Question to the HM Treasury:

To ask Her Majesty's Government what assessment they have made of the impact of the COVID-19 pandemic and resulting government policies on (1) incomes, (2) unemployment levels, (3) furlough levels, (4) benefit payments, (5) the number of companies ceasing to trade, and (6) regional levels of GDP, in each region of England including London.

We recognise the challenges that COVID-19 is having on all groups in society, including the most vulnerable. That is why the government announced an unprecedented package of support – including boosts to Universal Credit, the Coronavirus Job Retention Scheme (CJRS), and the Self-Employment Income Support Scheme – helping to protect incomes, jobs, and support those most at need. HMT distributional analysis as of the end of May 2020 showed that these interventions, along with the existing tax and welfare system, helped reduce income losses faced by working households by up to two-thirds, with the poorest working households protected the most (as a proportion of income).

On the level of unemployment, the unemployment rate in the three months to October rose 0.7ppts on the quarter and 1.2ppts on the year to 4.9%. The unemployment level rose by 241,000 on the quarter and rose by 411,000 on the year, to 1.7 million. The single-month unemployment rate for October rose by 0.3ppt on September to 5.2%. The unemployment level rose by 114,000 on the month and 582,000 on the year to 1.8 million.

Regarding those furloughed under the CJRS, this scheme was designed and created to respond to the crisis. As of 13 December 2020, the CJRS has helped 1.2 million employers across the UK furlough 9.9 million jobs, protecting people’s livelihoods. £46.4 billion has been paid out in grants.

On benefit payments, the pandemic has seen a substantial increase in Universal Credit claims – as of August, 4.6 million households were in receipt of Universal Credit, compared to 2.6 million in February. The Office for Budget Responsibility’s November 2020 Economic and Fiscal Outlook fully assessed the impact of Covid-19 and associated government policy measures of welfare spending, and found that the government is spending an additional £7.4 billion on its overall package of increased welfare support.

On the number of companies ceasing to trade, insolvency case registrations remain above 2019 levels. For the year to date, registrations in 2020 remain low, at around 73% of 2019 levels.

Finally, on the impact on regional GDP, in November 2020, the Office for National Statistics published experimental measures of quarterly regional GDP for the first quarter of 2020 for Wales and the English regions. They show a reduction in GDP in all regions compared to the last quarter of 2019. These statistics are still in development and should be interpreted with caution. The latest official regional GDP statistics relate to 2018 and were published in December 2019.