Yorkshire's 'hidden' unemployment crisis revealed to be three times bigger than feared

Research from the Centre for Cities think tank found that the true level of unemployment in the region is almost 14 per cent, as economic activity deepens the North-South divide.

It found that the official unemployment rate of 4.1 per cent does not include nearly 300,000 people who are involuntarily out of work but classed as “economically inactive”.

The official rate only includes those who are actively looking for jobs and does not measure people who are neither in work nor looking for a job due to circumstances outside of their control.

The research found that this problem is most prevalent in Hull and Barnsley, where nearly one in five working-aged people fall into the hidden unemployment category.

Of the ten places with the highest number of people involuntarily out of work, nine are in the North of England, of which three are in Yorkshire. Meanwhile eight of the ten urban areas with the lowest rates are in the South.

This comes as Jeremy Hunt, the Chancellor, has urged millions of jobless, newly-retired, or sick Britons to get back to work, as part of efforts to increase the country’s productivity and grow the economy.

Andrew Carter, Chief Executive of Centre for Cities, said: “Since the pandemic we have seen lots of headlines alluding to record-low numbers of job seekers but Cities Outlook shows there is actually a jobs shortage, with a significant North-South divide in involuntary inactivity rates.

“With the UK now likely to enter a recession, the Government must address its insufficient action on levelling up so far and act swiftly to create more opportunities that get people back into the North’s labour force.

“This will require setting out and implementing an agenda that delivers much-needed investments in skills and public services, while supporting job creation in struggling places.”

Jonathan Ashworth, Labour’s shadow work and pensions’ secretary, said: “The Tories failure to take action to tackle the number of people out of work in this country is leaving the country poorer, and northern areas particularly worse off.”

The report comes alongside the latest warning from the International Monetary Fund (IMF), which said that the UK will see the worst performance of countries in the G7.

In its latest World Economic Outlook update, the IMF downgraded its UK gross domestic product (GDP) forecast once again, predicting a contraction of 0.6 per cent against the 0.3 per cent growth pencilled in last October as Britain looks set to suffer more than most from soaring inflation and higher interest rates.

But it nudged up its outlook for UK growth in 2024 to 0.9 per cent, up from the 0.6 per cent expansion previously forecast.

Jeremy Hunt, the Chancellor, said: “The Governor of the Bank of England recently said that any UK recession this year is likely to be shallower than previously predicted, however these figures confirm we are not immune to the pressures hitting nearly all advanced economies.”

Today will mark the third anniversary of the UK’s exit from the European Union, with Rishi Sunak reaching 100 days as Prime Minister on Thursday.

Mr Sunak said: “In the three years since leaving the EU, we’ve made huge strides in harnessing the freedoms unlocked by Brexit to tackle generational challenges.

“Whether leading Europe’s fastest vaccine rollout, striking trade deals with over 70 countries or taking back control of our borders, we’ve forged a path as an independent nation with confidence.

“And in my first 100 days as Prime Minister, that momentum hasn’t slowed – we’re cutting red tape for businesses, levelling up through our freeports, and designing our own, fairer farming system to protect the British countryside.

“This is just the beginning of our plans to deliver on our five priorities, including growing the economy so we can create better paid jobs, and I’m determined to ensure the benefits of Brexit continue to empower communities and businesses right across the country.”