The Chancellor suffered a huge blow as work continues on her Budget on November 26.
Chancellor Rachel Reeves is in charge of managing the economy (Image: Getty)
The rate of UK unemployment rose to 4.8% in the three months to August, up from 4.7% in the three months to July, the Office for National Statistics said. The announcement of yet another increase in unemployment is another blow to Chancellor Rachel Reeves as she works on her Budget statement, due on November 26.
It means 1.74 million people are now unemployed – up from 1.4 million 12 a year previously. The number of people suffering the misery of unemployment is up by 300,000 over the course of one year. And the new figures out today show UK average earnings growth fell slightly to 4.7%, or just 0.9% once inflation is taken into account.
Conservatives and many business leaders have accused the Chancellor of making it harder to employ staff by pushing up the rate of national insurance paid by employers. Labour is also introducing a new Employment Rights Bill, which is designed to ensure staff have more rights in the workplace as soon as they start a job. But critics say this makes it harder for firms to “take a chance” on new staff, with young people hit particularly hard.
Helen Whately MP, Shadow Work and Pensions Secretary, said: “The only thing growing under Labour is the unemployment queue and the national debt. The Conservatives left office with unemployment at near record lows and the fastest-growing economy in the G7. In just over a year, Labour has killed growth and crushed jobs and livelihoods, with families paying the price.
“Keir Starmer has no backbone and is too weak to stand up to his own backbenchers to cut welfare and get people back into work. Now families face another Rachel Reeves’ tax raid, which will pile on pressure on workers and punish the businesses that create jobs.
“Only the Conservatives have the plan to do the right thing for the next generation by freeing business to create more jobs, drive growth, and deliver a stronger economy built on work, not welfare.”
Secretary of State for Work and Pensions, Pat McFadden said: “The numbers of people in work and looking for work are at a record high.
“However, there are still too many people locked out of employment or training and missing out on the security a good job provides.
“That’s why we are reforming Jobcentres and investing in our Connect to Work programme to build a workforce fit for the future and boost economic growth in every corner of the UK as part of the Plan for Change.”
As she prepares for her make-or-break Budget, Ms Reeves is to lead a cross-Government drive to slash red tape and build more housing and transport projects as she attempts to grow the economy.
But she has warned Labour colleagues she will not abandon her “fiscal rules” which prohibit extra borrowing to pay for day-to-day spending, even though this could force her to increase taxes or cut spending in her November 26 Budget.
A Treasury source said: “Ahead of Budget, the Chancellor is clear that tough decisions will need to be taken and there are no quick fixes.”
The source added: “Britain is facing a once in a generation challenge, after years of underinvestment and global headwinds have put stability at risk.
“Borrowing more would put our public finances in jeopardy, saddling future generations with more debt while a return to austerity would condemn the country to decline.
“That’s why the Chancellor is laser focused on pulling every lever to stimulate growth across the country and get our economy firing again.”
Further measures to slash regulation that the Chancellor believes is holding back businesses will follow changes already introduced to the planning system with the Planning and Infrastructure Bill, currently passing through Parliament. Schemes on the drawing board include the Sizewell C nuclear power station in Suffolk, local transport projects and the Lower Thames Crossing, a new road that will connect Kent and Essex through a tunnel beneath the River Thames.
