It came as another mixed jobless picture emerged north of the Border, with a 15,000 fall in unemployment overshadowed by a massive 27,000 rise in working-age Scots who have given up seeking a job and become “economically inactive”.
The Scottish Government is now facing fresh industry demands to introduce a “competitive” tax system north of the Border, with calls for MSPs at Holyrood to focus on policies which boost the economy. It emerged last week that Scottish GDP shrank in the final quarter of 2016.
Opposition parties claimed the focus on a second referendum is undermining economic confidence and demanded a change in approach. CBI Scotland director Hugh Aitken welcomed yesterday’s fall in unemployment. But he warned: “The number of people in work remained broadly unchanged, underlining the need for the Scottish Government to focus on policies that drive growth and support job creation.
“Improving educational attainment and setting a competitive tax regime to ensure Scotland continues to be an attractive place to do business and create jobs should be priorities in Holyrood.”
Middle-earning Scots now pay higher income tax than their counterparts south of the Border after the Scottish Government froze the threshold for the higher 40p rate at £43,000, while it is rising to £45,000 in England.
The Scottish Small Business Index yesterday found confidence had increased slightly among smaller firms in the first quarter of 2017, although it remains in “negative territory”.
The report adds: “Small businesses in Scotland are amongst the least confident in the UK, with four in ten anticipating their overall business performance will deteriorate over the course of the next quarter.”
And despite the weak pound in the aftermath of the Brexit vote, smaller firms have suffered a 10.2 per cent slump in exports and don’t expect any improvement in the coming months.
Revenues have also declined, with a massive 43.2 per cent fall resulting in a net balance of -11 per cent – the worst result in four years. Almost half (49 per cent) of firms said the state of the domestic economy is still the biggest barrier to growth.
Andy Willox, the Federation of Small Businesses’ Scottish policy convener, said: “Too few Scottish businesses have faith that our economy is travelling in the right direction. The UK government needs to convince firms that their plans for Brexit will safeguard their interests. The Scottish Government and our local councils also need to put local growth at the top of their agenda.”
Scottish Conservative shadow economy secretary Dean Lockhart said: “This shows that SNP’s unsettling threat of a second independence referendum has resulted in a great deal of unsettlement for businesses across Scotland.”
He added: “Its blinkered obsession with independence has completely derailed business confidence.”
The latest unemployment figures yesterday showed a 15,000 fall in the number of jobless Scots between December last year and this February, taking the country’s unemployment rate to 4.5 per cent, below the UK average of 4.7 per cent. However, the number of people in work is also down by 8,000 and now stands at 2.6 million. Over the year there are 20,000 fewer Scots in work.
This apparent contradiction between falling unemployment and a fall in the number of people in work is partly explained by a massive jump of 27,000 in Scots who became “economically inactive”.
This will include many people who are disabled and long-term sick, but also those who gave up on seeking work.
Scottish employability and training minister Jamie Hepburn insisted the SNP government is doing everything it can to support employment, citing Brexit as being the biggest threat to jobs.
Mr Hepburn said: “Despite economic challenges, these latest figures show Scotland’s labour market remains resilient with unemployment falling and our female employment rates and youth unemployment rates outperforming the UK.
“While we are doing all we can to support employment, clearly the biggest threat to Scotland’s labour market continues to be a hard Brexit.”