Government Incentives Needed to Create Jobs
The Government must give small firms incentives to create jobs, business groups have warned, following record unemployment figures.
UK unemployment rose to 2.62 million in the three months to September ― the highest level since 1994 ― according to the latest data from the Office for National Statistics (ONS).
Overall unemployment has now hit 8.3 per cent in the UK, the ONS said, while the jobless total for 16- to 24-year-olds had reached a record 1.02 million ― a 19-year high.
The Federation of Small Businesses (FSB) called the figures “shocking”, and said the Government must take urgent action to stimulate employment, including the granting of National Insurance tax breaks to micro firms.
“This would target tax cuts where they are most needed, and halt rising youth unemployment,”
said FSB national chairman John Walker, who said the Government needed to stop the younger generation “just disappearing from the workplace.”
The Confederation of British Industry also called on the Government to do more to help businesses, stating that “job creation, especially for young people, must be a major part of the Autumn Statement”. The business lobby group wants to see tax credits given to small firms hiring unemployed young people to offset National Insurance charges and salaries in the first year.
Responding to the grim figures, the Government said that the data indicated the extent to which the Eurozone crisis was affecting the UK economy.
Employment Minister Chris Grayling said:
“Our challenge is to put in place additional measures to support growth and create employment opportunities, especially for young people.”
But the British Chambers of Commerce predicted that the jobless total was likely to rise to more than 2.7 million next year, with escalating youth unemployment “particularly concerning”, according to chief economist David Kern.
“The immediate outlook is challenging as the private sector will find it difficult to absorb those people who have lost their jobs in the public sector,” said Kern.
He added that, for small firms to start hiring, cutting red tape and improving skills amongst jobseekers were both “vital”.
In a separate poll, the FSB’s recent Business Index survey ― which questioned 1,600 small firms ― found that more employers were looking to lay off staff rather than recruit over the next three months due to tight cashflow and reduced confidence about the economy.