More working in Scotland, but employment rate still lower than UK total

The number of Scots in work has risen in the last three months, but the country’s employment rate is below the national UK level.

Data from the Office for National Statistics (ONS) found there were 2,651,000 people in employment between October to December 2023 in Scotland.

But while this was up by 18,000 compared with the previous three months, the total was 60,000 lower than the same period in 2022.

The employment rate in Scotland was 74.4%, the ONS data showed, compared with 75% for the UK as a whole.

Scotland’s unemployment rate was also higher than for the UK, with 4.5% out of work from October to December, compared with 3.8% nationally.

A total of 126,000 Scots were unemployed in the last three months of 2023, up by 4,000 on the previous quarter and 30,000 higher than October to December 2022.

A Scottish Government spokesperson said: “The record high number of payrolled employees in Scotland is welcome, however, the wider data reflects the ongoing challenges facing the UK economy, including inflationary pressures and the continuing impacts of Brexit.

“The forthcoming Green Industrial Strategy will help businesses and investors realise the enormous economic opportunities of the global transition to net zero and create well-paid green jobs across Scotland,“ continued the statement.

“But with sectors such as hospitality and agriculture still facing enormous recruitment challenges, the UK Government’s proposed changes to immigration policy will further prevent access to the international labour market that Scotland needs for the economy to prosper.”

Scottish Secretary Alister Jack said: “It’s encouraging to see that Scotland’s labour market remains resilient.

“In January 2024, the number of people on company payrolls in Scotland increased to a new record high of 2.46 million.

“We’ve halved inflation to help achieve long-term, sustainable growth and our £2.5bn back to work plan is removing barriers to employment meaning fewer people are inactive.”

The latest ONS figures also showed that UK wage growth has slowed to its lowest level for more than a year, while vacancies fell back once again.

Average regular pay, excluding bonuses, fell to 6.2% in the quarter to December, down from an upwardly revised 6.7% in the three months to November. This was the slowest growth seen since the three months to October 2022.

But when taking Consumer Prices Index (CPI) inflation into account, real regular wages rose by 1.9% – a high since summer 2019, excluding the pandemic-skewed years. This is thanks to inflation having fallen back sharply from the 41-year high of 11.1% seen in October 2022.

Vacancies also fell for the 19th straight month, down 26,000 to 932,000 in the three months to January, in a record run of falls; though the decline was the smallest for a year-and-a-half.

In a sign that the jobs market as a whole remains largely resilient, the unemployment rate fell to 3.8% in the final three months of 2023, down from 3.9% in the three months to November and the lowest level since November to January 2023.

But the ONS cautioned that the unemployment rate should be “treated with additional caution”, as it continues to overhaul its Labour Force Survey due to low response rates.

The data also showed inactivity remaining at 21.9% in the three months to December, having last month seen big upward revisions dating back to at least April to June 2023, as the UK struggles with high levels of those off work due to long-term sickness.

More timely data estimated that the number of workers on payrolls rose by 48,000 between December and January to 30.4 million, though this is subject to revision.

Liz McKeown, director of economic statistics at the ONS, said: “It is clear that growth in employment has slowed over the past year.

“Over the same period the proportion of people neither working nor looking for work has risen, with historically high numbers of people saying they are long-term sick.

“Job vacancies fell again, for the 19th consecutive month, however, there are signs this trend may now be slowing.

“In cash terms, earnings are growing more slowly than in recent months, but in real terms they remain positive, thanks to falling inflation.”

Chancellor Jeremy Hunt insisted it was “good news” that real wages continue to rise, but admitted the “job isn’t done”.

He said: “Our tax cuts are part of a plan to get people back to work so we can grow the economy – but we must stick with it.”

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