UK unemployment hits 17-year high of 2.53 million
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UK unemployment up 27,000 to 2.53 million
Unemployment has reached a 17-year high of more than 2.5 million and youth joblessness is at record levels, new figures revealed today.
The jobless total jumped by 27,000 in the three months to January to 2.53 million, the worst figure since 1994, while the number of 16 to 24-year-olds out of work increased by 30,000 to 974,000, the highest since records began in 1992.
The unemployment rate for young people rose by 0.8% to 20.6%, also a record high.
The number of people classed as economically inactive also increased - up by 43,000 to 9.33 million, including 2.3 million looking after a family.
The total claiming Jobseeker's Allowance fell by 10,200 last month to 1.45 million, the biggest reduction since last June.
Figures from the Office for National Statistics showed that male claimants fell by 17,500 - the 13th consecutive monthly fall - while female claimants increased by 7,300 - the eighth monthly rise in a row.
Other data revealed that the number of over-65s in work increased by 56,000 in the latest quarter to reach 900,000, the highest since records began in 1992.
There was also a record number of 50 to 64-year-olds in work - up by 25,000 to 7.3 million.
Meanwhile, the number of people in work increased by 32,000 to 29.16 million, the highest figure since last autumn.
Average earnings increased by 2.3% in the year to January, up by 0.5% on the previous month, mainly driven by bonus payments in the finance and business services sector.
Pay averaged £453 a week in January, including bonuses.
Public sector employment fell by 45,000 in the final quarter of 2010 to 6.2 million, even before the full impact of the Government's spending cuts started to take effect.
Local government employment slumped by 24,000, central government by 9,000 and Civil Service by 8,000, while employment in private firms increased by 77,000 to almost 23 million.
There were almost half a million job vacancies in the three months to February, up by 24,000 over the previous quarter, although that figure included 29,000 temporary jobs for this year's census.
The number of days lost through industrial disputes remains historically low at 9,000 in January, taking the total for the year to 371,000 compared with 451,000 in the previous 12 months.
Employment Minister Chris Grayling said: "There is good news and bad news in these figures.
"There's been a welcome drop in the number of people on benefits, and the increase in full-time private sector jobs is a step in the right direction.
"But the rise in overall unemployment is a real concern and underlines the need to press ahead with policies which will further stimulate growth in the private sector.
"For those on benefits that are now looking to make the transition into the workplace our new Work Programme will provide tailored support to get them into jobs."
The Government's flagship new Work Programme will be in place by the summer and will offer personalised, tailored support to get people back into jobs.
John Salt, director of totaljobs.com, said: "With more cuts in the public sector, this rise doesn't, unfortunately, come as a huge surprise and is in line with our prediction that unemployment won't peak until late in the third quarter of 2011.
"Private sector recovery has, however, been more sluggish than expected. Sectors which had previously been key to job growth, such as retail, have been affected by a drop in consumer spending that comes in response to inflation and fear of an interest rate rise."
Martina Milburn, chief executive of youth charity The Prince's Trust, said: "Each month this year youth unemployment figures have reached record levels. Sadly Britain is breaking records for all the wrong reasons.
"We need to help young people back into work to strengthen the economy, communities and families."
Paul Kenny, the GMB general secretary, said: "There is widespread revulsion that the Government is deliberately adding to the dole queues at a time when the economy has not recovered from the 'bankers recession'.
"GMB's round-up shows that 226,472 public sector jobs are already under threat as a consequence of the spending cuts. Unemployment at all levels is not just a social ill but is an economic disaster and is not a price worth paying as we learned during the Thatcher years."
Dave Prentis, general secretary of Unison, said: "The Government's cuts-driven policies are driving the country into the ground. They are failing our young people with 16 to 24-year-olds facing a future without the hope of a decent job. An abandoned generation, collateral damage of the Government's failing economic policy.
"The cuts in local government are biting even harder now, with another 24,000 jobs lost. When jobs disappear communities lose essential services such as home care, day care centres and libraries, and local businesses lose the spending power of council workers.
"It's time for the Government to think again about the downward direction they are taking the country."
John Walker, chairman of the Federation of Small Businesses, said: "With youth unemployment at a 27-year high, the Government is making a mistake by scrapping the Graduate Internship scheme, due to come to an end this month. The scheme has been highly successful with some interns going on to start their own companies and others being offered full-time positions with the business they interned for.
"It is the UK's young people that are the future of the economy so it is time the Government invested in this vital sector. It must extend the Graduate Internship scheme and provide incentives for micro firms to take on apprentices. We need urgent action and next week's Budget provides the Government the perfect opportunity, so that we don't see a generation of youngsters consigned to the dole queue."
