The Jobless Crisis: 3 million and no end in sight

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The Independent Online
THE NUMBER of people unemployed and claiming benefit in Britain rose above 3 million last month for the first time in nearly six years, the Department of Employment said yesterday.

Economists could offer little comfort. Even if the economy is already beginning to recover, they expect the jobless total to climb to a new post-war record this year. Some fear that more than 500,000 more people will join the dole queue before the rise is halted.

The raw jobless total rose by 78,726 in January to 3,062,065, the highest since April 1987. But some of the increase was a seasonal effect as Christmas shopworkers were laid off and employment in building and tourism was depressed by the weather.

Excluding seasonal effects, unemployment rose by 22,100 to 2,995,100, a smaller increase than the City had forecast, and well down on the 60,300 rise in December, which pushed the Treasury into cutting interest rates.

The Government said yesterday that it had virtually halved the number of those out of work before, in the 1980s, and would do it again. Gillian Shephard, Secretary of State for Employment, told Channel 4 News: 'Between 1987 and 1989, there was employment growth of 2 million jobs in the economy, and provided the circumstances are right there is no reason why we shouldn't bounce back this time, too.'

Frank Dobson, Labour's spokesman, said: 'Mrs Shephard has pledged to halve unemployment by the next election. She's got no chance of keeping her promise unless there are some real changes in policy - or another 30 fiddles of the figures. They will be judged on this pledge.'

In Commons exchanges, John Smith, the Labour leader, said the unemployment figure was economic madness as well as social tragedy, costing pounds 27bn and 780 million working days lost a year. Paddy Ashdown, the Liberal Democrat leader, said the Government was 'fumbling while Britain is failing'.

But John Major told MPs the Government would introduce half a million new training places in April, interest rates were the lowest for 25 years and retail sales were rising. 'Those are the facts that bring positive hope for the unemployed, not empty rhetoric'.

The Department of Employment estimates that the trend rise in the jobless total is now 40,000 a month, little changed from December and well above the increases of last summer. 'The trend suggests that the economy is still stuck in the mire,' said Keith Skeoch, of James Capel.

The Treasury said the continued rise in unemployment did not imply that the economy was falling deeper into recession, as the upturn in employment always lagged after the recovery in output.

Unemployment surged late last year as companies lost patience waiting for a recovery that stubbornly refused to appear. They shed jobs at an unprecedented rate, with manufacturers axing 32,000 in December.

Some economists believe that unemployment is destined to stay high for several years.

Bill Martin, an economist with UBS Phillips & Drew, said the jobless total could rise until 1995, peaking at more than 3.5 million. The Employment Policy Institute believes that unemployment will still be about 3 million at the end of the decade.

The figures rose most sharply last month in the South-east and East Anglia, but fell in the North, conforming to the pattern throughout this recession. Since 1990, unemployment has risen by less than half in the North, but has more than tripled in the South-east.

The jobless rate in the South-east rose last month to match the British average - 10.5 per cent. UK unemployment is highest in Northern Ireland at 14.6 per cent and lowest in East Anglia at 8.6 per cent. The UK male jobless rate rose to 14.2 per cent, the highest since the 1930s.

The number of vacancies notified to Jobcentres fell by 4,400 in January to 104,700. As about a third of all vacancies are notified to Jobcentres, this suggests that 10 unemployed people are pursuing each available job.

Other Employment Department figures suggest jobs growth is far off. Less overtime was worked in December than in any month since records began in 1964. The average working week is now shorter than at any time for nearly a decade. More than a million hours were lost in short-time working in December, the biggest monthly loss since 1983.

The stress in the labour market was also shown by the 4.75 per cent growth in average earnings in the year to December, the lowest figure for 25 years.

3.5 million forecast, page 2

Ministers at odds, page 3

Anger in the Commons, page 7

Leading article, page 18

Boeing sheds 28,000, page 22

'Cole on the dole', page 28

(Photographs omitted)