recession, said the union organisation, with a sharper fall in economic output.

TUC general secretary Brendan Barber said: "Some now say that we have a recovery, but even if this is not a false dawn, as others fear, it will be years before the thousands of people who have lost their jobs, or who will lose them in months to come, will see anything to celebrate.

"That's why tackling unemployment must remain the Government's number one priority. Speeding up the process of getting people back into work and into jobs with decent pay will not only benefit the two million people currently out of work, but will also give the economy the spending boost it needs."

Meanwhile, the new jobless figures will paint a picture of a public sector protected from the worst of the recession, but gearing up for 350,000 cuts in the next five years, according to the Chartered Institute of Personnel and Development (CIPD).

Chief economist John Philpott said: "Predictions of reduced pain in the jobs market, and a lower peak in the jobless totals, are premature.

"The public sector has yet to feel the full impact of the recession, and the resultant bloodbath in the public finances. The CIPD's current estimate is that the fiscal squeeze implied by government plans will result in a total of 350,000 job cuts in the public sector overall between 2010/11 and 2014/15.

"This will be preceded by around 30,000 job cuts in local authorities in the next year."

The report said cuts on this scale would still leave the public sector workforce bigger than it was when Gordon Brown became Chancellor in 1997, leaving "ample scope" for a new government to take an even bigger axe to public sector jobs after the general election.

"Given the state of the public finances, the likely scale of job cuts required will also be greater than what might reasonably be expected from improvements in efficiency and will therefore inevitably have an impact on levels of public service provision," added Dr Philpott.

The CIPD said that most public sector workers had felt fairly secure in their jobs during the recession, but this was gradually starting to change, predicting that anxiety will mount in the next few years.