West Midlands bucks unemployment trend
THE scale of the task facing the new coalition Government in terms of reducing unemployment has been placed in sharp focus with the latest figures showing a further increase in the number of jobless.
Across the UK there were 2.51 million people (8%) officially unemployed in the quarter ending March – a rise of 0.2% on the quarter between October to December last year. The figure equates to an additional 53,000 people out-of-work.
The figures are the highest since the quarter ending December 1994.
However, the West Midlands bucked the trend, with the quarter seeing a fall of 4,000 (0.1%). There are now 249,000 people unemployed in the region; a rate of 9.3% – the highest in the UK excluding Yorkshire and The Humber (9.7%) and the North East (9.6%).
The West Midlands rate is unchanged year-on-year.
Across the UK, the number of people unemployed for up to six months fell by 52,000 to 1.21 million, however, the number of people unemployed for 12 months or longer grew by 94,000 over the quarter to reach 757,000 – the highest since May 1997.
The number of vacancies also fell over the quarter, declining by 6,000 to 475,000.
Business leaders in Birmingham and Solihull used the figures to call on the new government to act promptly to secure a business-friendly economic environment which could stem the tide of unemployment.
Will Rogers, policy adviser at Birmingham Chamber of Commerce and Industry, said: “One of the initiatives that should be acted on in the emergency budget next month is the scrapping of National Insurance contributions.
“These figures are still too high but there are initiatives which will encourage employers to recruit. For instance, the chamber has taken on four long-term unemployed people under the six-month Future Jobs Fund initiative, which needs to be sustained.”
“GDP figures revealed a setback in Quarter 1 of this year emphasising the continuing fragility of the economy. The new government needs to act now to create the conditions for firms to grow and create wealth, which in turn will lead to new jobs,” he added.
Alan Durham, policy director at the Coventry and Warwickshire Chamber of Commerce, said the figures highlighted the need to help business take on new staff.
“During the recession, unemployment levels have not hit the heights that many were expecting. In recent months, the figures have remained fairly steady but we shouldn’t become complacent about that,” he said.
“Some of the barriers to employing people have to be removed in order to allow companies to take on new staff and get the economy moving again.
“The scrapping of the proposed rise in employer contributions to National Insurance will be a good start from the new Government.”
President of the Black Country Chamber of Commerce, Mike Dell said he was disappointed but not surprised to see the overall jobless figure ncrease.
“The newly elected Government must create the right conditions for businesses to employ people. Recovery remains incredibly fragile; the Government has made it clear that reducing the country’s deficit is top of their agenda but in addition to this, Government policy must support employers to create wealth and jobs; the best way to do this is through a competitive tax base and a simplified tax regime. Increasing employer NI contributions is a tax on jobs, which will stifle employment growth at a crucial time,” he said.
As the new Government grapples with the thorny issue of bringing the massive deficit under control, a rise of 4.4% year-on-year in public sector pay will make unwelcome reading.
Average weekly total pay in the public sector was £467 in the three months to March – higher than the private sector. If public sector wage claims continue at the same rate then inflationary pressures will be significant.
Also, if the public sector is to be scaled back, then a rise of 7,000 in the number of people employed since September indicates some of the difficulties the new administration will face when reigning in the bureaucracy.
In the same period, employment levels in the private sector fell by 61,000.
The figures also show that for total pay, the annual growth rate for earnings was 4% for the three months to March.
The figure is now the highest it has been since June 2008 and is up 2.5% on the three months to February. The increase is said to reflect the higher bonuses being paid out across all sectors of the economy.
