Rural areas hit hard as job losses soar

UNEMPLOYMENT has almost doubled over the past 10 months in some of Scotland's rural areas as they struggle to cope with the recession, new research has revealed.

The percentage increase in unemployment in areas such as Perthshire, East Lothian and the Borders has far outstripped that experienced in Edinburgh, Glasgow, Dundee and Aberdeen.

A study conducted by David Bell, Professor of Economics at Stirling University, has provided the first break down of jobless statistics by local authorities since the start of the downturn.

In Perthshire, there were 953 people claiming benefit in April last year, a figure that has risen to 1,774 – a percentage increase of 86%.

There was a similar story in East Lothian, which topped the table experiencing a 96% increase in unemployment with the number of people out of work rising from 678 to 1,332.

In the Borders, there was an 81% increase with the jobless total rising from 899 to 1,629.

Although rural areas typically started off with a lower unemployment level than urban areas, the dramatic increase surprised Bell, the economic adviser to the Scottish Parliament's Finance Committee.

Bell said: "Most of the stories that we have heard about the way that the recession has developed have been associated with industries based in the cities or ones that we think of being based in the cities.

"Lots of people will be assuming that it is cities that will be hardest hit, but the evidence so far doesn't suggest that.

"It is normally the cities that we talk about, but they are not doing that badly compared with the rest of Scotland. But things are going to get an awful lot worse and maybe the cities will catch up."

Bell suggested the smaller Labour market in the countryside made it more difficult for people to find another job once they had been made redundant. Of the four major cities, Edinburgh experienced the largest percentage increase (40%) leading to suggestions that the difficulties of the financial sector were beginning to register in the figures.

Unemployment in Edinburgh now stands at 7,682 compared with 5,469 last April. The increase was more than that seen in Dundee (30%), Aberdeen (30%) and Glasgow (27%).

"That may be the start of an indication of the problems of the financial services and it is starting to feel the pinch when large institutions start to contract," Bell said.

Ron Hewitt, the chief executive of Edinburgh Chamber of Commerce, said: "The first areas to implode were the construction industry and the housing market and there were significant numbers of people laid off.

"Some job losses have been in the financial services, but they have been on a small scale so far. But there are going to be big losses at RBS and the Lloyds Group. Those losses haven't happened yet on the scale that they are going to."

The problems in Edinburgh were also blamed for the jump in unemployment seen in East Lothian.

A spokesman for Midlothian and East Lothian Chamber of Commerce said: "Around half of the working population in East Lothian commute into Edinburgh, so there is a ripple effect from Edinburgh and what is happening in the banking sector."

West Dunbartonshire and North Ayrshire were the council areas with the highest unemployment rate – the percentage of the working population that are out of work.

Both recorded a rate of 5.4%, which compared unfavourably with the Scottish average of 3.4%.

John Corcoran of Dunbartonshire Chamber of Commerce said: "West Dunbartonshire is an area that has suffered pretty badly over the years. Most of the heavy engineering has gone.

"We are stuck now with people being employed by local authorities, the Faslane base and a small enterprise culture.

"A lot of the service industry has been hit very badly. The housing market and the financial service people have been hit badly.

"We are also having to rely on seasonal industries with the Loch Lomond tourism industry being where we are in this part of the world. There has been a steady increase in unemployment across the board. In the business park where we are based a travel agent has recently gone into liquidation, a financial services agent has shut down.

"The closure of Woolworths hasn't helped and there are other shops closing here. There hasn't been a major pay-off, but there have been a lot of small things."

In East Ayrshire, 150 jobs were shed last week when the Vesuvius ceramics factory was shut down in Newmilns.

Martin Cheyne of the Ayrshire Chamber of Commerce said: "We still have a metals and chemicals industry, but those industries are dependent on the car industry and the steel industry, which are in decline.

"The newer industries such as the IT industry are holding up well, but they are smaller employers. It is the large manufacturing companies that are suffering. "

Mike Beale, the president of Perthshire Chamber of Commerce, said the Spirax Binding printing firm in Perth had closed with the loss of around 30 jobs, while the Woolworths closure had also accounted for around 30 jobs. He added: "The bulk of it has been lots of individual firms shedding a few jobs rather than big closures."