More people abandon the search for work

THE NUMBER of employees in Britain has dropped to its lowest level in seven years, showing that recent falls in the number of registered unemployed owe more to people giving up the search for work than the creation of new jobs.

The number of people without work and claiming benefits fell by 20,100 in May, after seasonal adjustment, according to the Department of Employment. That cut the jobless total to 2,661,400, or 9.4 per cent of the workforce, the lowest for two years.

This measure of unemployment fell by 51,500 in the first three months of the year, but the department said yesterday that in the same period employers shed 92,000 more jobs than they created. That was the biggest quarterly shake-out of employment since the summer of 1992.

John Prescott, Labour leadership candidate and employment spokesman, accused the Government of cynical manipulation to hide the real total: 'No one says it will be easy to return to full employment or that it can be achieved quickly, but governments have a responsibility to strive for it and this government is failing in that duty.'

Paul Convery, of the Unemployment Unit campaign group, said the figures meant as many as 3.7 million people wanted work and were available to start work last month. But David Hunt, Secretary of State for Employment, said the jobs figures - together with others showing inflation stable at 2.6 per cent and average earnings growth falling unexpectedly - showed Britain was set for non-inflationary growth.

Job losses were widely spread in the first quarter, but women have been faring better than men, and part-timers better than full- timers. Several thousand jobs were axed in manufacturing, energy and water supply, but the biggest fall was in services - the strongest sector last year. Some 61,000 service sector jobs disappeared.

The quarterly Labour Force Survey, which gathers information from individuals rather than employers, painted a rather more upbeat picture. It showed the number of employees rising by 24,000 in the three months to February, which analysts said cast doubt on the reliability of the figures.

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