Cutting red tape and introducing tax incentives are top of the wish list for the region’s business leaders as George Osborne prepares to deliver his make-or-break financial statement.
Birmingham Chamber Group warned that small businesses were reluctant to take on new employees because of uncertainty about the future state of the economy.
It called for a cut in employment regulation, particularly for smaller businesses, to give firms the confidence to hire again.
Meanwhile, the Institute of Directors called for a cut in National Insurance - again, to help employers create jobs.
Business Secretary Vince Cable has announced a series of reforms to employment law, including removing the right of staff to claim unfair dismissal until they have been employed for two years, up from one at present.
Katie Teasdale, head of policy and strategic relationships at Birmingham Chamber Group, highlighted other regulations which come into force when a firm employs five or more people, such as the requirement to draw up a formal health and safety policy and to make stakeholder pensions available to staff.
She said: “We know of small businesses that want to expand, and would benefit from expanding, who are reluctant to take on the extra staff because of the red tape and regulation it would involve.
“When they don’t know what the future holds they are reluctant to take on the extra responsibilities.”
John Rider, West Midlands chairman of the Institute of Directors, said: “The Autumn Statement needs to concentrate on short-term measures to encourage employment and get young people into work. I would like a reduction in employers’ National Insurance payments or even some sort of moratorium
“And on wider matters they should postpone the introduction of pension auto enrolment for at least two years – it is another cost on business which it cannot bear at this time.”
The Chancellor’s Autumn Statement, due on November 29, was originally expected to be a fairly pedestrian affair, following his “Budget for growth” in March.
But the crisis in the eurozone and a series of disappointing economic statistics have put Mr Osborne under pressure to introduce new measures to get the economy growing.
Hopes that the coalition government would get the deficit under control in this Parliament, allowing it to introduce tax cuts in time for the 2015 general election, look increasingly forlorn. As any measures taken now could take two years or so to feed in to the economy, Mr Osborne’s announcements on November 29 could determine this government’s future.
Figures earlier this month showed that 730,000 young people aged 16 to 24 are looking for work. When full-time students seeking part-time employment are added to the total, it means youth unemployment has reached 1.02 million.
And figures uncovered by Birmingham MP Liam Byrne (Lab Hodge Hill), the Shadow Work and Pensions Secretary, revealed the increase in youth unemployment in the city.
There are 4,775 young people aged 18 to 24 in Birmingham who have been unemployed for six months or longer – an increase of 62 per cent since January this year – statistics compiled by the House of Commons library show.
New figures from the Homes and Communities Agency also highlighted the severe challenges facing the construction industry in the West Midlands.
The number of new “affordable homes” built in the West Midlands in the six months leading up to September 30 was 187 – compared to 1,387 in the six months previously, a massive drop of more than 80 per cent.
The Bank of England has warned that the economy is expected to grow by just one per cent in 2011, revising down its previous forecast of 1.7 per cent, and will grow by just one per cent again in 2012, down from a previous forecast of two per cent.
There has also been some good news in the region, including the announcement that food giant Nestle is creating an extra 300 jobs at its factory in Tutbury, near Burton, on the border between Staffordshire and Derbyshire, which was welcomed by David Cameron personally.
The Prime Minister said: “This new investment by Nestle and the jobs it will create is brilliant news for UK manufacturing and for the local community.
“This demonstrates what can be achieved by investing in capacity and people as Nestle has done consistently over recent years. The jobs created by this new investment will benefit both skilled workers and those leaving school who will be able to train in the workplace to become the skilled workers of the future.”
But in an effort to encourage more job creation, Mr Osborne is expected to announce an emergency cash injection funded by money sitting idle in private sector pension funds and insurance schemes, to develop new infrastructure projects.
Measures are likely to include the construction of new toll roads, which would not only create jobs in the short term but could provide a boost to the economy by unblocking the congested A14 near Cambridge, which is used to transport goods from the Midlands to Felixstowe docks.
Ministers have also dropped hints that they are considering expanding the £1.4 billion Regional Growth Fund, which is already providing funding for a range of West Midlands businesses including Aston Martin, Jaguar Land Rover, Alstom and many others, and is expected directly to create or safeguard 10,000 jobs in the region as well as 65,000 in supply chains.
Solihull MP Lorely Burt (Lib Dem) said she was pushing for more measures to back industry.
She said “I would like to see further measures to stimulate growth, which is the only way we will get ourselves out of the financial doldrums we are in.”
The MP welcomed the Government’s plans to insure mortgages for first-time buyers, a measure she had backed for for some time as a way of creating jobs in the construction industry.
But she called on the Government to speed up plans to build 100,000 council homes, and to ensure small businesses have access to credit.
Chamber chief executive Jerry Blackett has also written to Mr Osborne urging him to abolish the 50p top rate of income tax, cuts in corporation tax and confirm the government’s commitment to the HS2 high speed rail line between London and Birmingham.