Darling considers £2 bln jobs package

By Sumeet Desai

LONDON (Reuters) - Chancellor Alistair Darling is considering a 2 billion pound package to boost jobs in Wednesday's budget, a government source told Reuters Saturday.

Darling will deliver his annual budget statement on Wednesday, the same day as new figures are expected to show unemployment soaring in the economic recession.

Some experts such as Bank of England policymaker David Blanchflower have said recent sharp rises in the jobless total are only the tip of the iceberg and unemployment could hit 3 million by the end of the year.

A government source said the budget could feature a 2 billion pound employment package to cover JobCentre Plus and a new initiative to target youth unemployment.

JobCentre Plus is an existing scheme run by the government to get people into work and help companies fill vacancies.

Blanchflower argues the projected rise in unemployment will disproportionately affect the young and that action is needed to prevent those hit joining the ranks of the long-term jobless.

"We have a jobs crisis and the government needs to act quickly. Unemployment is going to rise a lot during 2009...It is probably going to be the biggest issue in the next election," he said in an opinion piece published Friday.

Blanchflower has called for a massive fiscal stimulus to get the British economy out of recession but Darling's room for action is limited by the dire state of the public finances, notwithstanding the demands of an election due by June 2010.