Jobs squeeze leaves many young Scots with no choice but to sign on for dole

NEW figures on youth unemployment brought fresh warnings of a “wasted generation” being created, as it emerged that more young people in Scotland are looking for work than at any time since the last days of John Major’s government.

As unemployment in Scotland rose marginally for the first time since last year, the detailed figures revealed that 45,000 18- to 24-year-olds were claiming jobseeker’s allowance in July, up by more than 5,000 in a month.

The figure always rises in July, as some graduates and college leavers finish full time education and fail to find work, but this year’s increase is far higher than those in the previous two years.

It prompted fresh calls from Labour for the SNP government to do more to provide work guarantees for youngsters entering the job market, including subsidising jobs in the private sector.

But unions and Scottish ministers said the solution would have to come through a marked change of strategy from the UK government, as they repeated their calls for a loosening of the deficit reductions strategy.

With UK-wide figures showing a higher increase in unemployment than that seen in Scotland, Chancellor George Osborne conceded that the sudden lengthening of dole queues was “disappointing”, but insisted he would stick by his spending plans.

Yesterday’s labour force survey figures showed that the number of people registered as unemployed in Scotland between April and June was 209,000, up by 1,000, the first rise since last autumn. In the UK, the increase was proportionally far higher, rising by 38,000 to 2.49 million.

More up-to-date figures on the Jobseekers Allowance for the month of July showed a total of 144,700 people in Scotland claiming, up by 2,600 on the previous month. Again, the increase for the whole of the UK was bigger, rising by 37,100 to 1.56 million, the largest one month increase since May 2009.

However, the detailed figures showed that the increase in youth unemployment in Scotland – the number of 18- to 24- year-olds claiming jobseekers’ allowance – showed a 10 per cent rise, putting it at a level not seen since February 1997 in the final months of the last Conservative government when their were 46,230 claimants.

The 5,000 increase in the number of claimants in July compares with an increase of 3,000 in July in 2010 and 2009.

Year-on-year, the last time youth unemployment in July was higher in Scotland was in 1996.

The sudden increase prompted warnings last night that the squeeze on graduates and college leavers was only getting worse, leaving hundreds with no choice but to turn to unemployment benefit for an income.

Scottish Labour leader Iain Gray said: “The sad reality is that a generation of young Scots is leaving school with no opportunities. We urgently need a new approach to avert another wasted generation of Scots unable to find jobs.”

Stephen Boyd, of the STUC added: “This is a significantly higher increase than in previous summers. It is a reflection of the general state of the labour market. We are seeing a deficit in demand at a UK level, and we need an entirely new economic strategy.”

Yesterday’s unemployment figures were offset by news that ScottishPower is to create 1,500 jobs by upgrading its network over the next decade.

Furthermore, the figures showed a continued increase in the number of people in active employment north of the Border, rising by 24,000 in the April to June period.

The rise in employment and unemployment is consistent with an increase in the overall number of people in the labour force. But analysts warned last night that the rise in employment was threatened by the sluggish global conditions.

They also said too many of the jobs were part-time, with a growing problem of “under-employment” in many households.

First Minister Alex Salmond last night responded to the figures by calling on the UK government to adopt a “three-point action plan” – by increasing spending on capital projects, boosting finance for firms and by supporting consumer confidence.

“Scotland has lower unemployment, higher employment and lower economic inactivity rates than the UK as a whole – which indicates that the measures the Scottish Government is taking to strengthen recovery and boost economic activity are working,” he said. “But the rise in unemployment and the claimant count shows that more needs to be done in the key areas of capital investment, access to finance, and measures to boost economic security.”

Mr Gray said the SNP government should do more on the youth unemployment figures. The party published its own five-point plan, including an expanded Jobs Fund, more apprenticeships, and the reintroduction of the volunteer scheme ‘Project Scotland’.

Mr Gray added: “[Mr Salmond] has no serious plan to get young Scots into work and doesn’t seem to care. He is letting Scotland’s young people down.”

Business chiefs struck a cautious tone last night. Andy Willox, Scottish policy convener of the Federation of Small Businesses, said the fear of recession could itself tip the country into deeper decline. He added: “But we use the tax regime to make it as affordable as possible for small businesses to take on staff; we can make sure they can access the finance they need; and we can put job creation and retention at the heart of the business support network.”

Professor Brian Ashcroft, of the Fraser of Allander Institute at Strathclyde University said that the recovery of Scotland’s job market was too heavily reliant on part-time work. “We have been creating jobs that are largely part-time compared to the rest of the UK,” he said.

He added: “The labour market is still better than the rest of the UK. I am not certain how well this will be sustained over the coming months.”

But union chiefs said the rise in unemployment bore out their warnings of the Chancellor’s austerity measures. STUC general secretary Grahame Smith said: “With minimal growth in the economy over the last nine months, steeply declining real incomes, collapsing consumer confidence, austerity spreading across key export markets and public spending cuts just beginning to bite, the prospects for the Scottish labour market are grim.”

Mr Osborne said he had “a huge amount of sympathy for people looking for work”.

However, unveiling plans for a series of new enterprise zones in England, he claimed that the British people understood “perhaps better than politicians”, that “we borrowed too much, that Britain went on a debt-fuelled spending binge”.

On the rise in youth unemployment, a Scottish Government spokeswoman said: “On leaving school, more young people are progressing into education, employment or training.”