True toll of jobless in region near 14pc
Hidden tally three times worse than feared, new figures reveal
YORKSHIRE'S “hidden” unemployment crisis is three times worse than feared, a report has warned.
Research from the Centre for Cities think-tank found the true level of unemployment in the region is almost 14 per cent as economic activity deepens the North-South divide.
It found the official unemployment rate of 4.1 per cent did not include nearly 300,000 people who are involuntarily out of work but classed as “economically inactive”.
The official rate includes those who are actively looking for jobs and does not measure people who are neither in work nor looking for a job due to circumstances outside their control.
The research found that this problem was most prevalent in Hull and Barnsley, where nearly one in five working-aged people fall into the “hidden unemployment” category.
Of the 10 places with the highest number of people involuntarily out of work, nine are in the North of England, of which three are in Yorkshire. Meanwhile eight of the 10 urban areas with the lowest rates are in the South.
This comes as Chancellor Jeremy Hunt, inset, has urged millions of jobless, newly retired or sick Britons to get back to work as part of efforts to increase the country’s productivity and expand the economy.
Andrew Carter, chief executive of Centre for Cities, said: “Since the pandemic we have seen lots of headlines alluding to record-low numbers of job seekers but Cities Outlook shows there is actually a jobs shortage, with a significant North-South divide in involuntary inactivity rates.
“With the UK now likely to enter a recession, the Government must address its insufficient action on levelling up so far and act swiftly to create more opportunities that get people back into the North’s labour force.
“This will require setting out and implementing an agenda that delivers much-needed investment in skills and public services while supporting job creation in struggling places.”
Jonathan Ashworth, Labour’s shadow work and pensions secretary, said: “The Tories’ failure to take action to tackle the number of people out of work in this country is leaving the country poorer and northern areas particularly worse off.”
The report comes alongside the latest warning from the International Monetary Fund, which said the UK would see the worst performance of countries in the G7.
In its latest World Economic Outlook update, the IMF downgraded its UK gross domestic product forecast once again, predicting a contraction of 0.6 per cent against the 0.3 per cent growth pencilled in last October as Britain looks set to suffer more than most from soaring inflation and higher interest rates.
But it nudged up its outlook for UK growth in 2024 to 0.9 per cent, up from the 0.6 per cent expansion previously forecast.
Mr Hunt said: “The Governor of the Bank of England recently said that any UK recession this year was likely to be shallower than previously predicted.
“However these figures confirm we are not immune to the pressures hitting nearly all advanced economies.”
Today will mark the third anniversary of the UK’s exit from the European Union, with Rishi Sunak reaching 100 days as Prime Minister on Thursday.
Mr Sunak said: “In the three years since leaving the EU, we’ve made huge strides in harnessing the freedoms unlocked by Brexit to tackle generational challenges.
“Whether leading Europe’s fastest vaccine rollout, striking trade deals with over 70 countries or taking back control of our borders, we’ve forged a path as an independent nation with confidence.”
“Hidden” unemployment is a growing issue and presents a major headache for this country’s economy.
If Britain is to recover from a recession then all parts of the country need to be firing on all cylinders.
And it is clear from the study by the Centre for Cities that the region’s true economic potential is not being utilised.
Its Cities Outlook report shows that Yorkshire’s unemployment rate should be three times higher than figures suggest because the official rate only includes those who are actively looking for jobs and does not measure people who are neither in work nor looking for a job due to circumstances outside of their control.
As a result Yorkshire’s low unemployment rate does not include nearly 300,000 people who are involuntarily out of work but classed as economically inactive. Unemployment rises from 4.1 per cent to 13.8 per cent, when this group is factored in.
Hull and Barnsley are the most affected with nearly one in five people falling into this “hidden” unemployment category.
The report once again highlights a North-South divide. Cities in the North are more likely to face a job shortage. There is also a clear North-South divide in the number of people out of work due to long-term sickness.
It is further evidence of the need to level up. Unfortunately, the Government’s failure to deliver has left regions such as Yorkshire struggling economically.
What this region doesn’t need is piecemeal handouts for which they have to fight other towns and cities across the country. Instead, the Government needs to deliver a transformative economic agenda. One that puts people at the heart of the solution.
We need investment in skills and properly funded public services that give confidence to the private sector – encouraging them to invest and create jobs.