The coming storm: Unemployment set to rise again, experts warn

By Georgiana Keate

The recent drop in unemployment is likely to be reversed by upcoming figures, according to experts.

A report from left-leaning think tank the Institute for Public Policy Research (IPPR) suggests that recent figures have failed to take into account how long-term unemployment is hitting families across Britain.

"Long term unemployment increased by 32,000 to 887,000 and is now at its highest level since 1996. The government is not keeping pace with joblessness," Tony Dolphin, chief economist at the IPPR.

A fall in unemployment for the last two quarters produced a wave of optimism for the future of the job market. However, IPPR now say that these figures do not tell the whole truth and the proportion of those unemployed for more than a year is likely to return to same level seen at the worst times in 2011, peaking at 2.75 million.

The report shows that although unemployment went down by 45,000 in the last quarter, there are 1.4 million people who are stuck in part-time work but need a full-time job – the highest number since 1992. On top of this, people are being forced into self-employment after failing to find jobs within companies.

The figures also failed to show how long term unemployment is affecting the under 25s and the over 50s, the report argued.

More than a quarter of a million young people have been jobless for over a year as well as over half of the unemployed over 50s.

"As a general rule, the longer someone is unemployed, the less likely they are to ever return to work," Mr Dolphin said.

"Even when employment starts to pick up again, the long-term unemployed will find it hard to compete with other jobseekers and could find themselves permanently shut out of the jobs market."

The think tank's economist suggested that the government ought to start a scheme where jobseekers are guaranteed work for six months, something they would have to accept or risk losing their jobseeker's allowance.