Male unemployment at post-war high of 13.4%

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The Independent Online
SAVAGE JOB cutting in manufacturing industry left more than one in ten of the British workforce without a job and claiming benefit last month. Some 32,200 people joined the dole queue in September, taking the total to a five-year high of 2,843,300, adjusted for seasonal changes.

The Department of Employment said the rise in unemployment had been accelerating since the summer as manufacturing jobs dropped sharply. The male unemployment rate hit a post-war high of 13.4 per cent in September, exceeding its peak in March 1986.

Unemployment has risen for 29 successive months; it is 78 per cent above the 1990 low-point and at its highest level since May 1987. Economists believe the recent wave of redundancy announcements - including those by British Coal, Lucas, Ford and British Aerospace - will help to push the total close to 3 million by the end of the year.

The average rise in unemployment over the past three months - the figure normally emphasised by ministers - rose to 39,700 in September - the highest since February. London and East Anglia saw the biggest increases on the month. The jobless rate in the capital is exceeded only in northern England and Northern Ireland.

The Treasury maintained it was too early to tell if the trend rise was getting worse. Gillian Shephard, Secretary of State for Employment, said the September increase 'reflects world economic circumstances'.

Manufacturing industry employment dropped by 51,000 in August, the sharpest one-month fall yet in this recession. Chemicals, electronics and the food and drink industries were worst hit. Some 4.4 million people are now employed in manufacturing, barely half the figure in the early 1970s.

Competition among the unemployed for available jobs is now tougher than at any stage in the last recession. JobCentre vacancies slumped by 11,900 last month to 95,000, the lowest level for a decade. There are nearly 30 unemployed people competing for every vacancy notified to a JobCentre.

Economists said the renewed impetus to the rise in unemployment was the result of workers being shed after the widely expected post-election recovery failed to materialise. Export industries were also being affected by slowing economic growth in many overseas markets.

Keith Skeoch, economist at James Capel, said companies announcing disappointing profits were under pressure to make redundancies to reassure the stock market that their costs were under control and thus bolster their share prices. He added that the 'patent mess' of government economic policy made things worse, with the Chancellor apparently having missed a good opportunity to cut interest rates.

Bill Martin, at UBS Phillips and Drew, said that the Chancellor had been 'completely misadvised' not to cut rates more after the pound's ignominious departure from the European exchange rate mechanism. He expects the jobless total to be almost 3 million at the end of the year and

3.5 million by the mid-1990s.