Mayor warns of ‘historic rise in unemployment’

Data shows nearly half a million benefit claims in London during height of lockdown – up 185 per cent

Sadiq to use speech to business leaders to urge Ministers to support ‘jobs-first recovery’

The Mayor of London, Sadiq Khan, will today use a speech to the Confederation of British Industry to call on the Government to do more to protect the economy from the most harmful economic impacts of Covid-19.

According to data from the Office for National Statistics (ONS), the number of Londoners claiming unemployment-related benefits shot up from an average of 173,800 people a month during the last financial year to 494,800 in May (1) – an increase of nearly 185 per cent.

Speaking to business leaders at the CBI’s Summer Reception today, Sadiq is expected to call on the Government to introduce further measures to aid the recovery in London and across the UK, including more flexible support which can be targeted at specific sectors of the economy so that the particular challenges faced by different areas can be tackled.

In recent weeks, the scale of the economic impact of the coronavirus pandemic has become clear. Data from the ONS also showed the UK’s economy shrank by 20.4 per cent in April – the first full month of lockdown – suggesting the UK is on course for a historic recession. London also had some of the country’s highest Covid-19 mortality rates in March due to high levels of deprivation in some areas (2).

Analysis by the Greater London Authority (GLA) suggests unemployment is likely to rise further in the weeks and months to come, with almost 1.1 million London workers are in sectors facing the greatest economic risk, such as tourism and hospitality.

Data published by HM Revenue and Customs and collated by the GLA found 1.07 million Londoners have been furloughed – around 12 per cent of the UK total – with many from roles which could be made permanently redundant if the Government does not take further decisive action to protect the sectors most at risk (3).

In his speech, the Mayor of London, Sadiq Khan, is expected to say: “I’ve welcomed the Chancellor’s measures to support jobs, apprenticeships and careers advice. But the Government needs to go further faster. They need to target assistance in devastated sectors to prevent an historic rise in unemployment.

“Ministers were clearly too slow to act on the health consequences of Covid-19. We simply can’t afford for the Government to be too slow to act on the huge economic consequences as well.

“This will not only hurt our city, but will have a massive, negative knock-on effect on the rest of the country.

“So I’m going to continue putting pressure on the Government to implement a much more tailored, jobs-first recovery for London.”

The Mayor has committed to doing all he can to support London businesses of all sizes and sectors through these unprecedented times. In April, Sadiq launched Pay It Forward London, a scheme enabling Londoners to support their favourite businesses and which has so far helped more than 170 businesses raise at least £250,000 with the help of more than 4,000 Londoners.

He has also allocated £1 million to grow City Hall’s business support through the London Growth Hub and £2.3 million for a Culture at Risk fund to help some of London's most imperilled creative and night-time businesses, such as cinemas and music venues.

The Greater London Investment Fund, launched in 2019 to support London’s brightest start-ups, has repurposed £4.3 million of its funding to provide Coronavirus Resilience Loans (CRLs), using the Government’s CBILs guarantee.

Sadiq has also allocated £11 million to help the city’s skills providers shift to online learning and training, including specific measures designed to reach Londoners who are currently less able to access online courses.