Why Boris Johnson must honour his pledge to 'level-up' the economy - Andrew McPhillips

The number of people out of work is creeping higher, with the figure on a continual upward trend since the summer. However, this month’s unemployment figures released on Tuesday, though disappointing, are not as bad as they might have been given the scale of the huge economic shock the country – and, indeed, the world – has faced.

On the broadest measure of unemployment (that is to say, including those unemployed but not claiming benefits), the unemployment rate in Yorkshire and Humber has increased to 5.2 per cent from 4.1 per cent a year ago, an increase of roughly 30,000 people.

That’s only just above the average for England but well above the rate of 3.9 per cent in the South East.

Moreover, given that this data does not cover the most recent lockdown period, it’s likely that we’ll see this number continue to rise next month, with the extension of the furlough scheme mitigating the worst losses.

Indeed, the NatWest Regional PMI for November, also released this week, showed that businesses across all regions had reported job losses in the last month. The survey also provided an insight into how businesses are currently performing and how they feel about the future outlook.

Yorkshire and Humber bucked the trend and was one of only five of the twelve UK regions to report growth in November, second only to the South East – though the rate of growth has slowed from the previous month.

Businesses in this region are also the most optimistic in the UK according to the survey, with confidence about the outlook for the next 12 months at a four-year high. Where a score above 50 indicates expectations of growth, Yorkshire and Humber recorded a score of 80, compared with just 66 in the North East.

No doubt this is thanks to news of the vaccine developments, with many hoping the new year will bring a return to normality.

Despite the positivity about vaccines and economic recovery next year, it is clear that many people are heading into the Christmas period with a much more difficult financial situation than they were imagining less than a year ago.

Though some businesses will still feel a bit of a Christmas bounce, many will still be hit extremely hard at what is usually a make-or-break time of year. The scale of the challenge has been laid bare by the collapse of a number of high street chains in recent weeks.

We now need a credible economic recovery plan from the Government alongside real action to ‘level up’ – as they promised in the Conservative election manifesto.

The short-term measures to prop up the economy have had a positive impact in supporting jobs for now, but plans are urgently needed to ensure we deliver growth and employment opportunities in the long term.

Unless the Government lays out a strategy for this early in the new year, there’s a risk many more people will fall through the cracks in the months to come.

By Andrew McPhillips - Chief Economist, Northern Powerhouse Partnership

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