Brown moves to stem unemployment

By Frank Prenesti and Sumeet Desai

LONDON (Reuters) - Prime Minister Gordon Brown pledged on Monday to spend 500 million pounds to stem rising unemployment caused by the financial crisis.

With the jobless total already at a decade-high and set to climb further as companies hit by the credit crunch lay off thousands of workers, Brown said he was determined to not to let unemployment spiral out of control.

"This will not happen on my watch," the prime minister, who must fight an election in less than 18 months, told industry leaders at a special summit in London.

The money is part of the government's 20 billion pound fiscal stimulus package announced in November's pre-budget report.

"Because we know that the risk of long-term unemployment increases as skills and confidence depreciates - we are today setting out a new guarantee of intensive support for anyone still unemployed after six months," Brown said.

"Today the number of long-term unemployed is around 100 thousand. In the recessions of both the 1980s and 90s it reached more than 1 million. All our efforts must be to strive to prevent that from happening again."

Brown said the government would help employers who took on new staff, help young people with new apprenticeships and offer aid to people starting their own businesses.

Companies will get 2,500 pounds for new recruits taken from people who have been unemployed for more than six months.