UNIONS called for a national jobs guarantee for young people today after new official figures showed a sharp decline in the number of under-25s in payrolled work.

The Office for National Statistics (ONS) said that the number of payrolled workers fell by 8,000 last month, while vacancies dropped by 10,000 over the quarter to August. 

Wage growth also fell back to its lowest level for more than three years, dropping to 4.8 per cent, excluding bonuses, in the three months to July. It was 5 per cent in the previous three months.

ONS director of economic statistics Liz McKeown said: “The labour market continues to cool with the number of people on payroll falling again, while firms also told us there were fewer jobs in the latest period.”

TUC general secretary Paul Nowak said: “Fragilities in the jobs market have been long in the making and are another toxic Tory legacy.  

“But the government must build on this with a national jobs guarantee for young people. There are still too many young people stuck out of work, education and training.

“We know that real experience of paid work is the best way to turn the tide on long-term worklessness — and that over time this investment will more than pay for itself.”

It came as analysis of HM Revenue and Customs figures published today by the centre-right think tank Centre for Social Justice (CSJ) revealed a 51,000 drop in the number of under-25s in payrolled work from April to August.

Calling for an effective tax cut for businesses that hire 16 to 24-year-olds not in education, employment or training, CSJ senior researcher Ben Gregg said: “The government’s vow to get young people off benefits and into work is welcome, but these figures show how urgently they need to turn words into action.”

Work Foundation think tank director Ben Harrison also warned that unemployment — at 4.7 per cent — “continues to creep up” as more people look for fewer available jobs, with 2.3 jobseekers per vacancy. 

“As the potential for tax rises loom at the upcoming autumn Budget, government must ensure it does not increase the pressure on lower income workers who have borne the brunt of this squeeze in recent years.”