Unemployment hits 17-year high

UK unemployment between June and August rose to 2.57 million - a 17-year high...

Labour isn’t working. That was the 1978 Conservative party mantra that hammered the final nail into the coffin of James Callaghan’s government.

Fast-forward 33 years and it now appears that it’s the coalition government that’s not working.

Highest since 1994

Figures from the Office for National Statistics (ONS) show that unemployment increased by 114,000 between June and August this year. The rise pushes the total jobless figure to 2.57 million or 8.1%, the highest since the autumn of 1994.

The number of people out of work and claiming benefits also rose for the seventh month in a row in September. The total now stands at 1.6 million, up 17,500 on August.

Part-time worker levels suffered a drop of 175,000, the largest on record. Many pointed to this fall as a key contributor to the total rise and a reason why the overall unemployment figures weren’t as bad as they initially looked.

The number of over-65s in employment also underwent a record reduction of 74,000.

Youth unemployment

A particularly worrying figure lodged in these latest ONS stats is the rise in youth unemployment. Joblessness among 16-24 year-olds hit a record high of 991,000 in the three months to August.

But despite this record high rate, the rise is actually slightly less than levels previously predicted. Some analysts had expected youth employment to hit the one million mark.

Jobless levels among 16 and 17 year-olds also increased by 3,000 – up to 205,000.

Picking up the slack

The figures have been seized on by critics of the government as proof that the speed of current cuts is restricting growth.

The coalition government is relying on a swelling private sector to pick up the slack of job cuts in the public sector. However with the economy struggling to grow by any more than 0.5% per quarter, these vital new jobs are just not materialising.

The Treasury will be hoping that the pumping of £75bn into the economy from the Bank of England will go some way to break this stagnating economic trend and boost job creation.

Having its cake and eating it

The government has blamed this latest increase in unemployment on the international financial crisis. And granted, with economic turmoil gripping the eurozone, it would be naive to think that we were completely immune.

But nevertheless, when it comes to portioning off blame for the financial problems dominating our country, the government does seem to be somewhat having its cake and eating it too.

Blaming the international financial crisis for domestic issues is an argument usually advanced by Labour and always staunchly attacked by the coalition. How many times have we heard government ministers attack Labour on the grounds of the ‘the mess your lot left the economy in’, only for Labour to pass the buck onto international market failure.

The coalition’s explanation for rising unemployment is this same argument in reverse.

It is at best convenient, and at worst hypocritical, for the government to wholly blame UK unemployment increases on international financial problems. We must not let the eurozone crisis become a catch-all coalition wildcard, consistently used to explain away our faltering recovery.

The long-term prospects of the government’s economic strategy are still up for debate. But one thing is certain: when it comes to current job creation, the coalition isn’t working.

Your take

Do these figures prove that the coalition is not working?

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