Private sector regular pay also rose by two percent, compared with inflation of 1.3 percent, with strong wage growth in the manufacturing and business services industries according to the Office of National Statistics (ONS).

Work and Pensions Secretary Iain Duncan Smith said:

“These remarkable figures show that our long term economic plan to create a better more prosperous future for Britain is working. Behind them are countless stories of individual hard-work and determination, with more people than ever before feeling financially secure.

“What we can see at the end of 2014, is that our welfare reforms are ensuring that people have the skills and opportunities to move into work. Whether that’s work experience for young people to get their foot on the career ladder, the Benefit Cap encouraging people to get a job, or the Work Programme which is helping more people than any previous jobs scheme.”

Andrew Hunter, co-founder of job site Adzuna, disagrees that British workers have the necessary skills to succeed in certain industries:

“The recovery is more nuanced than it first appears. Although jobseekers outnumber available positions, there are not enough skilled workers to meet demand in booming sectors like Manufacturing and IT. Many of the jobs created over the last month have been seasonal slots to support customer service roles over the Christmas period. And the real wage increase is being helped by uncertainty in the Eurozone, and falling oil prices, which have forced inflation to artificially low levels.

“This skill shortage is pushing up salaries disproportionally in certain areas – but isn’t benefitting large chunks of the population. The government needs to focus on arming existing workers with new skills, and encouraging new entrants to our growing industries to make sure we capitalise on momentum in these areas.”

Overall employment figures

  • 30.8 million people in work (record high)
  • Employment rate – 73 percent
  • Unemployment rate – 6 percent
  • 1.96 million unemployed
  • Record number (14.4 million) and rate (68.1%) of women in work

Vacancies have also hit the level last seen at the beginning of 2008 – with 690,000 jobs available in the economy at any one time. The number of working age people claiming the main out-of-work benefits is also now the lowest in a generation.

Neil Carberry, CBI Director for Employment and Skills, said:

“As we come to the end of the year, it’s good news that unemployment continues to fall, as jobs are being created. It’s good to see even more people working full-time.

“We are starting to see the first signs of real pay growth picking up, which will have given households an encouraging boost in the run up to Christmas.”

Youth

Youth employment is up by 109,000 over the past year – with 3.8 million now in jobs. The number of young people aged 18-24 on unemployment benefits has fallen every single month for the past three years, and is at the lowest since the 1970s. The number of long-term unemployed young people claiming benefits has also nearly halved over the past year – falling 29,500 to 31,400.

Chris Jones, Chief Executive, City & Guilds Group, commenting on the latest ONS labour market statistics, said:

“It is encouraging to see so many more people in work this Christmas compared to the same time last year. But we shouldn’t let this good news lull us into a false sense of security, because the figures tell us only part of the story. If we are seeing more people in work, why are we still seeing skills gaps in a number of different industries? And there are still disgracefully high numbers of young people out of work, with seemingly little change since the summer. This is no cause for celebration.

“Unemployment policy needs to be about more than tomorrow’s headlines, or winning the next election. If we are to build a truly robust economy, with opportunities for meaningful employment for everyone, we need better long-term planning of employment policy that takes into account where the skills gaps of the future will be. And we need to see closer links between careers advice services in schools and Local Enterprise Partnerships so that young people know where the jobs are in their area.

“Let’s hope all parties make a new year’s resolution to look at long term solutions, so that unemployment becomes a tragedy of Christmas past.”

International comparisons

Over the past year, the UK has seen the strongest employment growth in the G7 – better than the United States, Germany, Japan, Canada and France.

Supporting people into work

The Department for Work and Pensions (DWP) offers a range of support across the country to get people off benefits and into jobs through our network of over 700 Jobcentres. These include work experience, employer-led training, work placements, skills training, the Work Programme, and help for budding entrepreneurs through the New Enterprise Allowance.

Research published this week confirmed that the benefit cap is providing a clear incentive for benefit claimants to find work.

The Work Programme – the biggest single payment by results employment programme Britain has ever seen – has also contributed to the numbers in work, by helping more than 330,000 long-term unemployed off benefits and into sustained work. The scheme is helping more people than any previous scheme, and new statistics will be published tomorrow.

DWP has also introduced the ‘Claimant Commitment’ in all British jobcentres – it is a more rigorous commitment for benefit claimants based on the person’s individual circumstances and clearly sets out what their responsibilities are while job hunting.