Pressure builds on Osborne as jobless toll soars

The number of young people in the dole queue for over six months has nearly doubled in the past year, sparking warnings that the figures are a “grim reminder” of long-term unemployment which “scarred people’s lives” in the 1980s.

As the national unemployment total hit 2.62 million, Bank of England Governor Mervyn King also downgraded his forecasts for UK growth to about one per cent for this year and next amid concern about the eurozone crisis.

Unemployment in Yorkshire and the Humber rose by 51,000 between July and September to hit 274,000. Yorkshire now has the second-highest unemployment rate in the UK, with 10.3 per cent of working age people jobless.

Employment Minister Chris Grayling described the Yorkshire figures as “a worry” but blamed a lack of business confidence fuelled by the eurozone crisis.

British Gas added to the gloom by announcing 850 job cuts while mining giant Rio Tinto Alcan put more than 600 jobs at risk.

Yorkshire and Clydesdale Banks also announced plans to axe 190 jobs on the same day as the Australian-owned group revealed details of bonus payments to its top UK executives.

The statistics pile pressure on Mr Osborne to reveal a far-reaching package of economic measures on November 29 in his Autumn Statement.

Business leaders want cuts to red tape, investment in infrastructure and incentives to employ people to aid growth. Mr Grayling promised more measures to aid Yorkshire’s economy and said he “wouldn’t rule out” extra money being pumped into the Regional Growth Fund, which is already funding a number of private sector projects in the region.

Gary Williamson, chief executive of Leeds, York & North Yorkshire Chamber, said young people had been victims of the recession and that policy makers “have a duty to ensure that this generation is not lost to long-term unemployment, which would be an unforgivable waste of talent and skills”.

Unemployment in Yorkshire is now 35,000 higher than a year ago, an extra 16,900 people are claiming Jobseekers Allowance and there are 11,000 fewer people in work, raising doubts over the chance of the Government closing the North-South divide.

Across the country youth unemployment has hit 1.02 million, the highest since comparable records began in 1992, although Ministers said this included full-time students seeking part-time jobs.

In Yorkshire, the number of 18 to 24-year-olds claiming Jobseekers Allowance for more than six months has nearly doubled from 7,160 to 13,650 in a year.

Michael Dugher, Barnsley East MP and Labour’s Shadow Minister without portfolio, said: “In the 1980s, long-term unemployment in many areas across Yorkshire scarred people’s lives for decades.

“These figures are once again a grim reminder that without a plan for jobs and growth, those days may be returning once more – with our young people bearing the brunt.”

But Mr Grayling said the Government was acting, with cash incentives offered to small firms taking on apprentices.

He also pointed to a programme of work placements for young people and intensive support and training for the long-term unemployed to find work through the Work Programme.