Unemployment rises to highest rate, 137,000 in Wales

Michael Hill, 20, has not had a permanent job since he left sixth form two years ago

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Unemployment in Wales is at its highest level since comparable records began in 1992, latest figures show.

For the three months to the end of September it stood at 137,000, a rise of 14,000 on the quarter. The unemployment rate now stands at 9.3%.

The highest unemployment reached at the peak of the recession was 133,000, a rate also of 9.3%.

The news comes as two funds totalling £55m aimed at helping businesses have been announced.

The latest figures on youth unemployment are for the year to the end of March. They show that 22.4% of 16-24-year-olds looking for work are unemployed.

There was a slight drop in the number of young people in Wales on unemployment benefits.

Ailing economy

The number of 18 to 24-year-olds claiming jobseeker's allowance in Wales fell by 300 in October, but the figure is still 16.2% higher than the same time last year.

Start Quote

It is absolutely vital that we take action to tackle joblessness using initiatives to build valuable skills”

End Quote Eluned Parrott AM Liberal Democrats

Ministers claim the money from the funds will create 5,000 jobs and stimulate the economy.

A £40m fund for small and medium-sized businesses is meant to increase the number of companies eligible for support, including for the first time those selling directly to the public.

The Labour Welsh government has faced claims from opponents that it has not done enough to help an ailing economy since it was elected in May.

The new funding includes £20m of private investment from financial institutions, but the Welsh government declined to disclose the source of the money, citing commercial confidentiality.

Enterprise Minister Edwina Hart also announced a £15m short-term fund to give grants directly to businesses trying to create and retain jobs.

The grants will not be repayable or restricted to any specific sectors. Businesses can apply between 12 December and 31 January.

Credit crunch

Mrs Hart said she had listened to the needs of businesses that have struggled to get capital to invest since the credit crunch.

She said: "I believe this dual package of support will provide the catalyst for growth, enabling businesses to invest in capital projects that will result in the creation of up to 5,000 new jobs and the safeguarding of many hundreds more across Wales.

"The £15m Wales Economic Growth Fund is a short-term, fast-track grant fund for business, providing immediate access to capital funding for investments that aim to complete in 2012 and create and retain jobs.

Analysis

These figures are comparable with what we saw at the height of the recession.

And yet the general economic climate does not feel as bad as then.

We are not seeing the factory closures, indeed the stats show the economy is growing.

Company insolvencies are still nothing like as bad as we would have expected thanks to the record low interest rates.

So where are the job losses coming from? The answer must lie in the public sector.

The latest figures on public sector losses in Wales won't be released until next month but it's likely that the cuts are beginning to gather momentum and be reflected in unemployment.

"It will significantly expand on the existing range of commercial funding available and is a fast-track approach to get maximum benefits to the Welsh economy in 2012."

'Too late'

The Conservatives said the government's latest offer of help for businesses was "too little too late".

Shadow business minister Nick Ramsay said: "At a challenging time for the Welsh economy, I am concerned that most of this funding does not become available until March 2012, which will come too late for many small businesses."

Plaid Cymru economy spokesman Alun Ffred Jones accused Labour of "sitting back", and said he would push ministers to bring forward capital spending.

The Liberal Democrats are calling for increased spending on education and training in their talks with ministers over the Welsh government's budget.

The party's business spokeswoman Eluned Parrott said: "It is absolutely vital that we take action to tackle joblessness using initiatives to build valuable skills."

Welsh Secretary Cheryl Gillan said there needed to be more co-operation between ministers in Westminster and Cardiff Bay.

She claimed that without the UK government's attempts to stabilise the economy - which critics claim has cut spending too severely - the country would be in a worse position.

"We never said it was going to be easy, but we are focusing our energy on creating the right environment for business growth," she said.

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