Redundancy pay to increase

22 April 2009

In light of the growing levels of unemployment, the government has announced that statutory redundancy pay will increase from £350 to £380 a week.

The latest unemployment figures show the number of people out of work rose by 177,000 to 2.1 million between December and February, while the claimant count increased by 73,300 to 1.464 million - its highest level since 1997. Average earnings growth, meanwhile, rose by just 0.1%, down from 1.7% in January.

In his 2009 Budget, the chancellor Alistair Darling addressed the need to help people and businesses. “It’s not just a morally right thing to do but economically essential,” he said.

He pledged to help people out of work to gain new skills, with an emphasis on younger people.

New measures include the creation of 250,000 new jobs for young people, £260 million of new money for training young people and £250 million to invested in supporting 16 to 17-year-olds to stay in education or training. A further £400 million will be invested in this scheme in 2010.

Meanwhile, from January 2010 there will be additional support for people aged under 25 who have been out of work for 12 months. Darling said he guaranteed that these young people would either get a job with a salary or training with money in addition to the benefits.

Sylvia Perrins, chief executive of the National Skills Academy for Financial Services, welcomes the move but questions the plausibility of how the various schemes will work in practice.

“To give everyone under 25 who has been out of work for 12 months a job or a place in training is incredibly ambitious - but it recognises the government's realisation that we can no longer sit on the fence,” she says.

Darling also announced a fresh cash injection of £1.7 billion towards JobCentre Plus, following on from funding that was announced in the pre–Budget.

He stressed his determination to get people back into jobs as quickly as possible, so that “short–term job losses” don’t turn into “a life-time on benefits”.


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