Youth hit hard as jobless total rises to 2.3m

King hits out as jobless total rises to 2.3m
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The Governor of the Bank of England has piled pressure on Alistair Darling by calling for a clear plan to reduce national debt within the next parliament. Mervyn King was speaking as the Office for National Statistics (ONS) revealed that one in five of Britain's young people is out of work.

With hundreds of thousands of young people preparing to brave the toughest jobs market in decades when the academic year ends this summer, unemployment among 18- to 24-year-olds rose to 18.3 per cent in the three months to April.

Mr King's comments in his annual Mansion House speech last night add to the pressure on the Chancellor, who said in his Budget speech that balance between national debt and national income would not be restored until 2018. The Institute for Fiscal Studies does not think this will be achieved until 2032.

Mr King also called for fresh powers to regulate the growth of credit and raised the possibility of so-called "narrow" or utility banks – those which will only be permitted to engage in basic banking business and not the riskier lending and trading that landed so many institutions in trouble.

However, he clashed with the Chancellor over the future of regulation. Mr King said the Bank of England would need more powers to carry out its new role of promoting financial stability, a role that Mr Darling set out in his Mansion House speech last year. The Governor likened the Bank of England to a church whose congregation saw it at key times but ignored it in the interim. He said that without clearer guidelines about how to implement its new role it "could not promise that bad things won't happen to our flock".

The ONS reported yesterday that unemployment in the three months to April had risen to 2.3 million. At 7.2 per cent, the unemployment rate is standing around where it did when Labour came to power in May 1997. It is, however, still about two percentage points lower than in the US and the European Union.

Youth unemployment is moving towards the 1 million mark and long-term unemployment is also growing. More than 500,000 adults have been out of a job for more than a year.

The shadow Work and Pensions Secretary, Theresa May, called it "another grim milestone" in the recession. But Mr Darling replied: "The steps taken at home and internationally are stabilising the banking system and supporting our economies. And this is in line with my Budget forecast for growth around the turn of the year. It will take time for unemployment to start falling... but the measures we have taken mean over 250,000 have moved off unemployment in each of the last four months."

Most of the unemployment numbers refer to the period to April, when the economy was passing though its lowest point. But the number of people claiming jobseeker's allowance during May, although up by 39,300 to a total of 1.54 million, rose by a much smaller amount than had been feared.

Economists took that to be a reflection of the visible, although still slight, improvement in conditions since March.

Manufacturing continues to shed labour, although financial services have stabilised and jobs in the public sector are up 168,000 on this time last year. But such growth is unlikely to last much longer, given the parlous state of the public finances.

No situations vacant: What this year's graduates will do instead

'We'll do a tour of Europe and the Middle East'

The next task facing Rory Shanks and Edward Durkin is to raise some cash to buy a Land Rover, which they plan to use on a trip around Europe and the Middle East.

Both have a wanderlust and thought, with jobs being scarce, it would be better to get it out of their system rather than try to seek full-time employment.

Rory, 23, will shortly come to the end of his sabbatical post with the National Union of Students, having completed a master's degree at York University. Edward, 21, is graduating this summer after studying maths with economics.

Rory had planned to take a job in advertising, but was put off after learning it was one of the hardest-hit industries.

"I wanted to go travelling and planned to drive to Hong Kong," said Rory. "But I was told that I wouldn't be able to drive through China so had to change plans. We will do a massive circuit of Europe and the Middle East and Russia instead."

To help finance the trip, Rory will be running a summer soccer language course based at Stowe, the public school in Buckinghamshire. "Basically, those who come on it get football coaching in the morning and evening and they learn English in the afternoon," he said.

They plan to spend about seven months on their driving tour, from October to April. Edward is planning to spend six weeks learning mechanics after helping out at the soccer school. "We'll be going to places where they don't have the AA," he said.

'I'm planning to do voluntary work with youth clubs'

Working in a supermarket is not really what Jo Redman had in mind when she started out on her university degree course at Loughborough.

But the 23-year-old, from Biggleswade in Bedfordshire, who was one of the first group of students to go to university under the top-up fees regime charging students £3,145 a year, may have to do just that. She needs to raise funds because she intends to get a job as a voluntary youth worker, helping – amongst others – young offenders. After three years at university, she has been landed with £20,000 of debt. Jo, who has been studying sociology, was at first seeking a graduate placement in the human resources department of a major company.

Jobs, though, are few and far between, so she changed her plans. "I was looking for a graduate replacement in a human resources department. It just wasn't on. I'm planning to do voluntary work with youth clubs – and mental health work with young offenders."

'I'm going to work for nothing on a publication in Zambia'

If you want to get in touch with Franck Martin in a few months' time, your best bet is to go to Zambia and seek out a Big Issue salesman. Franck, 22, has just completed a Masters degree after getting a first in politics at the University of Glasgow, and is planning a career in the media.

But the economic downturn has convinced him it would be hard to look for a full-time job in Britain at present, and his best bet is to get some life experience under his belt. Through a charity called the International Network of Street Papers, which runs newspapers similar to the Big Issue in 38 countries, he plans to work for free on a publication in Zambia.

"It's the same kind of thing as the Big Issue," he said. "They get homeless people to make some money by selling the paper on the streets. As it only comes out six times a year, it wouldn't necessarily mean full-time work."

Franck, a football fan, also hopes to move to South Africa in time for next summer's World Cup. He has been trying to work to fund his trip. "I've been looking at admin but we are told we are too qualified as graduates," he said. "They don't want to employ us because they think we'll be off the moment we get anything better."

'I'll be working for a small charity'

Abilasha Ramanan, 21, will be jetting off to Barcelona to learn Spanish after finishing her university course. The law student, from Bristol University, has decided to forget the idea of working in commercial law in Britain and now plans to become a human rights lawyer in Africa.

She has been told that learning a foreign language could be key to getting a job, hence her desire to learn Spanish. She has decided to offer her services to a charity in Ghana to gain experience in human rights work, which she hopes will boost her employment prospects. "I will be working for a smaller charity and hope to work with them for so long that they offer me a full-time job," she said.

During her time at Bristol, Abilasha did work experience at a solicitors but "hated it". She also work-shadowed a couple of barristers. "One of them said to me now is not the time to become a barrister. He told me a lot of the work they used to do is now being taken up by solicitors."

'I'll be mucking out a herd of cows'

The next few months will see Britta Koehler mucking out a herd of cows and supervising schoolchildren on educational visits.

Britta, 28, recently finished a course in conservation and site management at the University of the West of England, near Gloucester. She plans to work as a volunteer with the National Trust, garnering experience for when a full-time job crops up. She also has a three-year-old son, Max, to look after. "Child care is really expensive, it can cost £30 an hour," she said. "I'll have to have some kind of juggling of work commitments with my partner."

Britta, originally from Germany, has decided to settle in the UK after her graduation. But she has found that employers in the conservation field demand some kind of experience before they will take anyone on, since they do not regard a degree as sufficient preparation.

Interviews by Richard Garner