Video: ‘Lost generation’ warning as youth unemployment hits 1 million

The number of 16 to 24-year-olds looking for work increased by 67,000 in the quarter to September to 1.02 million, the worst total since comparable records began in 1992.

The unemployment rate among 16 to 24-year-olds is now 21.9%, also a record.

Total unemployment rose by 129,000 in the latest quarter to 2.62 million, the worst figure since 1994, giving a jobless rate of 8.3%, the highest since 1996.

Other data from the Office for National Statistics showed a 5,300 increase in the number of people claiming Jobseeker’s Allowance in October to 1.6 million, the eighth consecutive monthly rise and the highest total since the start of 2010.

Meanwhile, the number of people in employment fell by 197,000 in the quarter to September to 29.07 million, the lowest figure for over a year.

Employment Minister Chris Grayling said: “These figures show just how much our economy is being affected by the crisis in the eurozone. Our European partners must take urgent action to stabilise the position.

“Our challenge in the autumn statement will be to put in place additional measures to support growth and create employment opportunities, especially for young people.”

Business secretary Vince Cable said youth unemployment was a “long-standing and deep rooted” problem, as he helped launch a number of Government initiatives aimed at helping young people find work.

TUC general secretary Brendan Barber said: “Today’s milestone of more than a million young people being out of work is the true mark of the Government’s economic strategy.

“Government plans to offer cut-price work experience are a woefully inadequate response. The Prime Minister must stop the risk of losing a generation to unemployment and under-achievement by guaranteeing a job or high quality training to every young person out of work for six months.

“But the UK’s jobs crisis is not confined to youngsters. Overall unemployment is now rising at a rate not seen since the worst days of the recession. And wage rises are falling at a faster rate than inflation.

“Rather than using the Eurozone as an excuse for our mounting economic troubles, the Government should be using it to change course. The 2.6 million people out of work is the clearest sign yet that self-defeating austerity is not working.”

John Walker, chairman of the Federation of Small Businesses, said: “Youth unemployment figures are truly shocking and with more than one million young people unable to find a job, the Government must wake up and take action to turn this around - and its autumn statement is the perfect time to do this.

“The FSB has long argued for a National Insurance contributions cut for micro-businesses as a way of creating jobs. As a first step towards that goal, a measure the Government could adopt would be to cut National Insurance contributions for those aged between 16 and 24 taken on in a new job in a micro-business.”

At a Jobcentre Plus in Leeds, young people spoke of their frustration at not being able to find work.

Leeds University graduate James Dickenson, 21, said he was trying to find part-time work as he studied journalism in Manchester.

He said: “I only study part-time on a Saturday and Monday night so that leaves a lot of room for work.

“I have had three retail interviews and two bar trial shifts. I want bar or restaurant work but so many people are chasing the same jobs.

“I’ve had an interview today and recently did a trial at Browns restaurant which went well so I’m hopeful. They always say, ‘I’ll let you know’. It is very frustrating.”

Liam Blakeley, 19, has been trying to find work for two years without much luck.

He said: “The economy is just crap, that’s my take on it. I want painting and decorating work or construction work but people don’t want to know.

“They always said you have to have this amount of experience and these qualifications. All the jobs are management jobs in there (Jobcentre Plus). I’m not going to get those.”

John Cridland, director general of the CBI said: “These figures underline why we need urgent action to help our young people take their first steps in the labour market. A generation risks being scarred by the devastating effects of long-term unemployment.

“We are calling for action for jobs now, with a clear plan to get the UK working, focusing on our young people.”

The Government said today’s figures were a reflection of the impact the economic problems in the eurozone and slower growth in the wider global economy were having on the UK.

Ministers said the claimant count rise of 5,000 in October to 1.6 million showed signs of slowing, while the number of vacancies has risen in the three months to October, up 7,000 on the previous quarter to 462,000.

Martina Milburn, chief executive of youth charity The Prince’s Trust said: “Today’s figures are a wake-up call for Britain. It is critical to help young people into work for the future of our economy and society.

“It’s time to redouble our efforts to ensure every young person, no matter what their background, is provided with the support they need and deserve.”

Paul Kenny, general secretary of the GMB union, said “The millions of workers without jobs face a miserable Christmas and a bleak New Year.”

John Salt, director of recruitment firm totaljobs.com, said: “Today’s figures are devastating. The rise in unemployment shows how incapable the private sector has been at clearing the unemployment caused by public sector cuts, which is unsurprising given the state of the market.”

David Kern, chief economist at the British Chambers of Commerce, said: “The rise in youth unemployment to over a million is particularly concerning, but it should be stressed that more than a quarter of these are people in full-time education who are looking for part-time work.”

Shadow work and pensions secretary Liam Byrne said: “The brutal price our young people are paying for this Government’s economic policy is now crystal clear. The verdict is in - this Government is failing an entire generation.

“Today the Government have been given a million reasons to change course on the economy. Our country has not confronted youth unemployment on this scale since records began, and since January there has been an 83% rise in young people on the dole for six months or more. The news that a million young people are standing idle must shock this out of touch Prime Minister into an economic re-think, and fast.

“Whoever the Government tries to blame, the fact is Britain’s economic recovery was choked off a year ago and unemployment started rising again well before the recent eurozone crisis.”

Ian Brinkley, director of The Work Foundation, said: “These are dreadful figures. The overall fall in employment of nearly 200,000 in a single quarter takes us back to the worst days of the recession. Employee jobs have fallen by over 300,000, offset by a rise of around 100,000 in self-employment.

“With little prospect of a revival of economic growth in the face of contracting domestic demand and a Europe-wide economic slowdown, further job losses and even higher unemployment in 2012 are unavoidable.”

Kevin Green, the Recruitment and Employment Confederation’s Chief Executive said: “Reaching one million is a black mark on the UK jobs market. If we are to tackle youth employment we need to see two things urgently happen. First, we need to stimulate demand through practical measures such as a National Insurance holiday for small and medium sized enterprises taking on young jobseekers. Second, we must galvanise the involvement of businesses and employment experts to raise awareness and aspirations and build better bridges into work.”

Dr John Philpott, chief economic adviser at the Chartered Institute of Personnel and Development, said: “The UK is now clearly suffering a major jobs and pay crunch under the combined impact of tough fiscal policy medicine and very uncertain conditions in the global economy.

“The private sector is simply unable, at present to create enough jobs to offset public sector job cuts. At 2.6 million in the three months to September, unemployment is already higher than consensus forecasts had expected for 2011 as a whole. With nothing to suggest a pick-up in the economy any time soon, unemployment is at best likely to peak at around 2.75 million next year. Were the economy to experience a double-dip recession unemployment could reach three million by 2014.

“While the rise in headline youth unemployment to 1.02 million is set to grab most attention the most worrying feature of these latest jobs figures is a quarterly fall of 305,000 in the number of employees, split roughly half and half between full-timers and part-timers, including almost 100,000 temps. Without a corresponding 100,000 increase in self-employment the overall jobs situation would thus look worse still.”