Business Groups: Government Must Do More to Curb Unemployment Rise

Small firms need more Government support to create jobs, business groups have warned, following a surge in unemployment.

The number of those out of work rose by 128,000 (0.4 per cent) in the three months to October, bringing the total to 2.64 million or 8.3 per cent ? the highest level since 1994, according to the latest figures by the Office for National Statistics.

The Federation of Small Businesses (FSB) said the Government needed to introduce steps to help small firms create jobs and hence reduce unemployment, or businesses would struggle to find skilled staff in the future.

“The story around unemployment figures has been the same month in, month out,” FSB chairman John Walker said. “Bringing forward the [Government’s] Youth Contract, and ensuring young people can use these opportunities from day one of signing on for Jobseekers Allowance, will ensure that [they] are getting the skills they need early on.”

Allowing people to take part in Work Trials from the first day of their unemployment would also help create 46,000 new jobs and boost skills amongst job seekers, Walker added. Work trials allow businesses to try out unemployed job applicants for a short period before offering them a permanent contract.

The Confederation of British Industry’s deputy director-general Neil Bentley also urged the Government “to do everything possible to secure the private sector recovery”. “It’s time to get on with increasing exports, helping mid-sized companies, and attracting new investment into our infrastructure,” he said.

Responding to the figures, employment minister Chris Grayling admitted there had been an “unwelcome increase” in unemployment but insisted the data showed signs of a more stable labour market.

“The number of people in employment is higher than last month’s published figure and the number of unemployed people is steadying. The increase in those claiming Jobseeker’s Allowance has also slowed,” he added.

But the British Chambers of Commerce warned that unemployment looked set to rise further, predicting a total of 2.77 million unemployed ? around 8.7 per cent of the workforce ? by the end of next year.

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