West Lancashire MP Rosie Cooper is warning that ministers’ indiscriminate severing of furlough support risks deepening and entrenching regional inequality.

Labour have revealed the scale of the jobs crisis across the UK as a result of the government’s withdrawal of furlough from businesses in struggling sectors, and the high proportion of people working in these sectors in areas including the North West.

Retail has been the hardest hit by mass redundancies since the coronavirus pandemic struck, with manufacturing and aviation also badly affected. Tens of thousands of job losses have been announced and more redundancies are expected in these sectors, yet they have received no tailored support.

Labour is warning that the impact is likely to be felt far more deeply by some areas of the UK based on the proportion of their workforce in these sectors, with local economies being written off by government as Britain enters recession. The UK already has the worst regional inequalities in Europe and without targeted action, this is likely to get even worse.

Data shows that:

  • More than 10% of the North West’s workforce is in the retail sector – the highest proportion anywhere in the UK. Wales and the North East are second and third in terms of the proportion of the workforce in retail.
  • Almost 13% of the workforce in the East Midlands is in the manufacturing sector – the highest proportion in the whole country.
  • The West Midlands, Yorkshire and the Humber, Wales, the North East and North West all have between 10-12% of their workforce in the manufacturing sector.
  • In comparison, only 2.2% of London’s workforce is in manufacturing.
  • Meanwhile London is likely to be most affected by the damage to the aviation and travel industry, as it is the region with the highest proportion (0.7%) of its workforce in the aviation industry, and 64,000 jobs relying on aviation and travel.

West Lancashire MP Rosie Cooper commented:
“My West Lancashire constituents need to have confidence that Government is on their side, looking out for their needs and is providing specific support to the industries and communities we have here, from manufacturing to agriculture and from urban to rural.

“The North West is at risk of feeling deeper consequences of the recession and Ministers need to ensure they are considering all areas and industries when announcing changes to schemes like furlough or introducing new schemes, to ensure they are for the benefit of the whole of the UK.”

Matthew Pennycook MP, Shadow Business Minister, said:
“Ministers are writing off parts of the UK as the country enters recession, with figures suggesting some places will be disproportionately hit by the jobs crisis.

“Labour is calling for the government to u-turn on its damaging blanket approach to withdrawing furlough, which fails to consider the circumstances of different sectors or the impact on the communities that have a proud history in these industries.

“The government needs to do right by these communities and businesses, and see them through the crisis by targeting support, not pull the life raft away while the storm is still raging on.”

Jonathan Reynolds MP, Shadow Secretary of State for Work and Pensions said:
“Every job lost is a tragedy and we must do all we can to safeguard people’s livelihoods.

“We are in the midst of a jobs crisis right across the UK, but these figures show certain areas are more at risk than others. The Government’s one size fits all approach will see some communities hit harder and they must adopt a more tailored approach now if we are to avoid further job losses.”

  • Source of statistics: ONS, Business Register and Employment Survey (BRES) via NOMIS [downloaded: 12 August 2020]. Please see attached spreadsheet.
  • The Sky News coronavirus job tracker compiles announcements of redundancies by sector, and shows the worst affected sectors are retail, aviation, hospitality, manufacturing and energy.
  • The UK has the worst regional inequalities in Europe (source).
  • Statistics released by the Department for Work and Pensions also show the number of people claiming Universal Credit has reached 5.5 million, a rise of over 90% from February 2020.
  • Areas such as the North West where the number of people on Universal Credit was highest before the crisis have been particularly hard hit, with the number of UC claimants more than doubling in London since the start of the crisis.
  • This comes at a time when work coaches in Job Centres are already under significant pressure. As the Labour Party has previously warned, caseloads for a single work coach could double to an average of 228 by the end of this year.
  • The rising number of people claiming UC also comes as the Government reintroduced sanctions and conditionality for claimants, putting increased pressure on struggling households.
February 2020 July 2020 (p)
North East 166160 267308
North West  406074 710074
Yorkshire and The Humber  268098 482510
East Midlands  194937 378244
West Midlands  300675 539890
East of England  229122 468196
London  418280 893266
South East  302982 642373
South West  221333 429628
Wales  150527 266089

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