Small print shows that jobless will top a million

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Andrew Feinberg

White House Correspondent

The small print of the Budget has revealed the Treasury is expecting the number of people claiming unemployment benefit to rise from 794,600 to more than a million by the end of 2010.

The Government's own figures assume there will be a 25 per cent rise in the number of claimants out of work, raising fears that Britain's economy is heading for a serious downturn.

Vince Cable, the Liberal Democrat Treasury spokesman, said the figures in the Treasury "red book" undermined the optimistic forecast of growth by the Chancellor, Alistair Darling. "Even on the Government's very optimistic assumptions, they are expecting rising unemployment and this is a most conservative measure," he said. It was an indication that Britain's long decline in unemployment could be over.

"It means we are expecting quite a lot more claimants and the consequence of that is not just more unemployment but people who lose their jobs and cannot pay their mortgages," he said. If the country sees a repeat of previous downturns in the 1970s and the 1980s, the figures could lead to a net reduction in immigration and cause British workers to go abroad, Mr Cable added.

George Osborne, the shadow Chancellor, said the National Audit Office audit of the Budget figures suggested that the total number of claimants is projected to rise to 1.1 million in the near future. The unemployment total, which includes those not entitled to unemployment benefit, is different from the claimant total and stands at 1.6 million.

A Treasury spokesman said the figures were "cautious assumptions" rather than forecasts. "We have to err on the side of caution," he said.