Cowen says number signing on to pass 400,000

The number of unemployment claimants on the Live Register rose by a record 36,500 in January, the highest monthly increase on record, Taoiseach Brian Cowen has told the Dáil.

There are now 327,861 people claiming jobseekers' payments which corresponds to an unemployment rate of 9.2 per cent, Mr Cowen admitted at the beginning of a two-day debate on the Government’s €2 billion spending cuts package.

The total number of people seeking employment is now higher than at any other period in the history of the State, even eclipsing the numbers recorded in the early 1990s as today's workforce is significantly larger.

Mr Cowen said the number of people in receipt of unemployment benefits is now likely to exceed 400,000 by the end of the year.

Fine Gael leader Enda Kenny said the figures were “quite catastrophic” and amounted to an "employment bloodbath that would have horrific social consequences”.

Mr Kenny said around 1,500 people were being made redundant each working day and the Government was "plundering the public service income position to pay for the wanton waste of the last 10 years".

Citing figures he received from the Government, Labour leader Eamon Gilmore said that the 120,000 people who lost their jobs in 2008 cost the Exchequer €2.3 billion in welfare and lost tax revenue.

Mr Gilmore said the extra 36,500 people who joined the Live Register in January will cost the Exchequer around €730 million during the course of this year.

“If we continue to lose these jobs at the rate we’re losing them, the Government won’t be able to keep up,” he said.

Mr Gilmore said the Govenment's focus on curtailing public expenditure was misplaced as the real problem was the rising jobless numbers.

But Mr Cowen inisted that the savings were absolutely necessary to reorganise the public finances and to boost business competitiveness as well as investor and consumer confidence.

Legislation is expected early next month to give effect to the Government's new cutback proposals, which were announced yesterday following the breakdown in social partnership talks.

Under the plan the biggest item is a reduction of €1.4 billion in the public service pay bill, the bulk of which will be achieved through a new pension-related payment to be made by all public servants in the State.

Other measures include a cut of €95 million in overseas development aid, €75 million through a reduction in the early childcare supplement and €80 million from cuts in the professional fees paid by the State to lawyers and doctors.

The plan came against a background of further disastrous exchequer figures for January which show tax receipts €900 million down on the first month of last year.