London has by far the highest unemployment rate in Britain with 6.2% of its workforce looking for jobs, according to latest official figures today.
A regional breakdown from the Office for National Statistics (ONS) shows how the capital has become the nation’s unemployment black-spot with the rate rising by a full percentage point over the year to the March to May quarter.
The average rate for the UK is just 4.7% and the next worst hit region is the east Midlands on 5.7%. The unemployment rate is lowest in Northern Ireland where only 2.1% of adults are looking for work.
The figures suggest that London, which has huge concentrations of hospitality and retail workers, has been particularly badly hit by the fall-out from the increase in employer National Insurance Contributions that came into force in April.
The tax raising measure has had the biggest impact on companies employing large numbers of staff on relatively low pay or in part-time roles such as bars, restaurants and shops.
Separate data on the number of employees in London shows a fall of 1.8% in the year to May, again more than any other region and fastest annual fall outside the pandemic.
Westminster, which includes most of the West End, had the biggest drop of any local authority area with a 4.1% annual slump in the number of employees.
The ONS figures show hospitality has now lost 84,000 jobs since the Budget last October, many of those in London. The sector accounts for 45% of all job losses.
Kate Nicholls, chair of industry body UKHospitality, said: “These devastating job losses are a direct consequence of policy decisions at last year’s Budget, which have disproportionately hit the hospitality sector.
“The change to employer NICs in particular, was socially regressive and had a disproportionate impact on entry level jobs. Without a change of tack from the Government we could be looking at even more job losses in hospitality, when we should be bringing people into the jobs market.
“We desperately need to see action at the upcoming Budget. We urge the Government to act on our asks to fix NICs, by extending the existing exemptions to include both young people and people moving from welfare to work, which will boost jobs and help to reverse this huge loss.
“We also need to see lower business rates to revive high streets, and a VAT cut on hospitality to drive investment.”
Tina McKenzie, Policy Chair of the Federation of Small Businesses , said: “Today’s disturbing figures add to a weight of evidence that if you make it more expensive and riskier to give someone a job, the result will be fewer jobs. More people are already being locked out of opportunities, the benefits bill will rise even further, and the growth and prosperity we so desperately need will become more out of reach.
“Ramping up jobs taxes, pushing through 28 new bits of employment legislation, and then on top of that mooting a hike in employer pension costs, is not a recipe for job-creation and economic growth. Innovative, ambitious and compassionate small employers, who want to grow and create good opportunities for people, are absolutely up against it, with sky-high costs of doing business and a stagnant economy.
“Ministers should start basing policy-making on real-world evidence, including today’s official figures, rather than being swayed by well-intentioned, but misguided, wishful-thinkers.”
