North East Devolution and Levelling Up

North East jobless rate falls slightly over quarter, in line with national average

North East unemployment fell slightly over  the three months to April, in line with the national average, but remains second highest in the UK after London, according to figures released today by the Office for National Statistics.

The regional jobless rate (including Tees Valley) for February-April 2021 was 5.9%, a drop of 0.3% compared with November 2020-January 2021. The UK, Great Britain and England rates were all also down by 0.3%.

The regional rate was, however, up compared with the three months January-March 2021, when it was 5.4% and third highest, after London and the West Midlands.

London still has the highest unemployment rate at 6.5% but is closing the gap, with a reduction of 0.7%, the best performance jointly with the South West.

The North East also has the second highest rate for economic inactivity, with 23.5% of its population aged 16-64 not in the labour market. This is the second highest rate after Northern Ireland.

The North East’s employment rate of 71.9% is the UK’s second lowest after Northern Ireland, but the region did achieve employment growth of 0.6%, the second best performance over the three months after Wales, indicating a slight bounce back from its low level.

Looking back a year to the start of the pandemic, the North East employment rate was 1.5% lower in January-March 2021 than in February-April 2020, compared with a UK average fall of 0.9%. The region’s unemployment rate rose by 0.6% compared with the UK average increase of 0.7%.

However, the North East’s economic inactivity rate rose over the year by 0.9% compared with the UK average of 0.3%, suggesting that three times as many people in the region as nationally, proportionate to population, dropped out of the labour market altogether.  

The North East figures for the end of April include 115,000 people who count as employed but are on furlough, according to Richard Baker, director of strategy and policy at the North East Local Enterprise Partnership (NELEP). He also reported that about 4,500 workers were made redundant in the latest quarter, bringing the total to 29,000 in 12 months. In addition, 48,000 self-employed workers in the region claimed support in the first few weeks of the latest grant of the Self-Employment Income Support Scheme (SEISS).  

Mr Baker said the latest data ‘confirms the progressive improvement of the economy as Covid-19 controls are released, but also shows clearly that there is a long way to go for our region’.

Niamh Corcoran, policy adviser at the North East England Chamber of Commerce, said that while the figures were a cause for cautious optimism, we are not out of the woods yet.

‘The extension of restrictions and the unwinding of the Job Retention Scheme could pose a threat to this recovery and cause a spike in redundancies later in the year. In addition, there are still deep-set issues in the labour market which government needs to focus on to sustain this recovery. The national figures show that the numbers of people in long-term unemployment has reached the highest levels in five years’.