Seaside towns and tourist hotspots at sharp end of job losses

Every region of the UK is seeing a significant rise in unemployment, but coastal tourist destinations like Blackpool, Pembrokeshire and Devon are seeing the biggest jobs hit, the Resolution Foundation says in new analysis published today (Sunday).

With a drop of nearly half a million PAYE workers between March and April, Britain is facing a jobs crisis of unprecedented speed and scale. Job losses, furloughing and hours reductions have been widespread in every region, with between 17 per cent (in Wales) and 26 per cent (in South West England) of employees experiencing these changes in each region and nation.

But local differences look set to be exposed by the current jobs’ crisis. The analysis – Local differences – reveals that unemployment-related benefit claims have risen by more than one-third in every local authority, but in one-in-five areas it has doubled. Crucially, these claimant count increases in have been larger in areas that had higher claimant rates before the current crisis.

The Foundation’s analysis shows that Blackpool had the highest claimant count in the UK pre-crisis and also saw the biggest percentage point increase in the month to April – jumping 3.9 percentage points to 11.1 per cent. In contrast, Cambridge – which had the lowest claimant count in March – saw a much lower rise of 0.9 percentage points, to 2.5 per cent in April.

The Foundation notes that some local areas are experiencing a double blow. Right across the country locals are not able to spend as normal in hospitality or retail outlets, but tourist hotspots are seeing a second hit from the fact residents in other areas are no longer travelling to spend. Coastal areas like Scarborough, Pembrokeshire, Torbay and Cornwall have one-fifth of their workforce employed in the tourism sector and have seen some of the largest claimant count increases (3.1 percentage points, 2.7 percentage points, 3.6 percentage points and 3.1 percentage points respectively).

Previous Resolution Foundation research has highlighted that these local authorities are also the parts of the country that are older and have aged fastest since the turn of the millennium. This means more exposure to the pandemic’s health effects, and a potentially longer voluntary social distancing period limiting the pace at which local spending in those areas will pick back up.

The Foundation says that were it not for the Job Retention Scheme and Universal Credit, the loss of jobs would have been much larger in the worst-affected places. South Lakeland has seen almost a full half of employees (47 per cent) furloughed.

However, with Government support via the Job Retention Scheme starting to be reduced from August, the Foundation says this analysis reinforces the case for combining bold, nationally-coordinated policy action, including demand stimulus and back-to-work support, with targeted support for the sectors and places – especially tourist hotspots – that are facing a significant uphill challenge.

Charlie McCurdy, Researcher at the Resolution Foundation, said:
“Unemployment is set to rise significantly in every region of the country. Already one-in-four employees across the UK have experienced significant job changes due to coronavirus, whether through furloughing, reduction in hours and pay, or job losses.

“However, places with shuttered tourist industries and already limited job opportunities are being hardest hit so far. Some of the largest rises in those claiming unemployment-related benefits have been in deprived coastal towns like Blackpool and Hartlepool, which had higher unemployment rates before the crisis hit.

“We need a nationally-coordinated back-to-work strategy, within which the Government will need to build flexibility and provide targeted support to the hardest-hit areas to prevent slow local recoveries.”