Scotland unemployment figures drop by 40,000

There has been a fall in unemployment in central Fife.
There has been a fall in unemployment in central Fife.
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UNEMPLOYMENT in Scotland has fallen by a record 40,000 with the number in work rising to more than 2.6 million, as the UK’s jobless rate showed its biggest drop since before the credit crunch in 2008.

There were 151,000 people out of work in Scotland between June and August.

Scotland’s unemployment rate is below the UK’s, at 5.5 per cent against 6 per cent, a six-year UK low, the Office for National Statistics (ONS) said. UK joblessness fell by 538,000 over the past year – the biggest annual reduction since records began in 1972.

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Chief Secretary to the Treasury Danny Alexander hailed the figures as evidence of a “jobs-rich economic recovery” with UK vacancies rising by 18,000 to 674,000 since the summer.

Prime Minister David Cameron claimed the figures showed his plan to help business create jobs was effective. He said: “The biggest-ever fall in unemployment in history, taking it below two million, is great news. Our plan is working, but there’s still much more to do.”

The employment rate in Scotland of 73.9 per cent was above the UK average of 73 per cent.

The number of Scots out of work and claiming jobseeker’s allowance rose by 300 from August to 91,100 in September – but the level was down by 30,500 on September last year.

The number of women in employment in Scotland hit a record high of 1,284,000, with the rate, at 71.4 per cent, above the UK’s 68.1 per cent.

Scottish Secretary Alistair Carmichael said the data shows Scotland was “moving in the right direction”. “The biggest quarterly fall in Scottish unemployment since records began and confirmation that Scotland’s economy has now grown for two consecutive years is very welcome news,” he said.

Angela Constance, Scottish minister for training, youth and women’s employment hailed the “excellent news”. “I am particularly pleased to see female employment in Scotland reaching a record high,” she said.

However, Labour and the unions claimed lower-paid employees and part-time workers had missed out, with the number in part-time jobs in the UK hitting a high of 6.8 million.

Average annual pay growth improved but was still well below inflation at 0.7 per cent.

Trades Union Congress general-secretary Frances O’Grady said: “With these never-ending falls in living standards and so many new jobs insecure, low-paid and self-employed, workers have been excluded from the recovery.”

Rachel Reeves, Labour’s shadow work and pensions secretary, said: “The government failure to act on low pay has led to ­millions of people struggling to get by.”

ANALYSIS

John McLaren: Productivity gap could be our undoing

There was more good news in the latest figures on the Scottish economy released yesterday. Both output and the employment rate are up by almost 1 per cent on the previous quarter, igures matching or bettering the UK over the same period.

Over the longer term, the Scottish economy has not been growing as fast as the UK. Excluding the North Sea, UK output is 4 per cent higher than its peak in 2008, while Scotland’s is only 1 per cent higher. Once an adjustment is made for population growth both have yet to reach the levels seen in 2008.

The principle sources of recent growth have been business services and real estate, while construction has also made a strong recovery. The UK has been boosted by much faster growth in health, up 18 per cent since 2008; Scotland has only seen a 4 per cent rise. This differential is difficult to explain.

With Scottish employment levels now 2 per cent higher than in 2008, but output up only 1 per cent, worsening productivity would appear to be a Scottish issue too.

Most international bodies expect the UK, and by inference Scotland, to be one of the top performers in 2014 and 2015. However, this progress remains fragile.

• John McLaren is an economist with Fiscal Affairs Scotland

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