Levelling up: How the Covid pandemic has hit unemployment rates and jobs in each region of the UK

The Government promised in 2019 to level up the regions of the UK, especially areas of northern England with historically high unemployment. But what has happened to jobs in each part of the country over the last year, and how will that impact the levelling up task?

There is still a clear north-south divide in employment rates across the UK - although London has leapt to the front of the jobs crisis.

Tackling disparities in the quantity and quality of jobs between the regions of the UK will need to be a priority in post-pandemic Britain, a leading think tank has said.

The Resolution Foundation says big geographic disparities remained in the UK before Covid, despite promising jobs growth in areas with historically low employment leading to a fall in regional pay and employment gaps.

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Charlie McCurdy, an economist with the think tank, said it was clear London had been hardest hit in the pandemic, with the Covid-induced economic hit falling particularly on big cities.

But with others warning levelling up the UK’s regions will be four times harder after Covid, Mr McCurdy said it was still too early to know how the economic recovery would pan out in different regions.

So what do we know about the impact on jobs over the last year in the UK’s regions?

There are many ways to measure the impact of Covid on the economy, from job vacancy numbers to benefit claims.

Here’s what you need to know about the key figures. You can also explore the figures in our interactive graphics.

Claimant count

The Office for National Statistics publishes monthly figures on people claiming benefits primarily because they are unemployed.

There was a clear north-south divide in England before the pandemic, with more northern regions home to a disproportionately high number of benefit claimants,

The North East was home to 6 per cent of the UK’s claimants in February 2020, but only 4 per cent of the working age population. That means its share of claimants was 1.5 times as high as its share of the workforce.

The West Midlands (1.3 times higher), North West (1.2 times), Yorkshire and the Humber (1.1) and Scotland (1.1) also had a disproportionate share of claimants.

Following a surge in benefit claims during the pandemic, London is now home to the highest proportion of claimants, as of February 2021. But the West Midlands, North East and North West are still seeing a disproportionate share.

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Unemployment

The unemployment rate across the UK rose to a five-year high of 5.1 per cent between October and December.

It has since fallen slightly to 5 per cent for the three months to January but remains far higher than the same time a year ago, when it was just 3.9 per cent. That means there are now almost 360,000 more unemployed people across the country – 1.7 million in total.

Before the pandemic hit, the UK region with the highest unemployment rate was the North East, at 6.2 per cent between November 2019 and January 2020. That was streaks ahead of the next highest, Yorkshire and the Humber, where it was at 4.5 per cent while the South West lead the pack with the lowest rate, at 3 per cent.

London however has now leapt to the forefront of the jobs crisis. There, the unemployment rate sat at a whopping 7.2 per cent at the most recent count, ahead of the North East in second, still on 6.2 per cent. The capital has seen the single biggest increase in unemployment over the past year, rising from 4.5 per cent.

Unemployment rate, Nov 2019 to Jan 2020 and Nov 2020 to Jan 2021:

London 7.2 per cent, up from 4.5 per cent
North East 6.2 per cent, no change
West Midlands 6 per cent, up from 4.5 per cent
North West 5.1 per cent, up from 4.4 per cent
Yorkshire and the Humber 5.1 per cent, up from 4.6 per cent
East Midlands 5.1 per cent, up from 3.9 per cent
Wales 4.5 per cent, up from 3.3 per cent
South West 4.4 per cent, up from 3 per cent
Scotland 4.1 per cent, up from 3.5 per cent
East of England 4.1 per cent, up from 3.4 per cent
Northern Ireland 3.7 per cent, up from 2.4 per cent
South East 3.4 per cent, up from 3.2 per cent

Employment

The area with the lowest unemployment rate does not necessarily have the highest employment rate.

That is because there is a third category – economic inactivity, where a person has not been looking for work within the last four weeks and/or is not able to start work within the next two weeks.

That may include students, retirees, and homemakers.

In the early stages of the health crisis, the UK unemployment rate did not increase, but there was a surge of over 400,000 extra inactive people.

The Resolution Foundation believes many out-of-work people gave up hope of finding a job in the toughest lockdown periods, and have been captured in the economic inactivity group as a result.

While London has overtaken the North East in terms of unemployment, the latter still performs worse in the employment measure, with a rate of just 71.3 per cent, far lower than the UK average of 75 per cent.

Northern Ireland has the lowest employment rate, at 69.3 per cent, while the more southern English regions perform comparatively strongly.

Employment rate, Nov 2019 to Jan 2020 and Nov 2020 to Jan 2021:

South East 78.5 per cent, down from 80 per cent
East of England 77.4 per cent, down from 78.4 per cent
South West 76.8 per cent, down from 79.9 per cent
East Midlands 75.6 per cent, down from 78 per cent
London 74.4 per cent, down from 76 per cent
Scotland 74.3 per cent, 74.9 per cent
West Midlands 73.9 per cent, down from 75.2 per cent
Yorkshire and the Humber 73.8 per cent, up from 73 per cent
North West 73.7 per cent, down from 75.8 per cent
Wales 72.1 per cent, down from 74.4 per cent
North East 71.3 per cent, down from 71.7 per cent
Northern Ireland 69.3 per cent, down from 72.3 per cent

Universal credit

The number of people claiming Universal Credit has skyrocketed since the start of the pandemic – an extra 3.1 million people were claiming across Britain in February compared to a year ago, bringing the total to more than 6 million.

That means more than one in nine people are now claiming. The Government made changes to Universal Credit eligibility as part of its pandemic response, to support people in work who had seen their income fall or who were on furlough and needed a wage top up.

Again, London has seen the biggest increase in claimants, with an increase of 145 per cent. One in seven people in the capital are now claiming.

Claimants in the North East were most likely to be out of work completely however. Only 35.5 per cent were in employment in January (the latest period with this level of details), compared to a national average of 38 per cent and London’s 36.3 per cent.

Proportion of people on Universal Credit, Feb 2020 and Feb 2021:

London 14.4 per cent, up from 5.9 per cent
North East 13.1 per cent, up from 7.6 per cent
North West 12.9 per cent, up from 6.8 per cent
West Midlands 12.4 per cent, up from 6.3 per cent
Yorkshire and the Humber 11.8 per cent, up from 6.0 per cent
Wales 10.9 per cent, up from 5.8 per cent
Scotland 10.8 per cent, up from 5.6 per cent
East Midlands 10.4 per cent, up from 5.0 per cent
East of England 10.0 per cent, up from 4.6 per cent
South West 9.7 per cent, up from 4.8 per cent
South East 9.3 per cent, up from 4.1 per cent