Don’t get carried away with headline fall in unemployment

Subtantial progress may not come until 2013

The drop in the latest unemployment figures is good news. It is the first time unemployment has fallen in ten months. But underneath the headline fall is bad news for women and some worrying trends that make substantial progress over the next year very unlikely.

Today’s fall in the overall jobless count masks a continuing rise in female unemployment, now higher than at any point since 1987. Since last month’s figures, there are an extra 8,000 women unemployed and 27,000 more women out of work for more than a year. In total, there are now more than a million women (1,136,000) unemployed, the highest since 1987 and a rise of 100,000 over the last year. Of those, over a quarter (29 per cent) of women (327,795) have been unemployed for more than a year.

Long term unemployment continues to rise, reaching its highest level since 1996. Overall, long term unemployment rose 26,000, the highest level since 1996, to a total of 882,821. While 1,000 men have left long-term unemployment, there are now 27,000 more women who have been out of work for more than a year. IPPR predicts there will be almost a million unemployed for more than a year by the end of 2012. There is a real risk that these people will struggle to take advantage of any upturn in the economy.

While youth unemployment has fallen by 9,000, there are still more than a million (1,033,440) young people (aged 16-24) unemployed, the second highest since comparable records began in 1992. Of those, 263,000 young people (aged 16-24) have been unemployed for more than a year. The Youth Contract has now begun, but it has a huge job to do.

Almost half a million (430,672) people over 50 are now unemployed, up 42,000 in the last year. More than 40 per cent of unemployed over fifties have been out of work for more than a year, up 13,000 over the last year to 189, 593. It’s going to be very tough indeed for over 50s out of work for more than a year to fund new jobs, even when the economy bounces back.

There has also been a rise in part-time work, which rose by 80,000 while the level of full-time employment fell by 27,000. There are now 1.4 million people working part-time because they say they cannot get longer hours.

Public sector employment contracted by 270,000 last year, while private sector employment increased by just 226,000. The resulting gap means rising unemployment. The economy is not being rebalanced by public sector job cuts because growth in the private sector continues to lag. There are actually 19,000 fewer vacancies in the economy than there were a year ago. Looking ahead, there is going to be a rise of 100,000 in unemployment this year, according to IPPR analysis of the latest forecast from the Office for Budgetary Responsibility.

This is already hitting the north of England hard. Over the last year, unemployment is up 22 per cent in the North West (an extra 57,000 out of work) and up 11 per cent in the North East (an extra 14,000 out of work). The chancellor is wasting the opportunity to boost national prosperity by ignoring the economic potential of the north.

The priority for the government must be to prevent long term unemployment, with a job guarantee, and to support women to get back to work, by prioritising childcare. There is light at the end of the tunnel, but that tunnel stretches well into 2013. Before it gets substantially better, it’s going to get worse.

Boarded up shops wait for redevelopment in the Hanley Shopping Centre in Stoke-On-Trent. Credit: Getty

Richard Darlington is Head of News at IPPR. Follow him on Twitter @RDarlo.

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MPs Seema Malhotra and Stephen Kinnock lay out a 6-point plan for Brexit:

Time for Theresa May to lay out her priorities and explain exactly what “Brexit means Brexit” really means.

Angela Merkel has called on Theresa May to “take her time” and “take a moment to identify Britain’s interests” before invoking Article 50. We know that is code for the “clock is ticking” and also that we hardly have any idea what the Prime Minister means by “Brexit means Brexit.”

We have no time to lose to seek to safeguard what is best in from our membership of the European Union. We also need to face some uncomfortable truths.

Yes, as remain campaigners we were incredibly disappointed by the result. However we also recognise the need to move forward with the strongest possible team to negotiate the best deal for Britain and maintain positive relationships with our nearest neighbours and allies. 
 
The first step will be to define what is meant by 'the best possible deal'. This needs to be a settlement that balances the economic imperative of access to the single market and access to skills with the political imperative to respond to the level of public opinion to reduce immigration from the EU. A significant proportion of people who voted Leave on 23 June did so due to concerns about immigration. We must now acknowledge the need to review and reform. 

