Scotland ‘flirting with recession’
Growing alarm over Brexit as job figures slump
SCOTLAND is ‘flirting with recession’ following another dramatic slump in employment – and Brexit would deal a further blow to the faltering economy, warn experts.
The number of Scots in work fell by 48,000 from February to April.
Scotland was the UK’s only nation or region to see employment fall in the past 12 months and David Cameron said the Scottish economy, jobs, livelihoods and public services would suffer if the UK backs Brexit next week.
But in Prime Minister’s Questions, he cited the oil price crash following the independence referendum as evidence of the need to listen to experts’ warnings.
Trade union leaders said the labour market had endured a ‘wretched year’, while the respected Fraser of Allander Institute said Scotland would struggle to avoid returning to recession next year.
Angus Robertson, SNP Westminster leader, asked the Prime Minister what Brexit would mean for Scotland’s budget following George Osborne’s warning of an emergency budget with £30billion cuts. Mr Cameron said: ‘These figures are based on what the Institute of Fiscal Studies and National Institute of Economic and Social Research say.
‘They are talking about a £20billion to £40billion hole in our public finances if Brexit were to go ahead.’
He added: ‘For an economy like Scotland’s, which is such a big exporting economy, there’s no way we’d get a better deal on the outside than inside. So if we left, our economy, jobs and livelihoods would suffer.’
There was at least some good news for Scotland in the latest jobs figures, with unemployment down by 11,000.
But as that is not reflected by a rise in the number in work, it suggests people are retiring, going back into education or moving away to seek work.
There were more signs yesterday that the previously strong construction industry is also struggling, with employment in the sector falling by 1,000 to 188,000 during the first three months of 2016.
Brian Ashcroft, of the Fraser of Allander Institute, said: ‘The Scottish economy came within a hair’s breadth of recession last year and with little improvement recently may fail to avoid a recession in the coming months.
‘On Brexit, there is a high probability that output and growth in the Scottish economy will be damaged if the UK votes to leave the EU.
‘Not only would Scottish exporters have to overcome a potentially weaker competitive position due to lower labour and total productivity, they may also face less favourable trading arrangements.’
Grahame Smith, general secretary of the Scottish Trades Union Congress, said: ‘2016 is turning into a wretched year for the labour market.
‘The proximate cause of Scotland’s relatively poor performance appears to be the downturn in the oil and gas industry. However, this is in danger of being seriously compounded by the uncertainty caused by the European referendum.’
Scottish Secretary David Mundell said: ‘No other government has supported its oil and gas industry so extensively.’
Employability and Training Minister Jamie Hepburn said: ‘We are working to support job creation, while our economic strategy outlines our priorities, which include investing in infrastructure and promoting Scotland to boost trade.’
‘Wretched year for the labour market’