- Visits to workplaces in London reduced by as much as 73% at the start of the first national lockdown, compared to 67% for the rest of the UK.
- Visits to London workplaces remain 54% lower than prior to the pandemic.
- At the peak of the scheme, over 1 million Londoners were furloughed. As at the end of January 2021, 712,200 jobs in London were furloughed, 17% of all eligible positions.
- Overall, more than three-quarters of London’s boroughs had furlough rates that were above the national average, with furlough rates slightly higher for men (18%) than women (17%).
- By the end of October 2020, 465,000 self-employed Londoners had made a claim to the second tranche of the government’s Self-Employment Income Support Scheme, claiming a total of £1.2 billion.
- The number of payrolled jobs in London has fallen by 214,000: (in February 2020, the number of patrolled jobs stood at 4.15m, by February 2021, it had dropped to 3.95m).
- 27% of the total increase in London unemployment benefit claims was in the most deprived 20% of neighbourhoods. 9% of the increase was in the least deprived 20% of neighbourhoods.
- There has also been a disproportionate rise in unemployment benefit claims among men, with a 5.9 percentage point rise in claims in the year to December 2020, compared to 4.4 for women.
Restrictions to slow the spread of the virus, as well as the impact of the pandemic itself, have had a seismic impact on the UK’s labour market, and London has not been immune to this.
Londoners have reduced travel significantly
In response to the pandemic and the restrictions put in place by the government, Londoners and visitors to London have travelled significantly less around the capital. To understand the scale of this, we can look at mobility data produced by Google. This assesses changes in the number of people visiting different categories of places, including workplaces, compared to a pre-pandemic baseline period (3 January to 6 February 2020).
The data shows that:
- There have been very large reductions in visits to workplaces in London, and that these reductions were larger in London than for the rest of the UK overall.
- For most of the period, reductions in visits to workplaces were larger in Inner London than in Outer London.
- The reduction in visits to workplaces in London peaked at 73% at the start of the first national lockdown, compared to 67% for the rest of the UK.
- By February 2021, visits to London workplaces remain 54% below the baseline period.
- Even during the summer of 2020, when government restrictions on activity and work were comparatively light, there was at least a 25% reduction in workplace visits compared to the baseline period.
- There was a significant drop in workplace mobility in the week commencing 13 December 2020, which was due to London and many other areas of England moving into Tier 3 (on 19 December, London, the South East and the East of England moved into Tier 4).
Figure 10: Changes in workplace mobility as measured by Google (March 2020 - January 2021)
Many employees have been able to shift to home working
Of course, reductions in visits to workplaces do not necessarily signify reduced employment. In response to the pandemic, many businesses have been able to support their employees to work from home. Employees in London have been more able to work from home than those in any other English region, with 57% of London employees saying that they worked from home in April 2020, compared to 45% across the rest of England.
Figure 11: Proportion of employees saying they worked from home in April (April 2020)
For those unable to work from home, government support has protected many jobs, despite the fall in mobility
Where industries have had their activities restricted or working from home has not been an option, the government’s furlough scheme has been used to retain employees through the pandemic. At the peak of the scheme, well over 1 million jobs in London were furloughed. As at the end of January 2021, 712,200 jobs in London were furloughed, 17% of all eligible positions.
London’s furlough rate has been particularly high and consistently above those seen in the rest of England. Overall, over three-quarters of London’s boroughs had furlough rates in January 2021 that were above the average for England.
Figure 12: Furlough take up rate over time by region (July 2020 - January 2021)
Furlough rates in London, as at 31 January 2021, are slightly higher for men (18%) than women (17%).
Given that restrictions have had varying impacts on different sectors, there are notable differences in the furlough rate across London and for different populations. For example, those in the hospitality sector have been particularly hard hit, with more than half of jobs in accommodation and food services nationally being furloughed.
Together this has meant that different parts of London have had very different experiences of furlough. As at the end of January, the highest furlough rate was seen in Newham (22%) and the lowest in Richmond upon Thames (14%).
Furlough Take-up Rates as at 31 January (2021)
While there have been some well-documented gaps in coverage – with up to 500,000 self-employed people who were not working across the country receiving no support – many self-employed Londoners have also been protected by the government’s Self-Employment Income Support Scheme. For example, by the end of October 2020, 465,000 self-employed Londoners had made a claim to the second tranche of the scheme, claiming a total of £1.2 billion.
But not all jobs have been protected by home working and the furlough scheme
While the government’s schemes have protected many jobs, the scale of the economic impact of the pandemic has still had a significant effect on employment in the capital. In February 2021, the number of jobs – as measured by Pay As You Earn (PAYE) data – had fallen by 5% in London since February 2020. This equates to just over 209,000 fewer jobs and takes the number of payrolled jobs in the capital back to a level last seen in October 2016.
The fall in payrolled jobs has also been larger in London compared to the rest of England, which saw a 1.9% fall between February 2020 and February 2021. While detailed breakdowns of the data in London are not available, the national picture is informative on the groups most impacted by this fall. For example, across the UK:
- Under-18s have seen a 35% fall, 18–24-year-olds an 8% fall and those aged 25–34 just a 3% fall.
