THE government hailed a fall in unemployment yesterday, but more than a million people remain trapped in part-time work and millions more suffer low pay and zero-hours contracts.

In north-east England unemployment soared by 12,000 — even before the thousands hit by the closure of Teesside’s last steel works were taken into account.

Office of National Statistics (ONS) figures state that unemployment fell nationally by 79,000 to 1.7 million in the three months to August — a jobless rate of 5.4 per cent — and that private-sector wages increased in real terms.

“Renewed employment growth is welcome and while there are still years of lost ground to make up it’s good to see private-sector wages rising,” said TUC leader Frances O’Grady.

“But public-sector workers are increasingly falling behind. The challenge now is delivering a recovery that works for everyone across the country, regardless of which region or sector they work in.”

Ms O’Grady said that increasing numbers of workers were stuck in temporary or part-time jobs but wanted full-time work — 1.2 million part-timers want full-time jobs according to the ONS.

GMB general secretary Paul Kenny warned of “dark clouds on the horizon.” In addition to the job losses at SSI’s Redcar steelworks, 400 people were in for the chop at construction company JCB, he said.

“Employment growth is likely to slow as large cuts in public-sector employment kick in and as lower-paid workers seek more hours to make up for the nearly £30 per week cuts they face in tax credits.”