Kenneth Clarke: Insecurity will last for years

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The Independent Online
Kenneth Clarke yesterday admitted that the economic recovery would not fully result in a "feel-food factor" for another "two years at least" - at or after the next general election.

The Chancellor's sombre assessment of the period it would take for what he called the "best combination" of economic circumstances for 30 years to make the voting public feel secure came despite the 13th successive monthly fall in the unemployment total.

In a BBC radio interview, Mr Clarke said: ``I personally quite accept that people aren't going to feel more secure, more comfortable that they're going to get rising prosperity until we've carried on delivering this for another couple of years at least."

Gordon Brown, the shadow chancellor, pounced on the opportunity: ``The Chancellor is admitting people cannot feel good when they feel betrayed.''

A report published yesterday by the Employment Policy Institute, an independent research body, highlighted job insecurity as one of the causes of pessimism. The report cited evidence that only half of those in work felt secure in their jobs last year. Although well-paid professional jobs had been created during the recovery, many more white-collar workers were now on fixed-term contracts.

Mr Clarke's remarks came on a day when British Aerospace announced another 1,350 job losses. But the day also brought news that unemployment had fallen for the 13th successive month in February. Joblessness stands at its lowest point for more three and a half years, at 2.36 million. But the fall in unemployment shows signs of slowing down. Last month's drop, 24,700, was well below the recent average of 34,500.

The growth of average earnings slackened too. It was down to 3.5 per cent in January thanks entirely to the fact that bonuses in the City of London this year are far lower than last after a dismal year in the financial markets.

Economists in the City said yesterday's jobs figures pointed to a slower pace of recovery. So did separate figures on retail sales last month.

Although the volume of sales rebounded by 1.2 per cent in February, this simply reversed a deep dip the previous month. Over the past three months sales have been virtually flat.

National Lottery ticket sales probably helped to account for this. Although not included in the retail sales figures, they have amounted to about 2 per cent of retail spending and have almost certainly eaten into purchases of other items.

Recovery slows, page 32

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