North East unemployment remains highest in UK – with warnings of worse to come

Unemployment in the North East remains the highest in the country despite largely flat figures in the latest official figures.

The region’s rate of joblessness for the period from May to July remains at 5.2%, well above the national average of 4.1%. The number of people claiming unemployment benefit at the start of August was 125,140, almost unchanged since last month but still a rise of more than 50,000 from the pre-pandemic period.

Analysts have warned that worse figures are likely to come later in the year, as the official data catches up with the position on the ground and the Government’s Job Retention Scheme is wound down.

And there have been calls for specific help for the North East to tackle its long-term unemployment problem.

Nationally, the figures showed that almost 700,000 UK workers have been removed from the payrolls of British companies since March when the coronavirus lockdown began.

A study published at the start of this week warned that that number of job losses could double by the end of the year.

Reacting to the figures, Jonathan Walker, assistant director of policy at the North East England Chamber of Commerce, said: “With the labour market largely static over the summer, it is no great surprise to see the headline employment figures largely flat when compared to last month.

“Yet we know this masks tremendous uncertainty in our labour market. The reopening of the economy has seen firms largely bringing staff back from furlough rather than new recruitment. We also know that the winding down of the job retention scheme is likely to lead to significant redundancies in the months ahead.

“The continued rise in the claimant count is an early indicator of this.

“The need for immediate support for those sectors and individuals most at risk is clear. With the threat of local lockdowns looming large, employers in the areas of hospitality, culture and retail will be particularly exposed.”

Unemployment in the region stands at 68,000, a fall of 5,000 over the year due to a mini jobs boom at the start of the year, before the pandemic.

Nationally, the Office of National Statistics said the increase in unemployment has particularly impacted young people, as it revealed a 76,000 rise in the number of unemployed people aged between 16 and 24 over the past year.

ONS director of economic statistics Darren Morgan said: “Some effects of the pandemic on the labour market were beginning to unwind in July as parts of the economy reopened. Fewer workers were away on furlough and average hours rose.

“The number of job vacancies continued to recover into August, too. Nonetheless, with the number of employees on the payroll down again in August and both unemployment and redundancies sharply up in July, it is clear that coronavirus is still having a big impact on the world of work.”

The ONS also reported that average wages were 1% lower than a year ago, with particular slumps in wages in the construction, retail and hospitality sectors.

Employment Minister Mims Davies said: “We recognise that the pandemic has been difficult for many people who are worried about their incomes and that’s why our £30bn Plan for Jobs is aimed at protecting, supporting and creating jobs and it’s welcome news that there is some recovery in vacancies.

“Meanwhile, we’re creating hundreds of thousands of fully subsidised new jobs for young people through our £2bn Kickstart Scheme to give those starting out a leg up onto the career ladder and offer them hope for the future.”

Shadow work and pensions secretary Jonathan Reynolds said: “These new figures are deeply concerning, over five million people are not working and 2.5m have been out of work for three months or more.

“Unemployment will continue to rise unless the Government acts now and adopts a more flexible approach targeted at the sectors that need it most.”

Chronicle Live – Sunderland