By Max Clarke

Despite employment levels falling less than feared, and recovering faster than expected during the last recession, joblessness remains far higher than in 2007 and will not recover until after 2015, a leading think tank has said.

New policies are urgently needed to absorb this wasted labour pool back into the UK economy, or the government risks adding to the numbers of long-term unemployed. Chief amongst its priorities, the Institute for Public Policy Research writes, echoing similar call from the CBI (Confederation of British Industry), is extensive investment in the UK’s infrastructure.

A £5 billion injection in infrastructure would provide an instant boost to the UK’s vital construction sector, whilst bringing the UK closer in line with the continent, aiding investment.

The Bank of England must also boost quantitative easing by £50 billion immediately; with the option of a further £50 billion should the initial injection not do enough to stimulate lending. This recommendation is in line with a series of similar pleas, from the Institute of Directors, the British Chambers of Commerce, and even the Bank of England’s Monetary Policy Committee non-executive member, Adam Posen.

More unusually, the traditionally left-leaning think tank makes the recommendation for forcing benefits claimants to work 30 hour-a-week jobs either within the public sector, or within the voluntary, third sector. This will directly combat the growing problem of long-term unemployment.

The think tank, citing data from the Office for National Statistics notes that whilst post recession joblessness remains above than during the 2007 low, it is still far below the long term average, thanks to soaring joblessness in the late 1970s and early 1990s recessions. Despite numbers of unemployed remaining low, numbers of long-term jobless, and those who have never worked, continue to rise.

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