Jobless surge heaps pressure on George Osborne

Chancellor urged to change tack on economy as unemployment figure hits 17-year high

George Osborne came under mounting pressure to change his economic strategy after unemployment rose to 2.57 million yesterday, its highest level for 17 years.

Labour said the gloomy figures showed the Government's policies were hurting but not working. The Opposition's calls for the Chancellor to slow the pace of his spending cuts were endorsed by Christopher Pissarides, the London School of Economics professor who won the Nobel Prize in economics last year. He told the New Statesman magazine that Mr Osborne was being "inflexible" and warned the cuts could "slow the recovery and may even cause a double-dip recession".

In a highly charged Commons debate, Ed Balls, the shadow Chancellor, clashed with Mr Osborne as he repeatedly asked him how long he would stick to his strategy before adopting the more flexible approach the International Monetary Fund said may be necessary.

"Plan A is not working, the markets know it," said Mr Balls. But the Chancellor refused to countenance a change of course. Claiming that delaying the cuts would do more harm than good, he produced new Treasury figures showing that a 1 per cent rise of interest rates would cost families £10bn a year in higher mortgage payments. He insisted the Government was "sorting out the mess that we inherited", which could not be done overnight.

Yesterday's figures from the Office for National Statistics (ONS) show that the British workplace no longer looks like a country for old men or women. The number of over-65s in employment fell by 74,000 in the three months to August – the biggest drop in employment among that age group since records began in 1992.

The number of over 65-year-olds in work has grown since the recession but the trend is now going into reverse.

The default retirement age ended on 30 September, leading some to speculate that employers took their opportunity to get rid of older workers before the deadline. Michelle Mitchell, charity director of Age UK, said: "The indications are that the dramatic fall is the result of many employers rushing to use the final months of the default retirement age to fire staff for no reason other than they are aged over 65."

But Nick Palmer of the ONS said the likely explanation is that a large proportion of those over-65s in employment work part-time and in the public sector – the areas where most jobs are being shed because of the cuts.

Young people are being squeezed just as much as the old by the weak job market. Yesterday's figures showed that youth unemployment has reached 991,000, meaning that roughly one in five young people are jobless.

The number of people in public sector employment fell by 111,000 between March and June, while the private sector created just 41,000 jobs, dashing the Government's hopes of a private sector-led recovery.

Start your day with The Independent, sign up for daily news emails
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Recruitment Genius: Senior Environmental Adviser - Maternity Cover

£37040 - £43600 per annum: Recruitment Genius: The UK's export credit agency a...

Recruitment Genius: CBM & Lubrication Technician

£25000 - £27500 per annum: Recruitment Genius: This company provides a compreh...

Recruitment Genius: Care Worker - Residential Emergency Service

£16800 - £19500 per annum: Recruitment Genius: Would you like to join an organ...

Recruitment Genius: Senior Landscaper

£25000 - £28000 per annum: Recruitment Genius: In the last five years this com...

Day In a Page

Refugee crisis: David Cameron lowered the flag for the dead king of Saudi Arabia - will he do the same honour for little Aylan Kurdi?

Cameron lowered the flag for the dead king of Saudi Arabia...

But will he do the same honour for little Aylan Kurdi, asks Robert Fisk
Our leaders lack courage in this refugee crisis. We are shamed by our European neighbours

Our leaders lack courage in this refugee crisis. We are shamed by our European neighbours

Humanity must be at the heart of politics, says Jeremy Corbyn
Joe Biden's 'tease tour': Could the US Vice-President be testing the water for a presidential run?

Joe Biden's 'tease tour'

Could the US Vice-President be testing the water for a presidential run?
Britain's 24-hour culture: With the 'leisured society' a distant dream we're working longer and less regular hours than ever

Britain's 24-hour culture

With the 'leisured society' a distant dream we're working longer and less regular hours than ever
Diplomacy board game: Treachery is the way to win - which makes it just like the real thing

The addictive nature of Diplomacy

Bullying, betrayal, aggression – it may be just a board game, but the family that plays Diplomacy may never look at each other in the same way again
Lady Chatterley's Lover: Racy underwear for fans of DH Lawrence's equally racy tome

Fashion: Ooh, Lady Chatterley!

Take inspiration from DH Lawrence's racy tome with equally racy underwear
8 best children's clocks

Tick-tock: 8 best children's clocks

Whether you’re teaching them to tell the time or putting the finishing touches to a nursery, there’s a ticker for that
Charlie Austin: Queens Park Rangers striker says ‘If the move is not right, I’m not going’

Charlie Austin: ‘If the move is not right, I’m not going’

After hitting 18 goals in the Premier League last season, the QPR striker was the great non-deal of transfer deadline day. But he says he'd preferred another shot at promotion
Isis profits from destruction of antiquities by selling relics to dealers - and then blowing up the buildings they come from to conceal the evidence of looting

How Isis profits from destruction of antiquities

Robert Fisk on the terrorist group's manipulation of the market to increase the price of artefacts
Labour leadership: Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea

'If we lose touch we’ll end up with two decades of the Tories'

In an exclusive interview, Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea
Tunisia fears its Arab Spring could be reversed as the new regime becomes as intolerant of dissent as its predecessor

The Arab Spring reversed

Tunisian protesters fear that a new law will whitewash corrupt businessmen and officials, but they are finding that the new regime is becoming as intolerant of dissent as its predecessor
King Arthur: Legendary figure was real and lived most of his life in Strathclyde, academic claims

Academic claims King Arthur was real - and reveals where he lived

Dr Andrew Breeze says the legendary figure did exist – but was a general, not a king
Who is Oliver Bonas and how has he captured middle-class hearts?

Who is Oliver Bonas?

It's the first high-street store to pay its staff the living wage, and it saw out the recession in style
Earth has 'lost more than half its trees' since humans first started cutting them down

Axe-wielding Man fells half the world’s trees – leaving us just 422 each

However, the number of trees may be eight times higher than previously thought
60 years of Scalextric: Model cars are now stuffed with as much tech as real ones

60 years of Scalextric

Model cars are now stuffed with as much tech as real ones