the exception of the 1980s, the UK is currently experiencing the highest levels
of unemployment since the 1930s Depression.
recession has been tough for everyone and people continue to struggle.
Inflation is still above the two per cent mark and is likely to rise to almost
five per cent before the end of 2011. In part, those has to do with the VAT
increase at the start of the year pushing prices up, but with the Chartered
Institute of Personnel and Development suggesting that only 25 per cent of
workers will get a payrise in 2011, things are likely to stay tough.
levels of disposable income amongst both consumers and businesses have created
a vicious circle where people don’t spend and businesses can’t invest. Almost a
year after the disappointing final quarter of 2010, when growth fell back into
negative territory, the economy is lacklustre at best ,or indeed ‘in a coma’,
as one commentator recently described growth.
worryingly, economic forecasts for growth are all being revised down and many
were surprised that the second quarter employment figures showed an increase in
unemployment, rather than the decline we’d seen in the previous quarters.
unemployment stats show that more than 1.6 million people have been out of work
for up to one year with women and young people making up a large proportion of
the figures. With many students
finishing school who will not have a University place, this can only really get
want to help strengthen the recovery – but many of them just aren’t confident
enough to take on staff. The recent
Federation of Small Businesses ‘Voice of Small Business’ Index showed that the
number of firms reducing staff levels declined in the second quarter, although more
firms are still laying off workers than hiring new ones.
index also shows that a third of businesses that have applied for credit have
been turned down in the 12 months to June. As a result of failing to get all
the credit applied for, 40 per cent of respondents have on-going financial
concerns, almost a third (31%) have missed a growth opportunity, one in five
(21%) have delayed their investment plans and 18 per cent believe they are at a
from past recessions shows that demand for finance is at its highest during the
recovery as businesses look to invest and take on staff. At a time when the
Government is looking to the private sector to boost the recovery and create
jobs it is vital that businesses can access funds.
2010, the Department for Work and Pensions spent £2.24 billion on Jobseekers
Allowance. The Government must prioritise growth to ensure that businesses can
pick up the slack and ensure that the people that are out of work find new
to the Office for National Statistics, the average person earns £499 per week
and will contribute £5,941 per year to the Treasury in taxes. So taking one
million people off benefits and putting them into work would generate £5.9
billion for the Treasury- helping to put the recovery on a much firmer footing,
as well as tackling the deficit.
Government has many tools available to help create new jobs and put people back
into work. Its New Enterprise Allowance scheme provides a grant to help people
start up a business. In 1992, under the first Enterprise Allowance Scheme, more
than 36,000 businesses were set up and more than 10,000 additional jobs were
FSB believes that allowing people with a valid business idea the chance to use
the scheme from the first day they claim Jobseekers Allowance, rather than
after having claimed for six months, would get people straight back into work,
creating more jobs in the future. This is especially pertinent as the number of
people claiming Jobseekers has risen dramatically.
research has also shown that up to 46,000 jobs could be created if the
Government extended its current Work Trials scheme. Work Trials are beneficial
for both the employer and the employee as they offer key skills to help businesses move forward while at the same time
ensure the person on the work trial is learning new skills. Research shows that
nearly half of all jobs beginning with a Work Trial have led to a permanent job
in that business.
a recent FSB survey, nearly a third (31%) of members said that reducing
National Insurance Contributions (NICS) payments for the first six months of
employment would encourage them to take on more staff, and 11 per cent said
extending the NICs holiday scheme would be an incentive.
Current NICs scheme is only open to new start-up businesses for the first 10
employees they take on as long as the business isn’t operating in the east or
south east of England, or in London. It hasn’t really had the take up that the
Government expected with figures suggesting that only 5,137 businesses have used the scheme in its first 10 months of
FSB has long been calling for the scheme to be extended to existing micro
businesses across the whole of UK to help boost the recovery, as it is those
businesses that have been trading for some time that are more likely to take on
a member of staff.
economy will not flourish unless the unemployment level falls – but businesses
need a helping hand to take people on. Government, while cutting the deficit,
must put an action plan in place for growth. We must avoid a jobless recovery
at all costs because, businesses, consumers and the Government simply cannot
Andrew Cave spoke at “NOT a jobless recovery?” a ResPublica
public fringe series co-hosted with Monster across all three party conferences.