CHAMBER NEWS Unemployment rate at its highest


New figures published by the Office for National Statistics (ONS) show the UK unemployment rate has risen to its highest level for more than three years. Nationally, the unemployment rate


was 4.5% for the three months ending August 2020, compared to 4.1% for the May to July period – with 629,000 UK workers disappearing from the payrolls of British companies since the beginning of Covid-19 lockdown in March.


‘These figures suggest the East Midlands is slightly ahead of the national average when it comes to keeping people in jobs’


There were 153,000 people aged


between 16 and 24 in employment between June and August compared to the previous quarter, and 102,000 fewer than the same period in 2019.


In the East Midlands, the unemployment rate rose by 0.3% to 4.4%, one-tenth of a percentage point below the national average. Responding to the figures, Chamber chief executive Scott Knowles said: “These figures suggest the East Midlands is slightly ahead of the national average when it comes to keeping people in jobs. Our own Quarterly Economic Survey for Q3 2020 showed that a net six per cent of businesses expect to increase the size of their workforce in the three months following September. “It’s also important to note how


Government schemes are beginning to come into effect for 16 to 24-year-olds – who have been the worst-affected demographic during this pandemic – in the form of the Kickstart scheme. “On the surface, all this should


give us cause for optimism, but we know this is a macroeconomic perspective and there are certain sectors – such as hospitality, tourism and events – that are much more exposed.”


National lockdown could have lasting impact on businesses


The second national lockdown is “hugely disappointing” for businesses and could have long- term implications for some sectors, says the Chamber. Boris Johnson announced


another raft of restrictions lasting from 5 November to 2 December that will, among other things, force hospitality and non-essential retail businesses to close. Chamber chief executive Scott


Knowles said: “Confirmation that we are going into a second national lockdown is hugely disappointing news for businesses that have done everything in their power to adapt and operate safely, and is a clear


signal of the Government’s failure to create the world-class test and trace system it had promised us. “Business and market confidence


have been hit hard by the unclear, stop-start approach taken by Government over the past eight months, with little end in sight. “While we welcome the


extension of the furlough scheme, this may not give sufficient confidence to employers to preserve jobs in the long term. “It’s also important to note that


this support is aimed at individuals rather than businesses that have invested lots of money on reopening. It’s crucial the


Scott Knowles


Scott was also keen to emphasise how the picture had changed somewhat since the figures, released in mid-October, were recorded. He added: “The road to recovery has been slowed


down by further obstacles in the form of stricter lockdown restrictions, while the end of the Brexit transition period is looming dangerously ahead. “There’s still a lot of uncertainty


for businesses, making it difficult for them to plan, make decisions on investment and recruit staff because they aren’t sure what they are building towards. The next few months will be very important for the labour market and it feels like it’s going to be a bumpy ride ahead.”.


Businesses urged to stay open


Companies in sectors not forced to close by national lockdown should ensure they continue operating despite the second national lockdown, says the Chamber. While many firms shut down during the first lockdown in March, the


messaging from Government this time around is that people who can work from home should do so – but those who can’t should still go to work. However, the situation differs for sectors such as hospitality and


retail, which will be directly affected by new restrictions to close venues such as pubs, restaurants and non-essential shops. Chris Hobson, director of policy and external affairs at the Chamber,


said: “This isn’t a national lockdown like we had back in March and April, and businesses shouldn’t be reverting to that mindset. “There will be some businesses forced to close – such as in


hospitality and retail, and they, along with their supply chains, will need the support of Government – but this isn’t the case for other sectors. “We saw a lot of construction companies and manufacturers grind


to a halt during the last lockdown but one of the reasons for that was due to schools closing, which meant a lot of parents couldn’t go to work. “This time, schools are remaining open so parents can still go to


work so it’s a different situation. “If we’re not careful, we could talk ourselves into slowing down our


economy far more than we need to, but we can’t afford for it to grind to a halt this time around.”


Government comes up with a quick response to plug this income gap for businesses already facing a cashflow crisis. “We are also concerned about


the lasting impact this lockdown could have on the high street and hospitality sector. Many businesses were just beginning to get back on their feet and gearing up for the beginning of the festive period to offset the losses incurred earlier in the year, but this month-long


30 business network November 2020


lockdown may be one setback too many.” Scott urged the Government to


be clear in its messaging about which sectors could continue operating, adding: “What is clear is that this lockdown should not continue any longer than necessary. The Government must use this period to fix the ailing test and trace system once and for all in order to finally take the brakes off our economy.”


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