Small firms need simplified assistance to ease job creation

Small firms need simplified assistance to ease job creation

by Trevor Sturgess Business editor, The KM Group

Small firms need more Government help to create jobs.

That was the reaction from Roger House, chairman of the Federation of Small Businesses in Kent and Medway, to the 930 dip in the number of people claiming Job Seekers Allowance across the county last month. It fell to 30,939 in July.

National figures also showed a rise of 301,000 in the number of people in employment compared to last year. But Mr House said the unemployment rate of 7.8% – 2.51 million – in the three months to June remained stubbornly high, and figures for young people (973,000) and the long-term unemployed remained a concern.

He said: “The Bank of England’s decision to link monetary policy to the unemployment rate shows just how serious this concern is. We know that small firms create the lion’s share of new jobs, with FSB research finding that 78% of transitions for non-participants into the private sector come through small firms or by starting their own business.

“Simplifying assistance to small businesses would make it easier for more firms to take people on and Government could do this by consolidating the myriad number of support schemes currently in place to help small firms.”

The national claimant count fell by 29,200 to 1.44 million, the lowest since February 2009.

Stephen Gifford, director of economics at the CBI, the employers’ organisation, said: “While it’s encouraging that fewer people are claiming Jobseeker’s Allowance, it’s simply too soon for recent promising GDP figures to start filtering through to the job market in any material way.”

The figures are the first since Mark Carney, governor of the Bank of England, linked a possible future rise in the base rate – now at an historic low of 0.5% – to the unemployment rate, setting a target of 7%. The number of people out of work in the three months to June fell by 4,000 to 2.51 million but left a rate of 7.8%, a long way from governor’s target which could be at least three years away.

Between March 2012 and March 2013, the number of people employed in the public sector fell by 308,000, leaving a total of 5.7 million. The number of people employed in the private sector increased by 740,000 (24.06 million).

David Kern, chief economist at the British Chambers of Commerce (BCC) said: “Despite some concerns, such as higher youth and long-term unemployment, the overall picture is one of a slowly improving labour market. The level of inactivity has fallen and people are starting to return to the workforce. But firms are now under increased pressure to create jobs – otherwise those returning will find themselves unemployed.

“At a time when the government’s austerity plan remains in force and the public sector is shrinking, we are pleased to see the private sector is determined and able to create jobs. But it needs more support to sustain this, through increasing the flow of credit to viable businesses, a continued focus on keeping inflation low, and to reverse the large fall in investment in the UK that we have seen in recent years.”

Claimant count figures on July 11: Kent and Medway, 30,939 (down 930); Medway, 5,969 (down 216); Rest of Kent, 24,970 (down 714); Ashford, 1,760 (down 41); Canterbury, 2,053 (down 82); Dartford, 1,592 (down 31); Dover, 2,214 (down 79); Gravesham, 2,204 (down 104); Maidstone, 2,137 (down 81); Sevenoaks, 982 (down 48); Shepway, 2,366 (down 107); Swale, 2,993 (down 21); Thanet, 4,521 (down 57); Tonbridge and Malling, 1,302 (down 42); Tunbridge Wells, 846 (down 21).

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