FIGURES showing a huge fall in unemployment and a record number of people in work were undermined last night when a leading train company announced 1,300 job cuts.

Canadian engineering company Bombardier said three factories in the UK will close and jobs will be cut at several others under plans to restructure the business.

The announcement co-incided with the release of statistics showing that unemployment fell by 33,000 in the three months to January to 1,436,000, the second lowest figure since records began.

The number of people claiming unemployment benefit fell by 6,600 last month to 885,200, the lowest total for almost 30 years, while a record 28.27 million people were in work, 262,000 more than a year ago, mainly driven by the rise in women workers.

But there were 108,000 jobs lost in manufacturing in the quarter to January compared with a year earlier, mainly in electrical and optical equipment (25,000) and textiles, leather and clothing (22,000).

The number of unemployed people in the North-East fell by 5,000 during the quarter to 73,000 or 6.3 per cent.

The rate was unchanged in Yorkshire and Humber, standing at 123,000, or five per cent.

The Bombardier announcement was described by the Transport Salaried Staffs Association as another nail in the coffin for train manufacturing in this country.

Bombardier said its main site in Derby would stay open despite a gap in orders from the end of the year to 2008, but a smaller factory in the city will close as well as plants in Doncaster and Wakefield.

A total of 1,362 jobs will be lost, 23 per cent of Bombardier's total UK workforce.