date: 16 September 2008

embargo: 00.01hrs Wednesday 17 September

Long-term unemployment could rise to 700,000 in 2009, warns TUC

The number of people unemployed for at least a year could rise from its current level of around 400,000 to 700,000 by the end of 2009, the TUC warns today (Wednesday).

In an analysis of employment figures since 1997, the TUC has found that while employment levels have reached an historic high of around 75 per cent, recent figures have shown increases in unemployment, long-term unemployment (defined as being out of work for at least 12 months) and the proportion of unemployed people who are long-term unemployed.

The TUC predicts that if this proportion rises to 35 per cent, as has been the case in previous periods of rising unemployment, the total number of long-term unemployed could reach 700,000 by the end of 2009. The TUC has also predicted that unemployment, as defined by the International Labour Organisation (ILO), will rise from its current level of around 1.7 million to over two million by the end of 2009.

The TUC warns that the difficulties in getting people back into employment could be exacerbated by the Government's latest welfare reforms, which will start to take place next month (October). The TUC believes that the introduction of 'workfare' and the toughening up of benefits for lone parents and disabled people will place yet more pressure on already overstretched welfare services and could further raise long-term unemployment levels by pushing more people onto job seekers' allowance.

To counter rising unemployment, the TUC is calling for a series of economic measures from the Government and a shift in its attitude towards the City, which the TUC believes has been allowed to cause the current economic slowdown through a lack of accountability and regulation.

At Congress last week, the TUC called for greater support for manufacturing and skills provision, as well as further fiscal stimulus from the Treasury. The TUC believes that the Government's recently announced proposals to help home-owners were a welcome start, but that more action is needed.

TUC General Secretary Brendan Barber said: 'Employment levels have remained high despite the recent economic turbulence and are nowhere near the dark days of 1992, when nearly three million people were unemployed.

'However, the TUC is concerned that unemployment has been sneaking up in the last few months and it's up to unions, employers and the Government to halt and reverse this trend as soon as possible.'

'With unemployment rising, people are looking to the Government for a response and economic measures will be far more welcome than yet another round of welfare reforms. All the tabloid-friendly tough talk on benefit claimants will backfire on the Government when the numbers of people out of work, off benefits and sliding further into poverty start to mount.'

The TUC also believes that rising unemployment levels make the case for an interest rate cut even stronger.

TUC Head of Economics and Social Affairs Adam Lent said: 'Poor growth and falling consumer confidence are a far greater risk to the economy than inflation, which is still relatively low. The Bank of England can play a key role in helping to reinvigorate the economy by cutting interest rates this month.'

NOTES TO EDITORS:

Employment trends, 1997-2008

Source: Labour Force Survey data May/July 1997 - April/June 2008.

- The International Labour Organisation (ILO) defines unemployed people as those who are without a job and want one, have actively sought a job in the last four weeks and are able to start a new job in the next two weeks, or have found a job and are waiting to start in the next two weeks.

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Contacts:

Media enquiries:
Rob Holdsworth T: 020 7467 1372 M: 07717 531150 E: rholdsworth@tuc.org.uk

Press release (700 words) issued 17 Sep 2008