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Unemployment increases by 600,000 during coronavirus lockdown, new figures reveal

Job Centre - Image credit: PA

Unemployment increases by 600,000 during coronavirus lockdown, new figures reveal

The number people in the UK who are unemployed has increased by more than 600,000 between March and May as the coronavirus pandemic took its toll on the economy, new figures show.

Experimental data from the Office for National Statistics (ONS) and HM Revenue and Customs (HMRC) show that the number of paid employees fell by 1.7 per cent compared with May 2019, and by 2.1 per cent when compared with March 2020.

The ONS estimates that 163,000 people were no longer on payroll in May, on top of 449,000 in April – suggesting that 612,000 more people are now out of work compared to when lockdown began.

“Early indicators for May 2020 suggest that the number of employees in the UK on payrolls is down over 600,000 compared with March 2020,” the ONS said.

The UK employment rate in the three months to April 2020 stood at 76.4 per cent – 0.1 per cent lower than the previous quarter but 0.3 per cent higher than a year earlier – while the unemployment rate was 3.9 per cent  – 0.1 per cent lower than a year earlier, but similar to the previous quarter.

In Scotland the number of unemployed rose by 30,000 to 127,000 between February and April.

The employment rate in Scotland fell to 74.3 per cent and the unemployment rate rose to 4.6 per cent over the quarter between February and April 2020, the highest unemployment rate in the UK and up 1.1. percentage points from 3.5 per cent in the previous quarter.

The figures come after the ONS last week recorded a drop of more than 20 per cent in UK GDP month-to-month.

And they were published as Labour demanded a ‘back to work budget’ in a bid to protect people from further job losses.

Shadow chancellor Anneliese Dodds urged her opposite number Rishi Sunak to press ahead with an emergency summer budget focused on tackling unemployment.

The Labour frontbencher said: “We are increasingly worried that the slow and confused health response is now being followed by a slow and confused response to saving jobs.

“The window is closing to protect existing jobs and encourage firms to invest in creating new ones.”

In light of the ONS figures, the Scottish Government has called for support schemes to continue for “as long as required”.

It will hold a summit on Wednesday with Skills Development Scotland and the Scottish Funding Council to coordinate an approach to tackling unemployment in Scotland.

Business, fair work and skills minister Jamie Hepburn said: “These are the first labour market statistics to include a full month of lockdown measures and show clearly the scale of the challenge facing Scotland as a result of the coronavirus (COVID-19) pandemic.

“I know that many people will be feeling a deep sense of anxiety about their livelihoods.

“Keeping people in work while supporting those who have lost their jobs will continue to be at the heart of our thinking as we carefully reopen the economy.

“Scotland’s labour market has changed drastically since the lockdown measures were imposed.

“As such we will be convening a labour market summit tomorrow, with deputy first minister John Swinney, economy secretary Fiona Hyslop, further education minister Richard Lochhead and I leading discussions with Skills Development Scotland and the Scottish Funding Council to ensure a co-ordinated approach to tackling unemployment, giving people skills for the jobs that will be needed as we emerge from the crisis.  

“While the Scottish Government has welcomed the support schemes from HMRC during this time, and their extension, it is important that we ensure this support continues to be offered for as long as required, particularly in sectors such as tourism, hospitality, retail, culture, and oil and gas, which will not have fully recovered by October.

“That is why we are urging the UK Government to work with us to ensure support reflects what is required in Scotland.

“Failure to do so will put the economy at a competitive disadvantage in recovering from this crisis and could result in additional job losses. We must not allow that to happen.”

The STUC warned that there must not be a “panicked rush” to re-open workplaces in response to the unemployment figures that could cause a second spike in infection rates.

STUC general secretary designate Rozanne Foyer said: “Hundreds of thousands of Scottish workers are understandably worried about their jobs.

“No one more than us wants to see a return to work as soon as it is safe. But this has to be achieved safely and sustainably, with a public transport system that limits the spread of the virus, a massive increase in testing and adequate contact tracing.

“Tearing up the play book now could be a disaster causing cases to spike with all the suffering that would entail.

“Government concerns over extending the furlough scheme have to be looked at against the immediate impact on public funds of a massive increase in the cost of social security and the economic threat of a return to lockdown.

“Government needs to extend the furlough scheme, particularly for the most affected sectors, create a job retention scheme to support continuing employment and prepare to invest in shovel ready clean infrastructure as lockdown continues to ease.”

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Employment

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