Even as the Coalition Government vowed to kick-start UK infrastructure projects in a bid to create employment, a United Nations’ agency warned that the global economy was on the brink of a new jobs recession that could spark off social unrest.
The International Labour Organization said in its ‘World of Work Report 2011’ that it would take at least five years for employment in advanced economies to return to pre-crisis levels. It also noted that in 45 of the 118 countries it evaluated, which included those in the European Union, the risk of social unrest was increasing as a result.
A stalled global economic recovery had started to “dramatically affect” labour markets and about 80 million net new jobs would need to be created over the next two years in order to return to pre-crisis levels, the study said. The problem was that the latest slowdown suggested that only half of the requisite jobs would appear.
Director of the ILO’s International Institute for Labour Studies Raymond Torres told the BBC: “We have reached the moment of truth. We have a brief window of opportunity to avoid a major double-dip in employment.”
David Cameron, meanwhile, today promised an “all-out mission” to kick-start infrastructure projects in the UK in an attempt to revive the country’s flagging economy.
In an article for the Financial Times, the Prime Minister wrote that he had given the go-ahead to build two new power plants in Yorkshire, which would lead to the creation of 1,000 construction jobs. He added that other similar announcements were scheduled to follow over the next few months.
The move was part of a three-point plan to tackle the UK’s debts, improve its competitiveness and build up global trade, Cameron said.
Rebalancing the economy
Deputy Prime Minister Nick Clegg, on the other hand, unveiled the second tranche of English firms that stand to benefit from a final £950 million instalment of the £1.4 billion Regional Growth Fund – although Labour said that neither announcements amounted to new investment.
The Coalition Government hopes that the 119 successful bids from mainly small businesses will create or safeguard 201,000 new jobs, about 37,000 of which should take the form of direct employment and the rest from job creation in secondary and tertiary industry. The financial awards, which are subject to legal checks, are due to be handed out in spring next year.
But the Government also hopes that its scheme will be backed by about £6 billion of private investment. “This targeted support for businesses across the country allows them to expand and create jobs,” said Clegg. “It unlocks private sector investment – with at least £5 for every £1 of public money.”
The aim was to “rebalance” the economy away from a dependence on financial services so that “every region and sector benefits”, he added.
But Shadow Business Secretary Chuka Umunna attested that the Government was failing to adequately address the economy’s current lack of growth.
He claimed that the “long-delayed” funding amounted to a two thirds cut on past commitments, with one year’s budget for the scrapped Regional Development Agencies now being stretched out over three.
“Power stations already in the pipeline are finally being given the green light, but no investment is actually being brought forward. This does not amount to the significant plan for jobs and growth Britain’s economy desperately needs right now,” he told the BBC.
