Region still blighted by rising unemployment

UNEMPLOYMENT in the West Midlands rose by 28,000 (1.1%) during the final three months of 2010 when compared with the previous quarter, latest figures show.

There are now 261,000 people unemployed in the region, equal to 9.8% of the working age population. The rate is the second highest in the UK, beaten only by the North East (10.2%).

Across the UK as a whole, 2.492m people are now unemployed, a rise of 44,000 on the period July to September and equal to a rate of 7.9%.

Business leaders in Birmingham said the situation was unlikely to improve until the Government acted to cut the regulatory burden faced by businesses.

Christine Braddock, president of Birmingham Chamber of Commerce, said: “Excessive regulation, particularly additional employment laws, makes businesses less profitable and therefore leads to a reluctance to take on new staff and pushes them towards looking at redundancies.

“Over the next four years new employment laws alone will cost West Midlands businesses £1.75bn, which will obviously act as a disincentive to take on new staff.”

Her colleague Mike Ashton, of the West Midlands Chambers of Commerce, said a lack of skills in the region was hampering recruitment efforts.

“Those businesses looking to take on new staff often experience difficulty in finding qualified people because a third of the population of the West Midlands have no formal qualifications – 53% are not qualified above GCSE level,” he said.

Alan Durham, the director of policy at the Coventry and Warwickshire Chamber of Commerce, said the situation highlighted the need for a clear action plan for growth.

More had to be done to give the private sector confidence to take up the slack in the jobs market, he said.

“The public sector cuts will have played a part in these figures but that’s not necessarily the full story,” he said.

“Businesses need the confidence to start taking on new staff and that requires stability and a firm economic footing.

“It also means the Government delivering a clear and determined plan for growth, which we hope to see in next month’s Budget – one of the most important for many years.”

Despite the depressing data, the unemployment figures have actually shown a decline (-0.1%) if October to December is compared to the period September to November. Temporary jobs in the run-up to Christmas are thought to have played a hand in this.

One glimmer of hope for the region appears to have been the recovery in the twin sectors of manufacturing and construction.

Both were among the worst victims of recession but the latest data shows the number of manufacturing redundancies across the UK is now 50% less than in the final three months of 2009 (15,000 as against 30,000). Likewise construction, which is has seen a 32% improvement (23,000 against 34,000).

However, the figures also show that public administration redundancies are rising, with a 42% increase during the final three months of last year when compared with the same period in 2009.

With more public sector job losses likely, this figure may well worsen during the coming months.