While the take-up of the Job Retention Scheme has increased everywhere in January to reflect the third lockdown, there are signs that things are less bad than during the first one.
After the good news we heard on Monday from the Prime Minister laying out the Roadmap to exit lockdown, official data released this week on the labour market outlook in January also offers reasons to be optimistic.
As it was to be expected, the introduction of a third lockdown at the beginning of January led to an increase in the number of workers on the Job Retention Scheme across the country, with some 16 per cent of eligible workers in the UK using the Scheme as of the end of January.
Across the largest cities and towns Crawley continues to be the place most reliant on it, with 19 per cent of workers on furlough. Crawley is followed by coastal places like Blackpool, Brighton and Bournemouth among the places most reliant on the scheme, as well as other cities reliant on tourism and consumption such as Edinburgh, London and York. In contrast, Barnsley, Newport and Peterborough, despite having also experienced an increase in the number of people on furlough compared to December, are the places least reliant on the scheme.
City | The 10 places most reliant on JRS as of the end of Jan 2021 | City | The 10 places least reliant on JRS as of the end of Jan 2021 | |||||
Crawley | 18.9 | Barnsley | 11.4 | |||||
Blackpool | 18.1 | Newport | 11.6 | |||||
Brighton | 17.3 | Peterborough | 11.9 | |||||
Bournemouth | 17.1 | Doncaster | 11.9 | |||||
Slough | 16.8 | Hull | 12.3 | |||||
York | 16.4 | Swansea | 12.3 | |||||
London | 16.3 | Telford | 12.4 | |||||
Luton | 15.6 | Wigan | 12.4 | |||||
Edinburgh | 15.5 | Middlesbrough | 12.5 | |||||
Dundee | 15.5 | Plymouth | 12.5 |
Source: HMRC, Coronavirus Job Retention Scheme Statistics, January 2021
Overall, 4.7 million workers were on furlough at the end of January. While this was up on the monthly figure, it is nowhere near the peak during the first lockdown, when, at the beginning of May, 9.8 million workers in the UK were on the scheme.
Looking at the first time series data available at the local level – which dates back to the end of July last year – shows that this applies to all the largest cities and towns across the country too, with the exception of Blackpool. Given that during this time unemployment has not increased by 5 million, it is reasonable to treat this information as a positive sign that this third lockdown is hitting the economy less hard than the first one, possibly thanks to the much clear messaging from the Government this time around in relation to which activities could continue despite restrictions.
Lastly, while the number of people using the furlough scheme has increased because of the third lockdown, that was not the case for the claimant count – the number of people claiming unemployment-related benefits.
Nationally, 2.6 million people are currently claiming unemployment-related benefits. This is more than double the figure in March last year, but after a big increase in April and May, numbers have somewhat stabilised around this new high. This is, once again, pretty much true everywhere in the country: among the 63 largest cities and towns, only four – namely, Aberdeen, Blackpool, Peterborough and Hull – have seen an increase in claimant count between December and January while all other places have seen no growth or even slight declines.
All these numbers point to the success of Government’s interventions so far in protecting jobs during the pandemic. As the end of this health crisis seems now to be in sight, it is crucial for the Government to get the timing right in phasing out support for workers and businesses. This should mean ensuring the Universal Credit uplift, alongside the Job Retention Scheme are kept in place at least for as long as restrictions are in place and only withdraw support once the economy is back in full gear.
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