GOVERNMENT LOSES GRIP ON REALITY

The jobless total could hit 3.4 million by the end of the year, experts predicted last night.

But the Government was accused of losing touch with reality after a senior minister claimed economic recovery was on the way. Employment minister Tony McNulty insisted: “There is light at the end of the tunnel.”

His extraordinary prediction followed official statistics confirming that the number of people out of work was 1.92 million at the end of November.

Taking into account the number of job losses in December, the total is now well over two million.

The November figure was 131,000 higher than the previous three months and means at least 6.1 per cent of Britain’s workforce is now unemployed.

That is worse than the rate in Malta, Holland, the Czech Republic, Bulgaria, Austria, Slovenia, Romania and Cyprus.

Mr McNulty admitted recovery was “some time off” but claimed Government policies would eventually ease the recession.

“This is not now life as we know it and people, I think, need to understand that and cling to that hope,” he said.

Tory frontbencher Philip Hammond said Mr McNulty was living in a fantasy world.

“Unemployment is rising, mortgage lending plummeting and public debt accelerating towards £1trillion while the Bank of England fears that UK economic policy has lost credibility.

“Labour is losing touch. Who do they think they are kidding? The truth is that Labour has no solutions to the mess they have made of the British economy and their policies are taking Britain to the brink of bankruptcy.”

Figures yesterday showed the number of people claiming Jobseeker’s Allowance increased by 77,900 in December to 1.16 million – the 11th monthly rise in a row.

A total of 225,000 people were made redundant in the three months to the end of November, the highest since measurements began in 1995.

Richard Lambert, director general of the CBI, 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.”

John Philpott, chief economist of the Chartered Institute of Personnel and Development, said: “We are now only at the start of what will be the darkest period for jobs since at least the early 1990s.”

Labour MP John McDonnell said: “On this basis, unemployment today is over two million. This is a depression not just a recession, and the Government’s measures have failed to protect people and preserve jobs.”

It was claimed that JobCentre Plus managers tried to cover up queues of jobseekers yesterday.

A source said the centres opened early in an attempt to prevent photos of queues being taken, but the Department of Work and Pensions denied it.

A spokesman for the department said: “In these tough times every Jobcentre Plus office in the country is giving people real help to get back into work.

“Across the country, Jobcentres usually open at 9am other than on Wednesdays when they open by 10am, but individual managers have the discretion to open their office earlier if they wish.

Similarly, some Jobcentres are opening on Saturdays to offer immediate help for people who have lost their jobs.”

Mr McNulty later went on to concede that unemployment totals were “disappointing”.

“All the signs are things will get worse before they get better. I don’t think we’ve reached the bottom,” he said. “I think we are in for difficult times for some time to come.”

It is not the first time ministers have got into trouble for showing uncalled-for optimism, however.

Treasury minister Baroness Vadera claimed to have seen the “green shoots” of economic recovery and housing minister Margaret Beckett forecast an upturn in the property market.