Unemployment nightmare is entirely Labour’s fault
Rising unemployment is a double evil; it both reveals problems in the economy and exacerbates them. Unemployment has risen every month since Labour returned to power, and the number of people out of work will soon hit levels last seen during the pandemic.
Last month, the rate of job losses was at its fastest for 9 months, with the official unemployment rate now standing at 5 per cent. Economists, including those at the OECD, expect the rate to climb higher next year. A country losing jobs is like a car with a leaking fuel tank; sooner or later it will be running on fumes.
There is no way for ministers to avoid responsibility for this mess, given that their first major act was to increase national insurance – a tax on jobs – and saddle businesses with billions of pounds in extra costs. We are now living with the unambiguous consequences of government policy.
Tragically, just under half of the 170,000 jobs lost since the last election were held by people under the age of 25. Hospitality and retail bore the brunt of state-imposed increases to labour costs, with vacancies continuing their dramatic downward trajectory – meaning that more people are chasing fewer opportunities.
Nothing quite encapsulates the government’s warped view of employment like their decision to survey the wreckage and decide to increase employment costs yet further. The minimum wage for 18-20 year olds is increasing by 85p to £10.85 an hour, alongside further increases to the national minimum wage.
The Chancellor and Prime Minister like to boast they have “given a pay rise” to workers but they have done nothing of the sort; instead, they’ve casually and callously slapped additional costs on businesses still struggling under the weight of tax increases imposed last year. Two years ago, it would have cost an employer £15,624 to employ an 18 year old, full time. Now, it’s a shade under £20,000.
To those young people who retain their jobs I’ve no doubt it’s a welcome boost, but to expect anything other than a further spike in youth unemployment would be ridiculous. Oh, and the Employment Rights Bill is about to become the Employment Rights Act, meaning the cost and risk of taking on staff is about to go up, just when employers are feeling battered and bruised.