Press Office: 07712 675118 - 0191 2275 557
Unemployment risk in the North East
The TUC warns that there is a high risk of mass unemployment in the North East without a recovery plan centred on protecting and creating jobs, backed by major investment.
Workers who have required support from the job retention scheme and self-employed income support scheme are most likely to face unemployment risks in the months ahead.
In the North East, TUC analysis estimates that at least 349,500 workers (29% of the workforce) have required support from these schemes. Darlington, Northumberland, Sunderland, Gateshead and South Tyneside represent the local authorities in the region with the highest proportion of workers seeking support through these schemes is with over 30% of people in employment in those areas being supported through the Job Retention Scheme or the Self Employment Scheme.
On top of these figures, there will be many other people who have been laid off, or who entered the employment market during the crisis, and have been unable to find work.
And the union body says economic uncertainty will affect all industries, so there will be pressure on the jobs of many workers who have not been furloughed too.
A plan to get the North East and Cumbria growing out of the crisis – and stop mass unemployment
The pandemic alone did not cause the current crisis. It was made worse by a decade of austerity and failure to strengthen the North East economy, says the TUC.
Choosing the wrong approach now risks embedding low growth, long-term unemployment and all the social ills that go alongside.
The report recommends an approach based on recently published TUC research (see notes), which found that the fastest recoveries from economic crises in UK history were based on investment for growth.
An investment for growth approach must be resourced by central government, and will need action at regional level in three key areas:
These priorities complement the national priorities that we have already published in the TUC’s national recovery plan (see the notes below).
Local leadership and workers’ voices
The report calls for the formation of a the North East recovery panel with representation from unions, employers, Job Centre Plus, relevant civic partners and local and regional government.
Regional panels would work in tandem with a UK National Recovery Panel to turn headline objectives into tailored strategies for each region.
The TUC says that regional structures with devolved powers are essential to achieving the best recovery possible, because the nature and scale of the challenge varies greatly across different parts of the UK.
In the North East there is no one size fits all approach to regional devolution with towns, rural communities, and cities each needing a combination of investment in infrastructure, skills and public services.
Regional devolved bodies are already working together to improve the quality of jobs in the region with the North of Tyne Mayor Jamie Driscoll and Councillor Joyce McCarty leading the implementation of a ‘Good Work Pledge’ which is encouraging private sector employers to adhere to certain standards on pay and conditions when creating jobs.
“People are very worried about their jobs. Many have been laid off already. Losing your job is a dreadful experience – devastating for families. And if we allow mass unemployment to take hold, our economy will be smaller, and the recovery from the pandemic will be slower.
“That’s why good jobs are at the heart of our recovery plan for the North East and Cumbria. Jobs in a reborn manufacturing sector which protects and develops our regional strengths in advanced manufacturing, bioscience, and petrochemicals.
“Our key workers kept us going through the crisis, it’s time to invest and boost their pay”
“And we must value our public services in the North East too. But after ten years of cuts, it was much harder for them than it should have been. It’s time to rebuild local public services for the future.
“This week, we’re asking the Chancellor to put his faith in people in the North East and across the UK with big and bold investment. If he backs us in this way, we can avoid mass unemployment, work our way to recovery and build back better.”
ENDS
Notes to editors:
- Full report: The full report – A Better Recovery for the North East and Cumbria – is here: https://www.tuc.org.uk/sites/default/files/2020-07/Regional%20Recovery%20Report%20-%20Northern%20Region%20NE%20and%20Cumbria%20FINAL.pdf
- Regional and local unemployment risk: See the report for the full data by local authority. The analysis is based on claims made of support through the job retention scheme and the self-employed income support scheme. The figures are likely to be an underestimate, as around a million claims have not been assigned a location.
- Mass unemployment: Analysis by the Office for Budget Responsibility suggests that the UK unemployment count could reach 3m people as a consequence of the coronavirus crisis https://obr.uk/coronavirus-analysis/
- Evidence in support of investment-led economic recovery: The TUC published research in May 2020 showing that the most successful economic recoveries in the last century of UK history have come from investment-led approaches.
The research compared government expenditure in the decades following significant economic shocks and downturns. It found that during periods like the post-war recovery (1947-57), investment for growth paid for itself.
This is because millions of working families had higher disposable income through decent work, creating the economic demand needed for strong growth and healthy public finances. And investment in stronger public services meant an effective safety that supported people to start and grow businesses.
The following table summarises the analysis, with explanatory notes below.
|
Annual average |
Percentage points of GDP |
|||
Rank |
Decade |
GDP growth, % |
Of which government expenditure, ppts |
Public debt at start of decade |
Change in public debt |
1 |
1931-41 |
4.5 |
9.9 |
181 |
-21 |
2 |
1947-57 |
3.3 |
0.5 |
244 |
-123 |
3 |
1991-2001 |
2.9 |
0.3 |
23 |
+6 |
4 |
1981-91 |
2.9 |
0.2 |
43 |
-19 |
5 |
1975-85 |
2.3 |
0.2 |
54 |
-15 |
6 |
1921-31 |
1.9 |
0.0 |
160 |
+20 |
7 |
2009-19 |
1.9 |
0.2 |
59 |
+22 |
Notes and commentary:
- TUC UK national recovery plan: Our regional reports complement the national report that we published in May 2020. The key areas of action we have called for nationally are:
The full national report can be found here: https://www.tuc.org.uk/ABetterRecovery
- About the TUC: The Trades Union Congress (TUC) exists to make the working world a better place for everyone. We bring together more than 5.5 million working people who make up our 48 member unions. We support unions to grow and thrive, and we stand up for everyone who works for a living.
Contacts:
Northern TUC
Craig Dawson
cdawson@tuc.org.uk
07712 675118
0191 2275 557
TUC press office
media@tuc.org.uk
020 7467 1248
Want to hear about our latest news and blogs?
Sign up now to get it straight to your inbox
To access the admin area, you will need to setup two-factor authentication (TFA).