Scots economy 'lags behind UK' in latest economic data

Scotland's economic growth is continuing to fall behind the UK while the jobs picture also looks more bleak north of the Border, official figures have revealed.

The nations jobless total has jumped by a massive 11,000 . Picture: Ian Georgeson

The nation’s jobless total has jumped by a massive 11,000 – while falling to a ten-year low across the rest of the UK – as yesterday saw Clydesdale and Yorkshire Bank revealing it is to close 79 branches with the loss of more than 400 jobs and Airdrie Savings Bank, Britain’s last surviving independent savings bank, announcing it is to close with the loss of 70 jobs.

And although GDP was up by 0.2 per cent in Scotland in the third quarter of last year, this just a third of the growth rate which the UK enjoyed during the same period. Growth over the year was 0.7 per cent in Scotland, compared with 2.2 per cent UK-wide.

Scottish Secretary David Mundell said: “Whereas across the UK the news is better, here in Scotland unemployment is up, employment is down and Scotland’s economy continues to lag behind that of the UK.”

David Mundell says Scotland's economy is "lagging behind" the UK

He added: “The Scottish Government now needs to use all of these powers to secure and strengthen Scotland’s economy”.

The number of Scots out of work stood at 139,000 over the three months to November last year, according to Office for National Statistics (ONS) data released yesterday.

But a further sign of the widening gap between the UK and Scottish economies saw UK unemployment plunge to its lowest total for more than a decade, down by 52,000.

The Scottish Government’s minister for employability and training, Jamie Hepburn, said the Scottish and UK economies are facing “challenging economic conditions” but said unemployment in Scotland has fallen over the year.

David Mundell says Scotland's economy is "lagging behind" the UK

“It is also heartening to see how strongly we are performing in the youth labour market, where we see unemployment levels among young Scots steadily declining,” he said.

Liz Cameron, chief executive of Scottish Chambers of Commerce, said the jobless picture in Scotland is “bad news”. She added: “It is very disappointing that Scotland’s economic growth slowed in the third quarter of 2016 and continues to trail the UK as a whole, where growth remained steady during the same period.

“Over the year as whole, Scotland’s growth has been 0.7 per cent, compared to a far healthier UK rate of 2.2 per cent. Scottish Government actions must be aimed squarely at increasing this rate of growth and utilising the powers at its disposal to support businesses.”

Andy Willox, the Federation of Small Business Scottish policy convener, said the government must put Scots firms at the “top of the agenda”.

He added: “Scottish smaller business confidence was on the slide throughout 2016, so today’s mediocre economic statistics are unwelcome if not surprising.”

The number of people in work in both Scotland and the UK is down, falling by 14,000 north of the Border to stand at 2.6 million.

The Scots employment rate fell by 0.5 per cent to 73.4 per cent, below the UK average of 74.5 per cent. At 5.1 per cent, the Scottish unemployment is rate is above the UK’s rate of 4.8 per cent. The number of Scots out of work and claiming Jobseeker’s Allowance (JSA) last month was 52,700 and 81,500 people claimed JSA and Universal Credit.

The sluggish economic growth of 0.2 per cent is down to a slump in private sector services in Scotland. During 2014 and early 2015 this weakness was largely disguised by rapid growth in construction, but this is now detracting from overall economic growth.

Economic activity in Scotland fell by 2,000 over the quarter and now stands at 2.7 million, the economic activity rate falling over the year to stand at 77.5 per cent. This indicates that a growing number of Scots are simply “dropping out” of the jobs market and not seeking work.

Labour last night stepped up calls for the Scottish Government to commission a study into economic inactivity, with the party’s economy spokeswoman Jackie Baillie accusing Nationalist ministers of “ignoring” the issue.

Ms Baillie added: “Labour will amend the SNP’s Budget to stop the cuts and invest in our public services. If ministers are serious about addressing the fundamental challenges facing Scotland, they will ditch plans to cut £327 million from local authority budgets and slash the budget of Scottish Enterprise by a third.”