THE Labour Party received a pre-election boost yesterday with figures showing a record number of people in work and unemployment continuing to fall.

Despite speculation that the jobless total might start creeping back towards the politically sensitive one million mark, the number of people claiming unemployment benefit fell by 10,200 last month, to a 25-year low of 975,800.

The number of people in work reached a record 28.1 million, a rise of 268,000 over the year, the Office for National Statistics said.

In the North-East, unemployment in the three months to March, which counts people not eligible for benefit, fell by 1,000 to 94,000, equivalent to 7.9 per cent of the population.

In Yorkshire and Humberside, unemployment fell by 20,000 to 133,000, or 5.4 per cent of the population.

Education and Employment Secretary David Blunkett said: "This is an excellent set of figures, and further proof that we are turning the welfare state into a working state.

"The number of jobs is at its highest ever, as unemployment continues to fall and vacancies rise."

But the fall in unemployment received a mixed reaction from the North East Chamber of Commerce.

Rachel Spence, head of policy, said: "While we welcome the fall in jobless levels, the improvement is at best marginal and makes no real inroads into the gap between the North-East employment prospects and the rest of the UK.

"There is still a lot to be done to push unemployment lower, and what we must do now is redouble our efforts to attract more inward investment and encourage the growth of newer, smaller companies to provide permanent, sustainable jobs for local people."

However, the GMB union welcomed the figures.

General secretary John Edmonds said: "Labour has shown that careful management of the economy as well as instilling a sense of purpose in our young workers does lead to job creation and career development."