Record Numbers Employed But Incomes Suffer

The latest official unemployment statistics show that while the jobless total is still falling wage growth is too, intensifying the squeeze on living standards.

The Office for National Statistics (ONS) found that the number of people in work hit a new record high in the three months to December, at 29.73 million.

The figure represented an increase of 154,000 on the quarter to September, making it the highest total since records began in 1971.

But it also reported a continued cut in the real value of pay, with average earnings increasing by 1.4% in the year to December, down by 0.1% on the previous month.

The Work & Pensions Secretary Iain Duncan Smith told Sky News the wider figures showed that the Government was making progress in bringing down long term unemployment.

"It's difficult economic times but if you were in Spain or France or Italy or even Greece you would look at these figures and say I wish we were there rather than here."

The number without a job fell by 14,000 to 2.501 million in the final quarter, the ONS said, although there was a slight increase on a month-on-month basis which pushed the unempoyment rate to 7.8%.

There was a surprise 12,500 drop in those claiming jobless benefit but youth unemployment increased by 11,000, the highest rise for a year, and the number of people with more than one job increased by 41,000 to 1.1 million.

But regular pay, excluding bonuses, rose by just 1.3%, the lowest figure since the end of 2009.

The ONS noted that CPI inflation was running at 2.7% last year, with the annual growth in weekly wages staying below inflation since the middle of 2008.

Critics said there were still too many people who had suffered because of the lack of economic growth.

TUC General Secretary Frances O'Grady said: "It's encouraging to see another fall in unemployment, but not everyone is benefiting from the recent jobs growth.

"The number of young people out of work is edging back up towards a million, so the Chancellor must put tackling our youth jobs crisis at the top of his Budget priority list. He can start by introducing a guarantee of paid work for any young person out of work for six months or longer.

"The further squeeze on people's wages is also concerning. This is looking less like a temporary blip, and more like a longer-term problem for the economy."

There have recently been indications about how difficult it can still be to get a job, despite Government pointing to 500,000 vacancies in the economy.

It emerged on Tuesday that 1,700 people had applied for a total of eight jobs at a new Costa coffee shop in Nottingham.

The Department for Work and Pensions told Sky News that while it did not underestimate the challenge still facing the Government to get more people into work, there were 15,000 more people in work in the East Midlands over the past year.