Almost 50,000 more out of work

Business Editor

THE damage wreaked on the North East economy has been revealed in official jobs figures that show another big rise in people claiming unemployment benefits.

Data released by the Office for National Statistics (ONS) also reveal that the coronavirus outbreak came at the worst possible time for the region, with the North East having gone into the economic lockdown with big falls of unemployment that are now being rapidly reversed.

The North East’s headline figure for unemployment in the period from February to April shows that joblessness fell to 5.2%.

But more recent figures on people claiming unemployment benefits – which capture the situation on May 14 – show that 124,570 were claiming, a rise of more than 10,000 from the previous month and almost 50,000 in just two months.

There are also fears that the number of people out of work will rise still further when Government support for business through the furloughing scheme starts to end.

Nationally, workers on company payrolls slumped by more than 600,000 between March and May and unemployment claims soared by 1.6m as the coronavirus lockdown hammered the labour market.

Jonathan Athow, deputy national statistician for economic statistics at the ONS, said: “The slowdown in the economy is now visibly hitting the labour market, especially in terms of hours worked. Early indicators for May show the number of employees on payrolls were down over 600,000 compared with March.

“The claimant count was up again, though not all of these people are necessarily unemployed.”

He added: “More detailed employment data up to April show a dramatic drop in the number of hours worked, down almost 9% in the latest period, partly due to a six million rise in people away from work, including those furloughed.”

Minister for Employment Mims Davies said: “Today’s figures are starting to show the impact of Covid19 on our economy, but our furlough scheme, grants, loans and tax cuts have protected thousands of businesses and millions of jobs, setting us up for recovery.

“Already our nationwide network of work coaches have moved in to support jobseekers across sectors and match them with employers who are recruiting. They will be at the heart of our revival.”

Labour’s shadow work and pensions secretary Jonathan Reynolds called for an emergency Budget as he accused the Government of being too slow to deal with the crisis.

Jonathan Walker, assistant director of policy at North East England Chamber of Commerce, said: “The headline labour force statistics show that the regional economy was still in job creation mode right up to point when Covid-19 hit. These numbers do not yet fully show how severe the impact of the current crisis has been on our labour market.

“Government support such as the furlough scheme has helped to stave off many major job losses for the time being, but the fact May’s claimant count is 77% higher than this time last year shows the scale of the challenge we are likely to face.

“The North East continues to have the highest unemployment rate in the country. We know this crisis and any recession will be felt more strongly in regions such as ours.

“The promise of levelling up that brought the Government to power must be honoured in any economic recovery plans.”