TUC general secretary Brendan Barber said: "Today's figures are shocking.
"Over a year after the recession technically ended, unemployment is now at its highest level since the mid-1990s, with 2.53 million people out of work.
"The increase in the unemployment rate for young people is of real concern. Youth unemployment is at a record high - with more than a fifth of young people unable to find jobs, the risks for the future are very real.
"While the fall in the numbers claiming the dole is welcome, the number of jobs available in the economy has also fallen and there are over a million people in part-time work seeking permanent jobs.
"These figures show that the jobs recovery is still some way off.
"Public sector employment has already fallen 39,000 between September and the end of last year, and, with thousands more redundancies still to come - for example, in local authorities - this is no time to be cutting back on support programmes for the unemployed."
Unite general secretary Len McCluskey said: "Youth unemployment is at record levels and unemployment is the highest in 17 years and will continue to get worse.
"It's outrageous for Chris Grayling to claim there is some good news in these figures. Only a party that is completely out of touch with what is really happening to Britain would try to claim there is hope in its economic policies. There is no good news, only the tragedy of a lost generation of young people.
"The Government's aloof response to mounting unemployment will give no confidence that it is committed to growth or it understands that, not only is it stimulating unemployment, it is also stimulating a rise in insecure work.
"It is not just joblessness we need to fear but job insecurity and low-waged work. How can this be deemed growth?"
David Kern, chief economist at the British Chambers of Commerce, said: "These figures were mixed, but not as bad as some had feared.
"Unemployment and inactivity have risen in the three months to January, but employment is also up and the number of people claiming benefits has fallen.
"With the Government's austerity plan likely to result in further cuts in public sector jobs, we reiterate our forecast that total unemployment is likely to increase to 2.65 million over the next 12-15 months before it starts declining.
"These figures prove that the private sector is willing and able to create new jobs, and the Government must now use next week's Budget to scrap regulatory burdens preventing businesses, particularly smaller firms, from employing new staff."
Ian Brinkley, director of socio-economic programmes at The Work Foundation, said: "The labour market remains weak. Modest employment growth has been matched by increasing unemployment and economic inactivity comparing the three months to January with the previous three months.
"Some of this might be a short-term blip, but the prospects for 2011 are not encouraging as the expected large-scale job losses in the public sector have still to feed through.
"Meanwhile, the rise in unemployment has been largely felt by the young, increasing numbers of which are becoming long-term unemployed - a clear warning of big problems to come."
Graeme Leach, chief economist at the Institute of Directors, said: "The good news is that there doesn't seem to be any evidence of a wage price spiral developing.
"The rate of growth in average earnings in the private sector is only 2.1% compared with 2.5% growth in the public sector. Given the looming public sector shake-out and pay squeeze this should add downward pressure on overall earnings growth.
"The bad news is that the labour market release isn't exactly good news for consumer spending. Weak employment growth and earnings growth running at half the rate of inflation means that real household disposable income faces a big squeeze. This is the jobless and joyless recovery."
Dr John Philpott, chief economic adviser at the Chartered Institute of Personnel and Development, said: "The headline rise in unemployment suggests that the labour market weakened at the turn of the year, well before the impact of the Government's spending cuts and tax rises start to take full effect.
"Figures showing that public sector employment had already fallen by 123,000 in the year to December 2010 suggest that the eventual cull of public sector jobs by 2015 could be considerably higher than current Office for Budget Responsibility estimates suggests.
"However, figures showing more people in work in the private sector, including in manufacturing, and fewer on welfare benefits offers hope that the labour market might withstand the economic headwinds better than previously expected."
Prime Minister David Cameron's official spokesman said: "The figures on unemployment today are mixed. There is a rise in the ILO measure of unemployment and obviously that is of concern.
"But the number of people claiming Jobseeker's Allowance is down and employment has risen by 32,000.
"What is welcome is that that increase in employment is driven entirely by full-time jobs in the private sector."
Mr Cameron told the House of Commons: "Clearly, today's figures are a very mixed picture.
"The youth unemployment figures are disappointing once again.
"But overall what is interesting is that employment is up and the number of claimants nationwide is now down by 32,000 since last year."
Shadow work and pensions secretary Liam Byrne said: "Fifteen months after the recession ended, unemployment has hit a 17-year high and youth unemployment has hit the highest level ever.
"All over Britain, families now face a summer of struggle and the Tory-led Government has got to step in to help. You can't get the deficit down without getting people into work and paying taxes."
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