Scotland’s unemployment rate rose to 4.3% during lockdown

Unemployment in Scotland rose to 4.3% between March and May as the coronavirus lockdown restrictions hit the jobs market hard.

Scotland's unemployment rate rose to 4.3% during lockdown

The rise in unemployment marked a 0.6% increase on the previous quarter and was higher than the UK unemployment rate of 3.9%, according to the latest Labour Market Statistics from the Office for National Statistics (ONS).

However, the figures do not include nearly 750,000 Scottish workers who were enrolled on the UK Government’s furlough scheme during that time.

The ONS also revealed that the number of Scots seeking jobs increased by 15,000 to reach 120,000. Twice as many left the jobs market and were not looking for work.

The figures also highlighted a drastic decline of nearly 17% in the number of hours worked in May across the UK. After inflation, average pay dropped by 1.3%.

Across the UK as a whole, the number of workers on UK payrolls dropped by 649,000 in the same period.

Commenting on the statistics, Fiona Hyslop, cabinet secretary for economy, fair work and culture, said: “These statistics cover around 2 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 & 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. This will help anyone who has lost their job or is at risk of losing their job, as well as those looking for work.”

Tracy Black, CBI Scotland director, commented: “With unemployment in Scotland outpacing the rest of the UK, these figures show serious difficulties for many people across Scotland. Unfortunately, this looks like only the beginning of the impact on the local labour market and flattening the unemployment curve will be a significant but essential challenge.

“Government support measures have helped to protect many jobs and firms, but more direct help - including grants and extension of business rates relief – may be needed as initial support starts to phase out.

“We know unemployment falls unevenly, across geographies and social groups. Business must work closely with government to ensure that everything is done to create new opportunities, especially for young people, in order to prevent a lost generation of Scots workers.”

Colin Borland, director of devolved nations, Federation of Small Businesses, added: “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.

“We need to give customers and employees the confidence they need to get back out there, generate some footfall and get money moving around again.  The message has to be clear: by going out for that first pint or haircut in four months, we’re doing our bit to get the country back on its feet. The more that consumer behaviour gets back to something approaching normal, the more likely it is that those still on furlough can get back to work.

“We also need to address the practical issues around childcare and transport that are stopping working parents and those who can’t work from home indefinitely getting back to business.”

 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.”

  • Read all of our articles relating to COVID-19 here.
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