Recent figures suggest that London may already be bouncing back from the twin shocks of Brexit and the pandemic. The figures, based on pay-as-you-earn (PAYE) tax data, suggest that the number of working people living in London increased by just over three per cent between December 2019 and December 2022, an increase of around 138,000.
Tagged as “experimental statistics” by the Office for National Statistics (ONS), they count the “payroll population” – that is, the number of people on payroll, including those on furlough or sick leave, based on their home address. Therefore, they do not show the number of jobs in London (some of these people will commute out, while others commute in) nor do they show the whole population (they exclude self-employed people and people who are not working for whatever reason).
All that said, they provide another strong indication that whatever population exodus London saw during the first year of the pandemic has since gone into reverse. The chart below shows the trajectory of this change. March 2021, the month of the 2021 Census, is at the lowest point of the dip.
The composition of London’s payroll population has changed over this period, reflecting the implementation of Brexit in 2020 and new immigration rules in 2021. London’s EU worker population has shrunk by about ten per cent (80,000 people), while its non-EU worker population grew by around 20 per cent (150,000 people). The UK national workforce fell by about five per cent during the pandemic, and is now two per cent higher than it was in late 2019. The chart below shows how the three populations have changed.
The rest of England also saw growth in its non-EU workforce. Though this growth was largest in numerical terms in London, the proportionate increase in North East and North West England was much sharper: the number of non-EU workers living in these regions increased by 65 and 47 per cent respectively (and the number of EU workers fell less). This largely accounts for faster payroll population growth rates in these regions, as shown in the chart below. London’s growth is just above the English average, but higher than its southern neighbours’.
At the moment, the rise in the number of workers from outside the EU has been spread across the country, reflecting the fact that growth has been sharpest in “nationwide” sectors such as health, construction and transport. As the economy recovers, that trend may continue or else immigration will become more concentrated in London (as suggested in a previous article).
What does this tell us? Despite their limitations, these ONS figures suggest that London has begun to adapt to and recover from the double whammy of the pandemic and Brexit. And they confirm the need for caution urged by the Greater London Authority and others over using the Census figures to argue against investing the capital’s services – 2021 was a very odd year.