Unemployment in Scotland highest in the UK at 4.3 per cent

Unemployment in Scotland rose to 4.3 per cent between March and May, according to the latest figures from the Office of National Statistics (ONS).

This was a rise of 0.6 percentage points from the previous quarter and the highest rate of unemployment in the UK.

Scotland also had the joint highest increase in unemployment over the quarter along with London, and the highest increase in unemployment over the year of any of the UK nations or regions.

Across the UK as a whole, the estimated unemployment rate was 3.9 per cent in March to May, with England on four per cent, Wales 2.7 per cent and Northern Ireland on 2.4 per cent.

In Scotland, economic inactivity – those who are not employed but not seeking work – among those aged 16 to 64 rose to 22.4 per cent, a 0.8 increase on December to February, while employment in that age group fell 1.2 points to 74.1 per cent.

The figures show that 53,000 fewer people were in employment in Scotland since the previous year, while the number of working age who were economically active had dropped by 28,000 over the year.

Women were particularly affected, with an increase of 51.3 per cent in unemployment over the year, compared to a 15.7 per cent rise for men.

An estimated 649,000 fewer people were employed in the UK at the beginning of June compared to March and the number of hours worked fell by record amounts, both for the year and the quarter, despite a third of the period being prior to lockdown.

Comparing March to May 2019 with March to May 2020, total weekly hours worked in the UK decreased by 175.3m, or 16.7 per cent, to 877.1m hours.

This was the largest annual decrease since estimates began in 1971, with total hours dropping to its lowest level since May to July 1997.

The ONS also found that around half a million employees temporarily away from their jobs for coronavirus-related reasons were receiving no pay while their job was on hold.

Commenting on the statistics, Cabinet Secretary for Economy, Fair Work and Culture Fiona Hyslop said: “These statistics cover around two months of lockdown measures before businesses started to open again, but do not reflect the full picture of our labour market as the Job Retention Scheme will have offered some relief to many employers and employees.

“We want to provide long-term certainty for those affected by the COVID-19 pandemic, by continuing to keep companies in business and people in jobs and have provided a package of support to businesses that totals over £2.3 billion.

“This includes the £185 million additional support fund for businesses otherwise unable to access support.

“The Job Retention Scheme will end in October, but we believe the UK Government must extend the scheme, particularly for sectors that have been most affected by COVID-19, for example travel and tourism and hospitality, given that most of these sectors will not have fully recovered by October.

“We also need to make sure that there is support for those who have lost their jobs to date and we have committed a further £100 million for employability and training support.”

Scottish Secretary Alister Jack said: “Today’s figures continue to show the impact of coronavirus on our economy.

“The UK Government has provided unprecedented support for people and businesses in Scotland during this pandemic.

“Almost 900,000 jobs across Scotland are being supported through the UK Government’s ground-breaking furlough and self-employed schemes.

“People and businesses in Scotland also continue to benefit from UK-wide schemes such as the tourism VAT cut, company loans, VAT deferral, and Universal Credit.

“The UK Government is committed to supporting Scotland through this pandemic and getting our economy back on track. We urge the devolved administration in Scotland to work with us on that.”

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Scottish Labour leader Richard Leonard warned of a “lost generation” through the long-term impact of unemployment.

He said: “The further rise in unemployment today confirms that Scotland is on the brink of an unemployment crisis. 

“Unless a quality jobs guarantee scheme is in place before the furlough scheme ends, we will see mass unemployment on a scale not seen for generations, and a lost generation of workers who will feel the consequences for the rest of their lives.

“With one in three 18-24-year-olds now economically inactive, and unemployment having risen by over 50 per cent among women since last year, redressing inequality must be at the heart of this jobs guarantee scheme.

“The ONS has highlighted a significant rise in the number of workers still technically employed but not working any hours or being paid any money.

“This underlines the need for the Scottish Government to commit now to creating jobs paid at least the living wage and offering decent hours, terms and conditions – unlike the UK Government's Kickstart scheme.”

Business groups have also highlighted concerns over the figures.

Dr Liz Cameron, chief executive of the Scottish Chambers of Commerce, said: “The increase in the unemployment rate during this period covering a time when the economy was in lockdown presents a worrying picture.

“Jobs in Scotland face and will continue to face an immense threat as government support tapers off in the coming months.

“While job losses will have been tempered by the UK Government furlough scheme, the medium to long-term outlook remains uncertain.

“We need to see consumer demand stimulated rapidly over the next few months and a programme of further government support targeted towards those most at risk of long-term unemployment.”

Colin Borland, FSB’s director of devolved nations, said: “Sadly, these figures come as no surprise. 

“We’ve already seen one in ten of our members forced to make redundancies, with many more expecting to do so in the weeks ahead. 

“This is despite the lifeline support offered by, for example, the furlough scheme and the various short-term funding initiatives. 

“This isn’t a looming jobs crisis. Every indicator we see tells us it’s here now.

“That is why we need to continue unlocking the economy as quickly as we safely can. 

“Only by getting those parts of the economy that can get back to work moving again will we have the headroom to support those industries which are in for a longer, harder journey back.”

And analysis from the Fraser of Allander Institute suggested that the figures belied how serious the situation actually is.

In a video commentary, Stuart McIntyre warned that the employment figures were “not a full reflection of the situation facing workers in Scotland at the moment” or that they were likely to face in the coming months.

He pointed out that 30 per cent of employment or 737,000 jobs having been furloughed with UK Government support and a further 155,000 people have claimed support through the self-employment scheme.

It would take less than 20 per cent of those who have been furloughed to lose their jobs for the unemployment rate to more than double, he noted.

McIntyre said he expected a “substantial jump” in unemployment once businesses started up again and began to re-evaluate their workforce needs.