Downing Street Says » Unemployment

Asked for a response to the labour market statistics published this morning, the Prime Minister’s Spokesman (PMS) said the figures showed an unwelcome increase in unemployment; they also showed some signs that the labour market was stabilising.

Asked if there was disappointment that the private sector had not filled the gap left by public sector employment, the PMS said clearly firms’ decisions on whether to hire new people were being affected by the general economic outlook, and in particular what was happening in the Eurozone. The Office for Budget Responsibility forecast showed that by 2015 there would be half a million more people in jobs, fewer people on the claimant count and a lower unemployment rate, so there would be an increase in private sector employment over time.

Asked if the Prime Minister thought the employment figures were going in the wrong direction, the PMS said there was bound to be an impact on companies’ decisions to recruit when you looked at what had been happening in the global economy, in particular the Eurozone debt crisis. The PMS said that if you looked at other countries you would see that unemployment had been rising there too. He said the average unemployment rate in the European Union was 9.8 per cent and in the United Stated it was 8.6 per cent (Organisation for Economic Co-operation and Development figures), above the UK figure of 8.3 per cent. The PMS said the UK had a deeper recession than many other countries, but the fact that the UK rate remained below the rate you see in other countries reflected the flexibility of the labour market in the UK.

Asked if the Prime Minister agreed with the Justice Secretary’s comment that youth unemployment was a long term problem, the PMS said we knew that youth unemployment had been rising for some years; it started to increase in 2004, well before the downturn in the economy. The PMS said there were some structural problems that needed to be addressed. For example, we needed to make sure that the people coming out of our school system had the skills so that they could find jobs and secure employment. Youth unemployment did go up in recessions, which was what had happened in this country and elsewhere. The PMS added that youth unemployment in the UK was around the same level as the European Union as a whole, but there were big differences between different countries, the most notable being in Spain, where youth unemployment was nearly 50 per cent.

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» Wednesday, December 14, 2011

Unemployment

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