Small firms call for new measures as unemployment rises  

13th October 2020

New ONS figures have shown that the UK unemployment rate has risen to 4.5% with the claimant count rising 120% since March to more than 2.7 million/

Following the announcement of the figures, small firms are now calling for new measures to spur job and business creation.

Federation of Small Businesses (FSB) National Chairman Mike Cherry, said  “These figures are a stark reminder of the human impact of this terrible pandemic. Through adjustments to the Job Support Scheme, the Government is making welcome efforts to aid job retention. As harsher restrictions take effect across many parts of England, further measures may well be needed.”

 “As our economy is changed for the long-term, policymakers should start looking at additional interventions to aid job creation. The new Kickstart and Job Entry Targeted Support initiatives, taken alongside incentives to hire apprentices, mark critical steps forward. From here, we need to see the Government bringing down the upfront costs of employment across the board in order to stimulate hiring activity – starting with Employer National Insurance Contributions, which serve as a stifling jobs tax.”

 “Policymakers should also recognise the fundamental role that start-ups and the self-employed played in our recovery from the last recession. If we want them to play that role again, we have to throw them as many lifelines as possible. Too many have been excluded from support measures – including company directors and the newly self-employed – that needs to change.”

 “Equally, we need to look at how we encourage more of those currently out of work to strike out on their own. A Kickstart Start-Up initiative, modelled on the Kickstart scheme, for those looking to start their own firm could mark one way forward, building on the success of the New Enterprise Allowance and Start-Up Loan programmes.”

Meanwhile, Tej Parikh, Chief Economist at the Institute of Directors, said “Job losses are likely to keep mounting as this turbulent year draws to a close.”

“With the furlough scheme unwinding, cash-strapped firms have been forced into difficult decisions about retaining their staff. Demand remains weak and as restrictions ramp up again many businesses will be stretched when it comes to paying wage bills. The Job Support Scheme may need to be beefed up if the Government wants to avert further rises in unemployment.”

“The pick-up in vacancies offers a spot of relief. But while the UK’s flexible labour market has helped ensure high employment over recent years, it will surely need more support now. The Government should boost retraining courses, encourage start-up activity, and help SMEs to retain staff with a reduction in Employers’ NICs.”