Scots prospects bleak despite unemployment fall

• Unemployment in Scotland falls by 14,000 - number of people in work also falls, by 24,000

• Youth unemployment also down, from 87,000 to 82,000

• Scottish unemployment rate of 7.8% slightly above UK rate of 7.7%

There are fears that thousands are so dismayed that they have simply given up looking up for work, after the latest official figures also showed a 24,000 drop in the number of Scots who have a job.

The reason unemployment can fall while the number of people in work can also go down is because the amount of people in the labour market has shrunk as people stop looking for work.

Industry leaders have now called for more government action to get more people back into work and revive the ailing economy.

There are 207,000 Scots on the dole queue, according the figures for last September to November, but this is has doubled since the economic squeeze began to bite four years ago. The unemployment rate in Scotland of 7.8 per cent is now slightly higher than the UK total of 7.7 per cent.

Liz Cameron, Chief Executive of Scottish Chambers of Commerce, welcomed the fall in unemployment in the run up to Christmas.

But she warned: “There are underlying issues which remind us that Governments north and south of the border need to keep their feet on the gas in terms of action to stimulate our economy.”

“Unemployment and, indeed, underemployment are major factors in suppressing consumer demand and this, in turn, is holding back economic recovery.

“The Scottish and UK Governments must act decisively to support businesses and reduce the barriers to growth if the private sector is to create the jobs Scotland needs going forward.”

Across the UK, the unemployment total has fallen to its lowest level for 18 months while the number of people in work has reached another record high. The jobless total fell by 37,000 between September and November to 2.49 million, with an increase of those in work to 29.7 million.

The latest fall in unemployment north of the border comes after last month’s figures showed Scotland had seen the biggest fall in joblessness in four years when it fell by 19,000.

There are now 23,000 fewer people out of work than there were in the same period last year. The number of people out of work and claiming jobseeker’s allowance fell by 1,400 from November to 137,500 in December.

But the number of people in work has also fallen, decreasing by 24,000 to stand at 2.47 million in September to November. There has also been a fall of 38,000 in the amount of Scots classed as economically active.

Labour finance spokesman Ken Macintosh said it was “deeply worrying” that the fall in unemployment is outweighed by a “large fall” in employment in Scotland.

“Taken together with the rise in the number people classed as economically inactive, this suggests that the apparent fall in joblessness is actually largely due to people giving up looking for work and leaving the labour market,” he said.

Youth unemployment now stands at 82,000, according to the latest figures, but one in five young Scots still remains out of work.

Scottish Secretary Michael Moore said there needed to be a “joint approach from Scotland’s two governments” on unemployment.

But he stressed: “There is no room for complacency as we get to grips with the wider challenges.

“The UK Government will continue working hard to get more people back into work and keep its focus on maintaining a stable and growing economy.”

Finance Secretary John Swinney said the “strong performance” in youth unemployment over the year when it fell by 23,000 is particularly welcome.

He too stressed work must continue to “boost employment”, adding: “The Scottish Government is taking direct action by investing in our infrastructure and maintaining the most competitive business environment anywhere in the UK.

“Our budget includes a tax relief package for business worth over £540 million this year and bring forward a further £385 million package of economic stimulus. We are also targeting growth markets and growth industries.”