Jobless figures welcomed but TUC chief warns on pay

TUC chief Frances OGrady
TUC chief Frances OGrady

Business groups and unions have welcomed the latest fall in unemployment, although the TUC said a full recovery in the value of wages was still years away.

General secretary Frances O’Grady said: “Average weekly earnings are still worth £40 a week less than before the crash and pay growth remains too slow.

“The Government needs to do more to build a high-investment, high-productivity economy with more better-paid work.”

David Kern, chief economist at the British Chambers of Commerce, said: “Yet another set of positive employment figures confirms that Britain’s labour market remains a source of strength for our economy.

“However, if this cannot be translated into faster economic growth, higher employment will not be matched by gains in productivity.”

Shadow work and pensions secretary Owen Smith said: “The employment numbers are moving in the right direction. However, these statistics alone do not tell the full story, as they come in the middle of a Tory crisis of low pay and insecure work.”

Michael Martins, of the Institute of Directors, said: “It is encouraging to see the UK labour market continue to tighten despite the economic headwinds we are hearing so much about.

“The employment rate is still at a record high, the number of vacancies across the economy is at a near-record high and the number of people who cannot find full-time work continues to dip. Wage growth, too, is comfortably outpacing inflation.”

Laura Gardiner, of the Resolution Foundation, said that despite a gloomy jobs market, the proportion of people in work remained at record levels.

“But the pace of Britain’s pay recovery remains disappointing. Weak earnings growth, coupled with the ratcheting up of the personal tax allowance, are lowering tax receipts and putting more pressure on the public finances.”

Economist Dr John Philpott said employers were becoming more cautious over hiring decisions as they approach what will be a “quarter of uncertainty”, including the introduction of the national living wage in April and the EU referendum in June.