Comment: Positive job figures don’t mean worst is over
THE fall in UK unemployment in the past quarter is welcome, and in our parlous economic state we should not look a gift horse in the mouth.
You can’t help it, though, there’s too much neighing going on. We see unemployment falling in the teeth of pretty regular announcements of major business closures and restructurings.
Yesterday saw the latest addition to the conflicting picture: unemployment falling by 37,000 in the latest quarter to November, including down 14,000 in Scotland, to under 2.5 million – the lowest since spring 2011.
The UK now has the highest number of people in work since 1971, which is odd because we are in the most extended downturn since the 1930s.
McDonald’s put out news that it is adding 2,500 UK jobs this year alongside the wider employment figures, either fortuitously by the company or perhaps seeking to hijack the feelgood data.
But then Lloyds Banking Group spoiled the show by announcing 900-plus jobs have gone, admittedly as part of 15,000 redundancies flagged up by the bank in 2011. And regional airline Flybe revealed it had opened the emergency exit doors for 300 staff to leave – about 10 per cent of the workforce.
Meanwhile, thousands upon thousands of retail jobs have been shed as the scythe of closures and administrative receiverships has carved through the high street in the past couple of years.
In short, the big employment picture looks better, but is complicated by a regular stream of announcements on redundancies that prevent us feeling the worst is past.
As public sector jobs continue to be slashed, it is far from impossible that 2013 could see unemployment rising again, even against the backcloth of a beige UK economic recovery.
The jobless data is purely incremental in the wider shape of any recovery. A large factor in the better numbers is people accepting wage freezes and below-inflation pay rises in order to try to keep their jobs.
But this, at best moderate, earnings growth will not fuel consumer spending to trigger a recovery – even though debt-fuelled consumer spending ironically helped shove us into the mire in the first place.
Meanwhile, businesses are keeping the brakes on investment, partly through the eurozone’s ongoing problems. The better unemployment picture going over several months now is welcome. But it is no game-changer to economic sentiment; rather, we soldier on.
Britain’s firms need to speak up about Europe
POST the Prime Minister’s commitment to holding an in-out referendum on European Union membership, expect a plethora of business and financial organisations to profess devotion to single-market membership. They will be falling over themselves to do so.
The CBI, Institute of Directors and CityUK are just the first to break cover with trumpeted hopes that we retain the EU single-market present – with the red-tape ribbons cut away. There’s the rub.
France and Germany, which effectively run the EU show, want Britain to accept the prix fixe menu of membership, not go for the à la carte.
It’s time UK business was explicit about what EU rules it wants to opt out of, apart from the apparently omnipresent Working Time Directive. Until we know this, the debate is taking place in a vacuum.
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Wednesday 22 May 2013
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