Unemployment edges closer to two million mark

The Government today doubled spending on a "rapid response" unit to help people find work after unemployment reached an 11-year high, edging closer to the politically-sensitive two million mark.

Official figures for the three months to September showed that 1.82 million people were out of work, an increase of 140,000 from the previous quarter.

Related articles

• Interest rates may drop to record lows in 2009
• Bankruptcy fear for small businesses starved of borrowing
• Hamish McRae: Cut taxes, but don't expect miracles
• Credit crisis diary: Try not to talk the market down, chaps
• 5,000 jobs axed as City forecasts 3m by 2010
• Jeremy Warner: Sterling crisis threatens Brown's reflationary plans
• Sainsbury's rises out of the gloom
• Brown to act over credit card rate rises
• Taylor Wimpey sees no prospect of recovery in the short term
• Slowdown in Chinese demand triggers Cookson profit warning
• Yell promises £100m cost-cutting package
• Starbucks blames UK for weak performance
• Virgin Media to cut 2,200 workers in next four years
• InterContinental Hotels revenues tumble
• Vodafone plans to save £1bn to survive recession and intense competition
• Jeremy Warner: Colao makes cash his main priority at Vodafone
• Tax cuts now could mean tax rises later, says minister
• Leahy urges PM to do more to support struggling retailers
• G20 summit: New world order?

It was the highest figure since the end of 1997, shortly after Labour came to power, and led to calls for urgent action to boost job creation and help those made redundant.

Gordon Brown said in the Commons that despite rising unemployment, Labour had created three million jobs since coming to power, prompting Tory leader David Cameron to say: "Only this Prime Minister could be quite so smug on the day 140,000 people have lost their jobs."

The number of people claiming jobseekers allowance rose by 36,500 last month to 980,900, the highest figure since the spring of 2001 and the worst monthly increase since 1992.

The so-called claimant count has now increased for nine months in a row and is 154,800 higher than a year ago.

The number of people in work fell by 99,000 to 29.4 million and vacancies were down by 40,000 to 589,000, according to the Office for National Statistics.

Today's grim figures do not take into account recent job loss announcements, including news of more than 5,000 cuts yesterday by firms including Virgin Media, Yell, Taylor Wimpey and GlaxoSmithKline.

The unemployment rate is now 5.8 per cent, the highest since early 2000, while the number of people looking for work has jumped by 182,000 over the past year.

Unemployment among 18- to 24-year-olds increased by 53,000 to 579,000, the highest figure since 1995, while long term unemployment has also increased, with the numbers out of work for longer than a year up by 20,000 to 435,000.

Employment minister Tony McNulty said funding for the rapid response service was being doubled to £6m so that extra support can be given to workers hit by large scale redundancies.

"People who are worried about the current downturn need to know that there are jobs out there - the claimant count may be rising, but large numbers of people are also moving off benefits and into jobs."

Derek Simpson, joint general secretary of Unite, said a "a massive and urgent programme of Government intervention" was now needed, adding: "Every single one of these job losses is a personal tragedy but also a real loss of skills and productivity to the UK economy."

Graeme Leach, chief economist at the Institute of Directors said: "For the next 12-18 months the only way for unemployment is up.

"The UK labour market is about to suffer the consequences of the once-in-a-generation financial crisis. We think unemployment will reach 2.5 million by this time next year, peaking at around 2.8 million in 2010."

TUC general secretary Brendan Barber said: "The dole queue is now growing by 1,000 people a day - each one a human tragedy of wasted potential.

"The signs are that redundancies are coming even faster since these figures were collected. Countering unemployment must be public policy priority number one.

"The newly unemployed are facing a bigger cut in income than in previous recessions. Increasing benefit is the best way of stimulating the economy and will help cushion the financial shock of losing a job."

David Kern, chief economic adviser for the British Chambers of Commerce, said: "These labour market figures were dire and confirm that the economy is now facing a severe recession. Unemployment is up, employment is down and job vacancies have fallen further.

"It is important that the Government announces in its forthcoming pre-budget report a credible fiscal package that gives priority to helping businesses and families cope with the downturn.

"These figures also support the case for a further half per cent cut in interest rates in December."

John Cridland, deputy director general of the CBI said: "With the downturn now hitting every sector of the economy, job losses are an unwelcome but inevitable consequence of these difficult times.

"It is clear that the human cost of this downturn will unfortunately be higher than initially expected with unemployment continuing to rise through the coming months."

Dave Prentis, general secretary of Unison said: "These figures should spur on the Government to take immediate action to deal with the misery of unemployment."

John Philpott, chief economist at the Chartered Institute of Personnel and Development said: "The UK just waved goodbye to a decade long flirtation with full employment. Today's jobs figures would be considered dire if it were not for the fact that last month's figures were even worse. But these figures, which take unemployment to an 11-year high, are bad enough and will sadly be followed by further bad news in the coming months."

Liberal Democrat Shadow Work and Pensions Secretary, Jenny Willott said: "The Government is woefully unprepared to handle the increasing levels of unemployment that we are seeing across the country."

Recruitment consultants and estate agents were the professions fearing for their jobs the most in the "shaky" economic climate, according to a report by the National Endowment for Science, Technology and the Arts.

Chief executive Jonathan Kestenbaum said: "With unemployment approaching two million, people suffering in the hardest hit sectors should use this opportunity to re-train and apply their expertise to areas of the economy where the UK has a strong competitive advantage such as in our creative sectors. Doing so will be critical in helping people get back on the payroll."

Kevin Green, chief executive of the Recruitment and Employment Confederation said: "The feedback from professional recruiters shows that employers in a number of sectors are freezing hiring activities, although there is still strong recruitment activity in some sectors such as healthcare.

"With the number of jobless now passing 1.8 million it is critical that we avoid further barriers to employment. The Government must reconsider removing VAT concessions on temp work from April 2009 and must ensure that forthcoming EU regulations on temporary work are workable in the UK."

Stuart McBride, chief executive of recruitment firm Blue Arrow, said: "While the outlook for the next few months is undoubtedly gloomy, job opportunities are still out there.

"Interestingly, we are seeing an increased requirement for short and medium term contractors across a number of sectors - especially catering and industrial. This reflects our employers' need for workforce flexibility and indicates a requirement to back fill positions as migrant workers exit the UK."

Unemployment in the regions between July and September was (tabulate under region, total unemployed, change on quarter, unemployment rate)

North East 100,000, plus 7,000, 8.0 per cent
North West 230,000, plus 16,000, 6.8 per cent
Yorkshire and the Humber 180,000, plus 21,000, 6.8 per cent
East Midlands 135,000, plus 5,000, 5.9 per cent
West Midlands 170,000, plus 3,000, 6.5 per cent
East 140,000, plus 5,000, 4.8 per cent
London 298,000, plus 18,000, 7.4 per cent
South East 202,000, plus 18,000, 4.6 per cent
South West 114,000, plus 12,000, 4.2 per cent
Wales 95,000, plus 24,000, 6.7 per cent
Scotland 126,000, plus 13,000, 4.7 per cent
N Ireland 33,000, minus 1,000, 4.1 per cent

Will unemployment in the UK hit 2 million by the end of the year?