The Government is facing further pressure to cut lockdown restrictions as new figures laid bare the damage being caused to the labour market.
The latest unemployment data was published by the Office for National Statistics (ONS) on Tuesday just hours before the Prime Minister meets with his Cabinet.
New figures suggested the down turn had yet to feed through fully into unemployment thanks to the job retention scheme but there was a sharp drop in the number of paid employees, down by 2.1% or 612,000 in May compared with March, and a huge increase in benefit claims.
The slowdown in the economy is now visibly hitting the labour market, especially in terms of hours workedJonathan Athow, deputy national statistician at the ONS
The ONS said there was a decline in hours worked by people in jobs, while jobless claims under Universal Credit jumped 23.3% month-on-month in May to 2.8 million and soared 125.9% or 1.6 million since March when the UK was placed in lockdown.
ONS deputy national statistician Jonathan Athow said: “The slowdown in the economy is now visibly hitting the labour market, especially in terms of hours worked.”
He added: “More detailed employment data up to April show a dramatic drop in the number of hours worked, which were down almost 9% in the latest period, partly due to a six million rise in people away from work, including those furloughed.”
Asked if May unemployment figures could reach around 5%, Mr Athow said: “That would certainly go in that direction if that 600,000 reduction in payroll goes through into unemployment. We haven’t quite seen the down turn feed through into unemployment yet.”
Data published last week revealed that the UK’s economy shrank by 20.4% in April – the largest monthly contraction on record – as the country spent its first full month in lockdown.
Amid the economic fallout, Tory grandees have called on Boris Johnson to ease the extent of the restrictions currently in place.
Writing in the Daily Telegraph, former Conservative Party leader William Hague said that lockdown was a “disaster (that) cannot under any circumstances be repeated”.
The Prime Minister has promised a review into the two-metre distancing rule but Downing Street said it could not guarantee the results would be published before July 4, when the hospitality industry is due to reopen.
But Lord Hague urged ministers to step in and save the hospitality industry from “weeks (of) agonising” over a decision on cutting the two-metre enforcement – the gap people in the UK are advised to stay away from each other to prevent the spread of the virus – and cut it immediately.
The former foreign secretary said it was “not necessary to have a two-metre separation between people to keep the virus in retreat where it is already at a low level” and cited the experience of the likes of Denmark, France and Germany where the “recommended distance is shorter” than in the UK.
The British Beer and Pub Association (BBPA), a trade body representing brewers and pubs, has demanded Number 10 give a clear date for when pubs can open their doors, including what social distancing guidance businesses can expect to have to follow.
Scores of MPs, including former Cabinet ministers, used a debate in the House of Commons to urge the Government to announce its review decision before July 4.
Ex-business secretary Greg Clark asked why having a restriction shorter than two metres in other countries was “right for them but wrong for us”, while Commons defence committee chair Tobias Ellwood said it was “now time for the Government to decide”, not in two weeks.
It comes as:
– Around one in five pupils are said to have carried out no schoolwork at home, or less than an hour a day, since schools closed partially in March, according to research by UCL Institute of Education (IOE), while a report by the National Foundation for Educational Research suggested that fewer than half of pupils returned their last piece of set work to teachers.
– Scientists at Imperial College London will begin testing another possible coronavirus vaccine on humans this week.
– The Prime Minister faces a growing rebellion after he rejected England footballer Marcus Rashford’s demand to extend its free school meal voucher scheme through the summer holidays.
– A further 38 people died in the 24 hours up to 5pm on Sunday after contracting Covid-19, with the UK death toll thought to have passed 52,000.
– US-UK trade negotiators are due to commence the second round of talks as ministers look to prepare the way for a post-coronavirus economic boost.
Meanwhile Foreign Secretary Dominic Raab has insisted the Government’s medical and scientific advisers will continue to take part in its televised coronavirus briefings but “perhaps not on a daily basis” after a drop-off in public appearances from the experts in recent weeks.