Insider Media Limited

The slight drop in unemployment in the West Midlands over the second quarter of the year has been labelled "the calm before the storm" by Birmingham Chamber of Commerce. Public sector union Unison also warned the latest fall would be "cold comfort" for the thousands of people in the West Midlands without work.

The chamber said while it was good news that unemployment levels had dropped in the region, there are plenty of job losses in the pipeline.

Policy adviser Kiran Virk said unemployment in Birmingham still stood at 11.7 per cent (46,647 people) and in the region the figure was 6.6 per cent (159,400).

She said: “We should not be lulled into a false sense of calm. With huge public sector cuts being made during the next few months – which will be outlined in the forthcoming Comprehensive Spending Review – today’s figures do not reveal the true extent of things.

“There are 636,900 public sector jobs in our region, which is 27 per cent of the total.

“If the local authorities were to cut at least 20 per cent of their budgets, we could be looking at approximately 127,380 jobs being lost in the region.

“This is on top of the job losses already announced at Advantage West Midlands, and potentially others at the Government Office of the West Midlands – it all adds up to an extremely gloomy picture for consumers and business confidence.”

Public sector union Unison also warned that cutting public sector jobs would have huge knock-on consequences to private sector shops and businesses, ultimately choking off growth and economic recovery.

Roger McKenzie, Unison West Midlands regional secretary, said: “The latest figures are cold comfort to the 221,000 people in the West Midlands still locked out of the jobs market, and to the thousands public sector workers in the region faced with losing their jobs.

“The small drop shows that the Labour government’s economic life support plan was beginning to work. But this government is on the wrong track. It needs to invest in jobs to keep the economy moving. Cutting spending now will reverse the recovery, and could lead to a double dip recession.”