Eastern Scotland labour market among hardest hit during pandemic

Eastern Scotland has seen a sharper drop in the number of employees on company payrolls than most areas in the UK during the coronavirus pandemic.

Friday, 9th April 2021, 1:00 pm
Stock photo by John Devlin.

That’s according to Office for National Statistics figures showing the number of people receiving pay through PAYE – HM Revenue and Customs’ system for collecting income tax from salaries.

An estimated 860,669 employees in the eastern Scotland area – which covers 11 local authority districts including Midlothian – were on company payrolls in February. That’s 25,400 fewer than in February last year – the month before the UK’s first Covid-19 lockdown.

The 2.9 per cent annual decrease was one of the biggest declines in payrolled employment of 41 areas across the UK included in the analysis.

Nationally, the number increased slightly for the third month in a row, to 28.3 million, after nine months of decline.

But this still amounted to a drop of 693,000 (2.4 per cent) compared to the previous February.

While the employee workforce took a hit everywhere, the majority of areas to see the sharpest falls were in London and the South East.

“Inevitably, places with lots of jobs in hospitality, tourism, aviation and the arts have been hit particularly hard, while areas that are more reliant on public sector jobs and health services have been relatively better insulated during the crisis,” said Tony Wilson, director of the Institute for Employment Studies.

“However, many of those areas that have fared less badly had lower employment before the crisis and have even lower employment now. No part of the country has escaped unscathed.”

The labour market should see a recovery in hiring as parts of economy shut down by the pandemic start to reopen, Mr Wilson said.

He added: “But with nearly 5 million people still to come back from furlough and nearly 2 million people unemployed, we may well need more support in the coming months to get hiring going again.”

The Resolution Foundation, which campaigns to improve living standards for those on low to middle incomes, said that one of the big questions as the country emerges from another lockdown is how quickly people can return to work.

Hannah Slaughter, economist at the think tank, said: "Government policy will have a big hand to play in how successful this transition is.”

A Treasury spokesman said: ‘’We’ve invested more than £350 billion throughout the pandemic to protect millions of jobs and businesses – and extended the furlough scheme through to April so that people have certainty that help is in place.

“We will continue to implement our Plan for Jobs through support schemes such as Kickstart, Restart, and our apprenticeships incentives – helping jobseekers find new opportunities, protecting livelihoods, and supporting our economic recovery.”