Alister Jack responds to July 2020 Labour Market figures

Commenting on the latest Labour Market Statistics report released today [16 July 2020] 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.

Overview:

For the three months to May, Scotland’s overall labour market headline figures indicate a clear weakening. This comes after two full months of data is included of the lockdown measures: employment fell robustly (-47,000), unemployment increased robustly (+15,000) and activity fell robustly (-32,000). In addition, monthly claimant count numbers are relatively stable during the month of June, as there are 215,200 people in Scotland claiming Jobseeker’s Allowance and out-of-work Universal Credit (seasonally adjusted); this is up 600 on the month of May (revised). This compares to just over 111,000 during the month of March (up over 103,000).

As a result, Scotland’s unemployment rate at 4.3% is now moderately up on the rate we had around 12 months ago (up 1.1 p.p.) and up on the recent record low at the start of the year 2019, when it was 3.2%. This does not compare favourably to the UK overall, which has seen only a marginal increase of 0.1 p.p. over the year to 3.9%. However, this is not a true reflection of the current crisis situation due to Covid-19. There is an expectation that the labour market will deteriorate further when the economy is coming out of the artificial lockdown situation and job support schemes are going to be scaled down.

Currently, Scotland’s unemployment rate at 4.3% is above that of the UK as a whole (3.9%), which remained stable over the last quarter. Furthermore, the number of people employed at 2,642,000 in Scotland is somewhat down on the recent record high at 2,702,000. This means that Scotland’s employment rate, at 74.1%, remains below the UK’s rate at 76.4%. The next few months of data releases will show more how Covid-19 and the economic lockdown is going to impact negatively the labour market.

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