'National disaster' looms as one in five young Britons are now unemployed

Britain is facing a 'national disaster' as youth unemployment hits record levels, senior economists warned yesterday.

Nearly a fifth of those aged between 16 and 24 are unable to find work - a total of 947,000 young people.

That has helped drive Britain's overall jobless total up by 210,000 in the three months to July.



The new total of 2.47million is the highest in 14 years. The unemployment rate has jumped to 7.9 per cent from 5.6 per cent a year ago.

The figures lay bare the toll exacted by the recession. Only a few groups are seeing rising employment levels, including public sector and foreign-born workers and people of retirement age, yesterday's Office for National Statistics report showed.

David Blanchflower, a former Bank of England official and labour market specialist, said the current generation of school and university leavers is the largest for 20 years, making the recession doubly harmful.



He fears the bitter experience of enterbetweening the jobs market with so few opportunities will leave 'permanent scars' on Britain's youth.

Professor Blanchflower said: 'Firms have stopped hiring at a time when there are lots of young people around. This is a national disaster.

'The Government needs to do everything it can to get them off the unemployment registers. I believe there is going to be another huge jump.'

A separate report by the respected Organisation for Economic Cooperation and Development yesterday confirmed his bleak analysis, warning that joblessness will continue to rise across its 30 members.

Some 15million jobs were lost at the end of 2007 and July 2009, and ten million more could go by the end of next year, it said.

At 8.5 per cent the OECD-wide unemployment rate is already the highest since records began, and the institution warns that it is headed to 10 per cent.

The OECD's Stefano Scarpetta said: 'We are facing a jobs crisis. This is the most rapid increase in unemployment we have seen since the early 1970s.

'There has been a huge increase in youth unemployment. We need to prevent a lost generation of young individuals who are not being given a chance.'

Yesterday's ONS report showed that a record 19.7 per cent of young people are out of work in Britain. Another 34.6 per cent, or 2.55million, are classified as 'inactive'.





This may mean they have given up looking for a job, or are in education or long-term sick.

Economic inactivity across the population hit 7.9million, or one in five people - the highest since records began in 1971.

Meanwhile, the number of people claiming jobless benefits rose by 24,400 in August to 1.61million, the highest figure since May 1997.

Most sectors of the economy are shedding jobs with financial services, construction and manufacturing leading the way.

As a result, increasing numbers of employees are accepting pay freezes or minimal increases.

Average earnings excluding bonuses increased by 2.2 per cent in the three months to July, yesterday's figures showed, the lowest rate since records began in 2001.

Yesterday's figures will be particularly disappointing given recent evidence-that Britain started emerging from recession this summer. But on Tuesday Bank of England governor Mervyn King said the likely recovery will be too feeble to persuade employers to step up recruitment. continues here

Children in modern Britain living like 'times of Dickens'

Poverty levels in parts of Britain mirror "the times of Dickens", leaving schools struggling to cope with increasing numbers of children lacking the most basic personal skills, according to a teachers’ leader.



Some pupils from the poorest areas arrive at school unable to dress themselves or use a knife and fork, with some even unable to use a toilet properly, she said.

Lesley Ward, president of the 160,000-strong Association of Teachers and Lecturers, warned that many children were also being relied upon to raise younger brothers and sisters and lacked stable father figures in the home.

In a speech last night, Mrs Ward, a primary school teacher from Doncaster, said Labour had “tried hard on this issue” but had failed to fill the vacuum left by the death of the mining and manufacturing industries in many working-class communities.

She said it meant a “small, significant and growing minority” of children were being raised in families with low expectations and a level of poverty “mirroring the times of Dickens”.

It was “next to impossible”, she added, for schools to counter the effect of serious deprivation, family breakdown and a lack of parenting skills in many communities.

Her comments follow the publication of figures showing nearly three million children still live below the poverty line in Britain. Ministers have admitted there is little chance of hitting their target to half child poverty by 2011.

