It follows news that the number of people out of grew by 48,000 in 2.67 million in the final quarter of 2011.
Meanwhile youth unemployment climbed to 1.04 million or 22.2 per cent.
Quest Professional, a business training provider, is campaigning against the burden of regulation which hit thinks it partly responsible.
Managing director Sean Morgan says red tape is ‘scaring” small businesses.
He adds: ?Employment law is far too complicated and too intimidating and the liabilities are too great. It is easier not to bother employing someone and do the work yourself or simply go without, which also makes it hard for smaller businesses to expand.
“At present there are a number of major hurdles small businesses face, including unfair dismissal, maternity leave and discrimination laws. The government claims to be addressing unfair dismissal but it could be up to a year before we see an effect on unemployment rates.
Meanwhile, Charles Levy, a senior economist at the Work Foundation, says the government should focus on investment and innovation to ?bolster business confidence and enable companies to begin hiring again.
“The deficit reduction strategy alone is not enough” The government urgently needs a coordinated plan for boosting investment, innovation and exports, and it must signal its intention to do this immediately.