Scotland’s jobless at lowest since financial crash

There are now 2,625,000 Scots in work, the Office for National Statistics (ONS) figures showed. Picture: PA

Scotland’s jobless rate of 5.4 per cent at the end of 2014 was the lowest since the period covering late 2008 and early 2009, when a similar proportion of people were unemployed.

There were also sharp rises in the number of women and young people in work in Scotland at the end of last year, the Office for National Statistics (ONS) figures said.

Deputy First Minister John Swinney said the fall in Scotland’s unemployment to 149,000 – a six-year low – showed the economy was going from “strength to strength”.

Jobless figures for the UK as a whole fell to the lowest level in almost seven years, with the unemployment total dropping by 97,000 in the quarter to last December to 1.86 million – almost half a million down on a year ago. The UK’s overall unemployment rate was 5.7 per cent.

The number of Scots in work also rose by 20,000 during the quarter, up 63,000 over the year to stand at 2,625,000.

Women’s employment in Scotland increased by 20,000 over the quarter to 1,301,000 – the highest level on record. The participation rate for women in Scotland’s workforce also reached an all-time high of 75.5 per cent, above the UK rate of 72.5 per cent, the ONS found.

Youth unemployment in Scotland also fell to its lowest level in five years, with 59,000 people aged between 16 and 24 years old unemployed at the end of the quarter. Employment in that age group also increased over the year, by 28,000 to 350,000.

Scotland’s jobless total of 149,000, which includes those out of work and not eligible for benefits, is 48,000 less than the same period the previous year.

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The figures represent the lowest level of unemployment in Scotland since the period at the end of 2008 and the start of 2009, when the numbers out of work stood at 140,000 – 5.2 per cent of the population.

Meanwhile, the latest ONS findings showed the number of Scots out of work and claiming benefits in January fell to 81,100, representing a drop of 3,200 from the previous month.

Mr Swinney, who is also the cabinet secretary for finance, claimed Scotland was outperforming the UK as he hailed the sharp fall in unemployment.

He said: “Today’s figures are hugely encouraging and demonstrate a robust, more inclusive and active Scottish workforce supporting our economy, which in itself is going from strength to strength.

“Scotland is outperforming the UK on all three headline labour market indicators with employment continuing to increase and unemployment down.

“Unemployment is now back to levels not seen since 2009 as the Scottish economy continues to recover.

“Female employment and participation are both at a record high, and above UK rates.

“The gap between male and female employment rates in Scotland has shrunk to a record low of 4.0 percentage points – compared to 9.5 percentage points in the UK.

“Not only is the employment rate in Scotland higher, we are also seeing more women in employment.”

On youth unemployment, Mr Swinney added: “The Scottish Government is committed to supporting young people towards and into employment. And it’s encouraging to see the youth unemployment level and rate fell to their lowest in five years.”

Meanwhile, the overall UK unemployment figure of 1.86 million and a fall of almost half a million came as employment for Britain increased by 103,000 to almost 31 million – the highest since records began in 1971.

Britain now has the third-lowest unemployment rate in the European Union at 5.7 per cent, behind Austria (4.9 per cent) and Germany (4.8 per cent), according to the ONS data.

Prime Minister David Cameron said the findings showed the UK government’s economic plan was working. He said: “We inherited a situation where far too many people were unemployed, where we weren’t creating enough jobs in our country.

“We haven’t solved or tackled all of unemployment, but we have got 1.85 million more people in work today than when I became Prime Minister.

“We’ve created effectively 1,000 jobs every day since this government’s been in office.”

There were 8,000 additional jobs created in the manufacturing sector between June and September last year, with 192,000 people employed in the sector, figures on individual industries showed.

A total of 383,000 people were employed in retail – an increase of 4,000 over the three month period.

However, the figures covered the period before the sharp decline in oil prices, which poses a risk to thousands of jobs.

Lib Dem Chief Secretary to the Treasury Danny Alexander said the increase in employment in Scotland was equivalent to the population of Dundee – the fourth-largest city in the country.

Mr Alexander added: “UK employment has increased more across this parliament than in any other parliament since records began and Scotland continues to share in that because we said ‘No’ to separation last year.”

Labour’s shadow employment minister Stephen Timms said: “Today’s fall in overall unemployment is welcome, but five years of the Tories’ failing plan has left working people £1,600 a year worse off.”

ANALYSIS

John McLaren: ‘Until rising productivity returns it is less likely workers will see real terms increases in wages and living standards’

THE latest labour market figures for Scotland continued the positive trend seen over the last two years, with employment up by 134,000 over that period.

The biggest rise in job numbers in the two years has come in Health-related services (up by more than 30,000), in Hotel & Food services (up 19,000) and Education (up 16,000).

Employment has also been rising across the UK. However, rather than the usual south of England-led recovery, the Southern and Eastern regions of England have seen the lowest employment growth. Instead, the Northern and the Midlands regions of England, along with Scotland, have been the drivers of growth. Over the past year, employment has risen by 2.5 per cent in the North-East of England but not at all in the South-East. Over the past three months, employment has fallen in the South-East, East, South-West of England and London. In contrast, employment growth exceeded 1 per cent in the North East and West Midlands.

While recent employment trends are very welcome, but what is driving them is not clear. For both Scotland and the UK, two clouds on the economic horizon remain.

The first relates to North Sea oil. Already job losses, mostly concentrated in Scotland, have been announced by a number of North Sea firms. New Scottish government data, also released yesterday, highlighted the problem, with Scotland’s “geographical share” of North Sea-related revenues in the third quarter of 2014, falling to less than half of what they were in of 2013.

Such low revenues, related to lower profitability due to the falling oil price, do not bode well in relation to upcoming company decisions on future levels of North Sea activity and employment.

The second cloud relates to productivity. The rises in employment are being matched by similar rises in output which means labour productivity remains low.

Until rising productivity returns it is less likely that workers will experience real terms increases in their wages, limiting any rise in living standards. As a result, the current economic bounceback may lack a strong feelgood factor, which could have knock-on impacts for consumption and investment.

• John McLaren is an economist at the Fiscal Affairs Scotland think-tank

SEE FIGURES FOR SEPTEMBER AND NOVEMBER 2014 HERE >>