Chancellor must act on reality of flat-lining economy

17th November 2012

The Chancellor must take urgent action in his Autumn Statement to tackle unemployment and stimulate growth, First Minister Alex Salmond said today.

Speaking after the Office for National Statistics (ONS) published labour market figures, Mr Salmond said George Osborne must address the reality of the UK’s flat-lining economy and not hide behind the impact of the Olympics afterglow on employment in parts of the UK.

The ONS labour market figures covering the three month period July-September 2012 showed that the headline unemployment level in Scotland rose by 4,000 over the quarter and the unemployment rate increased by 0.2 percentage points to 8.1 per cent, compared with a UK rate of 7.8 per cent.

The headline employment rate for people aged 16 to 64, fell by 1.0 percentage points to 70.6 per cent.

The claimant count rate in Scotland fell by 0.1 percentage points over the year to October. The number of 18-24 year olds in Scotland on the claimant count decreased by 3,300 over the year. In the UK, the claimant count rate in October 2012 was the same as a year ago.

The figures also show that Scotland’s youth employment rate remains higher than the UK figure of 52.4 per cent.

The most up to date figures for July-September show that the youth unemployment rate in Scotland increased by 0.4 percentage points to 23.5 per cent. However, the figures from the Annual Population Survey - a more statistically robust source – show that the youth unemployment rate for the 12 month period July 2011-June 2012 was 21.4 per cent in Scotland and 21.3 per cent in the UK.

First Minister Alex Salmond said:“As we approach the Chancellor’s Autumn Statement, today’s labour market figures show it is becoming ever more critical for George Osborne to take meaningful action to bring jobs and growth to the UK economy.

“The biggest danger to the economy is the complacency of George Osborne. He should remember that the positive effect of the Olympics on employment will only last a few months, whilst the impact of the decisions he makes in this forthcoming Autumn Statement will last for years.

“It is time the Chancellor faced the reality that as a result of his decisions the UK’s economy is flat-lining – as shown by the fact that the claimant count remains unchanged over the past year across the UK as a whole and forecasts for the economy continue to be revised down. It would be a tragedy for Scotland, and for the UK as a whole, if the positive impact of the Olympics is used to justify continued inaction by the UK Government.

“The UK Government must beware of complacency basking in the Olympics afterglow - it is still clear that what is needed is a direct capital investment stimulus to boost the economy. An extra £5 billion in capital investment across the UK would allow us to provide an additional stimulus of more than £400 million to support employment in Scotland now.

“With the full economic powers of an independent nation and in the face of Westminster’s cuts, this Government is doing everything it can to stimulate Scotland’s economy and protect families, businesses and front line services.

“We have set out in Scotland's draft budget further investment in construction, skills and the green economy, alongside an additional £40 million for affordable housing, funding for more new school buildings; and we are helping small and medium sized businesses create up to 10,000 opportunities through a national employer recruitment initiative.

“This comes on top of the £485 million additional investment we have announced since last year's Spending Review and the £2.5 billion of infrastructure investment set out last year.

“The Scottish Government is doing everything it can to deliver jobs and growth. It is time George Osborne did the same.”

Angela Constance, Minister for Youth Employment said:“Tackling youth unemployment remains a top priority for the Scottish Government. As part of our commitment to maximise employment opportunities for young people, we are investing a total of £80 million in creating opportunities that will help improve the job prospects of 23,000 young people.

“We have guaranteed every 16-19 year old a place in training or education and will create at least 25,000 Modern Apprenticeship opportunities in every year of this Parliament. Every young person deserves the chance to fulfil their potential and make a full contribution to Scotland’s economy.”

Access the labour market statistics from the Labour Force Survey and the Annual Population Survey.

Although the Labour Force Survey (LFS) is a more timely source of youth labour market statistics, the Annual Population Survey (APS) is larger and more robust and, therefore, the preferred statistical source for Scotland. The APS data are compiled for 12 month periods and are updated on a quarterly basis. The LFS data, which are based on a smaller sample, are reported monthly on a rolling 3 month average basis.