Employment

There have been good bits of economic news this week.  First, a sharp fall in the rate of inflation.  The Consumer Price Index is at 2.2 per cent, down from 5.2 per cent a year ago, and its lowest rate since November 2009.

There's a caveat.  The fall in inflation has not taken into account rising energy bills.  Only last week gas suppliers announced very large increases in their prices.  British Gas prices will rise by 6 per cent from next month, adding £80 a year to the bill for an average dual fuel customer.

But there was a second piece of good news, with a fall in unemployment to 7.9 per cent, meaning 50,000 more people in work.  This represents the highest level of employment since records began in 1971.  There was also a fall in the number of people claiming Job Seekers Allowance.

In the Arundel and South Downs constituency the number of unemployed was 756.  This is just 1.7 per cent of the economically active population aged 16 to 64 - the 31st lowest constituency rate in the UK.

We are fortunate to have low unemployment rates, but of course there are areas of the country where this isn't true.

Youth unemployment has been persistently high, even in the years where the economy was growing.  It stood at 14.4 per cent in 2007 and is now 21 per cent - not as bad as some EU countries (in Spain and Greece it is over 50 per cent), but still far too high.

During the boom, many businesses imported cheap labour, while an entire cohort of the indigenous population simply weren't participating in the labour market - whether through lack of skills or readiness to work.  This is clearly an untenable situation.

It is why the Government's welfare to work programme, to ensure that work pays, as well as long-term measures to improve education and skills, are so important.

The £1 billion Youth Contract, for example is offering nearly 500,000 work experience places, apprenticeships and wage incentives to help young people get a job.

Long term economic problems can only be addressed through radical reform.  But the performance of business in creating new jobs, despite the persistent economic downturn, is encouraging.