North East unemployment claims soar amid lockdown

Two police officers patrol the empty streets of Tynemouth. Credit: PA Images

The number of people claiming unemployment benefit in the North East soared last month, official figures have revealed.

The Office for National Statistics (ONS) said the claimant rate in the region rose by 39,000 to 112,000, the first official picture of the economic impact of the pandemic.

9% of people in the North East are now claiming Universal Credit (UC) or Jobseeker's Allowance (JSA), the highest of any region in the UK.

The Institute for Employment Studies, a think tank, has found that claimant unemployment, the number of people who claim benefits versus the total number of people who are in work, has increased by 3% in the North East, the second highest in the country after the North West.

Bridget Phillipson, Labour MP for Houghton and Sunderland South and Shadow Chief Secretary to the Treasury, said the figures for were "truly frightening.

"We have seen before how sustained high unemployment scars communities and causes damage down the generations...", she wrote on Twitter.

Jonathan Athow, deputy national statistician for economic statistics at the ONS, said: “While only covering the first weeks of restrictions, our figures show Covid-19 is having a major impact on the labour market.

A worker at Nissan's Sunderland plant, where the majority of staff have been placed on the government's furlough scheme. Credit: PA Images

According to the Resolution Foundation, young people are more likely to experience unemployment or a fall in their income because of the pandemic.

Nye Cominetti, a Senior Economist at the think tank, said: “Today’s figures highlight the speed and scale of Britain’s job crisis. Employee numbers have fallen by nearly half a million in just one month, while the number of vacancies has halved.

“These shocking figures would be far worse were it not the Job Retention Scheme, which has so far protected 7.5 million jobs.

“But even despite widespread furloughing, Britain could still be facing the highest unemployment levels it has had in over a quarter of a century.”

Around one in three 18 to 24-year-old employees have lost work, either through being furloughed (23%) or losing their jobs completely (9%).

A fifth (20%) of employees in their late 20s (aged 25 to 29) have either been furloughed or lost their jobs, along with nearly a fifth (18%) of workers in their early 60s (aged 60 to 64).

Employees aged 35 to 44 are the least likely to have been furloughed or lost their jobs, with around 15% experiencing this since the crisis started, the report found.

Tej Parikh, chief economist at the Institute of Directors, said: “Even before lockdown, coronavirus was threatening to take the shine off the UK’s sterling jobs record, and initial estimates for April don’t make for easy reading.

“It’s clear that without the Government’s furlough scheme, the picture would have rapidly deteriorated even further."