UK youth jobless total passes one million

Ministers are under pressure to take fresh measures to help young people after youth unemployment rose above 1m while the jobless total surged more sharply than expected to a new 17-year high.

The coalition blamed the eurozone crisis for dismal statistics, but business groups, unions and opposition politicians demanded urgent action on jobs.

David Cameron will today announce a £250m fund over two years for which businesses can bid for vocational training – money that has been redirected from colleges and training providers.

Unemployment among 16 to 24-year-olds rose by 67,000 to 1.02m, or 21.9 per cent of the workforce in that age group, in the three months to September. The figure included 286,000 students seeking part-time work.

The total and rate of youth unemployment were the highest since comparable records began in 1992, though the Office for National Statistics said earlier data indicated the level was higher in the mid-1980s.

Overall unemployment rose by 129,000 to 2.62m, the highest since 1994. The unemployment rate rose by 0.4 points to 8.3 per cent of the workforce, the highest since 1996.

British Gas, mining company Rio Tinto Alcan and Clydesdale and Yorkshire banks added to the gloom with separate announcements of almost 1,700 job cuts.

Chris Grayling, employment minister, 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.”

Employment fell by 197,000 on the quarter and 109,000 over the year to 29.07m, the biggest drop for more than two years, showing the private sector is not offsetting jobs lost in the public sector. Economists expect unemployment to continue rising, with predictions of the peak next year ranging from 2.6m to more than 3m.

Ed Miliband, Labour leader, told ministers to “stop trying to blame the last Labour government or the eurozone and start taking action to get our young people back to work.”

The prime minister’s training fund will be worth £50m in 2012-13, plus £200m in the second year. Ministers also confirmed a £1,500 incentive for small companies to take on 20,000 apprentices aged 16-24.

But the CBI employers’ group, which wants a broader incentive for all companies taking on young people, said that did not go far enough. John Cridland, director-general, said: “The country cannot afford to let youth unemployment grow as it has this morning.”

Men accounted for almost all the quarterly drop in employment and two-thirds of the rise in unemployment, although the female jobless total also hit its highest since February 1988. Employees excluding the self-employed fell by 305,000 to 24.79m, while self-employed people reached a record high of 4.09m.

The number claiming jobseeker’s allowance rose by 5,300 to 1.6m in October, lower than in recent months.

Pay pressures remained subdued, with average earnings excluding bonuses up 1.7 per cent on a year earlier, down 0.1 points in the previous quarter. Including bonuses, the rise was 2.3 per cent, down 0.4 points.