Job losses stoked by small firm failures

25/11/2009

Companies going bust in the recession have proved to be a major contributor to the rise in overall unemployment, analysis suggested today (November 25th).

According to CreditPal, an online guidance service for small businesses, 164,000 people in England and Wales have lost their jobs over the past year due to their employer going to the wall.

This total represents 29 per cent of the 569,000 rise in unemployment measured by official figures over the same period.

High-profile casualties of the recession include retail chains Woolworths and Zavvi.

However, the failure of thousands of smaller businesses have had a much lower profile.

CreditPal said that there were 15,000 company liquidations across nine sectors over the past 12 months.

These firms employed an average of 10.9 people each.

Chris Poll, chief executive of Future Route, creator of CreditPal, said: "These liquidations have had a significant impact across the UK’s [small business] network, not only through the jobs lost directly, but also by leaving trading partners with bad debts."

Kevin Still, EuroDebt director, added: "It is not just the businesses that fail and the impact on their supply chain, there are approximately 3.5 million unincorporated businesses and many have had to take pay cuts or pay freezes just to stay in business. This applies to the 10 or so employees that may be supporting the business, having to work extra hours for no additional money.

"Job and income stability should be a major priority for many as we see out the recession. EuroDebt has seen many people significantly tighten their budgets to accommodate major squeezes in disposable. Unfortunately for some this means they have reached a position where they can’t meet all their contractual agreements on credit cards and personal loans. EuroDebt is not only helping the business owners, but also the employees, who need a range of debt solutions."

Latest official unemployment figures put the UK's jobless total at around 2.5 million.

Tags; Young Family Finances, Job loss, Recent Graduate Debt,

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