Share

BCC: Positive Unemployment Figures Continue to Mask Worrying Trends

Commenting on the labour market figures published today by the ONS, David Kern, Chief Economist at the British Chambers of Commerce (BCC), said:

“These better than expected unemployment figures are good news, and strongly reflect the sacrifices made by businesses and workers in restraining pay. However, they continue to hide worrying trends. The number of people in employment has fallen dramatically, with a significant decline among those in full-time work. The number of people working part-time, because they could not find a full-time job, has risen.

“More worryingly, the number of inactive people - those leaving the workforce - has risen to a record high. If some of these people decide to look for work, unemployment could rise sharply.

“Despite the decline in unemployment, we reiterate our forecast that the jobless total is likely to increase to around 2.65 million over the next six to nine months. The government should use the forthcoming budget to introduce measures that support bussiness’ ability to increase employment - with particular emphasis on full-time jobs. Scrapping the hike in employer NICs, planned for next year, and substituting it with a 1% rise in VAT, should be a top priority.”

Unemployment Underlines Need for National Insurance Rethink

Commenting on the release of figures which show that Scottish unemployment has risen by 16,000 over the three months to January, Liz Cameron, Chief Executive of Scottish Chambers of Commerce, said:

“What is worrying about these figures is that Scotland is seeing consistently rising unemployment at a time when the rest of the UK has been experiencing a sustained fall in the number of jobless. Although our overall rate of unemployment remains slightly below the UK average, the gap is narrowing and the worry is that, with a large public sector workforce and spending cuts on the way, Scotland may continue to suffer further rises in unemployment for some time to come.

“This underlines the need for the private sector to be supported as it seeks to create new jobs in Scotland and with the Chancellor’s budget just a week away, that would be a great opportunity for him to send a positive message to Scotland’s business community and abandon plans to impose a further tax on jobs through raising the rates of National Insurance Contributions next year.

“Business recognises the need for Government to reduce public spending and increase revenues but taxes on employment are not the way to go when so many of our talented people need to be recruited back into the workforce.”