Thursday, 19 March 2009

Unemployment rockets through 2m

Figures released yesterday show that UK unemployment has reached 2.03 million, up by 165,000, by the end of January 2009. The number of people receiving Jobseeker's Allowance has added a record 138,400 to reach 1.39 million.

John McDonnell MP, LEAP Chair, said: "Behind every one of these devastating figures is a story of mounting human suffering across the country. It is clear now that the Government's package of bailing out the banks is not working."

Graham Turner, author of The Credit Crunch, said:

"We should not be surprised that the claimant count rose 138,400 in January, nor that the December increase was revised up, from 73,800 to up 93,500. Indeed, the slew of job layoffs announced by companies suggests this will not be the peak. The monthly increase is certain to accelerate even further beyond the 118,700 increase recorded at the worst point of the 1990/91 recession. On that occasion, the monthly increase in the claimant count eased to 50,000 within five months and carried on falling. This time around, any reversal, whenever it materialises, will inevitably be protracted. There is every chance that the unemployment on the ILO measure will rise to 4.0m by the end of 2010 unless the Government intervenes quickly to save jobs.

"The Bank of England's recent shift to quantitative easing will not be enough. Now is the time for an industrial strategy to reverse the huge job losses in manufacturing, which have disproportionately hit Wales, the Midlands and the North East. The alternative technology already exists to generate a new wave of green products, critical in the battle against climate change. The government must use its control of banks to support industry, otherwise vital skills and manufacturing capacity needed to sustain any recovery, will be lost. The proposed rescue of LDV, the troubled van maker, is an acid test of the government’s willingness to marry the preservation of jobs with its carbon emission targets.

"The Government needs also to take proper, effective and accountable control of banks, to arrest the wave of business foreclosures. Banks need to be run as utilities and not on the basis of profit maximization, otherwise soaring defaults will entail huge social costs."

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