The number of people in work is at a record high of almost 30million.Figures from the Office for National Statistics showed the total workforce across public and private sectors last year was 29.7million, the largest number since records began in 1971.
At the same time, unemployment dropped by 185,000, the biggest annual fall for more than a decade, to 2.49million. This is around the same level as when David Cameron entered Downing Street in May 2010.The ONS also said the number of job vacancies has jumped to nearly 500,000, the largest since 2008, the year the recession began.While the number of workers has never been higher, the overall percentage in employment has fallen slightly due to a growing population. Of people aged 16 to 64, the ONS said 71.4 per cent are working, compared with 73 per cent at the beginning of 2008.Neil Carberry of the CBI said: ‘Pay restraint has played an important role in preserving jobs.’More than one in four private sector workers have suffered at least one annual pay cut or a freeze, rising to 48 per cent in the public sector, according to a report by the National Institute of Economic and Social Research.
This has helped to protect jobs because bosses have been able to keep control of their wage bill, avoiding staff cuts. But the squeeze on income is fuelling the crisis on the high street as consumers have less money to spend. The average pay rise last year was just 1.4 per cent, while the consumer prices index, a measure of inflation, is 2.7 per cent.The strength of the jobs market is at odds with the weak economic recovery.ONS figures due tomorrow may show that economic output fell in the final three months of last year, raising fears of a triple-dip recession.A number of high-street retailers including Jessops and HMV have recently collapsed into administration.
Nida Ali, economic adviser to the accountancy firm Ernst & Young’s Item Club, said: ‘These are pretty impressive figures for the labour market in the face of a weak economic environment.‘But the story remains similar to previous months, with the data betraying hints that the labour market might be starting to run out of steam.’However, Lloyds TSB distracted from the good news today as it emerged that the bank is set to cut more than 940 jobs, bringing total job losses there to 1,300 in just a few days.Exeter-based airline Flybe is axing 300 jobs – 10 per cent of its workforce – in an attempt to cut its costs by £35million.
Unemployment was at its worst in the North East, with 9.1 per cent of people looking for work. In the South West, by contrast, the jobless rate stood at just 5.5 per cent.The number of people classed as economically inactive, including those looking after a relative or who have given up looking for a job, fell to just over 9million.Part-time employment fell by 23,000, but this was offset by a 113,000 increase in the numbers employed full-time in the three months to November.Data from the Office for National Statistics also showed a 26,000 increase in the number of women out of work for up to six months, to reach 571,000, which may reflect changes to the benefits system which have resulted in more single mothers looking for work.
The number of job vacancies in the economy increased by 10,000 to almost half a million at the end of last year, the highest number for four years, a hint that further falls in unemployment could be on their way.Other figures revealed that the number of self-employed workers has increased by 7,000 to 4.2million.In another encouraging sign of life for the economy, long-term unemployment has fallen – down by 10,000 for those out of work for more than two years, to 434,000, and by 5,000 for people unemployed for at least a year, to 892,000.But the number of 16 to 24-year-olds out of work increased by 1,000 to 957,000, the first rise since last summer.
Average earnings increased by 1.5 per cent in the year to November, lagging behind inflation at 2.7 per cent.The average pay packet in Britain was £472 a week at the end of last year – the equivalent of around £24,500 a year.Britons worked an average of 31.8 hours a week during the period covered by the statistics, up slightly from the previous year.Employment minister Mark Hoban welcomed the figures, claiming that the British employment rate was increasing fast than any other G7 country.’These are very positive figures showing employment rising for 15 months and despite difficult economic circumstances, unemployment is lower than when this Government took office,’ he said.
‘It’s good to see long-term unemployment falling and the number of young people claiming jobseeker’s allowance dropping again, while the increase in vacancies shows there are jobs out there.’But we are not complacent, and will continue making sure we give jobseekers the support and training they need to achieve their goal of returning to work.’But Unison general secretary Dave Prentis cautioned against overconfidence, saying: ‘Any fall must be welcome but progress is still painfully slow for the 2.49million people still desperately looking for a job.’The number of High Street names going into liquidation shows there is no room for complacency. And only yesterday the Government announced more than 5,000 cuts to Army personnel.
‘We know that many thousands of public sector workers’ jobs are under threat as council budget cuts mean that elderly care centres, nurseries, swimming pools and other valued services face the axe.’Liam Byrne, shadow work and pensions secretary, said: ‘Today’s headline fall in unemployment is welcome news, but today’s figures show no roaring recovery, they show very shaky foundations.’Half of the country saw yet another rise in unemployment, nearly half a million people have been on the dole for more than a year, and youth unemployment rose.’The Federation of Small Businesses warned that hiring could slow if new companies were not encouraged to expand.
‘With small firms more likely to hire the long-term unemployed, they need additional incentives to create new jobs,’ chairman John Walker said.’We continue to call for an extension to the current regional National Insurance Contributions holiday to all micro firms across the UK. This could create around 47,000 new jobs and add £1.3billion to GDP.’David Kern, chief economist at the British Chambers of Commerce, argued that the strong unemployment figures cast doubt over the gloomy statistics on Britain’s GDP.
‘The new figures reinforce favourable trends that have been apparent over the past year, and raise continued questions over the accuracy of the much more pessimistic GDP figures,’ he said.Lloyds confirmed its plans to cut hundreds of jobs, adding: ‘Lloyds Banking Group is today announcing 940 role reductions within the group operations, insurance, retail, wealth and international and commercial divisions.
‘Lloyds Banking Group is committed to working through these changes with employees in a careful and sensitive way. All affected employees have been briefed by their line manager today. The group’s recognised unions, Accord, Unite and LTU, were consulted prior to this announcement and will continue to be consulted.’The group’s policy is always to use natural turnover and to redeploy people wherever possible to retain their expertise and knowledge within the group.’
Ged Nichols, general secretary of Accord, said: ‘This is a bleak start to the year for hard-working employees and is bad news for the UK economy on a day when the small fall in the numbers unemployed was supposed to be good news.’The fact that nearly 200 of the jobs are to be outsourced to India is particularly unwelcome. Accord is certain that this is not what UK taxpayers would want from a bank in which they are the largest shareholder.’ – DalyMail