We know that the single market is founded upon the so-called "four freedoms", namely the free movement of goods, capital, services and people & labour. As things stand, membership of the single market is on an all-or-nothing basis. 

We believe a focus for negotiations should be reforms to how the how the single market works. This should address how the movement of people and labour across the EU can exist alongside options for greater controls on immigration for EU states. 

We believe that there is an appetite for such reforms amongst a number of EU governments, and that it is essential for keeping public confidence in how well the EU is working.

So what should Britain’s priorities be? There are six vital principles that the three Cabinet Brexit Ministers should support now:

1. The UK should remain in the single market, to the greatest possible extent.

This is essential for our future prosperity as a country. A large proportion of the £17 billion of foreign direct investment that comes into the UK every year is linked to our tariff-free access to a market of 500 million consumers. 

Rather than seeking to strike a "package deal" across all four freedoms, we should instead sequence our approach, starting with an EU-wide review of the freedom of movement of people and labour. This review should explore whether the current system provides the right balance between consistency and flexibility for member states. Indeed, for the UK this should also address the issue of better registration of EU nationals in line with other nations and enforcement of existing rules. 

If we can secure a new EU-wide system for the movement of people and labour, we should then seek to retain full access to the free movement of goods, capital and services. This is not just in our interests, but in the interests of the EU. For other nation states to play hardball with Britain after we have grappled first with the complexity of the immigration debate would be to ignore rather than act early to address an issue that could eventually lead to the end of the EU as we know it.

2. In order to retain access to the single market we believe that it will be necessary to make a contribution to the EU budget.

Norway, not an EU member but with a high degree of access to the single market, makes approximately the same per capita contribution to the EU budget as the UK currently does. We must be realistic in our approach to this issue, and we insist that those who campaigned for Leave must now level with the British people. They must accept that if the British government wishes to retain access to the single market then it must make a contribution to the EU budget.

3. The UK should establish an immigration policy which is seen as fair, demonstrates that we remain a country that is open for business, and at the same time preventing unscrupulous firms from undercutting British workers by importing cheap foreign labour.  

We also need urgent confirmation that EU nationals who were settled here before the referendum as a minimum are guaranteed the right to remain, and that the same reassurance is urgently sought for Britons living in mainland Europe. The status of foreign students from the EU at our universities must be also be clarified and a strong message sent that they are welcomed and valued. 

4. The UK should protect its financial services industry, including passporting rights, vital to our national prosperity, while ensuring that the high standards of transparency and accountability agreed at an EU level are adhered to, alongside tough new rules against tax evasion and avoidance. In addition, our relationship with the European Investment Bank should continue. Industry should have the confidence that it is business as usual.

5. The UK should continue to shadow the EU’s employment legislation. People were promised that workers’ rights would be protected in a post-Brexit Britain. We need to make sure that we do not have weaker employment legislation than the rest of Europe.

6. The UK should continue to shadow the EU’s environmental legislation.

As with workers’ rights, we were promised that this too would be protected post-Brexit.  We must make sure we do not have weaker legislation on protecting the environment and combatting climate change. We must not become the weak link in Europe.

Finally, it is vital that the voice of Parliament and is heard, loud and clear. In a letter to the Prime Minister we called for new joint structures – a Special Parliamentary Committee - involving both Houses to be set up by October alongside the establishment of the new Brexit unit. There must be a clear role for opposition parties. It will be equally important to ensure that both Remain and Leave voices are represented and with clearly agreed advisory and scrutiny roles for parliament. Representation should be in the public domain, as with Select Committees.

However, it is also clear there will be a need for confidentiality, particularly when sensitive negotiating positions are being examined by the committee. 

We call for the establishment of a special vehicle – a Conference or National Convention to facilitate broader engagement of Parliament with MEPs, business organisations, the TUC, universities, elected Mayors, local government and devolved administrations. 

The UK’s exit from the EU has dominated the political and economic landscape since 23 June, and it will continue to do so for many years to come. It is essential that we enter into these negotiations with a clear plan. There can be no cutting of corners, and no half-baked proposals masquerading as "good old British pragmatism". 

The stakes are far too high for that.