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Payroll workers drop by 612,000

Written by: Emma Lunn
But furlough scheme means the UK unemployment rate remains unchanged at 3.9% in the three months to April.

Unemployment hasn’t risen as feared, according to figures from the Office for National Statistics (ONS).

The ONS said early estimates showed the number of paid employees dropped by 2.1% or 612,000 in May compared with March.

The UK unemployment rate between February and April was 3.9% – the same as January to March. Economists had predicted the rate could rise to as high as 4.7% but the Government’s furlough scheme appears to have gone some way to sustaining UK employment.

But the ONS also said that jobless claims under Universal Credit jumped 23.3% month-on-month in May to 2.8 million and soared 125.9% or 1.6 million since March when the UK was placed in lockdown.

Jonathan Athow, deputy national statistician for economic statistics at the ONS, says: “More detailed employment data up to April show a dramatic drop in the number of hours worked, which were down almost 9% in the latest period, partly due to a six million rise in people away from work, including those furloughed.”

Jack Izzard, director of The Great British Bounce Back, a support group for small and micro businesses, says: “We are now starting to see the brutal economic reality of Covid-19, with 600,000 fewer people on payroll in May compared to just two months before. Were it not for the Government’s furlough scheme, which has protected nearly 15 times that number of jobs, the picture would be considerably bleaker.

“When the furlough scheme draws to a close, the UK’s businesses will feel the full impact of Covid-19. When the armbands supporting so many businesses at present are taken off, the number of unemployed, sadly, is likely to soar as businesses are unable to cover the cost of every salary themselves.”

The figures were released as Citizens Advice warned of a surge in demand for redundancy advice. The charity said that, since lockdown, the number of people Citizens Advice has helped with redundancy issues has almost tripled compared to the same period last year.

Gillian Guy, chief executive of Citizens Advice, says: “In a heartbreaking sign of our times, our frontline advisers are helping one person every two minutes with a redundancy issue. Each job loss can mean a household struggling to make rent, cover their bills or pay for their food shop.

“The Job Retention Scheme has so far prevented many redundancies, but with more job losses on the horizon, the government must ensure people can access adequate support through the benefits system. It must also protect people who are facing eviction or harsh debt collection as a result of this pandemic.”

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