It also comes amid fears that children’s education chances are still too strongly linked to family background.

Private schools extended their lead over the state sector in GCSE and A-levels this summer. And figures published this week by the Organisation for Economic Cooperation and Development showed the UK had more teenagers out of work and without a college place than almost any other developed nation.

In her speech, Mrs Ward said: “I am talking about perfectly healthy children who enter school not yet toilet-trained.

“Children who cannot dress themselves, children who only know how to eat with a spoon and fingers, and have never sat around a table to enjoy a home-cooked family meal. Children who think that the word ‘no’ means if you throw a wobbly it will miraculously turn into yes.

“Children who get themselves, and sometimes their younger siblings, up in the morning. Children who bring themselves to school at very young ages. Children who sometimes don’t know who will be at home when they get home – if anyone. Children who don’t know exactly who the father figure is in the home from month to month.”

She added: “I know of a pupil who actually saw, from the classroom window during a lesson, his house door being kicked in and his dad being led out of the door in handcuffs – this was during Sats week. He did not achieve the level he should have. Are we surprised?”

Doncaster has already been at the centre of a series of child protection controversies. The local council was criticised in a damning report recently following the deaths of five children known to the authority. And last week police and social services came under fire for failing to stop two brothers in the nearby former pit village of Edlington terrorising the local community, culminating in a savage attack on two boys.

Mrs Ward, who has just been appointed president of the ATL, the third biggest teaching union, said low expectations had been created among parents following the decline of heavy industry. Typically male-dominated jobs have been replaced in many areas by part-time, low-paid service jobs filled by women, she said.

Speaking in central London on Wednesday, she said: “Teachers all over the country are working in areas like this. Areas where often more than half the children receive free school meals, where one in ten of the school population is on the at risk register, where 10 per cent, or more, of the children in each class have some form of special need.

“These children come from some of our poorest communities, starting school with the huge weight of deprivation on their shoulders, and it can be next to impossible to counteract the effects of such deprivation. I would like to stress I am not talking about the whole of our school population, but a small, significant and growing minority.”

The comments come as a survey published today found more than a third of parents believed Labour had failed to live up to its election pledges on education.

Almost nine in 10 said all political parties hyped up their promises to secure votes, according to the study by the charity Edge, although most parents did not believe the Conservatives would fulfil their pledges to make schooling a priority.

A spokesman for the Department for Children, Schools and Families said: “There has been an enormous programme of social reform over the past 10 years that has lifted 500,000 children out of poverty and in June the Government enshrined in legislation it's commitment to eradicate child poverty by 2020.

"Most three and four year-olds now access free childcare, thanks to £3 billion of annual funding by Government, which helps many parents get back to work. We have also committed to spending around £2 billion more by 2010 on public services aimed at breaking cycles of deprivation - key to meeting our 2020 target. These focus on childcare, raising attainment, improving schools, reducing health inequalities and improving school transport.” continues here

5M BRITONS HAVE NEVER WORKED UNDER LABOUR

NEARLY two million people in Britain have never had a job and a further three million have not worked since Labour came to power, shock figures revealed last night.


In the worst unemployment black spots, as many as a quarter of all adults have not held down a job since 1996.

The disturbing figures, released by the Tories yesterday, were obtained from analysis of a recent population survey.

They show that a total of about five million have been out of work for over a decade.

The Conservatives warned that the statistics confirmed Britain was burdened by hidden pockets of severe long-term unemployment years before the current recession.

And while they backed support for people made redundant in the downturn, they accused Labour of fostering a culture of worklessness and benefits dependency in the most impoverished areas.

Frontbencher Theresa May released the figures yesterday, ahead of a keynote speech tomorrow attacking Labour’s welfare system.

She will tell the Westminster-based think-tank Policy Exchange: “These people have been hidden by Labour for the past 10 years. They have built a wall between the working and the workless, hoping to keep their failures out of sight.” the worst long-term unemployment black spot is Newham in East London...

