So far, so predictably gloomy. Figures from the Office for National Statistics released yesterday revealed that a further 140,000 people lost their jobs in Britain in the three months to the end of September. The overall level of national unemployment now stands at 1.82 million; the highest since Labour took power in 1997. More unemployment inevitably means more people on benefits. And the welfare claimant count has risen by 36,500 in the past month to 980,900.
Yet this is only the beginning. The joblessness total is on course to top 2 million by the end of the year and it could easily reach 3 million by the Christmas after next, approaching the devastating highs of the Thatcher era.
But this is not just about figures. As our reports this week by Paul Vallely in our Life supplement have vividly demonstrated, the real story of rising unemployment is one of human misery and despair. The Bank of England Governor, Mervyn King, was right yesterday to call this the biggest financial crisis since before the First World War. But ordinary working people, not high-flying financiers, are going to end up paying the highest price. There is room for some small hope. The pound is depreciating on international exchanges, which mightgive a boost to out exporters. The UK's flexible labour markets should help cushion the downturn too. Many east and centralEuropean workers are departing, creating job vacancies for those prepared to take them. Wage inflation should not be a problem in this recession either. All these safety valves are already helping.
But what else, people want to know? What should government and the monetary authorities be doing? There is some real movement here. Interest rates are coming down, and will undoubtedly be reduced further. This should help the economy, providing the banks pass the cheaper cost of borrowing on to their customers. Furthermore, the Government is likely to produce tax cuts in the pre-Budget report. And Gordon Brown wants some internationally co-ordinated "fiscal stimulus" to arise from this weekend's meeting of world leaders in Washington.
But we must be realistic. There is no magic bullet out there in the Government's armoury to deal with rising unemployment. There might be something to be said for giving a targeted boost to areas particularly badly hit by rising joblessness, such as construction. A few judicious orders by local councils to buy up half-built properties and convert them into social housing could be useful. But such schemes will not, in themselves, make much of a dent in the unemployment figures.
Tax cuts for businesses might also help at the margins, but nothing will persuade firms to hire more people if they do not have the orders coming in. As for ordinary people, if they are concerned about the size of their credit card bills, there is always a high chance that they will save any tax rebate granted to them, rather than spend it in the shops.
The unpalatable bottom line is that there is nothing ministers can do directly to ensure that hundreds of thousands of people do not lose their jobs in the coming months. Far better that they focus their energies on ensuring this recession is shallow and short and that the public finances are on course to return to health in the medium term. What we do not need, no matter how bad the news gets, are futile and politically-driven gestures.Reuse content