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Unemployment slightly down to 2.47m

By Channel 4 News

Updated on 14 July 2010

As the latest Office for National Statistics (ONS) figures show the number of people out of work has slightly fallen to 2.47 million, Works and Pensions Secretary Chris Grayling tells Channel 4 News the key is to break people out of the benefits 'spiral'.


Job centre (Reuters)

The number of unemployed in Britain has fallen by 34,000 between March and May to 2.47 million.

The number of people claiming jobseeker's allowance last month also fell by 20,800 to 1.46 million, according to the ONS.

Average earnings increased by 2.7 per cent in the year to May. That is 1.4 per cent down from the previous month.


Works and Pensions Secretary Chris Grayling said: "It's a small step in the right direction. Any fall is welcome, but I think we have to remember there are big challenges ahead in terms of turning the economy around, in terms of dealing with the deficit and in terms of creating an environment in which private sector is creating sustainable long-term employment.

"I think over the course of the parliament, all the long-term forecasts that I've seen have suggested a fall in unemployment. The economists who analyse this generally say we'll see a downward trend, even despite the pressures we face in the public sector.

"The key as far as I'm concerned is making sure unemployment begins to fall so that as jobs are created in the economy, we ensure those people who have been on long-term benefits this time round, in this decade, get the opportunity to get back into work in the way they didn't in the last.

"We've got to look at how we get those people back into work and break them out of that spiral."

Cuts
Shadow Works and Pensions Secretary Yvette Cooper says that the government is "callous" as it is cutting the support for jobs and for the unemployed, because we're not yet seeing private sector job growth that we need to get out of recession.


She said: "It is far too soon to cut all of that. They are cutting 90,000 youth jobs at a time when youth unemployment is still too high. And at a time when we're not yet seeing serious private sector job growth across the economy. That's what the great risk is here."

She continued: "Many people want to work part-time, particularly parents with children, but we also know people don't want to work part-time; they are looking for full-time jobs. The real risk here is that we don't yet have enough growth in private sector jobs across the economy.

"This is why it's such a wreckless time to suddenly cut support for things like construction jobs and building schools for the future and to cut the support for the unemployed to get back into work."

Part-timers
Part-time workers reached record levels in the three months to May as people struggle to find permanent jobs following the recession.

The ONS figures show a 148,000 quarterly rise in part-timers to 7.82 million, the highest level since ONS records began in 1992.

The ONS said that a record 27 per cent of the total workforce is now part-time employed, with the category accounting for the vast majority of the 160,000 rise in total employment. That is the biggest quarterly jump since August 2006.

At the same time the number of full-time employees fell by 22,000 over the month, to 18.2 million.

The ONS also said the number of people out of work for more than a year reached a 13-year high of 787,000 after a 61,000 rise in the three months to May.

The number of economically inactive workers, which hit record levels in the quarter to April, edged down by 0.2 per cent to 8.1 million. This is the first fall in this category since March last year.

The people classed as "long-term sick" has reached 2.04 million. That is the highest level since March 2007.

Job vacancies
New vacancies for jobs are down by almost a third on pre-recession levels. This is will trouble the government who had hoped that public and private sector cuts could be softened by the creation of new positions, according to unions.

The TUC claims the economic recovery remains "fragile".

The union said that some 492,000 job vacancies in May represented a 29 per cent fall on the 692,000 pre-recession levels of April 2008. Construction, science and manufacturing have been worst hit.

The TUC analysis showed there were 10,000 vacancies in the construction sector in May, a 64 per cent fall on the 28,000 in April 2008. The number dropped by 49 per cent in the science sector. This figure from 65,000 to 33,000. Manufacturing fell by 46 per cent from 56,000 to 30,000.

The union warns that the twin-track approach of culling public sector jobs and cutting private sector demand through deep spending cuts will lead to a jump in poverty.

TUC general secretary Brendan Barber said: "Economic recovery remains fragile. Even on the most optimistic assumptions, recovery is not strong enough to generate new jobs for those being made redundant in both the private and public sectors as a result of the spending cuts.

"Employers and unions worked very hard to keep unemployment below 2.5 million despite the deepest recession for 60 years, but this will make it harder for companies to take on more jobs as the economy recovers.

"At best we can expect a jobless recovery and at worst a double-dip increase in the dole queues.

"Mass unemployment, particularly among the young, looks set to be a permanent part of the economic landscape. It is hard to see how the deficit can be reduced with tools that do so much damage to the wider economy's ability to create jobs, generate growth and pay taxes."

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