In neighbouring Tower Hamlets and in Merthyr Tydfil in South Wales, about 24 per cent of the population have not worked since before 1996...

The figures, based on the 2001 population census for England and Wales, show that the worst long-term unemployment black spot is Newham in East London.

A total of 43,850 people there – about one in four adults – have not worked since 1997 and more than 2,400, or about one in 100, have never worked in their lives.

In neighbouring Tower Hamlets and in Merthyr Tydfil in South Wales, about 24 per cent of the population have not worked since before 1996.

Other areas blighted by high levels of long-term unemployment include Liverpool, Manchester and Middlesbrough.

In her speech tomorrow Ms May will say: “Unemployment did not disappear during the boom years. It was merely disguised, renamed, and hidden away.”

She will add: “Many of those covered in these statistics will not appear in the unemployment figures at all. No doubt the figures will cover some of the 800,000 people who have been on incapacity benefits for over 10 years.

“They will include lone parents which the state has told not to bother trying to work until their youngest child was 16. They will include some of the record numbers not in education, employment or training, who often don’t appear in the benefit figures.”

The Tory figures show that 1,851,841 people had been “economically inactive” all their lives at the time of the 2001 census and 5,931,880 had not worked since before 1996.

Matthew Elliott, of the TaxPayers’ Alliance, said: “It’s absolutely right that we have a safety net to help people who fall on hard times, but the Government have allowed welfare to become a life choice rather than a last resort.

“We have families where generations have been unemployed – small wonder there is so much social breakdown.”

Earlier this month, figures published by Policy Exchange showed that six million people in Britain are living on jobless benefits. continues here

Firms still looking to hire migrants even as unemployment hits 14-year high of 2.4million

Companies are planning to hire more migrant workers even as Britain's jobless toll rises by almost 3,000 a day, a new survey shows.

Figures today reveal unemployment has increased by a further 220,000 to a 14-year high of 2.435million.

The number of people claiming jobseeker's allowance increased by 24,900 in July to 1.58 million - its worst level for more than 12 years, according to the Office for National Statistics (ONS).

This marks the 17th month in a row where the so-called claimant count has increased in the UK.

There was further grim news from The Bank of England, which forecast today that the economy would shrink by around 5.5% at the lowest point this year before beginning its recovery.

The Bank's inflation report said the recession "appeared deeper than previously estimated" but pointed to "encouraging signs" that its unprecedented monetary stimulus was taking effect.



Despite the jobless rise, nearly one firm in 12 aims to take on immigrants because they cannot find suitably qualified Britons, according to the report by the Chartered Institute of Personnel and Development (CIPD) and accountants KPMG.

The survey shows that 8 per cent of employers intend to recruit migrant workers in the third quarter of 2009.

Some bosses said this is because they find migrants more 'hardworking and reliable', while others said they tend to be better qualified.

This comes after official figures showed the number of non-UK nationals in employment increased in the first quarter of 2009 while the number of UK nationals fell. The survey undermines controversial claims by Gordon Brown that he wants 'British jobs for British workers'.

The CIPD said Labour was failing to ensure that large sections of the British-born population have the right skills to compete in the jobs market. Gerwyn Davies, public policy adviser at the CIPD, said: 'The best way to provide "British jobs for British workers" is to make Brits better equipped to compete in the jobs market rather than raise barriers to skilled migrants.

'Most are recruited and retained by employers because they provide skills or attitudes to work in short supply among the homegrown workforce.'

Economist Howard Archer, of IHS Global Insight, said the jobless pain will be particularly acute for young UK school and university leavers. He forecasts unemployment will peak at 3.2 million next year.

'Even if the economy does return to growth in the third quarter, activity is still unlikely to be strong enough for some considerable time to come to prevent further net job losses,' he said. Lord Mandelson admitted that unemployment levels were "unacceptable" but the Business Secretary insisted that even more people would be out of work if the Tories had been in power during the recession.

