Press release

Grayling: Government will continue focus on growth to tackle unemployment

This news article was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government

The Government must remain focused on supporting the economy and driving growth, says Employment Minister Chris Grayling.

The Government must remain focused on supporting the economy and driving growth in the private sector, Employment Minister Chris Grayling said today.

New figures published by the Office for National Statistics today, show a rise in unemployment (ILO measure) to 2.49 million.  The number of people claiming Jobseeker’s Allowance has also seen a rise of 37,000 to 1.56 million underlining that there are still challenges in the labour market. The number of people in employment has increased by 25,000 to 29.27 million indicating that more people have moved into the labour market this quarter.

Ministers are concerned about a rise in unemployment, which is why today they are announcing the location of eleven new Enterprise Zones, designed to boost local growth and create over 30,000 new jobs by 2015. Today’s employment figures are not a surprise after the fall in economic growth in the last quarter which was caused largely, according to the Office for National Statistics, by a series of one-off factors such as the Japanese earthquake and the royal wedding.

Employment Minister Chris Grayling said:

These are disappointing figures but we always said that the road to recovery would be choppy. Clearly this has been a difficult few months with a range of one-off factors and a slowdown in the world economy having an impact on the UK. This is why is we are focused on taking steps to increase growth, support the economy and encourage businesses to invest and create jobs. “For people who lose their jobs, our new Work Programme is now up and running and will offer jobseekers flexible support tailored to their needs to help them into employment.”

The Government has already introduced significant measures to stimulate growth including:

  • the location of eleven new Enterprise Zones, designed to boost local growth and create over 30,000 new jobs by 2015;
  • launching the new £1.4 billion Regional Growth Fund (RGF) for projects to support growth;
  • cutting corporation tax;
  • exempting small businesses from new domestic regulation;
  • absolving new businesses from paying employment taxes on their first employees;
  • keeping interest rates low;
  • creating real incentives for businesses to grow and create job opportunities;
  • announcing four annual reductions in corporation tax;
  • cutting the small companies rate;
  • expanding loan guarantees;
  • investing in science and apprenticeships;
  • promoting exports through major trade missions;
  • launching the New Enterprise Allowance (NEA) which will help up to 40,000 businesses get up and running;
  • supporting work clubs and enterprise clubs across the country.

The new £1.4 billion Regional Growth Fund (RGF) is providing support for projects that can drive sustainable economic growth. The first round saw numerous businesses and projects make successful bids for significant funding to create and safeguard jobs. Considering the amount of private sector investment many of the successful bids are already bringing in, the value of the RGF is several times more than the Government input of £1.4 billion.

The Government recently launched the new Work Programme to give jobseekers the help to get back into sustained employment. Private and voluntary sector organisations are investing £581m upfront in the biggest welfare to work programme this country has ever seen to provide tailored support built around the needs of individuals. Organisations will be paid by results and allowed to develop support that really addresses the needs of jobseekers.

In 2011-12 the Government will increase funding for apprenticeships to over £1.4bn, sufficient to train 360,000 apprentices, giving people the training that builds successful careers and enables businesses to gain the skills they need to grow.

Notes to Editors:

Background to labour market statistics: August 2011

This month’s Labour Force Survey covers April to June 2011. The claimant count and Jobcentre Plus vacancy count dates were 14th and 8th July 2011 respectively.

The number of people in work rose this quarter

  • 29.27 million people were in work in April to June 2011.
  • the employment level was 25 thousand higher than the previous quarter and up 251 thousand on the year.
  • the employment rate is 70.7%, unchanged on the quarter, but up 0.2 points on the year.

ILO unemployment rose this quarter

  • 2.49 million people were ILO unemployed in the April to June quarter, up by 38 thousand on the January to March period and 32 thousand on the same quarter last year.
  • the ILO unemployment rate is 7.9%, up 0.1 percentage points on the quarter but unchanged on the year.

The number of people on JSA rose again this month, but the number claiming one of the other main out-of-work benefits is improving:

  • claimant unemployment was 1,564.0 thousand in July 2011, up 37.1 thousand on the level in June 2011, and 98.6 thousand on the year.
  • the claimant unemployment rate, at 4.9%, is up 0.1 percentage points on the month and 0.3 percentage points on the year.
  • the figures continue to be affected by welfare reform, including the ongoing process to re-assess existing claims for incapacity benefits, and this is likely to have made some contribution to the rise in the JSA caseload.
  • in the year to February 2011, the number claiming incapacity benefits fell 36,000 to 2.58 million. The most recent provisional figure for June 2011 suggests the caseload has since fallen further to 2.57 million.
  • in the year to February 2011, the number of lone parents on income support fell 78,200 to 613,800. Provisional figures for June 2011 suggest the number has fallen further in recent months, to 595,000, driven by welfare reform.

The level of economic inactivity is down on the quarter and on the year

  • the economic inactivity level is 9.3 million, down 23 thousand on the quarter and 44 thousand on the year.
  • the economic inactivity rate is 23.2%, down by 0.1 points on the quarter and 0.2 points on the year.
  • excluding students, inactivity as a share of the 16-64 population is 17.6%, unchanged on the quarter but down 0.4 points on the year.

The number of redundancies rose this quarter and the number of unfilled vacancies fell

  • There were 154 thousand redundancies in April to June 2011, up 32 thousand on the previous quarter and 4 thousand on the year.
  • ONS’s vacancy survey estimates an average of 449 thousand unfilled vacancies in the three months to July 2011, down 22 thousand on the quarter and 28 thousand on the year. Taking account of the impact of one-off vacancies associated with the Census, the underlying level of vacancies is close to flat.

Total weekly pay in April to June was up by 2.6% over the year

  • growth in regular weekly pay, excluding bonuses, was up 2.2% on the year.