| 5.5°C Belfast

Cut in corporation tax 'will help ease Northern Ireland youth jobless rate'

A corporation tax cut for Northern Ireland would help ease youth unemployment, an economist has said.

According to new figures, the youth unemployment rate is now 23.5% — the highest since 1995 and up 5% over the year.

The overall unemployment rate for May to July was 8.2%, up 1.1% on the previous quarter.

And the number of people signing on for unemployment benefits in August rose by 100 to 63,100.

Ulster Bank chief economist Richard Ramsey said finding jobs for young people was the biggest challenge facing the labour market.

While the growing claimant count and unemployment rate were no surprise, he said: “Northern Ireland’s main labour market concern remains creating sufficient employment opportunities for the next generation.

“If ever there was a statistic that was calling out for a lower corporation tax rate, it is the latest youth unemployment figures. Northern Ireland's youth unemployment rate (those aged 18-24) hit a new 17-year high during the three months to July 2012.

“Northern Ireland's current youth unemployment rate of 23.5% compares with a UK rate of 19.6%. Northern Ireland could well see a youth unemployment rate of 25% plus in the future.”

A recent report commissioned by the Department for Employment and Learning (DEL) claimed that cutting corporation tax — from 24% to a rate closer to if not the same as the Republic’s rate of 12.5% — would lead to the creation of 58,000 jobs in Northern Ireland.

Meanwhile, Stormont’s employment minister has rejected charges of complacency over the level of young people on the dole.

Employment committee chairman Basil McCrea (UUP) said: “I think the Executive is not rising to the challenge of youth unemployment.”

Committee member Jim Allister asked Mr Farry at what point it would be admitted that policies to create jobs are not working.

But the minister said: “There is no complacency whatsoever.”

But he conceded no one could claim success when the current figures are as high as they are.

Factfile

  • Northern Ireland seasonally adjusted unemployment rate: 8.2% for May to July 2012, up 1.1 percentage points on the previous quarter and up from 7.4% the year before.
  • 45.5% of those unemployed in Northern Ireland have been unemployed for one year or more.
  • The unemployment rate for 18-24-year-olds is 23.5% — up 5.2% over the year.
  • The claimant count rate (6.9%) in August 2012 was the second highest among 12 UK regions — the UK rate was 4.8%.


Belfast Telegraph


Privacy