Leader: Glimmer of hope among grim news for jobless

The rise in the jobless rate to 8.7 per cent, above the UK rate of 8.4 per cent, and with this gap continuing to widen, is politically awkward for an SNP administration which made much of Scotland’s better relative performance in the early part of the downturn.

Back then, the Scottish Government was happy to take the plaudits. Now, with the reversal of fortune, the blame is put squarely on the shoulders of the Westminster coalition.

Behind the overall 18,000 rise in the jobless total to 234,000 compared with a year ago are features that continue to give concern. Outstanding among these is the persistently high level of unemployment among 16-24-year-olds, at 103,000. This is a sharp reminder that government attention should continue to focus on schemes to encourage employers to take on young workers and to press ahead with apprenticeship and training schemes. Also worrying is that another 12,000 women have lost their jobs and here, too, the gap with the rest of the UK continues to grow.

However, while the overall unemployment picture is unlikely to brighten soon, there are some encouraging pointers. The headline rate for employment for those of working age, at 70.8 per cent, remains higher than for UK (70.3 per cent). It is also the 16th consecutive monthly increase.

The main pressure point remains public-sector employment. A total of 16,000 jobs were lost from the public sector in Scotland, while total private-sector employment increased by 7,800.

This makes it all the more important that further private-sector job creation is able to take up the slack. And here the picture is becoming more hopeful. The latest Bank of Scotland Purchasing Managers Index, released earlier this week, showed the steepest rise in staffing numbers for four years, helped by solid increases in service-sector recruitment activity. The February PMI index, measuring activity across Scotland’s manufacturing and service industries, signalled the fastest rise in business activity for five months.

The data also showed another solid increase in total new business received by Scottish businesses, although growth was confined to the service sector and was the weakest in the current three-month period of expansion.

Several options have been strongly touted in the run-up to the Budget next week that could help stimulate demand. Yesterday, the Cabinet secretary John Swinney reiterated his call for a National Insurance holiday specifically targeted at young people. Another is a rise in the income tax threshold towards £10,000 more quickly than under current plans.

Other measures include further pressure on the banks to boost lending to business – the SME sector in particular. While the rate of increase in unemployment may now be slowing, more needs to be done.