Co-op to lose 2, 000 jobs.

THE insurance arm of the Co-op axed 2, 000 jobs yesterday, casting a shadow over new jobless figures which edged up for the first time in almost a year.

The jobs will go over the next two years under plans by the Co-operative Insurance Society to modernise the service.

The announcement came hours after official figures showed the number of people out of work between March and May rose by 6, 000 to 1. 43m.

Other data revealed the claimant count was down by 9, 600 in June at 850, 900, the 13th consecutive monthly fall and the lowest total for almost 30 years.

Work Minister Jane Kennedy praised the Government's jobs record and said Britain had the best record of the major world economies.

But union leaders pointed to the continuing loss of manufacturing jobs, which fell by 106, 000 over the past year to a record low of 3. 37m.

Derek Simpson, general secretary of Amicus, said: ``Urgent and far reaching action is needed now to safeguard jobs and the future of UK manufacturing. ''

The number of unemployed men fell by 20, 000 over the latest quarter to 824, 000, the lowest figure for 20 years.

Mervyn Pedelty, chief executive of Co-operative Financial Services (CFS), said: ``By taking this action, we will be better placed to fulfil our Co-operative mandate of meeting the needs of ordinary UK households. ''

Dave Fleming, national officer of Amicus said: ``The proposed job losses are deeply disappointing to us, but reflect the difficulties all insurance companies face in a cutthroat market. ''