Ministers fear 'bloodbath' of job cuts

Another sharp rise in unemployment to be announced today will be followed by a "bloodbath" of job cuts in the new year, ministers fear. The number of people on jobseeker's allowance, which stood at 980,000 last month, is expected to pass the one million mark when the monthly unemployment statistics are issued this morning.

The wider Labour Force Survey, which includes people out of work but not claiming unemployment benefit, will edge towards the two million mark. It stood at 1,825,000 last month. Ministers believe this measure will break the two million barrier in the new year. They suspect many firms in financial trouble are holding back because they do not want to make people redundant before Christmas. "It is going to get bloody in January and February," one said.

James Purnell, the Secretary of State for Work and Pensions, will say in a speech today that the impact on people's lives matters more than the unemployment statistics. "When times are tough, we must give people more help," he will say. "Unemployment has risen, but that doesn't mean we should do what previous governments did and abandon people to a life on benefits." The Government will unveil a £158m plan to help people who have lost, or fear losing their jobs, find their next post through careers advice and skills training. It will expand services for those whose jobs are at risk, including white-collar workers, rather than the long-term unemployed. Advice will not be restricted to Jobcentres but will also be provided by colleges and training providers.

The money, from the European Union's social fund, will help 40,000 people who need new skills or training. "Many more people will have real help to find or stay in work," said John Denham, the Universities Secretary.