The peer said: "One thing I and the Government know is that any such level of unemployment is unacceptable.

"The question is, what is the Government doing about it, and what would be the level of unemployment if the Government had not intervened in the economy in the way in which we have?" continues here

UK to sink further into red than any major country, warns OECD

The UK is predicted to sink further into the red than any other major developed country next year, according to the Organisation for Economic Co-operation and Development (OECD).

The fiscal deficit is expected to rise to 14 per cent of economic output in 2010, compared to an average of 8.75 per cent in the 30 most developed markets, it says in a report.

The OECD warned that "public finances have deteriorated sharply" since the beginning of the recession and called on the UK to continue to develop "a strong and credible" framework for reducing the ratio of debt to output.The report said the downturn in economic activity had pushed up unemployment and reduced wage growth inflation. And still they open the gates...

"To improve stability, the government should continue to develop a concrete and comprehensive plan to ensure that debt is on a declining path once recovery takes hold," the OECD said.

The organisation said the state of the UK's balance sheet meant the possibility of extra stimulus to the economy was curtailed.

Ireland, the US and Spain are all expected to have fiscal deficits above the average figure next year, the report said.

It also said the UK economy was likely to recover "only mildly" in 2010, with any return to health dependent on an upturn in the housing market and credit availability.

The report said the downturn in economic activity had pushed up unemployment and reduced wage growth inflation.

It predicted that UK unemployment, which currently stands at a 12-year high of more than 2.2 million, will "rise substantially" and "labour market conditions will remain unfavourable for a long period".

"While labour market flexibility remains relatively high in the United Kingdom, policies to help the unemployed remain employable should remain a priority," it said. continues here

Jobless total will top 3m in two years, says Treasury

Unemployment will rise to more than three million over the next two years, according to Treasury forecasts disclosed yesterday. 

The figures show ministers are prepared for the amount spent on joblessness benefit almost to double by the spring of 2011. 

Last week a Bank of England official said it was possible that that unemployment could rise to four million, a figure that would surpass the record 3.3million on the dole during the deep recession of the early 1980s. 

The Treasury calculations suggest the Government expects to spend just over £2billion on Jobseeker's Allowance, the main benefit for the unemployed looking for work, in the financial year that ends today. 

However the amount needed to pay the benefit is expected to rise to £3.25billion over the next 12 months, and to £3.8billion in 2010-11. 

Revealed to MPs in answer to a parliamentary question from former Labour minister Frank Field, this rise is predicted to increase costs to taxpayers by 84 per cent. 

It is thought 2.5million will be unemployed by the spring of 2011. 

Last month the claimant count rose by 138,400, the largest monthly increase since modern counting methods began in 1971  continues here

Immigrants unlikely to return home during recession, equalities watchdog warns

Immigrants are unlikely to return to their homelands during the recession, according to a report, putting further pressure on the jobs market.

The study claims that foreign nationals who have put down roots in Britain are here to stay, and will not move back home just because of rising unemployment, which has just breached 2million for the first time in more than a decade.

Almost 3.7million foreign nationals moved to Britain between 1997 and 2006, according to the Migration Policy Institute's new study, while 1.5m people born in this country emigrated, leaving net migration at 2.2m.

” immigration is part of the solution to economic problems, not part of the problem. He said the solution was not to "clamp down" on people wanting to move to Britain but to help workers improve their skills so they can compete for jobs more effectively...”

And migration levels are predicted to remain high despite the economic downturn, making it more difficult for low-skilled Britons to find work and risking clashes with people born overseas.

There were protests across the country in January after Italian and Portuguese contractors were given jobs at the Lindsey Oil Refinery in North Lincolnshire, while support for the far-right British National Party is said to be increasing amid fears that British workers are losing out to foreigners in the hunt for scarce jobs.

The report published said: "Return migration is not likely to be highly responsive to rising unemployment for most immigrant groups... as strong social and family ties encourage immigrants to remain in the country.

