NORTH East leaders have called on the Chancellor to address the growing unemployment situation and extend furlough, ahead of Wednesday's Budget.

Stockton North MP Alex Cunningham has called on the Chancellor to urgently address the 'dire situation' of growing unemployment in his constituency.

Newly released claimant figures from the House of Commons Library shows that there are now 4,510 people claiming unemployment related benefits in Stockton North – an increase of 1,465 compared to the same period in 2020.

This amounts to 7.9 per cent of 16 to 64 year olds in the constituency – 1.5 per cent higher than the UK equivalent claimant rate.

Of these 975 are aged 18 to 24 – a rise of 340 on January 2020.

There are also 5,303 people in Stockton North currently furloughed from their employment.

The Coronavirus Job Retention Scheme (furlough) is set to expire in April although an extension is expected.

Mr Cunningham said: “The soaring unemployment figures – on top of 12,500 jobs lost in the Tees Valley during this pandemic – is a dire situation that the Chancellor needs to urgently address. Too many people are losing jobs as a result of the Government’s mistakes and too many young people are losing out on employment and training opportunities.

“We need a plan now from the Chancellor, not promises of a plan next week. People need certainty – they need to know that furlough will be extended and Universal Credit will not be cut. We also need to see a real plan to get our younger people into work.

“People can’t afford to wait for the Chancellor to get his act together. They need emergency action today, not more dither and delay until the Budget.”

On whether the furlough scheme should be extended, Jessie Joe Jacobs, Labour Candidate for Tees Valley Mayor, said: "Of course. Many businesses have been devastated by a traumatic year and the people they employ remain in a very precarious place.

"Many Tees firms, large and small, will suffer an economic long Covid and they will need all the help they can to battle back. Key to that will be supporting the staff who have been furloughed while firms readjust and reopen.

"We can't afford to risk the future of firms by pulling the rug from under them now.

"After a decade of Tory austerity and cuts, the Tees was already among the worst areas in the country for unemployment but the Covid crisis has really pushed that to crisis levels. So many firms closed down and laid off staff and others cut back to the bare minimum to get through lockdowns.

"During lockdown unemployment in Middlesbrough soared to 10.1 per cent, the fifth highest in the country. In Redcar and Cleveland it was 7.6 per cent. In Hartlepool 7.5 per cent. Stockton 7.2 per cent. Those figures show how hard this has hit the area. And behind the statistics there are real people, struggling to survive in extraordinary times.

"This area has historically had high levels of youth unemployment but the Covid crisis exacerbated the situation. So many young people work in the hospitality sector, in pubs and restaurants, and those businesses were hit first and hit hardest. Our young people took the brunt of it.

"Furlough must be extended to help straining businesses and relieve the anxieties of staff with the cut-off date hanging over their head and I would like to see something concrete for the excluded, the millions of self employed who never qualified for furlough or government support. I have heard stories of beauty business owners having to borrow money from parents just to feed their kids. That can't be right.

"We have to look forward to the future now too. We need an expansion of the Kick-Start scheme and more funding for apprentices to help young people into real jobs with a real future.

"I am also joining Labour's call for a £1 billion business start up fund to give our entrepreneurs the backing to make their business ideas a reality."

Update support for employers, firm says

A Darlington managing director has urged the government to update support for employers.

Nicky Jolley, the founder and managing director of HR2day is calling for an update to employment resources such as the furlough scheme. 

These changes can help to protect many North East businesses from making redundancies or possible closures. 

The furlough scheme covers up to 80 per cent of an employee’s salary for the hours they cannot work, including bank holidays, up to £2,500 per month, providing they were on the payroll as of October 30 2020. 

Ms Jolley has previously called for this date to be extended to consider the two national lockdowns since October, and any new hires appointed in this period. 

She said: “The road map that the Prime Minister announced is positive, and it shows a light to the end of a long tunnel. However, there are many months left and this time will be the most difficult for employers.

“The furlough scheme has been crucial to businesses over the past year, particularly those which have either been forced to close or are unable to operate at full capacity. Despite making a number of useful changes to the scheme, the government still hasn’t met the needs of many businesses that have taken on new staff since autumn 2020. 

“The Chancellor also has an opportunity next week to extend business rates relief.

This is a crucial time for many businesses and their employees, now the Chancellor must make sure there are businesses left to reopen in April, May and June with an economic roadmap that will support employers and safeguard jobs through Easter and into the summer.”

The forthcoming Budget must further relax business taxes and minimise the growing risk of closures and redundancies across SMEs in the North East, Azets - the UK’s largest accountancy and business advisory firm for SMEs has said. 

Joanne Regan, Regional Managing Partner at Azets in the North East said: “SMEs are the backbone of both the North East and UK economy and they are being starved of cash. We urge the Chancellor to use tax relief to help businesses retain cash flow.

“Without cash, a business cannot survive and there are too many businesses now in that position. There is already a cash flow crisis which is threatening the backbone of our economy and, unless tackled urgently, will trigger the closure of many otherwise sound businesses.

“The Chancellor last year introduced a raft of measures that protected businesses and prevented mass unemployment, however, many businesses that are now mothballed, such as those in the hospitality sector, are still having to maintain buildings, pay insurance and finance debt.”