Unemployment hits two million

Wednesday, 18 March 2009 5:34 PM

By politics.co.uk staff

More people are out of work than at any time since New Labour came to power, with unemployment now hitting the two million mark.

The figures, for the three months to January, gave an unemployment rate of 6.5 per cent as the total number of jobless rose to 2.03 million.

Theresa May, Conservative shadow work and pensions secretary, said: "This is a grim milestone that no one wanted to reach.

"[Work and pensions secretary] James Purnell and Labour are sleepwalking their way through this unemployment crisis casting people adrift as they continue to close job centres.

"Gordon Brown's negligent and complacent attitude over the past decade means we have a huge skills gap in the economy."

Tony McNulty, minister for employment, said: "These latest figures show the human impact of the global recession. No matter how hard times get, we will not give up on anyone who loses their job and will continue to provide real help to everyone who needs it.

He added the government was investing £2 billion in Jobcentre Plus and next month people who have been claiming for six months will be able to access the enhanced package of support announced in January.

Companies dealing with insolvencies are now seeing more firms closing than in the recessions of the 1980s, and the unemployment total is expected to top three million.

Alan Tomlinson, partner at licensed insolvency practitioners Tomlinsons, said: "I have been an insolvency practitioner since the eighties and have never been so busy.

"Companies of all sizes, and in all sectors, are folding by the day, putting more and more people out of a job. The CBI's prediction, last month, that unemployment will peak at just over three million in the second quarter of 2010 could prove to be wildly optimistic."

People losing their jobs are being urged to contact their council to ensure they are getting all the advice, support and benefits they are eligible for.

"From retraining and finding a new job to filling in housing benefits forms, town halls are there to help people through difficult times," said Margaret Eaton, chairman of the Local Government Association.

"Councils can help people save up to £2,000 a year by keeping household costs down in whole range of ways. An eye watering £1.8 billion of council tax reductions go unclaimed every year meaning that millions simply aren't collecting the benefits they're eligible for," Ms Eaton said.

"Town halls are able to give hard pressed residents a helping hand."

Analysts expect unemployment to peak at more than three million, by which time one in ten employable Britons would be out of work.

"Reports of companies laying off workers are prevalent, while an increasing number of companies are folding," said Howard Archer, chief UK and European economist at IHS Global Insight

"With the economy seemingly set to contract through 2009 and very possibly beyond before starting to recover gradually, we expect unemployment to rise to a peak of 3.3 million [by late 2010/2011]."

John Philpott, chief economist at the Chartered Institute of Personnel and Development, said recent job losses had been characterised by a "public sector-private sector divide", describing the public sector as a "recession free zone".

According to figures from the TUC, there are already ten jobseekers for every vacancy in the UK.

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