The government is braced for further gloomy news on the economy this week with the claimant unemployment count set to rise above the symbolic 1m level for the first time in nearly eight years.

The jobless total, which hit a low of 794,900 in January (2.5% of the workforce), has already risen by nearly 200,000. The government’s preferred measure of unemployment, based on the Labour Force Survey, is also rising. It stands at nearly 1.83m and has increased by more than 220,000.

The news comes as Lord Mandelson, the business secretary, is preparing to unveil a limited package of help for Britain’s car industry. He is expected to make government lending available to the finance arms of the car firms on commercial terms, so prospective buyers can obtain credit.

Unions warn that as many as 25% of jobs in the motor industry are at risk because of a collapse in new car sales, which last month were 37% down on a year earlier. The sector employs about 190,000 people directly in Britain, with a further 660,000 in dealer-ships, component firms and other areas dependent upon it.

Globally, the industry is in trouble with America’s big three, General Motors, Ford and Chrysler, this weekend waiting for news of a bailout.

Vauxhall said yesterday that it was not expecting a “huge response” from its workforce over the offer of a “sabbatical” on reduced pay. GM, the owner of Vauxhall, put the scheme to unions at its plant in Ellesmere Port, Cheshire, on Thursday.

The plan would give staff the chance to take a break from work on 30% of their basic salary from two to nine months.

A Vauxhall spokesman said: “It’s an economic downturn with a finite lifespan and when it improves we will need all our staff again. We are cutting costs next year, but absolutely not by cutting staff jobs.”

Alistair Darling, the chancellor, is set to announce further measures this week to try to kickstart lending by the banks to homeowners and small businesses.

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