North East unemployment fell to a record low in the latest three-month period, according to figures published today by the Office for National Statistics (ONS). The region (including Tees Valley), so long used to having Britain’s worst unemployment, now has a lower rate than both London and the West Midlands.
The North East rate for November 2022 to January 2023 was 4.1%, a fall of 0.6% and the largest reduction in the UK apart from Yorkshire & the Humber, where it fell by 0.8%. The rates for the UK and England were unchanged on 3.7% and 3.8% respectively.
Compared with the same period a year ago the North East saw the UK’s largest decrease in unemployment of 1.3%.
The North East’s economically inactive rate – people not in work or seeking work – was also down. It fell by 0.3% but is still on 24.9% which is the UK’s highest jointly with Wales.
Taking unemployment and economic activity together, the North East employment rate – those in work – rose by 0.6% compared by only 0.1% for the UK. However, the North East rate of 71.8% remains the joint lowest with Northern Ireland. The UK rate is 75.7%.
Commentators expect Chancellor Jeremy Hunt to introduce measures in tomorrow’s budget to encourage more people back to work and reduce the number of economically inactive people of working age, of whom there are 8,850,000..
North East unemployment reached 13.3% in 1993, not long after current dataset started to be compiled, and was 11.1% as recently as 2012.
Targets
The North East Local Enterprise Partnership (NELEP) set itself ten-year targets when it was set up in 2014, including to reduce the economic inactivity gap between to North East (excluding Tees Valley) and England (excluding London) by 50% and the employment gap by 100%.
Although up-to date statistics for those precise geographies are not yet available, we know that the economic inactivity gap between the region as a whole and the UK as a whole between November 2013 and January was 2.6% and the employment gap was 4.1%.
Today those gaps are 3.6% and 3.9% respectively. The employment gap has been reduced slightly but the economic inactivity gap has widened. With a year to go before these and other targets are due to be met, there is still a massive, not to say unscalable, mountain to climb.
Encouraging
Helen Golightly, chief executive of NELEP, which was holding its annual meeting in Newcastle, today, said:
“The data…shows encouraging signs of progress in the region’s labour market over the past 12 months. The latest regional employment total is over 25,000 higher than a year ago and the employment rate has increased by more than the England equivalent. In addition, the unemployment rate has fallen by more than in any other region.
“However, there is work to be done to close the gap further as the North East still has the lowest regional employment rate and the highest working age economic inactivity rate… It is a concern that the number of economically inactive people has only fallen slightly in the last year despite the increased employment total.
“Additionally, we need to ensure that employment increases across the entire North East workforce. Experimental ONS data suggests that the rise in employment in the last year in the North East has been concentrated among older females and younger males.”
Ambition
Callum George of the North East England Chamber of Commerce said:
“When you consider the significant investments in the region that will create more jobs, in the long term we hope that they can drive a real shift in momentum for employment in the North East. Already this year we’ve had the positive news of FulwellCain Studio’s plans to create 8,000 jobs in filmmaking amongst other critical private sector investments.
“What’s now important is that we can match the right skills to vacancies in the area, to ensure that employment is fulfilling and long term. Looking ahead to Chancellor Hunt’s Spring Budget tomorrow, it will be crucial that people are not just encouraged back into work but are also supported adequately in doing so. This means addressing challenges such as childcare, health inequalities and training; which we called for in our budget submission at the start of the year.
“With everything going on in our region – be it devolution or private investment – there’s a clear appetite for ambition in the North East. It’s critical that our regional ambitions are matched by policies designed to support people back into work.”
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