"Extensive evidence from past downturns strongly supports the argument that migration flows are only partially sensitive to economic conditions.

"Furthermore, in the long run, the underlying drivers of migration... will remain strong, suggesting that migration flows will pick up again during the economic recovery."

Sir Andrew Green, Chairman of the campaign group Migrationwatch UK, said: "In the past, a recession has only had a temporary effect on immigration but we are now in an entirely new situation where large numbers of European citizens can enjoy the full benefit of the welfare state rather than go home.

"So it would be no surprise if they do just that."

But Trevor Phillips, the Chairman of the Equality and Human Rights Commission, the Government watchdog that ordered the study, insisted that immigration is part of the solution to economic problems, not part of the problem.

He said the solution was not to "clamp down" on people wanting to move to Britain but to help workers improve their skills so they can compete for jobs more effectively.

Mr Phillips said: "The solution will lie in adapting our workforce for the new economy – an economy that will be more knowledge-driven, not built around the large hulking industries and even more reliant on innovation and skilled workers to fuel growth."

Hazel Blears, the Communities Secretary, claimed migration "probably will reduce" in the future.

She said: "I think it will go down but I don't think it's going to disappear tomorrow." continues here

Ten applicants for every job as unemployment set to smash through 2million barrier

Soaring unemployment has left an average of ten people chasing every vacancy, figures revealed yesterday.

Ministers were on the defensive last night over claims that unemployment was climbing sharply in areas where Jobcentres were closing and will exceed two million this week.

The Government is diverting hundreds of officials from other posts to serve as welfare advisers.

Nearly 1,000 civil servants working on child maintenance and disability claims have been drafted in to reinforce job centres.

A survey by the TUC found that in some parts of the country, the number of jobseekers far exceeds the number of vacancies.

Despite claims by Gordon Brown that there are up to 500,000 unfilled vacancies, the study found extensive job shortages.

The TUC says 60 workers are available for each vacancy in the South East.

The Isle of Wight is the worst hit, with 3,152 registered jobless in an area where there are just 53 registered vacancies.

General secretary Brendan Barber said: 'These shocking figures blow out of the water the Government's claim that there are plenty of jobs available for people who are prepared to look.'

The Conservatives have released figures showing that in 2008, the number of benefit claimants more than doubled in 38 constituencies where job centres had closed since 2002.

The Tory study identified the South West as hardest hit, with 12 constituencies where unemployment has more than doubled.

In the Mid-Dorset and North Poole seat, for example, a Jobcentre Plus office was closed last year but the number of claimants has risen by 163.4 per cent.

The South East saw 11 constituencies affected, while the remainder were spread across England.

The Office for National Statistics is expected to announce on Wednesday that there are now two million people unemployed. 

Between October and December the jobless figure rose by 146,000 to 1.97 million - the highest level since 1997.

The British Chambers of Commerce has warned it could reach 3.2million in the second half of 2010.

Work and Pensions Secretary James Purnell stopped a programme of Jobcentre closures in November, but only after 54 offices had shut. 

Tory work and pensions spokesman Theresa May said: 'Instead of providing extra support when unemployment began to rise, Labour continued its programme of job centre closures.

'Now unemployment is rising and there simply aren't the resources to cope.'  continues here

The very middle class dole queue: Jobseekers describe their first taste of unemployment

They are the human faces of the credit crunch. 

This was the sobering scene just after breakfast time in suburban South-East London yesterday when the local JobCentre opened its doors at 9.30am.



On the day that unemployment reached 1.86million, the snapshot of those seeking work starkly illustrates the middle class backgrounds of those being thrown out of work.

The Daily Mail spoke to a string of well-qualified business analysts, teachers, marketing consultants, recruitment managers and personal assistants - all of whom are experiencing unemployment for the first time.

All had previously enjoyed the benefits of good jobs but are now facing the stark reality of no work for the New Year.

