1.5m more self employed workers file claims for universal credit


More than 1.5 million people have applied for universal credit since social distancing measures were introduced a month ago, underscoring the scale of the crisis in jobs and incomes.

The increase since March 16 has been six times as large as the normal average of 235,000 a month. There was a huge take-up in the ten days after that date, when claims rose to 950,000, almost ten times as many as there are normally in a two-week period.

Further evidence of the impact of the economic shutdown came as official figures showed cracks starting to appear in the labour market. Early estimates showed that the number of employees fell by 0.06 per cent in March to 29.1 million, a drop of 17,500, according to the Office for National Statistics.

The numbers were small, though, and economists said that they did not reflect the scale of the jobs crisis because they included three weeks before the social restrictions were in place.

Official figures for the three months to February showed that employment rose by 172,000, better than the 108,000 forecast, to a record 33.1 million and that the employment rate hit a new high of 76.6 per cent. Unemployment increased from 3.9 per cent to 4 per cent as 58,000 more people declared themselves jobless.

Both employment and unemployment rose because the inactivity rate fell to a record low of 20.2 per cent as more people sought work. Wage growth dipped from 3.1 per cent back to 2.8 per cent. Mims Davies, the employment minister, said that the jobs data had been “overtaken by current events”.

Paul Dales, at Capital Economics, the consultancy, said that the unemployment rate was likely to double because of the pandemic. A million people have been furloughed, with the government paying most of their wages because businesses do not have the cash.

Economists expect the job retention scheme to be used by more than eight million workers and to cost the taxpayer £40 billion.

Many other people, including the self-employed, have applied for universal credit because they do not qualify for the relief package.

The Department for Work and Pensions said that three million people were claiming universal credit. The figures do not necessarily translate into a one-for-one increase in unemployment as people also can claim if they suffer a drop in income.