- There was a 18% fall in jobs in the accommodation and food services sector and a 18% fall in the arts, entertainment and recreation sector.
Figure 14: Percentage change in PAYE jobs compared to February 2020 (February 2018 - February 2021 (Feb 2020 = 0))
The immediate prospects for the capital also look precarious. Though estimates of vacancies based on online job adverts have started to improve from the 70% slump they saw to May 2020, they are still nearly 40% below their pre-pandemic levels.
Figure 15: Index of the number of vacancies (February 2018 - January 2021 (2019 average = 100))
While not available at a London level, statistics show nationally the sectors where recruitment has fallen most. For example, at the end of the second week of February 2021, online job adverts in the ‘Catering and hospitality’ category were at just 23% of the level they were during the same week the previous year, while ‘Graduate’ roles were at 46% and ‘Wholesale and retail’ jobs at 54%.
And it is those least able to shoulder the burden who have been impacted the most
The data available suggests that the people most affected by the economic impacts of the pandemic are those who were already living in the most deprived areas. In part, this is due to the fact that many roles in relatively poorly paid sectors are not constructed to be flexible or do not lend themselves to allow for working from home. For example, while 70% of people in professional occupations nationally said that they were able to work from home in April 2020, the figure for those in caring, leisure and other service occupations was 15% and for process, plant and machine operatives just 5%.
With this in mind, it is perhaps unsurprising that more deprived neighbourhoods have fared worse economically during the pandemic.
For example, more deprived areas have consistently had higher furlough rates than less deprived areas. The most deprived 20% of constituencies in London had an average furlough rate of 19% in January 2021, compared to a 15% average for the least deprived 20% of constituencies.
Figure 16: Average furlough take-up rate by constituency deprivation quintile in London (July 2020 - January 2021)
Again, certain sectors have been hit harder. For example in London, more than one in four (26%) of those furloughed work in the accommodation and food services sector and one in five (19%) in the wholesale and retail sector.
Figure 17: Breakdown of total furloughed jobs in London, by sector (31st January 2020)
The picture is similar for self-employed people, where claims for the government’s Self-Employment Income Support Scheme (SEISS) are significantly higher in more deprived areas. Nine in ten (89%) self- employed people in the most deprived 20% of London constituencies took up the scheme – showing that their trading incomes had taken a hit. This compares to less than six in ten (57%) doing so in the least deprived 20% of London constituencies.
Figure 18: Take up of the Self-Employment Income Support Scheme in London, by Constituency income deprivation quintile (Second tranche of scheme as at 31st October 2020)
It has been difficult to measure the impact that the pandemic has had on unemployment. A useful but imperfect alternative is to look at how many people are claiming unemployment-related benefits, such as Jobseeker’s Allowance, or are claiming Universal Credit while being unemployed. According to this measure, the most deprived 20% of neighbourhoods in London have seen a 7 percentage point increase in the proportion of working-age adults claiming unemployment benefit over the year to December 2020, compared to a 2.9 percentage point increase in the least deprived 20% of neighbourhoods.
Overall, this means that 27% of the total increase in unemployment benefit claims seen in the capital have been in the most deprived 20% of neighbourhoods. There has also been a disproportionate rise in claims among men, with a 5.9 percentage point rise in claims in the year to December 2020, compared to a 4.4 percentage point rise for women.
There is also a clear trend of younger workers being hit hardest, with the proportion of 18–24-year-olds in London claiming unemployment benefits increasing by 7.2 percentage points over the course of the pandemic, compared to a 3.6 percentage point rise among people aged 60–64.
Figure 19: Change in unemployment benefit claim rate in the year to December 2020, by neighbourhood deprivation quintiles (December 2019 - December 2020)
Figure 20: Change in unemployment benefit claim rate in the year to December 2020, by gender (December 2019 - December 2020)
Figure 21: Change in unemployment benefit claim rate in the year to December 2020, by age (December 2020 - December 2021)
Hear from our grantee Work Rights Centre on the impacts they have seen since the COVID-19 pandemic hit
 Coronavirus Job Retention Scheme statistics, August 2020, HM Revenue & Customs (HMRC).
Available at www.gov.uk/government/statistics/coronavirus-job-retention-scheme-statistics-august-2020 (accessed 1 April 2021). Note monthly data started in July 2020 so this is not included in Figure 12.
 Coronavirus Job Retention Scheme statistics, February 2021, HMRC.
Available at www.gov.uk/government/statistics/coronavirus-job-retention-scheme-statistics-february-2021 (accessed 1 April 2021).
 ‘Jobs, Jobs, Jobs: Evaluating the effects of the current economic crisis on the UK labour market’, Resolution Foundation, page 64. Available at resolutionfoundation.org/app/uploads/2020/10/Jobs-jobs-jobs.pdf(accessed 1 April 2021).
 Self-Employment Income Support Scheme (SEISS) statistics, November 2020, HMRC.
 ‘Online Job Advert Estimates’, February 2021, ONS.
 ‘Coronavirus and the Effects on UK Labour Market Statistics’, ONS.
Available at ons.gov.uk/employmentandlabourmarket/peopleinwork/employmentandemployeetypes/articles/coronavirusandtheeffectsonuklabourmarketstatistics/2020-05-06 (accessed 1 April 2021).