Unemployment tops two-million mark for first time since 1997

Unemployment has soared to more than two million in the UK, official figures have revealed.

Data from the Office for National Statistics confirms that the number of people out of work in the three months to January 2009 was 2.03 million – its highest level since 1997.

However, the figures show that the public sector is a ‘recession-free zone’, seemingly immune from job cuts, according to the Chartered Institute of Personnel and Development (CIPD).

John Philpott, CIPD’s chief economist said the private sector has been affected far worse than the Civil Service or other public sector employers.

“The public sector is, at present, an entirely ‘recession-free zone’. While private sector employers are shedding hundreds of thousands of jobs and freezing or cutting the pay of millions of employees, their public sector counterparts are mostly maintaining staffing levels and presiding over relatively generous pay increases,” he said.

Last month the government refused to rule out a pay freeze in the public sector, sparking fears of more industrial unrest as employers try to settle annual pay rise claims. But Philpott called for the government to clamp down on public sector pay to bridge the emerging divide between public and private sector employers in the recession.

“What the government could and should do is put a clamp on public sector pay rises. With the private sector in dire straits, and inflation, for now, giving way to deflation, there is no labour market necessity or strong economic justification for public sector earnings to rise faster than private sector earnings.

“Cash-strapped private businesses are asking staff to make sacrifices to save jobs. The government and public sector employers should do likewise, redirecting savings on wage bills to help combat the rising toll of unemployment.”

An estimated three million people will be unemployed by the end of 2009. Recruitment agency Reed has today launched a campaign to help keep people working. Ideas for employers have been posted on KeepBritainWorking.com, including subcontracting employees from a supplier, encouraging staff to take up flexible working and training non-sales people to become sales assistants.