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North East LEP reaction to ONS regional labour market statistics

The North East Local Enterprise Partnership’s (North East LEP) Strategy and Policy Director, Richard Baker, has commented on today’s regional labour market statistics, released by the Office for National Statistics (ONS).

“Whilst today’s employment data continues to be dominated by the impact of the furlough scheme which is working to protect North East employment levels during this period, the data also shows the impact of declining levels of economic activity in the region, and risks for the future as the job retention scheme is phased out are also becoming clearer.

“The latest HMRC statistics show that 30% of workers in the North East LEP area that were eligible for furlough were being supported by the Coronavirus Job Retention Scheme (CJRS) by the end of June 2020. In addition, 76% of the eligible self-employed had claimed Self-Employment Income Support Scheme (SEISS) grants by that date. The take up rates have been similar to those for England and in total over 300,000 North East workers were supported by the end of June.

“Other data is beginning to show the impact of COVID-19 with a decline in earnings, increases in claims for universal credit and estimates of growth of unemployment benefits:

  • In the PAYE Real Time Information, median monthly pay in the North East region in the three months to June was 2.3% lower than in the three months to March. This was the fourth largest percentage decrease among the nine English regions.
  • The number of Universal Credit claimants in the North East LEP area has increased by over 70,000 (57%) between mid-March and mid-July. This benefit provides additional income for low paid workers as well as supporting those seeking employment and those unable to work due to sickness or caring responsibilities. In March, less than a third of claimants had been claiming for fewer than six months but, by mid-July, this had increased to almost a half. Overall the number of North East claimants had increased by a smaller percentage than in England as a whole (up 86%).
  • Today’s ONS estimate of the number of unemployment benefit claimants shows a rise of just under 36,000 (65%) between mid-March and mid-July in the North East LEP area. This compares with an increase across England of114%. As with Universal Credit, the percentage change in the North East was similar in all working-age groups, but highest among those aged 45 to 49 and 50 to 54 (up 70% and 68%, respectively).
  • Nationally ONS indicators suggest that the number of employees in the UK is down around 730,000 compared with March 2020. It highlights that the quarterly decrease in UK employment was particularly driven by decreases in the numbers of workers aged 65 years and over, self-employed and part-time workers.

“These trends are aligned with the reports from the Bank of England which showed a 21% decline in GDP in this quarter. Whilst in other reports, there is some suggestion that vacancies are beginning to grow slowly they have some way to go to return to levels from before Covid. It is important that support continues to be given to the labour market in the short term and that action is taken to stimulate the economy.

“The North East Local Enterprise Partnership (LEP), CBI, North of Tyne and North East Combined Authorities have come together, with the support of industry, to form the North East COVID-19 Economic Response Group to provide maximum support for businesses in the immediate term and to plan for long-term economic recovery following the COVID-19 outbreak and to ensure the region has strong and collaborative economic leadership as we work through the impacts of the measures introduced to slow the spread of the virus.

“By coordinating one response to the current economic crisis, we will use one voice and our collective influence to reassure the North East public, deliver crucial interventions and lobby Government.”

The North East Growth Hub is working hard to ensure businesses have access to all the latest information, guidance and support regarding Covid-19. This can be viewed here: https://www.northeastgrowthhub.co.uk/toolkits/covid-19-coronavirus-toolkit

Business are also being asked to complete this short survey to help us understand what support is needed and feed this back to government: https://www.surveymonkey.co.uk/r/COVID19_Business_Survey


Notes to editors

About the North East Local Enterprise Partnership (North East LEP)

The North East Local Enterprise Partnership (North East LEP) is a public, private, education and voluntary sector partnership that covers Durham, Gateshead, Newcastle, Northumberland, North Tyneside, South Tyneside and Sunderland local authority areas.