Unemployment up to 5.1%

Unemployment rose to 5.1% in the three months to December, driven in part by falls in self employment and part-time employment, according to the Office for National Statistics.

Its figures show, however, that there was a rise of 83,000 people in payrolled employment between December and January, the second consecutive monthly increase. However, there were 726,000 fewer people in payrolled jobs in January than in the previous February.

Unemployment was up 1.3% on the same quarter last year and 0.4% on the previous quarter with unemployment for men up 1.4% on the previous year earlier and 0.2% on the previous quarter. This compares with figures of 1.2% and 0.6% for women. Women’s unemployment rate was estimated at 4.8% compared to 5.4% for men. Women were significantly more likely to be economically inactive, for instance, because of caring responsibilities, but the number of men who were economically inactive is increasing, while it is falling for women.

Decrease in full time self-employed people

The ONS says falls in employment were driven by decreases in the number of full-time self-employed people and part-time employees. The decrease in full-time self-employed people was driven by men, but full-time self-employed women also saw a record quarterly decrease. Meanwhile, the decrease in part-time employees was driven more by women, although male part-time employees also saw a quarterly decrease. The quarterly decrease was partly offset by an increase in full-time employees, which was mainly driven by women.

The number of self-employed in the UK fell to 4,374,000 – a drop of 653,000 from the same time last year. IPSE [the Association of Independent Professionals and the Self-Employed] says: “After over a decade of continuous growth, this takes the total number in the self-employed sector back to levels not seen since 2013.” It urged the Chancellor to use the Budget to plug the gaps in the Self-Employment Income Support Scheme and get support to sole directors of limited companies, newly self-employed people and other groups who have missed out on financial support.

Redundancies

The redundancy rate was estimated at 12.3 people per thousand employees and the number of people claiming benefits – including those in low paid jobs – rose to 2.6 million. Young people were hard hit by job losses, with long-term young unemployment nearing 200,000.

There were 211,000 fewer job vacancies than a year ago, but 64,000 more than the previous quarter.

Tony Wilson, Director of the Institute for Employment Studies, said: “These jobs figures lay bare the impacts of the crisis last year, with 500 thousand more redundancies in 2020 than in 2019 and the largest annual fall in employment since 2009.  Nonetheless these figures are still better than many had feared earlier in the year, and the most recent payroll data shows employment growing again through December and January.

“However, there is enough in today’s data to give the Chancellor pause for thought as he puts the finishing touches to the Budget next week. Long-term youth unemployment has risen to 200 thousand, an increase of one third, and there are now comfortably more long-term unemployed people than there will be Kickstart jobs or subsidised apprenticeships.  Meanwhile the employment ‘gap’ appears to have stopped closing for disabled people, older workers and ethnic minority groups, with no specific measures in place to address this.  There also worrying signs of increased job insecurity, with now 1.5 million people in involuntary temporary or part-time work – up by 190 thousand on the year.

“If the Chancellor had hoped that at this Budget he may be able to start to rein in spending and ease up on support, today’s figures may will give him cause to think again.”

Meanwhile, figures from the Department for Work and Pensions show the number of people claiming Universal Credit – either due to unemployment, reduced hours or income – has doubled since the start of the pandemic.

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