Chancellor must protect Lancashire businesses and tackle struggling labour market at Budget

Businesses across Lancashire must not be hit with further employment costs in October’s Budget, while the new Chancellor must take action to support the UK’s struggling labour market.

That’s the view of Emeritus Professor Joe Nellis, head of economic research at national accountancy and advisory firm MHA, which has offices across Lancashire. His comments follow the release of the latest UK labour market data from the Office for National Statistics.

UK unemployment remained at 4.9 per cent in the three months to July, while annual growth in regular earnings, excluding bonuses, held at 3.5 per cent. However, youth unemployment remains at around 15 per cent - a level Joe describes as concerning.

Joe has warned against measures that could further weaken the jobs market and discourage business investment.

Joe said: “The UK labour market is continuing to struggle, despite the upbeat message from the Chancellor last week that the economy is beginning to ‘turn the corner.’

“Decisions made by the Government in recent Budgets have increased business costs, particularly employment costs, leading many businesses to become increasingly cautious about expanding recruitment.

“As a result, the number of job vacancies has fallen substantially over the past year. The hiring of young people has been especially disincentivised and the situation facing younger workers is a cause for concern.

“Youth unemployment has risen steadily in recent years and is now more than three times the overall national unemployment rate, with the increase in the national minimum wage and NICs exacerbating long-standing issues in the labour market.

“This situation could become a longer-term structural problem if young people entering the workforce don’t get sufficient opportunities to acquire the necessary skills and experience to kick-start their careers.”