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Universal Credit claims soar by 856,000 as virus grips economy

Rocketing benefit claims and unemployment figures risk sweeping people up in a "tidal wave of evictions" later in the year

More than two million people in the UK are claiming Universal Credit after Covid-19 public health crisis pushed hundreds of thousands out of work, new figures show.

The concerning numbers mean the country should prepare for a “tidal wave of evictions” if no extra protection is given to private renters when the government lifts bans later this year, experts have warned.

The DWP released data showing a nearly 70 per cent increase in claimants between March and April this year as the country locked down to slow the spread of Covid-19.

And the number of new claims for the unemployment benefit and job seeker’s allowance reached 856,500 in April alone, the biggest increase in claims since records began in the 1970s, as sectors were forced to effectively shut down indefinitely.

It’s likely these numbers would be even higher without the government’s job retention scheme which is estimated to have saved roughly eight million jobs – though ministers have warned that this support could be scaled back come August when employers will be expected to contribute more to subsidise their employees’ incomes.

Separate figures, released by the Office for National Statistics, showed that 50,000 more people were without work between January and March compared to a year ago, a number set to rise as the year goes on.

That is in part because the employment figures don’t yet give a full picture of lockdown’s impact – that data will come later – meaning this rise is only a small indication of the economic devastation expected further down the line.

Research by housing charity Shelter previously suggested that nearly one in five private renters in England, which works out as 1.7 million people, expected they would lose their jobs in the next three months as a result of the labour market chaos.

Shelter chief executive Polly Neate said: “With a huge surge in people applying for benefits and early warning signs of major job losses to come, it’s clear that Covid-19 is going to send shockwaves through our economy like never before.

“We know from our services that thousands of renters are suddenly scrambling to stay afloat, and for those who’ve become unemployed, the furlough scheme is no help at all. Many are turning to Universal Credit in a desperate bid to pay their rent but are quickly finding out housing benefit levels are too low to break their fall.

“People paying average rents face huge shortfalls and many are racking up serious debts that put their homes at risk. Without more support, they will be swept up in a tidal wave of evictions when the government ban lifts. To prevent this, housing benefit must be increased to cover average rents and the benefit cap lifted – to give people a fighting chance.”

Earlier this month the Bank of England warned that the pandemic could plunge the country into the deepest recession in three centuries.

Jonathan Athow, deputy national statistician at the Office of National Statistics, said: “While only covering the first weeks of restrictions, our figures show Covid-19 is having a major impact on the labour market.

“In March employment held up well, as furloughed workers still count as employed, but hours worked fell sharply in late March, especially in sectors such as hospitality and construction.

“Through April, though, there were signs of falling employment as real-time tax data show the number of employees on companies’ payrolls fell noticeably, and vacancies were sharply down too, with hospitality again falling steepest.”

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