MercoPress. South Atlantic News Agency

Record unemployment in UK: 2.38 million, the worst since 1995

Employment minister Jim Knight argued that the situation is worse in the US, France and Germany.

Unemployment in the United Kingdom has soared to “truly horrendous” levels after a record 281,000 people joined the growing jobless ranks, taking the total to 2.38 million, the worst since 1995.

Youth unemployment jumped to a 16-year high, the number of people out of work for longer than a year rose to the worst for 11 years, employment fell, and more than 300,000 people were made redundant in the three months to May, the second highest figure on record.

Car giant Jaguar added to the gloom by announcing plans to end production of its X-Type car by the end of the year with the loss of up to 300 jobs.

The firm said it would be seeking voluntary redundancies at its factory in Halewood, Merseyside, which is also to close for three weeks as part of an extended shutdown starting in September because of “ongoing weaknesses” in the industry.

The number of people claiming jobseeker's allowance increased by 23,800 in June to 1.56 million, the worst total since Labour came to power in 1997. The so-called claimant count has now increased for 16 months in a row and is more than 700,000 higher than a year ago.

Youth unemployment jumped to a 16-year high of 726,000 after a quarterly rise of 95,000, while the number of people out of work for longer than a year rose by 46,000 to 528,000, the highest for 11 years.

Meanwhile, the number of people in work fell by 269,000 in the latest quarter to 29 million after a record fall of 0.9% in the employment rate to 72.9%.

UK Employment Minister Jim Knight said the figures showed many people were suffering the effects of the global recession. But he maintained there were signs Government actions to help the unemployed were starting to work.

“We have a lower unemployment rate than the United States, Germany and France,” he said. “Through investing now in more staff, more training and working with local employers, fewer people are getting stuck on benefit for months and years; the active welfare state is working. People aren't being dumped on inactive benefits like incapacity benefit, and unemployment is nearly half a million less than it would have been without the Government's response.”

But Conservative shadow work and pensions secretary Theresa May said: “Unemployment is casting a dark cloud over the economy, ruining the lives of millions. Whilst the economic cost is great, the human cost is incalculable. Labour are in denial about the true scale of the problem, with ministers continuing to sleepwalk their way through the recession.”

TUC general secretary Brendan Barber said: ”Today's figures are truly horrendous. The people who have lost their jobs this month and who fear they will in months to come are not talking of recovery or green shoots. It's particularly worrying that over half a million unemployed people have been out of work for at least a year, including 133,000 young unemployed people. With a new generation of school and college leavers soon starting to look for work, our unemployment crisis will get even bigger”.