North East Devolution and Levelling Up

North East climbs the jobs table

The North East has climbed further off the bottom of England’s unemployment table. After several months ahead of London, which was disproportionately badly hit by the covid pandemic, the region has now overtaken the West Midlands as well, according to statistics published by the Office for National Statistics today.

Unemployment in the region fell by 1.0% to 5.4% in January to March compared with the previous three months, which was the largest fall in the UK, equally with the East Midlands. Meanwhile unemployment in the West Midlands fell by only 0.4% to 5.7%. London remains bottom of the table, with a fall in joblessness of 0.2% to 6.8%.

However, the North East’s high level of economic inactivity means that its employment rate of 72.2% remains the lowest in the UK apart from Northern Ireland, even though it has improved by 1.1%, which is the best performance except Wales[1]. 23.5% of the North East’s working age population are economically inactive, which is the highest rate apart from Northern Ireland, even though the North East saw the biggest fall in inactivity in England of 0.4%, equal to Northern Ireland but behind Scotland (down 0.6%) and Wales (down 1.8%).

Hope

North East England Chamber of Commerce Policy Adviser Niamh Corcoran said:

‘The numbers released today offer hope that economic indicators are beginning to head in the right direction, with North East unemployment declining and employment rising. It is without a doubt that the government’s Job Retention Scheme has had a key role to play in this, by protecting jobs and livelihoods during the two waves of the pandemic.

‘Whilst the figures today offer early signs of a stabilising labour market, it’s important we do not become complacent. As lockdown eases, a number of sectors, such as culture and retail, are yet to bounce back. It will likely be a long process for those sectors to return to pre-pandemic levels of capacity and employment growth.

‘Today’s national statistics also expose the disproportionate impact of the crisis on young and older workers. Long term unemployment is rising at its fastest rate since 2010, with unemployment for young people and the over 50s at the highest rate in five years.

‘As the labour market begins to stabilise, it is vital that government takes action and makes concerted efforts to bolster deeply impacted economic sectors and prevent young and older workers from falling into long-term unemployment’.

Encouraging

Richard Baker, Strategy and Policy Director of the North East Local Enterprise Partnership (LEP), said:

‘The headline North East regional data released today is encouraging after the challenges of the last year with signs of improvement in the labour market in the first three months of 2021. Employment increased by 14,000 compared to the last quarter of 2020 and unemployment decreased by 13,000. 

‘However, this is just the start of the recovery and there is much work to do. Despite these increases, the figures show that the region has the lowest working age employment rate at 72.2%, compared to 75.5% across England. It also has the third highest unemployment rate in England (5.4% of the economically active) and the highest proportion of working age people who are economically inactive (23.5%).

‘Over the past year, Covid-19 has impacted on the lives of many people in the North East region. About 32,000 workers have been made redundant since the start of 2020 and the number of payrolled employees in April was about 18,000 lower than in February 2020. At the end of March, almost 140,000 workers in the region were still furloughed. This meant that they were classified as employed in the official statistics, but in an uncertain position about their futures. About 44% of these worked in either food and accommodation services or retail, which highlights how important the impact of the changes to the rules which are now happening will be to North East employment trends during 2021.

‘The latest job seekers claimant count continues to highlight large variations in unemployment within the North East LEP area. More than 30 wards, spread across all seven local authorities, have a claimant count rate of over ten per cent, while a similar number have rates of less than a third of that. This count also highlighted that one in five claimants in the North East LEP area were aged under 25’.


[1] The employment and activity rates are for those aged 16-64. The unemployment rate is for all aged over 16.