LONDON (Reuters) – The rate of new benefits claims in Britain has slowed but is still above the normal level, a senior Department for Work and Pensions (DWP) official said on Wednesday, underlining the impact of the coronavirus outbreak on jobs.
Britain has received more than 1.4 million new claims for welfare payments since March 16, when the government began asking people to avoid unnecessary social contact — around six times the normal level.
“The events of the last month have been truly seismic,” DWP director general Neil Couling told reporters.
He said claims for universal credit, which groups six benefits into one payment, were now two or three times the normal level, down from about 10 times at the peak, but “still well above what happened in the financial crisis”.
The first people to make pandemic-related claims will learn of their entitlement from today, with payment due on April 22.
On Tuesday, Britain’s budget forecasters said the economy could shrink by 13% this year due to the coronavirus shutdown, with two million people projected to lose their jobs.
British labour market data including the number of people seeking jobless benefits in March is due on April 21.
Couling said claimant numbers could not be used to directly predict the rise in unemployment as universal credit is intended to top up earnings, with around 30-40 percent of existing claimants in work.
Initial uncertainty over measures to support workers also mean some claims have been withdrawn or changed, with some people having been rehired under the government’s furlough scheme and some self-employed claiming benefits until support payments kick in.
“We have counted them in, I am yet to count them out as it were,” Couling said.
The government announced on March 20 it would provide 80% of pay for workers who are temporarily laid off and has since also set out a scheme for the self-employed.
The furlough scheme is supporting “an awful lot of people” who would otherwise be claiming universal credit, Couling said, so decisions over how long it will continue will impact future claims.
“I don’t think any of us can quite say how the economy is going to perform over the next few months because there are some pretty difficult choices we have all got to make as a country,” he added. “It all depends on how things pan out. I think it is foolish to hang too much on forecasts at the moment.”
Reporting by Kylie MacLellan, Editing by Guy Faulconbridge and Catherine Evans