By Steve Bargeton, political editor

THE NUMBER of people out of work in Britain has topped two million—the highest since Labour came to power in 1997.

The latest unemployment figures out yesterday showed the number of people on the dole in Scotland has risen by 43,600 over the past year.

Last month another 8900 joined the dole queue, bringing the total claiming jobseeker’s allowance to 112,600. The number of people out of work in the three months to January, including those not eligible for benefit, rose by 1000 to 135,000.

Scottish secretary Jim Murphy described the figures as “bad” and “a real blow to the families affected.”

“We will do whatever it takes to support the newly unemployed to stop them becoming the long-term unemployed.

“The government is doing everything it can to stimulate the economy and support the labour market, including a range of help for the unemployed,” he said.

The theme was echoed by First Minister Alex Salmond, who claimed the Scottish Government’s economic recovery measures are supporting more than 7000 jobs.

“We are doing everything in our powers to support jobs through the economic recovery programme,” he said.

“Our comprehensive programme is exactly the kind of firm, positive action required in these challenging times.

“And there can be absolutely no justification for the UK Government’s threatened £500 million cut to the Scottish budget in the teeth of a recession.”

Scottish ministers said the latest unemployment figures show the labour market is outperforming the rest of the UK.

UK unemployment broke the psychologically significant two million barrier according to yesterday’s figures, reaching a 12-year high of 2.03 million.

However, while the number of people in work continued to fall in Scotland, the number of people employed by the public sector showed an increase and now accounts for nearly a quarter of the Scottish workforce.

Figures this week show some 579,300 working in the public sector in the 2008 final quarter —46,000 up since 1999 and 1200 up on the final quarter of 2007.

The sector now accounts for 22.9% of all employment, although the proportion was higher in 1999, at 23%.

Finance secretary John Swinney noted a slight fall in those employed by quangos, and a 2% rise in NHS employees.

“We are acting to make public services simpler, sharper and more effective for the people of Scotland,” he said.

“We are delivering more staff and maximising resources in frontline services, with police numbers at an all-time high and more frontline NHS workers, while scaling back the organisational clutter and complexity of our public sector.”