Surge in UK Benefits Applications Reinforces Jobless Fears

LONDON (AP) — The number of people seeking benefits in the U.K. is rising at the fastest pace on record and reinforcing fears that the country could see a surge in unemployment from its near 45-year low as a result of the lockdown measures put in place to contain the coronavirus pandemic.

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Government figures released Tuesday showed that the number of people seeking to tap the country’s main benefit — Universal Credit — has soared in the weeks since the curbs on everyday life were implemented.

Following an analysis of the government figures, the independent Resolution Foundation economic think tank, says that 1.77 million individuals made a declaration for Universal Credit in the four weeks since the government advised against non-essential contact and travel on March 16. At their peak, in the week after the restrictions were tightened on March 23, the daily number of new applications was running at eight times the normal rate.

That increase in the total number of people seeking benefits is already more than the 1.36 million officially registered as unemployed in February.

“Today’s data shows an unprecedented increase in people beginning claims since coronavirus restrictions began,” said Laura Gardiner, the think tank’s research director.

In the run-up to the coronavirus crisis, Britain’s employment rate hit a record high. It’s likely to be years, if ever, before it betters the 76.6% recorded in February as the pandemic slams the economy.

The country is expected to endure a sharp spike in joblessness, though maybe not at quite the same rate as the U.S., where job gains made in the decade since the global financial crisis have been wiped out in just four weeks. There are fears that one in five Americans may end up being unemployed as a result of the crisis.

Not everyone who seeks Universal Credit will register as unemployed as the benefit provides a safety net for those on low wages and whose income may have been recently reduced. It also doesn’t account for workers whose incomes are being supported by the Coronavirus Job Retention Scheme, which allows firms to furlough employees with the government paying cash grants of 80% of wages up to a maximum of 2,500 pound ($3,200) a month.

There were 185,000 applications from companies for the furlough scheme on Monday, its first day in operation, helping to safeguard 1.3 million jobs, Britain’s Treasury said.

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