TRADITIONALLY, the North-East may have had its employment stronghold in the manufacturing and mining industries, but by 2012, following decades of decline, that will account for only a small proportion of our workforce.

The Institute for Public Policy Research (IPPR) released figures yesterday showing the region has one of the lowest levels of employment in the UK, with nearly one in five of the working population claiming unemployment benefits.

Between 1982 and 2002, the North-East lost 100,000 jobs in manufacturing, nearly 40 per cent of the sector, and by 2012, a further 25,000 jobs will have gone.

The outlook for mining is also bleak, with 39,000 jobs lost over two decades, accounting for 90 per cent of the sector.

While the more traditional jobs in the region have declined, it is contrasted by a growth of 59,000 posts in business and other services and an additional 78,000 jobs in health, education and administration.

The arrival of hypermarkets such as the MetroCentre, in Gateshead, and Dalton Park, in Murton, County Durham, has failed to bring an increase in the number of people employed in retail and, along with banking and insurance jobs, has remained stable.

The study also revealed the region has the largest number of people who are unemployed because they suffer from a health problem or disability, with former mining communities having a very high proportion of people claiming benefits for sickness, particularly in Easington, County Durham.

Research found that 22.5 per cent of people in the district were claiming benefits relating to sickness and incapacity, compared with only 2.6 per cent in Wokingham, Berkshire.

Nationally, levels of employment have improved in recent years, but the author of the report and research director at IPPR, John Adams, concluded the UK was far from being at full employment and that that should be seen as a political and social ambition.

The North-East, out of all the UK regions, was the one that faced the biggest challenge in achieving full employment, according to the report.

He said: "With a renewed commitment and a concerted effort, full employment might soon be within our grasp.

"The challenge may seem great, but the rewards would be enormous.

"The Government has placed a strong emphasis on welfare-to-work and skills policy. In particular, proposals to reform incapacity benefit could make a positive contribution in providing effective routes off benefits and into work.

"However, these initiatives will not be sufficient to tackle worklessness in poorer regions. People in these areas want to work, but to achieve this, more jobs are needed in areas which have very low employment rates."

In areas such as Middlesbrough and Hartlepool, only one in three people with no qualifications had a job, compared with 51 per cent nationally.

The figures also showed that North-East women were the lowest paid in the UK and workers in London received £225 more each week than their North-East counterparts.

IPPR North praised the Government's decision to commit to a target of getting 80 per cent of working age people into work, but said if that goal was to be met, the UK would need a stronger focus on improving employment rates in the poorer regions, such as the North-East.