Significantly, many were once employed by the building trade - which has been hardest hit by the slump and property market crash. Many of those the Mail spoke to still appeared shocked by their sudden unemployment.

Father of two Jonathan Birss, 40, a former business analyst who once earned up to £100,000 a year, was signing on for the first time after losing his job when a major IT contract came to an end.

Mr Birss, if Chislehurst, Kent, said: 'Signing on feels a lot like failure. It's the last thing I've ever wanted to do, I just want to provide for my family and it's not really possible at the moment. It's demoralising and humiliating.'

Francoise Raingeard, 58, a former personal assistant who earned £32,000, has been signing on for two months. She lost her job after the Government-backed postal watchdog, Postwatch merged.

She said: 'There are jobs available, it's just that too many people are applying for them.'

She has made more than 80 job applications but had only one interview in the past month.

Stephen Gibbs, 52, a former building site manager earning £50,000, was signing on for the first time. He was made redundant earlier this year, having been laid off after 35 years in the industry while younger workers on a lower salary were kept on.

He has no children but cares for his elderly father. His wife is a part-time youth worker.

Because he registered as self-employed 18 months ago, Mr Gibbs has been denied the dole for another six weeks.

He said: 'I think it's disgusting. Some people have never worked. I've worked hard all my life and paid taxes but now, when I really need it, I get nothing.

'I have been prudent with my savings but they are depleting quickly. I still have to pay the £600 mortgage each month on the house and it's getting increasingly difficult.' continues here

All 807 Woolworths stores to shut by January 5 as 27,000 jobs are axed

All 807 Woolworths stores will have closed down by January 5, the group announced yesterday. 

A countdown for the closure of the chain, a fixture on the High Street for 99 years, was triggered last night after no one offered enough cash to buy it as a going concern. 

The news means that some 22,000 permanent staff and 5,000 temporary workers will suffer a miserable Christmas and unemployment in the New Year.



The first 200 stores will close on Saturday, December 27, another 200 go on December 30, a further 200 on January 2 and the remainder on Monday, January 5.

Staff will be given just ten days' notice before their particular store closes.

Shopworkers' union Usdaw said it was 'appalled' at the news.

Some 50million new items are being delivered into stores this week, including DVDs, CDs and 200,000 copies of the X Factor single Hallelujah.

The firm administering the winding up of Woolworths, Deloitte, said current discounts of 20 to 60 per cent will be increased as the clock ticks down to store closures.

Deloitte said it has received interest from other retailers, including supermarkets, clothing and value chains, to buy 300 Woolworths stores. The others may simply be returned to their landlords and boarded up.

Joint administrator Neville Khan said: 'We are now moving to the closing down sale period.

'It is a very difficult situation for a lot of people, particularly the staff, and we are trying to deal with it in as sensitive a way as possible.'

He raised hopes that jobs could be saved, saying that - as far as possible under privacy laws - Deloitte would pass on the details of current Woolies employees to the buyers of the 300 stores.

Mr Khan also revealed that administrators are in talks over the sale of Woolworths trademark and its Worth It! value brand. Consequently, it is possible the name could be revived at some point.

Ironically, Woolworths has seen some of its biggest-ever sales in recent weeks on the back of its closing down sale. Shoppers who deserted the chain for decades have flocked back in search of bargains.

Woolworths' distribution arm EUK - which supplies CDs to supermarkets and Zavvi - is also in administration. More than 700 jobs from this business have been lost, however there are hopes it can be sold, which would save the remaining 400 staff.

Mr Khan said the task of saving Woolworths had been made harder because potential buyers have had difficulty raising the money needed from the banks, which have imposed strict controls on new lending. continues here

LEVEL OF YOUNG JOBLESS ATTACKED

Business leaders attacked the level of youth unemployment and warned that young people were more likely to get involved in a life of crime if they didn't have a job.

The Confederation of British Industry said it was "unacceptable" that Britain ranked 23rd out of 28 in an international league table of young people not in education, employment or training.

