BCC: Government must support private sector job creation

BCC: Government must support private sector job creation

• In the three months to August 2011, unemployment increased by 114,000, and employment fell by 178,000
• “The figures are concerning, and reinforce the need for the government to boost the private sector’s ability to create jobs, and employ those people likely to lose their jobs in the public sector over the coming year.”

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

“Given the worsening global economic situation and the government’s tough austerity plan, the latest labor market figures are not surprising. The increase in unemployment and the fall in employment over the last three months are the largest seen since mid 2009. Unemployment has not been higher in absolute terms since 1994 (in the three months to October). The figures are concerning, and reinforce the need for the government to boost the private sector’s ability to create jobs, and employ those people likely to lose their jobs in the public sector over the coming year. Cutting red tape and enabling people to acquire the skills they need for employment will help businesses increase their workforces.

“The number of unemployed people aged 16-24 rose by 74,000 over the quarter, but has not yet reached a million. Although this includes people in full-time education who are looking for part time work, the total number of unemployed people aged 16-24 is the highest since comparable figures began in 1992.

“The BCC’s September forecast predicted that total unemployment would rise to 2.62m by the end of 2012. However, on this basis of these figures, there is a risk that the jobless total will be even higher next year.

“While we continue to support the government’s deficit cutting plan, it is important that the MPC makes every effort to sustain demand in the near term. Last week’s decision to increase QE by £75bn will be helpful but not sufficient. The QE programme could be boosted if the MPC acquired more private sector assets and adopted further measures to boost the flow of credit to businesses, particularly SMEs.”