The Office of National Statistics has just published a batch of figures on the UK's workforce, nearly coinciding with the Friday, 16 July's submission to The Treasury by most government departments of their proposed budget cuts. The Treasury requires drafts based on 25 percent and 40 percent cuts to the 2010-2011 figures and these will form the basis of the autumn Spending Review and November's Budget Address to Parliament by George Osborne, Chancellor of the Exchequer.
To the end of May 2010, the employment rate increased by 160,000 over the previous quarter to 28.98 million with part-time workers making up 117,000 of this increase. Those working part-time now total 6.63 million (22.9 percent). The number entering the workforce as self-employed for this period numbered 59,000 bringing their share of the workforce to 3.93 million (13.5 percent). There's no mistake in the figures because those in full-time employment fell by 22,000 to total 18.2 million (62.8 percent).
Meanwhile, the same quarter's unemployment level was 7.8 percent, down a tiny fraction on the previous quarter, at 2.47 million and whilst there was good news that those unemployed for up to six months fell by 54,000 to 1.16 million, there was a disturbing rise of 61,000 in those unemployed for more than a year, reaching 787,000, this the highest quarterly total for 13 years. The remainder of just over the half million have been unemployed for between six months and a year.
Those claiming Jobseeker's Allowance (JSA) fell nearly 21,000 between May and June to reach 1.46 million although there were small increases in the North-East and Northern Ireland.
The number of inactive people of working age (16-64 for men and 16-59 for women) decreased by 62,000 to 8.1 million but of this, the "long-term sick" element increased by 54,000 to reach 2.07 million.
These national figures mask regional and local variations. In Scotland for example, the number of people out of work increased by 8,000 and is now 216,000, 8.1 percent of the workforce and shows a big rise over the same period last year when the figure was 181,000. Yet the Scottish Nationalist Party administration in Edinburgh were able to take some comfort from the fact that the number claiming JSA fell by 600 from May's figure, the fifth albeit small fall in a row, and currently stands at just over 133,000 in June, a much less dramatic year-on-year rise of 5,500. Not so good was the contraction by 65,000 in the size of the Scottish workforce over the past year to stand at 2,443,000.
As to how last Friday's proposed department budget cuts will affect workforce and unemployment levels in Scotland, David Bell, Professor of Economics at Stirling University, writing in The Scotsman newspaper on 15 July 2010 suggested that a reduction in the public sector might be as high as 15 percent or so, though a more accurate idea can only be made after the Government's autumn Spending Review is published and the cuts will only really start to be felt after April 2011. To offset these expected cuts, Mr Bell writes: "We've got to encourage the private sector to expand and banks have a role in this in terms of investment....by making it easier for businesses to get loans, so that they can invest and create jobs."
The degree to which departmental spending reductions on the proposed scales will affect the workforce in the UK is most likely to accentuate further the North-South divide and in particular, London and the South-East from the rest of Britain, for the South-East is least dependant on central and local government employment and disbursements as a portion of regional GDP. The area is lucky to have a stronger economy and more diverse employment base.
Not so fortunate is Northern Ireland where currently over 70 percent of regional GDP is government generated. Sammy Wilson, Northern Ireland Finance Minister tacitly acknowledged this predicament when speaking at Belfast City Hall on 03 June 2010, he told his audience that the really hard choices they faced were not straightforward "because public sector spending in social policy areas directly affects our economy."
Mr Wilson could not have been more stark in his warning to Stormont colleagues that the £128 million of cuts imposed at the end of May 2010 were simply the beginning and that over the next few years, Ulster "will see massive reductions in public expenditure" and "we can no longer afford to deliver the full range of commitments set out in the Programme for Government"
The violence witnessed in West Belfast this past week can only add to Northern Ireland's budgetary woes but it is the already well outlined and ongoing devolved government programmes that demonstrate the tricky part for the ruling party politicians of the Stormont and Edinburgh Parliaments and the Welsh Assembly in Cardiff. It is true that each of these bodies wanted a coalition of the sort that would have allowed them a fair degree of influence over Westminster legislation but it was not simply a matter of being pro or anti the main UK parties.
Having been given devolved responsibility with considerable budgetary powers, for example in Scotland, the abolition of university tuition fees, reduction in prescription charges and free care for the elderly, these politicians find themselves with a now indeterminate budget and, to the delight of their political opponents, often having to go back on their previous commitments and manifesto pledges.
It is unfair to suggest that such responsibilities were too soon awarded, or a mistake in the first place, but the Parliaments and Assembly did forget that there is only one real Treasury. Their sin of confusing the power to tax with the privilege of disposal is surely a human one but the Finance Ministers in Cardiff, Belfast and Edinburgh are now simply the local face of a straightened London Exchequer.
Clearly, when the Prime Minister, David Cameron speaking on 22 May this year stated that he intended the "re-balancing our economy" which had become "too reliant on a few sectors, for example, financial services, and a few regions, particularly London and the South-East" he must have been anticipating the conclusions of a report by Oxford Economics, a consultancy firm. This company has just completed a study on behalf of the Financial Times, much of which appeared on Friday, 16 July's edition. The PM will be disappointed but hardly surprised to learn that "London and South-East England are poised to create jobs at more than twice the rate of the rest of the UK during the next five years."
Oxford Economics estimates that 353,000 jobs will be lost in the public sector to 2015, much less than the 610,000 loss predicted by the body set up by the Government, the Office for Budget Responsibility. It thinks that the net number of new jobs in the same period will be just under 1,320,000. London is expected to create 385,000 net new jobs, 29 percent of the UK total, despite a present unemployment level of 9.3 percent, the country's second highest. In sharp contrast, the consultancy expects Wales to generate a mere 4,100 new jobs.
Background figures last month were far from encouraging when the TUC amongst other bodies announced that there were five dole claimants for each job vacancy in the UK and although the City of London had more vacancies than JSA claimants, London as a whole had nearly eight claimants per vacancy and Scotland, North-East England and Yorkshire & The Humber each had six chasing that elusive job. Even allowing that a majority of jobs available do not get placed in the Government's Job Centres, these are worrying figures.
Is the UK economy capable of creating more jobs and new opportunities in the kind of dynamic environment that will be required in the future when our population is expected to expand to 70 million in a little over a generation? Yes, of course, though Job Centres as mentioned above, only tell part of the vacancy story and many employers bypass them altogether.
Looking at a good and popular website like S1jobs.com based in Glasgow, one finds on offer 3,684 jobs in Scotland across a wide range of skills and locations. The prospective applicant must not be frightened. A captioned article on the G1 Group opening the new-look Corinthian Club and wanting to hire 200 staff, ended up interviewing some 2,000 over three days from all over the UK. There is considerable interest in the new hi-tech green technology joint venture between Japan's Mitsubishi Power Systems and Scottish and Southern Energy which is expected to create 1,000 new jobs by 2015.
Turning to the west of Scotland's main newspaper, The Herald's jobs web-page, there are 3,645 offers of work. The breakdown by location is:
and Stirling and Inverness each have 63.
The breakdown by skill:
Oil & Gas 137
With so much bad news and the knowledge that more is about to follow down the track, it is all too easy to feel a little morbid about the state the United Kingdom is in, but provided that the young in particular approach the problem with an open mind, flexibility and a willingness to go to where the work is, the country should rebound with renewed vigour and better than before. It's just not going to happen in the next-but-one set of government statistics.