The picture could worsen "dramatically" in the coming months as the economy suffers, said the business group, arguing that £250 million a year could be saved if the number of young people claiming benefits was halved.

John Cridland, deputy director general of the CBI said: "The CBI has long warned that the UK's approach to disengaged youth is failing. Now we can see the knock-on effects that such failure has on the whole of society.

"This is not just an issue of so many school leavers failing to achieve the expected minimum of five good GCSEs after 11 years of full-time education. This is about the UK churning out thousands of people without the basic skills and attitudes they need to make their way in the world. continues here

LET THE JOBLESS LAG LOFTS, SAYS BROWN

Gordon Brown provoked fury yesterday by telling the unemployed to get new jobs “lagging lofts”.

His disregard for the misery caused by the economic crisis came as experts predicted the jobless total could hit three million.

Tory Work and Pensions spokesman Chris Grayling said: “If training people to lag roofs is the best suggestion he can make, then it doesn’t say much for the challenges we face as a nation.”

Whitehall figures yesterday showed the number of people out of work soared by 164,000 to 1.79million in the three months to August – the biggest rise in 17 years.

Experts feared the increase was accelerating amid the economic downturn, with some predicting the three million jobless total would be reached by 2010.

The grim news was being seen as a wake-up call to the PM last night as he basked in the adulation of European leaders for his financial rescue measures to bail-out beleaguered banks.

Speaking at an EU summit in Brussels, Mr Brown claimed a Government energy-saving scheme to insulate houses could be a major source of job opportunities.

“We are training large numbers of additional people to do that work in insulation and that will become one of the unemployment programmes that will grow over the next period of time,” he said.

“We will do whatever we can to ensure people can stay in jobs, and that those who lose their jobs can get new skills for the next job and we will do whatever we can by creating new opportunities for work over the next few months.”

Mr Grayling said: “For all the hype surrounding Gordon Brown in the past few days, these comments show just how out of touch he is with what is going on in the real economy.

“He promised that he had ended ‘boom and bust’ but the unemployment figures show what an absurd claim that was. Now as people are paying the price for that failure, he has nothing substantial to offer them.”

Yesterday’s sharp rise in unemployment was the biggest increase since 1991, raising the jobless rate by 0.5 per cent to 5.7 per cent of the total workforce.

The news was compounded by an announcement of 800 job losses at US-owned computer chip firm Freescale Semiconductor in East Kilbride, near Glasgow.

TUC general secretary Brendan Barber said: “This is extremely bad news and these figures do not even show the effects of the bank crash.”

Vicky Redwood, UK economist at Capital Economics, said: “Worse is to come. By the end of 2010 we expect unemployment to hit three million.”

Separate figures released in Parliament yesterday showed that while the number of British-born workers in jobs was falling, the employment of immigrants has rocketed over the past two years.

Since 2006 the number of Britons in work fell by 365,000 while 865,000 more newcomers from overseas have got jobs.

The Office of National Statistics revealed the number of people claiming Jobseeker’s Allowance increased by 31,800 in September to 939,900, the eighth consecutive monthly rise and the highest figure for almost two years. continues here

UNEMPLOYMENT `SET TO SPIRAL`

The Government has been warned that unemployment could spiral to three million after the biggest jobless rise since 1991 left 1.79 million people looking for work.

Unemployment soared by 164,000, more than 10%, in the quarter to August, while the number of people claiming jobseeker's allowance increased for the eighth month in a row.

Prime Minister Gordon Brown vowed to do all he could to keep people in jobs, pointing out that unemployment was higher in America, Germany, France and Italy than in Britain.

The Prime Minister said one way to tackle unemployment and climate change at the same time was to train people to install loft insulation. 

He said: "We are training large numbers of additional people to do that work in insulation and that will become one of the unemployment programmes that will grow over the next period of time. So the need to meet climate change goals and cut people's gas and electricity bills will create work."

