The Scottish areas facing the most severe job cuts due to Covid-19 recession

A new report has revealed that Edinburgh and Glasgow are likely to be severely affected by the looming economic downturn triggered by the Covid-19 lockdown as a result of the two cities’ reliance on banking and finance jobs.

The analysis by think-tank the Social Market Foundation shows that while London will be hit hardest, followed by areas that already had high levels of unemployment going into the crisis, Scotland will not escape recession and rising job losses.

According to the report, the UK faces a “sluggish” recovery after the severe economic impact of lockdown, with more than two-thirds of UK jobs being in sectors now facing moderate or severe ramifications from coronavirus over the next three years.

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Unemployment is expected to rise as a result of the coronavirus lockadown.Unemployment is expected to rise as a result of the coronavirus lockadown.
Unemployment is expected to rise as a result of the coronavirus lockadown.
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People employed in industries including banking, insurance and construction are at greater risk of unemployment and reductions in wages and hours. Workers in more mildly affected industries such as public administration, education and health, energy, water and agriculture are least likely to face job losses.

The SMF report says other industries, including transport, manufacturing, hospitality and other services are assessed as facing a “moderate” impact over the medium term.

London has 79 per cent of its jobs wrapped up in the worst affected industries. In Scotland, the report shows that West Lothian is likely to be the worst hit area as the proportion of jobs facing a moderate or severe impact is as high as 71 per cent.

Orkney is second on the Scottish list at 68 per cent, followed by Falkirk on 67 per cent. Glasgow comes next on 65 per cent, along with North and South Lanarkshire, and then Edinburgh on 64 per cent.

The least affected areas are South Ayrshire on 57 per cent, with the Western Isles, Aberdeen and Aberdeenshire on 58 per cent.

The SMF report states: “The places that face the greatest impact from the downturn are largely in the more affluent south-east and London. However, an area’s recovery from disruption will depend on local resilience and pre-crisis levels of economic output and employment.”

It adds: “Our view is that the UK economy will take on a sluggish, U-shaped recovery.

“The possibility of a returning surge of coronavirus, enforced social-distancing measures and a withdrawal of the government’s fiscal response will likely exacerbate common recession-induced behaviour changes, such as reduced consumer confidence and spending.”

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The SMF said forecasters predicted unemployment could increase by 1.5 million due to the crisis, leaving a total of around 2.9 million people out of work.

“The consensus of recent forecasts suggests that unemployment will not recover to previous levels until after 2023,” the report says.

While West Lothian is in the top third of areas by impact, SMF chief economist Kathryn Petrie said that in comparison to other parts of the UK, Scotland would not be as badly affected.

She said: “The data suggests Scotland’s industrial mix will enable it to weather the storm better than other regions.”

However, responding to the report, opposition MSP said the figures showed the Scottish Government had to do more to protect jobs as Scotland began to exit from lockdown.

Scottish Conservative Lothians MSP Miles Briggs said: “Clearly businesses and workers right across the country are going to suffer, but the outlook for West Lothian is particularly bad.

“We cannot afford for people in West Lothian to be left behind. The SNP government needs to start working now to support businesses in the area and make sure there is a plan for recovery.”

Scottish Labour’s Lothians MSP Neil Findlay said the government should use Barnett consequentials coming to Scotland as a result of “significant extra funding” due to be announced for English councils to help boost local economies.

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And Scottish Liberal Democrat MSP Alex Cole-Hamilton said: “The Scottish Government must make sure that every corner of Scotland has the support it needs to survive and thrive. No-one must be left behind.”

A spokesperson for the Scottish Government said: “We are prioritising work to tackle unemployment arising from the ­pandemic and we will work in ­partnership with local government and partners in the third and private sectors to support people towards and into sustainable and fair work, implementing solutions which take account of ­Covid-19 impacts at local level.

“In addition, Finance Secretary Kate Forbes has written to the UK ­government in advance of Wednesday’s economic update, calling for a range of vital measures to ­minimise the impact of Covid-19 on our economy to prevent unnecessary job losses.”

The full list

Areas with the highest proportion of jobs facing a moderate or severe impact in a Covid-19 downturn

West Lothian: 71%

Orkney Islands: 68%

Falkirk: 67%

Glasgow City: 65%

North Lanarkshire: 65%

South Lanarkshire: 65%

Edinburgh, City: 64%

Perth & Kinross and Stirling: 63%

East Ayrshire and North Ayrshire mainland: 63%

Inverness & Nairn and Moray, Badenoch & Strathspey: 62%

Clackmannanshire and Fife: 62%

East Lothian and Midlothian: 62%

Shetland Islands: 61%

Inverclyde, East Renfrewshire and Renfrewshire: 61%

Scottish Borders: 61%

Angus and Dundee City: 60%

East Dunbartonshire, West Dunbartonshire and Helensburgh & Lomond: 60%

Dumfries & Galloway: 60%

Caithness & Sutherland and Ross & Cromarty: 59%

Lochaber, Skye & Lochalsh, Arran & Cumbrae and Argyll & Bute: 59%

Aberdeen City and Aberdeenshire: 58%

Na h-Eileanan Siar (Western Isles): 58%

South Ayrshire: 57%

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