MORE than 3,000 people joined the jobless register in the Liverpool city region last month as unemployment continued its sharp climb.

Official figures released yesterday showed there had been a 7% monthly increase in the number of people claiming jobseeker’s allowance, now standing at 45,276.

Nationally, the number of people claiming increased for the 11th consecutive month to 1.16m, a rise of 9% and the highest figure since 2000.

There will be worse to come in next month’s figures, as the effects of tens of thousands of job cuts which have already been announced in January continue to filter through to the official data.

In the last fortnight alone, 240 jobs have been lost at Gibsons Foods, in Ellesmere Port, and a further 300 are likely to be lost at closure-threatened Bromborough meat-packing factory Tulip, as well as numerous other job loss announcements.

However, the city region has continued to out-perform the rest of the country, with Liverpool in particular proving to be more resilient than most.

In the last year, the claimant count for people living in the city has increased by 23%, just half of the national rise of 46%.

The city region, which also includes Halton, Knowsley, Sefton, St Helens and Wirral, added 10,880 people – 32% – to its claimant count during 2008.

However, the region still has a much higher proportion of claimants, as 5% of the region’s potential workforce receive jobseeker’s allowance compared with just 3.1% nationally. Liverpool has the second-highest level in the country, of 6.3%.

Halton is one borough being especially badly hit, as its claimant count has risen 56% since January, 2008, more than double Liverpool’s 23% increase.

The picture is particularly bleak in the last two months, with 824 extra people receiving jobseeker’s allowance, up by more than one-quarter.

Despite the problems, economist Peter Stoney, an honorary senior fellow at Liverpool University Management School and director of the Liverpool Research Group in Macroeconomics, believes there are good reasons for the region to stay positive.

He said: “The research group have always been less pessimistic than the consensus forecast for two reasons.

“First, we have a much larger proportion of people working in the public sector. Secondly, we have fewer people exposed to direct unemployment from working in the financial services sector than other regions.”

He is also confident the massive intervention by governments and central banks will have an effect on the global economy.

“I think that so much medicine has been thrown at the problem, not just in the UK but also in Europe and the US, it would be very surprising if the medicine doesn’t have an effect by the end of this year, at the latest. We don’t expect the claimant count to go above 1.5m.

“The trouble at the moment is that all these companies are shedding jobs because the banks won’t support them. The banks have made a complete hash of it and it is understandable they are being cautious now.”

Liverpool Chamber of Commerce chief executive Jack Stopforth agrees the availability of credit remains a critical issue for businesses.

“Even though the figures show less bad news for Liverpool, it isn’t good news. We may have to condition ourselves to further rises in unemployment.

“Cashflow is the number one priority for businesses, so the lack of availability of credit is a serious issue.

“There’s a presumption that the banks will be reluctant to lend, but there’s also evidence of their reluctance. But, although companies are talking about impending cashflow, the reality is that they are still investing and still employing.”

However, local optimism is not reflected nationally. Dr John Philpott, chief economist at the Chartered Institute of Personnel and Development (CIPD), believes we are entering “dark days” and predicting more than 1 in 10 people will be unemployed at the peak of the crisis.

Dr Philpott said: “Overall, today’s figures confirm that the labour market was in recession before the turn of the year.

“But the worst of this jobs crisis is yet to come. We are entering the dark days and should be prepared for a depressing period when – as in the 1980s and 1990s recessions - the benefit claimant count will rise by more than 100,000 each month.

“And, even on the most optimistic of scenarios, around 1 in 10 people will be unemployed by the time the jobs recovery begins.

“I expect that the total level of redundancies will reach 300,000 in the first quarter of 2009, with the economy set to shed at least 600,000 jobs overall during the course of the year.” There are two main ways of counting unemployment – the Labour Force Survey (LFS) unemployment count and the jobseeker’s allowance claimant count.

The claimant count produces a much smaller unemployment number, but is often preferred by economists because it better represents the number of people who are looking for a job.

It measures the number of people who are eligible for jobseeker’s allowance, which is paid to people who are capable of work and looking for a job but not currently in employment.

The UK-wide LFS figure is based on the number of people without jobs who are looking for work, irrespective of whether they are signing on.

Its findings are based on a survey of 140,000 people. The national jobless figure increased by 131,000 in the three months to November to 1.92m, the highest figure for over a decade.

The UK now has an unemployment rate of 6.1% and, with thousands of job losses announced, next month’s figures are expected to pass the psychologically-important 2m barrier.

The Office of National Statistics does not break the unemployment data down below regions, but, across the North West, another 36,000 people are now unemployed and now stands at 256,000 people, or 7.6% of the working-age population.

CBI Director-General Richard Lambert said: “These numbers are as bad as we expected, and are sadly going to get worse. The combination of falling demand and global credit constraints is pushing unemployment sharply higher.

“But there will be some powerful stabilising forces kicking in later this year, including the impact of interest rate cuts, falling inflation and the fiscal stimulus.

“We hope Monday’s package of measures will also help to reassure viable companies that they won’t run into trouble in the coming months because of a lack of credit.”

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OPINION: PAGE 8

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