Unemployment is the big enemy

By Jonathan Morris, December 8, 2011

One of the most worrying consequences of the current economic malaise is the inexorable rise in unemployment in the UK.

In November, Government figures showed 2.62 million people without jobs. That is 8.3 per cent of the work-force, the highest over the past 15 years. Of these, 422,000 people have been out of work for more than two years and a record 21.9 per cent of those aged 16-24 have no job.

While the jobless figures in countries like Spain and Greece may be far worse, we cannot afford to be complacent, especially given the warning from the Governor of the Bank of England, Mervyn King, that growth in this country could stagnate until the middle of 2012. GDP in 2012 is now likely to be just one per cent, half of the previous forecast.

The challenge is to take concerted action to combat unemployment at a time when the pressure is to cut public expenditure.

The Government has targeted youth unemployment by launching a £940 million plan to provide subsidised work for 160,000 18-24 year olds, as well as 250,000 new work experience placements.

This is clearly fair as the lack of previous job experience can act as a strong disincentive for potential employers. However, safeguards will be needed to prevent employers using the scheme as a source of cheap temporary labour and avoid taking on additional permanent staff.

The government must also send a clear message that it is committed to assisting the long-term unemployed. Those who have been out of work for a lengthy period are likely to find securing new employment ever more difficult. Some may never find jobs again, especially in a global economy with accessible cheap labour.

For those of us who recall the high levels of unemployment of the late '70s and early '80s, last month's unemployment figures have come as a rude awakening. While the Government will face a host of economic issues in 2012, reducing the numbers out of work is likely to be one of its fiercest challenges.

Jonathan Morris is a partner at the international law firm Berwin Leighton Paisner LLP

Last updated: 11:46am, December 8 2011