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North East Local Enterprise Partnership 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).

The headline North East employment data includes both the North East LEP and Tees Valley LEP areas and is based on interviews throughout the three months from February to April 2020. More than half of this period was before the coronavirus (COVID-19) restrictions were put in place, so the data does not reflect the full impact of these restrictions. In addition, the release uses the internationally-agreed definition of employment that includes workers temporarily absent from a job. Furloughed workers and non-working self-employed people with a reasonable expectation of returning to their jobs are therefore classified as employed in today’s data.

“Overall, the data for this quarter indicates that employment was increasing in the North East region in the first part of 2020. It was 36,000 higher than in the previous quarter and at a record level, while unemployment fell by 11,000 and economic inactivity decreased by 24,000.”

Economic inactivity covers a broad group of people not actively seeking work for a wide range of reasons, including full-time study, looking after family and home, disability and ill-health, and retirement.

“As the UK moved into lockdown, the North East was the English region experiencing the largest increase in the employment rate of those aged 16 to 64 and the biggest fall in the adult unemployment rate. Although, this was from a baseline position where the employment rate was still the lowest, and the unemployment rate the highest, among the nine English regions.

“Whilst today’s survey statistics are important and represent an important point of reference for the future recovery of our economy, more recent administrative data also released today shows the impact of the measures being taken in response to COVID-19 on the North East LEP area.

“The number of Universal Credit claimants increased by over 63,000 (51%) between mid-March and mid-May. While this includes both workers and non-workers, today’s ONS estimate of the number of unemployment benefit claimants shows a rise of almost 36,000 (or 66%) over the same period. Although these are huge increases they are, in percentage terms, lower than the increases across England excluding London (where the respective totals increased by 74% and 108%). Further perspective can be drawn from last week’s HMRC data which highlighted that, by the end of May, about 24% of the North East LEP area workforce were furloughed and about 72% of eligible self-employed people had sought Government support. These were similar percentages to the national picture.

“The North East Local Enterprise Partnership (LEP), CBI, on behalf of all businesses, North of Tyne and North East Combined Authorities and the regional universities and transport body have come together 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.

“The immediate focus so far has been on supporting businesses to remain operational, to keep people in employment and to work with partners to solve industry challenges. As the Government moves forward the relaxation of controls, the Covid Response Group will begin to implement action to recover the region’s economy and we have published a report on our joint approach this week which can be accessed here.

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

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