Unions and opposition politicians pressed the Government to halt its programme of Jobcentre closures and 12,000 job cuts in the Department for Work and Pensions in the face of lengthening dole queues.

In the Commons, shadow foreign secretary William Hague said it was a "grim day" for the British economy, and claimed that a Government promise of £100 million to help retrain the jobless had been previously announced, and would be spread over three years, working out at just £18 for each unemployed person. 

TUC general secretary Brendan Barber said: "This is extremely bad news, and these figures do not even show the effects of the bank crash. After years when we could take reasonably full employment for granted, we are now in for grim times. This is the next big challenge for the Government."

Vicky Redwood, of Capital Economics, forecast that, at the current rate, the number of people claiming jobseeker's allowance would top a million by the end of this year. Total unemployment would rise by 1.5 million to about three million by the end of 2010, she predicted.  continues here

Two million could be out of work by Christmas, Bank of England warns

• No jobs left for school leavers
  
• Britain is already in a recession
• House prices could fall more than 30%
  
• Workers will not be getting a pay rise
• 
  

Around two million people will be unemployed by Christmas as the credit crunch bites, a key Bank of England policymaker warned yesterday.

Professor David Blanchflower said he predicts 2,000 people will lose their jobs every day over the next four months. 

This would take unemployment levels to their highest since Labour came to power in 1997.

For families up and down the country, redundancy would be devastating at a time of soaring household bills. 

Millions of people are barely coping with rising food, fuel and gas bills, and will be crippled if they lose their job - particularly if they are the sole breadwinner. 

Young people will also be affected, with 'no jobs' for hundreds of thousands of children when they leave school, he warned. 

In an interview, Professor Blanchflower, who is a member of the Bank's Monetary Policy Committee, gave a series of warnings about Britain's economic meltdown. 

He says that Britain is already in a recession which is in danger of being 'very serious and long-lasting' unless urgent action is taken.

And he admits his original forecast that house prices will fall 30 per cent might be 'optimistic' and the drop could be even sharper. 

And as a further blow to workers, he says those who keep their jobs will not get a pay rise, or will get one which is below inflation. 

His interview, with the news agency Reuters, will worry workers up and down the country who fear that their job is no longer safe. 

As one of the nine people who set interest rates every month, he is one of the most powerful economic voices in the country. 

Every week, more companies admit that they have had to sack staff in a bid to cope with the economic crisis. 

In the past few days, one housebuilder, Bovis, said it has cut 40 per cent of its staff and rival Taylor Wimpey has axed 900 jobs.


And to make things worse for those who lose their job, many will face an impossible struggle to get a new job because firms have 'stopped hiring'. 

Professor Blanchflower, an economics lecturer at Dartmouth College in the U.S., said: 'I am expecting to see a number of something like two million by the end of the year. School leavers are coming into the jobs market and there are no jobs for them. 

'People have to start to respond to the fact that we are in a recession and the danger is that we will be in a very serious and long-lasting recession unless we do something..' 

'I certainly think we are in negative growth now and I expect several further quarters.' 

He also launched a veiled attack on his fellow members of the Monetary Policy Committee. At the last 11 meetings, Professor Blanchflower has voted to cut interest rates. But other members, including the Bank's governor Mervyn King, have largely ignored him, and voted to cut rates on only three occasions since October. 

He said: 'To sit and worry about inflation expectations and what is going to happen to those, rather than worry about the fact that the economy is going to go into a recession, seems to be misguided.' 

Tory Treasury spokesman Philip Hammond said: 'This is a startling prediction from a member of the Bank of England's Monetary Policy Committee. 

'If it turns out to be true, it will represent a meltdown in employment and yet more misery for families in the months ahead.' 

There is already evidence that unemployment is starting to rise sharply as bosses are forced to cut staff to cope. The latest figures from the Office for National Statistics show 60,000 became unemployed between April and June, raising the total to 1.67million. continues here