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U.K. Sees New Welfare Applications Surge to 1.2 Million

U.K. Sees New Welfare Applications Surge to 1.2 Million

(Bloomberg) --

Britain has received 1.2 million new claims for Universal Credit welfare payments since March 16, highlighting the scale of the financial hardship being inflicted by the coronavirus crisis.

Universal Credit is paid to people without work or on low incomes, and in normal times there are around 55,000 applications a week.

With businesses shuttered and people confined to their homes, there are fears that Britain is heading for its deepest economic slump for a century and soaring unemployment. The National Institute of Economic and Social Research predicts the second quarter could see the economy contract by as much as 25% if the restrictions continue.

A similar picture is unfolding around the world, with figures Thursday showing almost 17 million Americans have applied for unemployment benefits in the past three weeks.

U.K. Prime Minister Boris Johnson, himself now hosptialized with coronavirus, urged people to stay at home on March 16 and ordered a formal lockdown a week later in an effort contain the spread of the disease.

Confirming the tally of welfare applications, the Department for Work and Pensions said people seeking help no longer need to call the department as part of the process.

“We are doing whatever it takes to make claiming benefits as straightforward as possible during a time when we are receiving an unprecedented number of claims,” Work and Pensions Secretary Thérèse Coffey said in a statement. “Once you’ve completed your online application, you can rest assured we have received your claim and we will call you if we need to check any of the information you’ve given us.”

The move follows criticism of the time taken to handle new applications. Between March 23 and March 27, there were 1.8 million calls to the Universal Credit hotline. March 30 alone saw the number climb to 2.2 million.

The government has pledged to pay 80% of the wages of people put on temporary leave by their employers and increase unemployment support. However, self-employed workers must wait until June to receive similar help.

The latest Universal Credit figures suggest there has been some slowdown. Last week, the DWP said 950,000 claims were made between March 16 and March 31.

©2020 Bloomberg L.P.