Scottish unemployment: Danger of ‘lost generation’ as jobless total rises 19,000

The number of Scots out of work has soared back to its recession peak, with 231,000 now on the dole, an increase of 19,000 between September and November last year.

And there is little sign of improvement in the year ahead with a “spiral of decline” looming unless action is taken to halt the slide. Youngsters are worst hit with 18 to 24-year-olds accounting for more than a third – 88,000 – of the jobless total after rising by 8,000.

Across the UK, the jobless total has reached 2.68 million – the highest since 1994 – and is predicted to climb to 2.8 million by the end of the year.

It has prompted fresh Scottish Government calls for a UK-wide jobs summit to tackle the crisis, while UK ministers said it was a “clear signal” that politicians must focus on kick-starting the economy.

One of the country’s most senior economists, Professor John McLaren of the Centre for Public Policy for Regions, said: “It could get to a situation now where the prospects for graduates are as bad as they were in the 1980s.

“The unemployment situation could get considerably worse as a whole and we could see tens of thousands more jobs going. This is likely to disproportionately affect young people because of the difficulty of very few places taking on more employees.

“There’s very little that can be done, as we’re talking about a global recession and until there’s a return in economic confidence it’s hard to see much of an improvement in the situation.”

Unemployment has more than doubled in Scotland in three years after falling to a record low of 105,000 in mid-2008 just before the recession. Even during the recession it only twice topped the 230,000 mark where it now stands.

Liz Cameron, chief executive of the Scottish Chambers of Commerce, said: “This further large rise in Scottish unemployment is disappointing and highlights the challenges faced by our economy in 2012.

“Last year, the private sector was successful in creating over 50,000 jobs but in the face of accelerating cuts in the public sector and an uncertain future for our traditional export markets, it will be difficult to maintain this level of performance.”

The number of people in work fell by 8,000 to about 2.47 million in the three months to last November.

Labour leader Johann Lamont said: “Scotland is in the grip of a national unemployment crisis, with figures reaching disaster levels and even worse than the rest of the UK.

“We face a toxic mix of unemployment and low growth. Alex Salmond’s economic strategy isn’t working and as a result Scotland risks being pushed into a vicious cycle of low growth, high unemployment and all the social misery that goes with the fear of recession.”

Scotland now has an unemployment rate of 8.6 per cent – higher than the UK average of 8.4 per cent. UK unemployment rose by 118,000 in the three months to November to 2.685 million, official figures show.

Scottish Secretary Michael Moore is to chair a national event in March to tackle youth unemployment and said the figures are a clear signal that focus must be on getting the economy “back to health”. He said: “We have to get Scotland back to work and it is imperative we keep making the right decisions to support and grow our economy.”

In December last year the number of people out of work and claiming Jobseeker’s Allowance (JSA) was 140,900 – a fall of 1,400 over the month and the fourth consecutive monthly decrease. Not everyone who is unemployed is entitled to JSA.

Finance secretary John Swinney said the Scottish Government is using “every lever” to secure investment and boost jobs.

He said: “The Scottish Government is also reiterating our call to the Chancellor for an urgent jobs summit – comprised of the four finance ministers of the Westminster government and the devolved administrations – to agree a programme of immediate employment creation, with a focus on increased infrastructure investment.”

Andy Willox, of the Federation of Small Businesses, said the figures made “grim” reading.

“Every person out of work is also someone spending less on Scottish small businesses’ goods and services – putting further pressure on local economies and risking a spiral of decline,” he said.

Grahame Smith, general secretary of the Scottish Trades Union Congress (STUC), said the figures were “shocking”, with the body’s own figures indicating that there are some 502,655 people who are under-employed or are out of work and want a full-time job.

Scottish Liberal Democrat leader Willie Rennie called on the SNP government to use the “extra” £400 million it got from Westminster to boost growth in the forthcoming Budget

Scottish Conservatives finance spokesman Gavin Brown said modest unemployment falls in Northern Ireland and Wales showed Scotland is under performing.

Laurie Russell, chief executive of social enterprise body the Wise Group, added: “We must invest in our future by giving young people the skills and experience they require to compete in a challenging job market.

“We need to keep young people active and build their aspirations or we are in danger of creating a lost generation.”