Rover collapse hits job figures

THE collapse of MG Rover started hitting official unemployment figures for the first time today, leading to an increase in the number of people claiming Jobseeker's Allowance.

The so-called claimant count rose by 13,200 last month to 855,300, including an increase of 6,000 in the West Midlands, where the carmaker's Longbridge factory is based.

The claimant count has now increased for four months in a row for the first time since the end of 1992, and has grown by 41,500 since the start of the year.

More than 5,500 Longbridge workers lost their jobs when MG Rover called in administrators in early April, and the crisis has also cost thousands of jobs in firms which used to supply the company.

The claimant count has risen by an average of 12,500 over the past three months and today's data was the first to reflect the human cost of Rover's demise.

The total level of unemployment, which includes those not eligible for benefit, fell by 15,000 in the three months to April to 1.4m, giving a jobless rate of 4.7%. This measure, by the International Labour Organisation, is more widely recognised for global comparison. Of the G8 list of the world's richest countries, only Japan has a lower rate of unemployment at 4.4%.

However, today's figures show the number of economically inactive people in the UK rose by 71,000 on the quarter to 7.91m, mainly due to more people looking after family and more inactive students. The number of inactive men reached a record high of 3.1m, according to today's figures from the Office for National Statistics.

Average earnings increased by 4.6% in the year to April, up by 0.1% compared with the previous month. The figure was slightly higher in private firms - 4.7% - although excluding bonuses the overall rate was 4.1%, unchanged from the previous month.

The number of jobs in manufacturing reached a new record low of 3.2m after a fall of 79,000 in the three months to April compared with the same period a year earlier. Vacancies fell back by 11,500 in the three months to May, to 635,900, although stood 7,500 higher than a year ago.