Capital spending urged as Scottish unemployment falls by 12,000

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By Martin Kelly

Scottish unemployment has fallen to below UK levels with figures published today showing a drop of 12,000.

The drop in the unemployment rate to 8.1% means that Scotland’s unemployment rate is now lower than that of the UK which sits at 8.3%.

The boost was reinforced with news that the number of people in work in Scotland increased by 17,000, which was one third of all new jobs created across the UK.  The figures, supplied by the Office for National Statistics (ONS), cover the three months to February.

The SNP welcomed the statistics which they described as encouraging.  However SNP MSP Paul Wheelhouse warned that there could be no room for complacency and called for shovel ready projects to be funded as soon as possible.

Mr Wheelhouse insisted the recovery remained fragile and said the action taken by the Scottish Government risked being undermined by Westminster cuts.

Mr Wheelhouse, SNP MSP for South of Scotland and a member of the Finance Committee, said:

“These are greatly encouraging statistics.  Scotland now has lower unemployment, higher employment, and lower economic inactivity than the UK as a whole with more people finding employment and a fall in the jobless rate.

“Action taken by the SNP Government – including increased capital expenditure and improved access to finance for medium and small sized businesses – must not be derailed by spending cuts from Westminster.”

The MSP called on the UK Government make available the £300m needed to fund the list of Shovel Ready projects the SNP Government had provided the UK Government at the request of PM David Cameron.

Mr Wheelhouse added:

“Every £100m of investment in capital projects supports an estimated 1400 jobs.  David Cameron himself accepted the link between the two when he met with the First Minister.

“Given that Paul Johnson of the Institute for Fiscal Studies made clear to the Finance Committee that the case for a fiscal stimulus, such as increasing capital investment, is stronger now than it was last year, David Cameron now needs to help us get these projects going as soon as possible.

“The Scottish Government is doing what it can with its limited resources but the ‘shovel-ready’ money is vital to create more jobs and push the recovery forward.”

First Minister Alex Salmond said:

“The actions of the Scottish Government and our agencies are paying dividends, and there have been very positive announcements recently – such as Gamesa’s decision to bring their wind power manufacturing facility and 800 jobs to Leith, and GlaxoSmithKline’s £100 million expansion plans for sites in Montrose and Irvine.

“But what is needed to now to propel recovery forward is an injection of increased capital spending – which is why I am writing again to David Cameron with the list of £300 million of ‘shovel-ready’ projects across Scotland to boost growth and support thousands of jobs.”

Scotland’s headline unemployment level for people aged 16 and over fell by 12,000 with the rate falling by 0.4 percentage points over the three month period December-February 2012 to 8.1 per cent.  The UK rate decreased by 0.1 percentage points to 8.3 percent.

This is the biggest fall in unemployment in Scotland for over a year, since November 2010-January 2011.

Scotland’s headline employment rate remains higher than the UK as a whole for the seventeenth consecutive month of labour market statistics.  At 66.6 per cent, the rate of female employment in Scotland remains the highest of all UK countries and higher than the UK as a whole (65.3 per cent).

The overall economy in Scotland also fared better over the last quarter than that of the UK with GDP falling by 0.1% against a UK wide drop of 0.3%.

Secretary of State for Scotland, Michael Moore said the figures were welcome news.

He said: “We can be hopeful this is a sign that the Scottish labour market is stabilising, but there is clearly still a big challenge ahead to bring down unemployment and get more people back into jobs.

“We still have a lot of work to do and there is absolutely no room for complacency.”