Number of Brits on benefits up 126%, unemployment up by 600,000


The number of British people receiving work-related benefits soared by 126% between March and May as the number of people employed over the same period plunged by 600,000.

Office of National Statistics figures released today show the early impact of the lockdown on the UK’s economy but experts have warned its full effect will not be apparent until the government’s furlough scheme ends in October.

Other figures released by HMRC today (Tuesday) shows the wage support scheme introduced by chancellor Rishi Sunak is paying 9.1 million workers – representing more than a quarter of the UK’s workforce.

‘Labour market is on red alert’ warns TUC

The labour market is “on red alert”, said the secretary of the Trades Union Congress (TUC) Frances O’Grady, adding: “We need strong action now to stop lasting economic damage.”

The unemployment rate in both Northern Ireland and Wales has doubled while the figures for Scotland show it has the highest rate of unemployment among the four UK nations. The latest figures – which only capture the first five weeks of lockdown – show England’s rate of unemployment is 3.9%, Wales is 3%, N Ireland 2.3% and Scotland 4.6%.

Without the government’s furlough scheme the number of unemployed across the UK would be much higher. The economy has seen a record drop in the total number of weekly hours worked – down 9% on the previous year according to the Office of National Statistics (ONS) whose figures show the total 959.9 million hours worked is down 94.2 million hours compared to last year.

Worse to come

The huge spike in unemployment rates and number of people claiming work-related benefits is compounded by a record fall in the number of job vacancies – down by 342,000 to 476,000 –  signalling worse is to come for the British economy.

It is “abundantly clear” that the labour market has weakened significantly said Ruth Gregory, an economist for Capital Economics.

“Some of this will surely start to filter through into the actual unemployment figures as the government’s job furlough scheme is wound down from August.”

The Recruitment and Employment Confederation’s CEO Neil Carberry said that while “the unemployment rate is likely to be much higher than 3.9%”, reopening the economy and easing the lockdown should lead to more people being hired.

“The scale of the growth in unemployment through the rest of the year will depend on consumer confidence and how employers react to the winding down of the furlough scheme,” said Carberry.


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