Unemployment soars amid huge fall in public sector jobs

Job Centre Plus sign
The number of people claiming Jobseeker's Allowance has increased for the 12th month in a row Photo: Reuters

The unemployment rate increased to a near 17-year high today after another rise in the jobless total and a huge fall in public sector employment amid more grim news on jobs.

Unemployment increased by 28,000 between November and January to almost 2.7 million, while the number of people claiming Jobseeker's Allowance increased for the 12th month in a row, up by 7,200 in February to 1.6 million, the worst figure since the end of 2009.

French-based pharmaceutical firm Sanofi added to the gloom by announcing the closure of a plant in Newcastle upon Tyne with the loss of 450 jobs, while UK Coal raised the threat of closing Daw Mill mine near Coventry, the biggest in the country, jeopardising another 800 jobs.

Our Consumer Editor Chris Choi reports from Newcastle where one in four people work for the public sector.

Deputy Prime Minister Nick Clegg said the rise in unemployment was "disappointing" but insisted the problem was not the fault of the coalition Government.

He told the House of Commons that it would be wrong to suggest it was a "problem invented by this Government", adding that unemployment among women and young people had risen under the Labour administration.

Deputy Labour leader Harriet Harman countered: "When we left Government, unemployment was coming down", adding that the coalition's economic policy was "not only driving up unemployment, it means they will have to borrow more". It's hurting, but it certainly is not working."

The Government said there were signs that the labour market was "stabilising", with the number of people in work increasing by 9,000 to 29.1 million, while the 28,000 increase in unemployment was the lowest for almost a year.

Other figures from the Office for National Statistics showed that public sector employment fell by 37,000 in the final quarter of 2011 to just under six million, while the numbers employed in private firms increased by 45,000 to 23 million.

Public sector employment has fallen by 270,000 in the past year following the Government's spending cuts.

Deputy Prime Minister Nick Clegg at Cabinet meeting
Deputy Prime Minister Nick Clegg said the rise in unemployment was not the fault of the coalition Government Credit: Reuters

Youth unemployment increased by 16,000 to reach 1.04 million, a jobless rate of 22.5%, while the number of unemployed women jumped by 22,000 to 1.13 million.

The number of people working part-time because they could not find a full-time job increased by 110,000 to 1.3 million, the highest since records began in 1992.

Part-time employment rose by 60,000 to 6.6 million, while self-employment fell by 52,000 to just over four million.

Average earnings increased by 1.4% in the year to January, down by 0.5% on the previous month.

The Unison union said 625 public sector jobs have been lost every day since the coalition Government was formed, equivalent to one every two minutes and 18 seconds.

The UK's unemployment rate is now 8.4%, up by 0.1% from the previous quarter, the highest since the end of 1995.