Covid wiped out decade of job gains in UK's industrial heartlands, says report

A year of the Covid-19 pandemic has wiped out a decade of progress in reducing unemployment in Britain’s industrial heartlands and left the jobless rate higher than after the financial meltdown of the late 2000s, a report has found.

In the first comprehensive study of its kind, researchers from Sheffield Hallam university have revealed the scale of the setback from twin health and economic emergencies on parts of the UK that went into the crisis lagging behind in terms of prosperity and wellbeing.

The report by Christina Beatty and Steve Fothergill warned that without action by the government to make good on its “levelling-up” agenda, large parts of the Midlands, the north, Wales and Scotland would continue to struggle when the economy eventually recovers from the pandemic.

About one-third of the UK’s population lives in the industrial towns, regional cities and former coalfields covered by the study – parts of the country that were crucial to Boris Johnson’s victory in the 2019 general election.

Fothergill said: “As the economy recovered from the financial crisis there was real progress in bringing down unemployment in older industrial Britain even though the problem had by no means been solved, but in less than a year since the onset of the pandemic, the increase in unemployment across older industrial Britain has more than offset these gains.

“In effect, the pandemic has wiped out ten years’ economic progress in older industrial Britain.”

The report was commissioned by the Coalfields Regeneration Trust, which was set up to support former mining communities across Britain, and the Industrial Communities Alliance, an all-party association of local authorities in the industrial areas of England, Scotland and Wales.

It found:

• In the nine months between the start of the crisis in February last year and November 2020, unemployment rose by 310,000 in older industrial towns, 100,000 in the former coalfields and 140,000 in the main regional cities.

• Over the same period claimant unemployment among 16-24-year-olds in older industrial Britain roughly doubled.

• If one-third of the workers on furlough at the end of October were to lose their jobs, redundancies would increase by 230,000 in the older industrial towns, by 80,000 in the former coalfields and by 80,000 in the main regional cities.

• By late 2020, the economic downturn had pushed the numbers on all out-of-work benefits across older industrial Britain to almost one-in-six of all adults of working age, and in some local authorities – such as parts of Middlesbrough, Knowsley and Blaenau Gwent – as high as 20%.

• Up to the start of 2021, the rate of confirmed infections in older industrial Britain was on average 10-20% above the UK average, seen by the researchers as evidence of fewer people able to work from home.

• The cumulative death rate in older industrial towns and the former coalfields was on average 30% above the UK average – a reflection of an older and less healthy population.

Keith Cunliffe, the deputy leader of Wigan council and the national chair of the Industrial Communities Alliance, said: “As this report shows, our older industrial areas were lagging behind before the crisis and have been hit hard during the economic downturn. When we finally emerge from the crisis we will still be lagging behind.

“Before the pandemic the prime minister made much play of his intention to ‘level up’ the regions. Older industrial Britain expected to be the main beneficiary of this new priority and this remains the expectation of many voters and newly elected MPs. There is a need to build a national economic recovery but, as the report shows, there is also a pressing need to stick with the levelling-up agenda.”

Peter McNestry, the chair of the Coalfields Regeneration Trust, said: “The government needs to keep levelling up firmly on the agenda and rather than talk about change, make it happen. We have provided detailed plans and strategies that will make a lasting and positive difference for generations, yet we cannot work alone.”