WAGE WORRIES
Benefit claims jump 70% in a month as unemployment rises to 2.1m in coronavirus lockdown
THE number of people claiming benefits in April has soared by 70 per cent to almost 2.1million due to the coronavirus crisis.
With 856,500 more people claiming unemployment benefits in April 2020 compared to March, according to the Office for National Statistics (ONS) today.
⚠️ Read our coronavirus live blog for the latest news & updates
The data measures those on Universal Credit who are looking for work as well as those on jobseekers allowance - although the Department for Work and Pensions (DWP) points out that some of these claimants will be on low income jobs meaning they're not all unemployed.
It comes as separate data published by the DWP today reveals there were 1.5million Universal Credit claims made between March 13 and April 9, 2020.
That's over six times more than in the same period last year and the most in a single month since Universal Credit launched in April 2013.
DWP adds that it's seen 25,000 Universal Credit claims being made each day since the start of the coronavirus epidemic.
Unemployment up by 50,000 people
Meanwhile, unemployment figures jumped by 50,000 to 1.35million in the three months to March, the ONS said.
It takes Britain's unemployment rate up to 3.9 per cent.
The retail, travel and hospitality industries have been particularly hard hit by coronavirus, with job losses and pay cuts being announced and some firms folding altogether.
British Airways, for example, has announced that up to 12,000 jobs are to be scrapped while Ryanair is axing up to 3,250 roles.
On the high street, Debenhams has gone into administration, and Cath Kidston, Oasis and Warehouse have shut their doors for good.
On a regional basis, Blackpool, Liverpool and Hull have suffered the highest spikes in those claiming unemployment benefits from March to April.
One in nine people in Blackpool are claiming unemployment benefits, according to think tank Centre for Cities.In contrast, Cambridge, Oxford, Reading and Milton Keynes were the least affected by the April jobless figures, which lay bare the north-south divide on the impact of the coronavirus crisis.
But the UK's employment rate reached the joint highest on record over the first three months of the year with 76.6 per cent of people in work.
The data only covers the very start of the coronavirus crisis though, taking into account just one week of lockdown, which began on March 23.
Furloughed workers are also counted as employed by the ONS, despite not working and only receiving at least 80 per cent of their usual wages, up to £2,500 a month, under the scheme.
Around 8million people have so far been furloughed with £11.1billion in wages claimed, according to new data published by HM Treasury today.
More than 6million Brits could find themselves unemployed by the end of May due to a "horrendous" coronavirus impact on jobs, according to additional research.
It means 20 per cent of Brits will be without a job - five times the current rate of 3.9 per cent.
Tony Wilson, director of the Institute for Employment Studies, warns that unemployment today is likely to already be close to 3million.
He said: “These figures give us the first official confirmation of what we’ve known for some time, which is that unemployment is rising faster now than at any point in our lifetimes.
"But if anything, today’s data underplays the depth of the crisis that we’re in, as it only counts those who had successfully claimed benefits for unemployment as at 9 April, so excluding many young unemployed and more recent claimants.
"In reality, unemployment today is likely to already be close to three million."
But Minister of State for the Department for Work and Pensions, Therese Coffey, this morning told Sky News that furlough is helping to keep people in jobs.
She said: "We know that the number of claimants since March 16 has gone up by about 2million - that reflects the people turning to the benefits system.
"But we can also recognise the success of the furlough scheme and how many people are still attached to their employers rather than leaving the employment market, and that's been an important part in helping us recover once we're through this emergency."
The Sun wants to Make Universal Credit Work
UNIVERSAL Credit replaces six benefits with a single monthly payment.
One million people are already receiving it and by the time the system is fully rolled out in 2023, nearly 7million will be on it.
But there are big problems with the flagship new system - it takes five weeks to get the first payment and it could leave some families worse off by thousands of pounds a year.
And while working families can claim back up to 85 per cent of their childcare costs, they must find the money to pay for childcare upfront - we’ve heard of families waiting up to 6 months for the money.
Working parents across the country told us they’ve been unable to take on more hours - or have even turned down better paid jobs or more hours because of the amount they get their benefits cut.
It’s time to Make Universal Credit work. We want the Government to:
- Get paid faster: The Government must slash the time Brits wait for their first Universal Credit payments from five to two weeks, helping stop 7million from being pushed into debt.
- Keep more of what you earn:The work allowance should be increased and the taper rate should be slashed from from 63p to 50p, helping at least 4million families.
- Don’t get punished for having a family: Parents should get the 85 per cent of the money they can claim for childcare upfront instead of being paid in arrears.
Together, these changes will help Make Universal Credit Work.
Join our or email Uni[email protected] to share your story.
Ms Coffey added: "Not every employer will have been in a position necessarily to furlough their employees.
"I'm not going to speculate on individual employers but there are still ongoing costs to running businesses, not just salaries.
"But nevertheless, civil servants at DWP have done a great job at processing those claims to try and make sure we get money to people as quickly as possible when they need it and that's been a key part of helping families through this particular emergency."
Job vacancies plunge to lowest level since 2001
When it comes to vacancies, the ONS reveals that February to April 2020 saw the largest quarterly drop in available vacancies since the data began to be collected in 2001.
During these three months there were an estimated 637,000 vacancies in the UK - down by 170,000 compared to the previous quarter, and 210,000 fewer than a year earlier.
What is furlough?
THE aim of the government’s job retention scheme is to save one million workers from becoming unemployed due to the lockdown.
Under the scheme, the government will pay 80 per cent – up to £2,500 a month – of wages of an employee who can’t work because of the impact of coronavirus.
Workers will be kept on the payroll rather than being laid off.
The government will pay the associated employer national insurance contributions and minimum automatic enrolment employer pension contributions on top.
The scheme has been extended to run until the end of September (although businesses will be asked to chip in from August) and can be backdated to March 1 2020.
It’s available to all employees that started a PAYE payroll scheme on or before March 1, 2020.
If you’re between jobs, have started at a new place of work or were made redundant after this date then you can ask your former employer to rehire you to be eligible for the scheme.
Employers can choose to top up furloughed workers’ salaries by the remaining 20 per cent but they don’t have to.
Firms who want to access the scheme will need to speak to their employees before putting them on furlough.
While on furlough, staff should not undertake any work for their employer during the scheme.
Separate research by think tank the Institute for Fiscal Studies (IFS) reveals that by the time lockdown was announced, firms had stopped posting new vacancies almost entirely.
It says new job postings on March 25 were just 8 per cent of their levels in 2019.
Jonathan Athow, deputy national statistician for economic statistics at the ONS, said: "While only covering the first weeks of restrictions, our figures show Covid-19 is having a major impact on the labour market.
"In March employment held up well, as furloughed workers still count as employed, but hours worked fell sharply in late March, especially in sectors such as hospitality and construction.
More on money
"Through April, though, there were signs of falling employment as real-time tax data show the number of employees on companies' payrolls fell noticeably, and vacancies were sharply down too, with hospitality again falling steepest."
Thomas Lawson, chief executive of benefits charity Turn2us added: "The surge in applications for Universal Credit highlights the crisis many are now living.
"Unfortunately our social security system is not fit for purpose. This is a significant worry as the recession following coronavirus extends into the summer months and beyond."
Topics