BBC Scotland drops a clanger


by George Kerevan

IT’S not often my old mate, Douglas Fraser, BBC Scotland’s business and economy editor, gets his facts wrong. But wrong he was yesterday when analysing the latest job figures for Scotland.

Here’s what Douglas told us on the BBC Scotland website:

“The latest survey figures saw 7,000 more people in work in Scotland, while the UK figures saw a rise of 143,000. That points to Scottish jobs growth, but not as strong as in England.”

Note his comment: there was a growth in employment in Scotland, but “not as strong as in England”. Douglas Fraser is a very conscientious journalist but in this case he is absolutely wrong.

Table 18(1) of the latest labour market survey from the Office of National Statistics (ONS) tells us that in the past 12 months, some 25,000 more people were in work in Scotland. That’s a rise of 0.5 per cent compared with a year ago, and largely down to John Swinney’s artful front-loading of capital spending to boost the construction industry.

However, the same ONS table says that the rise in employment in England was only 0.4 per cent. Where I come from, 0.5 is bigger than 0.4. Actually, it is bigger by a factor of a quarter, suggesting the rate of increase in job creation in Scotland was 25 per cent faster than in England.

For the record, the rise in employment in Wales in the year to this February was only 0.3 per cent. In Northern Ireland it was also 0.3 per cent. And for the UK as a whole it was 0.4 per cent. So Scottish employment growth was faster than any of the other UK nations and for the UK itself.

Even if you look only at the last three months till February, Scotland still comes out well. Comparing December-February (the worst of the winter) with September-November, there was a 0.2 per cent rise in employment in Scotland. In England and for the UK as a whole, the figure is the same – 0.2 per cent. So again Douglas Fraser is wrong in saying Scotland was performing less well than England in creating jobs.

How did Douglas get it so wrong? I think his (erroneous) reasoning went this way. Total UK employment rose by 143,000 in the last quarter but only by 7,000 in Scotland. Given that Scotland’s population is roughly a tenth of the UK total, surely we should see around 14,000 new jobs to be keeping up with the rest of the country?

However, this is comparing apples and oranges. You calculate the rate of growth of jobs against the local baseline you start with in each specific area. Compared with the local employment situation a year ago north of the border, the Scottish economy has put on jobs at a faster rate than England has when compared with the local English baseline.

Why is England lagging? The truth is that the economies of the individual English regions are very different. Two regions have shown strong employment growth over the past 12 months:  the South West (1.8 per cent) and the East of England (0.8 per cent). But there are other regions where employment has actually continued to fall: the North East (-1.4), the West Midlands (-0.9) and Yorkshire and Humber (-0.1).

This tells us that the intervention of the SNP Government has helped the Scottish economy, while the traditional English manufacturing regions – which lack economic powers – have languished. South of the border, only in the privileged heartlands of the English south is there sign of (modest) economic recovery. Another good reason for devolving more fiscal powers to Holyrood.

GEORGE KEREVAN is an economist and business journalist.