THE number of people in work in Britain fell by the most since 2009 in the three months through June as the coronavirus crisis took a heavy toll on the labour market.
Led by a record plunge in self-employed workers, there were 220,000 less people employed in the second quarter, the Office for National Statistics said on Tuesday (11).
Separate tax data for July showed that the number of staff on company payrolls had fallen by 730,000 since March, sounding the alarm about a potentially much bigger rise in joblessness.
As the data emerged, struggling British department store chain Debenhams announced a further shedding of 2,500 jobs, dealing the latest blow to the country’s battered retail sector.
Mounting job losses are expected as Britain winds down its job retention scheme which protects employees. It is due to close at the end of October.
Chancellor Rishi Sunak said the figures showed the government’s support programmes were working, but job losses were inevitable.
“I’ve always been clear that we can’t protect every job, but … we have a clear plan to protect, support and create jobs to ensure that nobody is left without hope,” he said.
Ruth Gregory, senior economist at Capital Economics, warned that the “cracks evident in the latest batch of labour market data are likely to soon turn into a chasm”.
The unemployment rate unexpectedly held at 3.9 per cent, but that reflected an increase in people who had given up looking for work and who were therefore not considered to be unemployed, and people who said they were in work but were getting no pay.
“Government needs to step in and help those who are likely to lose their job retrain for new openings in different sectors,” KPMG economist Yael Selfin said.
The number of self-employed people fell by a record amount in the three months to June, led by older workers, while the number of employees rose – something the ONS said was partly accounted for by workers reclassifying themselves as employed.
The number of people claiming universal credit rose to 2.689 million in July, leaping by 117 per cent from March.
Pay fell by the most in more than 10 years in the April-June period, down 1.2 per cent, reflecting how workers on the job retention scheme receive 80 per cent of their pay. Excluding bonuses, pay fell for the first time since records began in 2001.
However, there was a small increase in job vacancies in the three months to July.
“The increase was driven by small businesses (less than 50 employees), some of which reported taking on staff to meet coronavirus guidelines,” the ONS said.