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Yesterday the Coronavirus Job Retention Scheme opened for business. The scheme was firstly announced in March as an attempt to contain unemployment during the Coronavirus lockdown and, in one day only, it received over 140,000 applications from firms looking for support to pay their employees’ wages.
While we know that, despite these measures, there has been an unprecedented increase in Universal Credit claims nationally, data at the local level lags a few weeks behind. This means it is not yet possible to tell whether the lockdown – as well as the Retention Scheme – have had a similar impact in different parts of the country.
With that in mind however, the claimant count data released today by the Department for Work and Pension does tell us important information about the strength of different local labour markets just before we entered the lockdown.
In particular, it reveals three things:
1. Overall, just before the country entered the lockdown, 3.1 per cent of the UK working-age population made a claim for Universal Credit or Jobseeker’s Allowance. This was slightly higher than in the previous month (3 per cent). However, the monthly increase was slower than in previous months, and the country as a whole had a strong labour market
2. The national figures hides considerable variation, with the top 10 largest cities and towns for claimant counts all in the North and Midlands. Hull had the largest share of claimant counts, double the national average, followed by Birmingham (5.8 per cent) and Blackpool (5.5 per cent). York was the only northern city among the 10 places with the lowest share of claimant counts, with the bottom of the ranking instead populated by cities and large towns in the Greater South East of England, including Aldershot (1.4 per cent), Cambridge (1.6 per cent) and Exeter (1.7 per cent).
Source: Department for Work and Pensions, Claimant count March 2020 data
3. These latest patterns are consistent with previous data. With the exception of Burnley, which was 11th this time last year, all the top 10 large cities and towns for claimant counts in this latest release were also among the top 10 a year ago. And this was similarly the case for the places with the lowest shares of claimant counts too – once again reminding us that the North/South divide in employment opportunities in the UK is an ongoing challenge that needs to be urgently address.
While we can all start to see the economic effects of this pandemic from our windows, we will have to wait until this time next month to have a clear understanding of their real magnitude in different parts of the country. For now, we know that some places were entered this crisis in a much weaker position, making them more vulnerable to possible economic shocks. Watch this space as we continue to monitor the effects of the pandemic on different local labour markets and for our latest thinking on how the Government might want to address these challenges.
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