RTTNews - The Confederation of the British Industry said in a report Monday that unemployment in the UK will continue to rise, and peak at 3.03 million in the second quarter of next year. The CBI pointed out that government policies were required to reduce unemployment, during the critical phase of economic recovery.

Business leaders believe a package of labor market investments and reforms, including an alternative to redundancy, could help stem the tide of job losses.

The CBI said the government should implement quickly an Alternative to Redundancy (ATR) scheme. According to this scheme, an employee would not work for a maximum period of six months, but would be paid an ATR allowance equal to twice the rate of Job Seekers Allowance - paid half by government and half by the employer.

Moreover, the CBI said the government should review the length of the consultation for redundancies. Currently, firms must give a consultation period of at least 90 days where 100 or more employees face redundancy in a three-month period. The timeframe prolongs uncertainty for staff and delays firms trying to adapt to rapidly changing circumstances, the CBI said.

The report said the 2011 hike in employer National Insurance contributions should be deferred. Further, the UK has reached a tipping point on employment regulation, having added GBP70 billion to business costs since 1998, it said. The CBI calls for all future legislations introduced by the government to be tested by the question: how will this help create sustainable jobs?

Further, the CBI wants the government to target more assistance to younger people, who were the worst hit by the recession. Also, it wants employers and universities to improve skill set of those in the workforce.

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