By Max Clarke
Unemployment jumped again last month to a 17 year high of 2.53 million, figures published yesterday by the Office for National Statistics show. And while the government cuts and public sector redundancies have been blamed for the increase, members of the UK200Group of leading accountancy and legal firms argue that the figure is to be expected and that it will likely worsen if reductions to inhibitive red tape are not addressed.
David Ingall, partner, JWPCreers:
“The increase in unemployment is no surprise and it will undoubtedly go higher. There are a number of things the Chancellor can do but has he the courage to do them?
“There has got to be an improvement in confidence. In many ways this goes hand-in-hand with the war on red tape. Until employers can take employees on without the fear that they are going to be lumbered with them in the long-term or have to take on additional costs, they simply won’t do it. Yes, some incentives might be useful but simple is best. If you have to jump through a series of hoops to get a relief, again, that is more red tape.
“The issue about over 65’s against the younger working generation is yet another example of the law of unintended consequences. It is another example of red tape that employers are going to have to deal with - how to get rid of an over 65 who does not want to retire.”
Jonathan Russell, partner, ReesRussell:
“One of the problems I believe the Government has with unemployment is that during the recession many businesses have not made staff redundant but instead have reduced their hours. This means there is considerable capacity within the private-sector to be taken up without the need for businesses taking on additional staff.
“Small businesses will not take on new staff until they can see a permanent need and would rather fill a potential short term need with overtime or agency labour. With the lack of confidence in the economic recovery, businesses are reluctant to take that step of employment.
“A novel idea which would appeal to many businesses would be a Government run agency for staff that for a period of time could be taken on without the employment risks. This would help many overcome this fear.”