'Deeply distressing' - Hull to be hit by worst coronavirus economic impact and slowest recovery, report reveals

Hull’s high unemployment rate before the crisis (7.6 per cent, twice the national average), and the difficulty faced recovering from the financial crash in 2008, contributed to the findings from the Social Market Foundation (SMF) which Labour MP Emma Hardy said were “deeply distressing”.

The SMF found that while the worst economic shock will mostly be seen in London and the south-east of England, those places will bounce back relatively quickly.

But areas such as Hull will see a harsher overall impact.

Hull West and Hessle Labour MP Ms Hardy said without interventions the city risked falling further behind.

She said: “This report is deeply distressing. At the same time it comes as no surprise to me that areas which have suffered the most from 10 years of austerity will feel the economic impact of Covid-19 most deeply.

“With a government that seems more concerned with big announcements than tackling details there is a real danger that areas like Hull will continue to be over-looked and fall further behind.”

While Hull North MP Labour’s Dame Diana Johnson said: “This research confirms what we knew already. Since the decline of Hull’s old maritime industrial base, Hull has been one of the first in and last out of recessions since the 1980s.

“Despite recent progress in the green energy sector and culture, the current crisis caused by the COVID-19 economic lockdown is very worrying for Hull. This is why myself and others have been calling for action on many fronts to protect existing local jobs, reboot the economy and push ahead with the longer term regeneration of Humber Docklands.”

She added: “If the ‘Northern Powerhouse’ means anything, this will be done with the same sustained focus that London Docklands enjoyed from the 1980s.”

SMF researcher Amy Norman, said: “The economic severity of coronavirus will be felt across many places, but we must remember that this recession does not occur in isolation. Many people and places outside of the capital will be particularly vulnerable due to the lasting hardships of the past decade.”

In Yorkshire and the Humber, Calderdale and Kirklees had the highest proportion of jobs the thinktank were facing a moderate of severe impact from the virus.

Bradford came second on the list of worst hit places, according to the thinktank.

The report said: “Areas of Yorkshire and the Humber as well as London are likely to see severe impact on jobs in a local economy where unemployment was already high. These findings suggest that the coronavirus crisis could exacerbate inequalities (loss of skills and potential earnings) for workers in already sluggish labour markets.”

In Hull, nearly three quarters (73 per cent - 81,700) of workers are employed in what the SMF deemed moderately or severely impacted industries such as manufacturing (21,200), banking, finance & insurance (13,800), distribution, hotels and restaurants (26,700) andconstruction (7,800).

While nearly 30 per cent (36,000) will likely be protected by the public administration, education and health industries.

The SMF report said: “The economic impact to the area is therefore likely to be characterised by cumulative, predominantly moderate underperformance in many industries, as opposed to a substantial downturn in one core industry. Consequently, local leaders may find stimulus and investment interventions difficult to target.”

Karl Turner, Labour MP for Hull East, said: “A flexible, sector-focused approach to ending the furlough scheme, that allows manufacturers to respond to market conditions, would allow vital local industries such as caravan manufacturing to come through this crisis and protect jobs.

“The government needs to ensure that we see a post-pandemic recovery in Hull and across the UK, not just in London and the south-east. This report should be yet another warning to Boris Johnson that we urgently need action, not rhetoric, if places like Hull are to avoid a 'lost generation' of stagnant growth and employment.”

Researchers found it took seven years in Hull for unemployment rates to return to pre-crisis levels after the financial crash, and they said: “This suggests that the area may see more sustained joblessness and a more sluggish recovery from coronavirus than places such as Lambeth.”

The government has previously said it was committed to delivering on election promises to “level up” the country and increase prosperity in areas outside of London, despite the impact of coronavirus.