With the economy necessarily being shut down in an unprecedented way, it is urgent that the government acts to protect jobs and incomes.
I am increasingly worried that the slow and muddled health response is now being followed by a slow and muddled response to saving jobs. The window is closing to protect existing jobs and encourage firms to invest in creating new ones.
Labour is calling for an urgent “Back to Work Budget” to protect UK jobs at a crucial phase of the coronavirus recovery.
Analysis of new labour market data from the ONS shows the scale of the economic challenge facing the North East, as claimants for Universal Credit and other unemployment benefits rose by 71.34% between February and May 2020, to 125,992.
Although an imperfect measure of unemployment, these figures show a severely strained jobs market and an urgent need for a Back to Work Budget.
The Government has reportedly postponed its next full budget until autumn, raising concerns a slow and muddled health response is now being followed by a slow and muddled response to saving jobs.
Vacancies also fell by 60% across the UK between February and May, with steeper falls in some sectors. This includes:
- 80% fall in construction, employing 4.6% of workers in the North East
- 94% and 70% falls in motor trades and retail, employing around 13.3% of workers in the North East
- 94% fall in accommodation and food services, employing 8.8% of workers in the North East
- 85% in arts, entertainment and recreation, employing 2.1% of workers in the North East
Meanwhile, figures released by the Government show 24.47% of the workforce are furloughed in the North East whilst 67,000 of the workforce are using the Self-employed Income Support Scheme.
- 8,900 employments have been furloughed
- 1900 are using the Self-employed Income Support Scheme.
- There were 2935 claimants for Universal Credit and other unemployment benefits in February 2020. There were 4370 in May 2020, an increase of 48.9%.
Labour called for and welcomed these schemes, but we are concerned about their abrupt withdrawal which risks pushing millions of people into unemployment. The Chancellor plans to withdraw support for all sectors and areas of the economy at once, and has not linked his plan to other public health measures, such as easing social distancing guidelines where it is safe to do so.
These figures show the Government cannot afford to delay its next full budget until after the summer and must urgently bring forward a Back to Work Budget to protect jobs and livelihoods in the North East. The government must also ensure the vital support provided by the JRS and SEISS are not withdrawn too soon, and that any withdrawal is tailored to the specific needs of firms and sectors in Easington and the wider North East.