ROCKETING fuel prices could put people out of work and the Chancellor must "understand" those pressures, the jobs minister yesterday suggested.
Chris Grayling also acknowledged the dole queue could get longer in the first half of this year, but insisted the coalition was focused on growth and would boost employment over 2011.
His comments come as fuel prices have soared, not least due to VAT rising to 20%.
Unemployment in the North East also rose by 5,000 in the quarter to November, leaving 120,000 on the dole queue. The region’s unemployment rate stands at 9.6%, second only to the West Midlands.
The employment level in the region fell by 36,000, with the rate dropping by 2.1% over the same period, while those classed as economically inactive climbed by 34,000 to 451,000.
Asked about the impact of rising petrol prices, Mr Grayling said: “David Cameron has asked the Treasury to take a look at what can be done and indeed [Treasury Chief Secretary] Danny Alexander talked about possibly taking measures to help remote rural communities.
“And I think, yes, we do need to understand the pressures that a rising oil price can bring. I know the Treasury is looking very hard now at what it can do in the context of what is happening at the moment.”
He insisted there was no surge in unemployment, but stressed the need to create the right environment for business – for example tax incentives for regional firms taking on new staff.
“I would expect growth to be a major theme of the next few months, including the Budget.
“I think it is likely that the Chancellor will want to have more to say about what we are trying to do to stimulate growth and stimulate employment.”
Mr Grayling added a new enterprise allowance would launch in the North East shortly, with a package worth up to £2,000 offered to unemployed people wanting to set up their own businesses.
Asked about the outlook for unemployment, Mr Grayling said: “Clearly in terms of the headline figure this month, we are seeing an increase in unemployment on a quarterly measure.
“I would be surprised if we went through with smooth reductions every single month. But I am confident that the trend off the back of the policies we have introduced will be to begin to bring unemployment down and to see employment rise.”
Nationally, unemployment has soared by 49,000 to 2.5m. One in five 16 to 24-year-olds are jobless after an increase of 32,000 in the quarter to November to 951,000, the highest figure since records began in 1992.
Employment levels have fallen, redundancies have increased and the number of people classed as economically inactive has reached 9.3m.
The only bright news from the Office for National Statistics was a 4,100 fall in the number of people claiming Jobseeker’s Allowance last month to 1.46m.
Public sector employment fell by 33,000 to six million between last June and September, while private sector employees were static at 23 million.
The TUC’s Northern Regional Secretary, Kevin Rowan, said: “Today’s figures show a devastating increase in unemployment and should raise alarm bells about the Government’s economic strategy and reckless cutting.
“Allowing 5,000 job losses in the region is a false economy since every job lost is one less person paying taxes and one more person receiving benefits. What’s most worrying is that this is likely to be only the thin end of the wedge.
“There have been over 9,000 further North East public sector job cuts announced since today’s figures were gathered and firms in the construction sector are going to the wall too.
“Combined with George Osborne’s decision to increase VAT it’s reasonable to expect consumer confidence on the high street will surely be dampened, putting retail and service sector jobs at risk too.
“We don’t believe that sudden and savage cuts are the answer. Only by tackling the jobs deficit will the Government be able to tackle the fiscal deficit.”