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Record number of people in work

A record number of people are in work after another huge fall in unemployment, new figures have shown.

The jobless total fell by 115,000 in the quarter to September to 1.96 million, the lowest figure since the start of the year.

The number of people claiming jobseeker's allowance was 931,700 in October, 20,400 down on September, and the 24th consecutive monthly cut.

Employment increased by 112,000 in the latest quarter to 30.7 million, the highest since records began in 1971, the Office for National Statistics (ONS) reported .

The number of non-UK nationals working in this country increased by 230,000 over the past year to 2.9 million, while the figure for UK nationals went up by 445,000 to almost 28 million.

Pay, including bonuses, was 1% higher than a year ago and excluding bonuses went up by 1.3%, the first time the figure was above CPI inflation for five years.

The 1% average earnings figure is 0.3% higher than last month.

Around 14.7% of workers, or 4.5 million, are self-employed, down by 88,000 on the quarter but up by 279,000 on a year ago, while the number of part-time workers wanting a full-time job remained at around 1.3 million.

There were just over nine million people classed as economically inactive, including students, long-term sick or those who have given up looking for work, 38,000 more than between April and June.

Employment Minister Esther McVey said: "Record numbers of people in work means more people with the security of a regular wage who are better able to support themselves and their families.

"With the vast majority of the rise in employment over the last year being full-time, it's clear that thanks to the Government's long-term economic plan, we are helping businesses to create the jobs that people need.

"More young people are getting their foot on the career ladder and we've seen record falls in female unemployment, so as the economy continues to grow, more and more people are having their lives transformed by moving into work."

The Government pointed out there are more than half a million fewer unemployed people than there were a year ago with schemes such as the Work Programme contributing to the biggest annual fall in long-term unemployment in 16 years - down by 206,000.

The number of people claiming the main unemployment benefit - jobseeker's allowance - has also been falling every month for the last two years and is now more than half a million lower than May 2010.

Paul Kenny, GMB general secretary, said: "Many of the new jobs are precarious and badly paid while the real value of take-home pay for the rest of the workforce is 13% below pre-recession levels.

"Although 898,000 workers have left public sector employment since 2010, the deficit is still £100 billion because this increased economic activity is not generating more income from taxes.

"The Tory recipe to get a recovery in pay and income from taxes is even more savage cuts in public spending and public sector jobs."

Ian Burke, director of totaljobs.com, said: "As the UK economy continues to grow and create new jobs, it's crucial that everyone benefits from its success. Although unemployment continues to fall, many employers struggle to fill roles because some jobseekers do not have the right skills.

"It's vital that, as we lead into the general election next year, both Government and employers work together to ensure that employees in the workplace and new entrants into the labour market have the skills demanded by today's economy."

Ms McVey said the vast majority of new jobs were full-time, while there have been record falls in youth and long-term unemployment and redundancies.

There is a "steady trend" of increased employment, falls in unemployment and wage rises, she said.

"All the data is going in the right direction as we build a stronger economy, and obviously I hope unemployment continues to fall right up to the general election."

Shadow work and pensions secretary Rachel Reeves said: "Today's fall in overall unemployment is welcome, but after four years when prices have risen faster than wages there is a huge amount of lost ground to catch up.

"Working people are now over £1,600 a year worse off than when David Cameron came to office, most people are not feeling any recovery and the link between the wealth of the nation and family finances remains broken.

"The Government has failed to tackle low pay and as the OBR has said, stagnant wages and too many low-paid jobs are leading to rising borrowing."

John Allan, chairman of the Federation of Small Businesses, said: "To reach full employment, ministers should focus on boosting skills while maintaining labour market flexibility.

"We know that taking on a member of staff can be expensive for small firms, yet they continue to be the source for a large proportion of new job creation. If this is to continue, Government should redouble its efforts to cut the costs of doing business."

Business Secretary Vince Cable said: "Today, we've had another remarkable set of employment figures. Almost 700,000 more people are in work compared with this time last year, the majority of which are full-time workers and in the private sector.

"Unemployment for young people and the long-term out-of-work has also continued to fall.

"But this hasn't happened by accident. The Government has taken a number of steps to make things fair and flexible for Britain's workers. We are delivering opportunities for everyone to get on in life and preventing the exploitation of the most vulnerable.

"The broad-based employment growth we are seeing is one of this Government's key achievements in office.

"However there is more to be done. We are only just seeing earnings grow faster than inflation. We want workers to see the full benefit of the recovery. That is where our focus must be in the coming year."

Deputy Prime Minister Nick Clegg said: "These figures show that our economy is continuing to recover strongly after one of the harshest recessions for decades.

"It hasn't been easy. But I am proud of what has been achieved during this coalition Government - across the UK, there is now a record level of employment, with 30.8 million people in work.

"Today's encouraging figures are a tribute to the hard work and enterprise of the British people. Working together, we are building a stronger economy in a fairer society."

David Kern, chief economist at the British Chambers of Commerce, said: "These figures highlight once again that the UK labour market remains strong, and that the pace of economic growth continues at a steady pace. Pay rises have increased but remain weak, and living standards are still under pressure.

"Despite this, these figures suggest that there is considerable scope for the economy to continue expanding steadily. Both the MPC and the Government must make every attempt to counter signs of a slowdown - and next month's Autumn Statement will be an opportunity for the Government to take bold action and support growth and enterprise."

TUC general secretary Frances O'Grady said: "It's good to see an increase in real wages after so many years of falling living standards, but at today's rate of wage growth it would take another 12 years for people's pay to be worth what it was before the recession. And with the recovery looking as if it is already running out of steam, we cannot even be confident of that.

"Huge concerns remain about the quality of many of the jobs being created, and as the Chancellor has found out to his cost many people are not earning enough to pay much tax, if any."

Dr John Philpott, director of The Jobs Economist, said: "This is the most encouraging set of labour market figures for several months, combining a return to strong employment growth with a sharp fall in unemployment and average weekly earnings growth of 1.3% (excluding bonuses), just outpacing the 1.2% consumer price inflation rate.

"Most significant of all, the level of job vacancies is now almost back to the pre-recession peak, the number of unemployed people per vacancy falling to 2.9. This suggests a return to sustained if modest real-wage growth in the coming months, though the main beneficiaries will be skilled workers for whom demand is rising faster than supply rather than people in the lower half of the jobs league who will continue to feel the big squeeze."

Neil Carberry, the CBI's director for employment and skills, said: "The good news is that businesses are creating more full-time jobs for people as the recovery continues.

"Over the past few months, we've seen companies' pay awards start to recover, and this is feeding through to average earnings.

"Nevertheless, many people are still finding times tough. That's why the CBI has put forward a blueprint for action on living standards, including cuts to employees' National Insurance and childcare costs.

"Much more remains to be done to ensure growth works for everyone."

Institute of Directors chief economist James Sproule said: "At a time when much of Europe has a chronic problem with unemployment, the UK is showing the long-term benefits of a flexible labour market, where workers and employers co-operate to build success in their individual companies.

"Co-operation during the recession muted the rise in unemployment and it is this approach which is now leading to pay rises. Importantly, both employers and employees have understood that increases in wages must be driven by improved corporate performance. This ensures that wage increases in real terms, which we are beginning to see, are sustainable and based on productivity gains.

"While the continuing fall in inflation raises the danger of slipping into deflation, the UK's buoyant employment market and impending wage rises make this unlikely."

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