Capital Set For Largest Decline In Employment This Year, Says New Report
A new economic study predicts London has the most to fear from the impact of lockdown and Brexit. Lawyers argue that the findings mean the government’s levelling up agenda can’t be too simplistic when assessing the north-south divide and the wider needs of the nation.
The latest UK Powerhouse report by law firm Irwin Mitchell and the Centre for Economics and Business Research (Cebr), reveals that London will witness the largest decline in employment in Q4 2021 of any of the 50 locations in the study* and a fragile return to economic growth.
At the end of last year, London was in the bottom 20 cities for GVA** growth. Inner London was on -7.1% GVA; while it was similar picture for year on year employment, with Outer London the worst performing city in the report, on -8.4%.
By the end of Q4 2021, the economic outlook improves slightly, but Outer London is set to remain among the 20 worst performing, on 6.2% GVA. The overall picture in terms of employment is disappointing, with London in the bottom five of all 50 UK cities surveyed.
Thanks to its large accommodation and food services sector making liberal use of the furlough scheme, Outer London is expected to witness a 5.4% fall in employment when the scheme ends.
HMRC data shows 56% of employees in this sector using the furlough scheme and coupled with the same percentage on furlough in London’s arts, entertainment and recreational industries, the capital is expected to see many jobs at risk of redundancy when the furlough scheme ends.
UK Powerhouse makes several recommendations to tackle the difficulties business face coming out of lockdown. These include the need to take advantage of policies to encourage investment and improve skills and local government having bespoke plans in place to support job creation.
The UK Government also needs to prioritise implementation of the TCA with as little disruption as possible to businesses and negotiating a smoother trading relationship with the EU post Brexit.