Chancellor Rachel Reeves has faced fresh humiliation as new jobs data revealed a rise in economic inactivity, with Conservatives accusing her of 'killing jobs'. The number of people classed as economically inactive rose by 68,917 to 20,489,441, meaning they are not officially unemployed but not seeking work.
Conservative Criticism
Shadow Business Secretary Andrew Griffith said: 'These figures disguise the fact that many people have fallen out of the workforce and are adding to the ever greater ranks of sick note Britain where being on Benefits Street is better than a hard days graft. We need to create an economy that encourages people back into the workforce.'
Shadow Work and Pensions Secretary Helen Whately added: 'Labour are killing jobs and people are giving up. The rise in economic inactivity tells us people aren't even trying to get work anymore. That means more people on benefits and a higher welfare bill, at the taxpayers expense.'
Labour's Response
Work and Pensions Secretary Pat McFadden defended the government's record: 'This month's figures show that there are 400,000 more people in work than this time last year, but we know ongoing instability in the Middle East is causing uncertainty in our labour market. We have the right economic plan for growth and stability in a volatile world – and we are taking action to create opportunity and make sure that no one is left behind.'
McFadden highlighted the Youth Guarantee, backed by £2.5 billion investment, and the Connect to Work programme supporting 300,000 disabled people.
Vacancies at Five-Year Low
The Office for National Statistics (ONS) reported vacancies fell by 19,000 to 707,000 in the three months to May, the lowest since April 2021. The decline was significant in retail, hospitality, and professional services. The ONS said some firms are putting recruitment on hold due to economic uncertainty and higher labour costs.
Unemployment edged down to 4.9% in the three months to April, from 5% previously. However, payroll numbers fell by 53,000 in April to 30.3 million, though a flash estimate showed a slight rise in May. Wage growth remained at 3.4%, outpacing inflation by 0.3%.
ONS director Liz McKeown said: 'The labour market remained broadly stable in the latest quarter, with further softening evident in some measures. Payroll numbers continued to fall, with new recruits at their lowest level in five years.' She noted some workers are moving into self-employment, while the vacancies decline signals firms are 'becoming more cautious about taking on new staff.'
The government's hike in employee National Insurance Contributions in April last year and above-inflation minimum wage rises have added to employer costs.
