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By a Newsnet reporter
Scotland’s Finance Minister John Swinney has called into question conclusions in a report that forecasts Scottish unemployment will be the worst in the UK by 2016.
According to a study by the Centre for Economics and Business Research (CEBR), unemployment north of the border will surpass that of the rest of the UK in 2012 and will reach its highest level since 1993, within four years.

The study predicts that higher rates of unemployment will be seen throughout the UK as a whole, with Scotland experiencing some of the largest rises in those out of work.

However Scottish Finance Minister John Swinney challenged the claim that Scotland would suffer more and pointed out that the unemployment rate in Scotland is currently lower than the UK.

He said: "The fact is that the Scottish economy outperformed the UK as a whole in terms of GDP growth over the last two quarters of 2011 combined - and we have a higher employment rate, lower unemployment and lower economic inactivity in Scotland compared to the position south of the border.”

One of the reports authors’, economist Rob Harbron, claimed that Scotland’s ‘dependency’ on public sector employment left it vulnerable to government cutbacks.

He said: “With almost one in four workers employed by the public sector, jobs in Scotland are at particular risk to government cutbacks.

“Weak economic conditions look set to continue across the UK over the next five years and as a result, Scottish economic growth is expected to be only slow in the years to 2016, with the economy expanding by just 1.6 per cent a year by 2016, well below pre-financial crisis trends.

“Sluggish job creation in the private sector, combined with public sector job losses, look set to force the unemployment rate up from 8.8 per cent in 2012 to 9.7 per cent by the end of 2016.

"The last time that the rate surpassed this was in 1993."

By comparison, according to the report, the UK average would fair slightly better, levelling out at 9.2 per cent from 2014 to 2016.

The 9.7% unemployment prediction for Scotland is 1.1% worse than the CEBR was forecasting for Scotland in October last year.

Mr Swinney questioned the author’s pessimistic outlook and claimed that Scotland’s economy was holding up despite the economic policies being pursued by the UK coalition, which had brought the UK into a second recession. 

Mr Swinney added:

"The most recent real figures show that Scotland's unemployment level fell by 12,000 over the three-month period December-February 2012 - the biggest fall in unemployment in Scotland for over a year."

Mr Swinney claimed that the report was evidence that the economic policies of the UK government were causing harm and called for more economic powers to be transferred from London to Edinburgh.

Mr Swinney continued:

“Scotland needs the full economic and financial powers of independence so that we can do even more to boost the economy and jobs.

“If this paper tells us anything it underlines the importance of achieving a ‘yes’ vote in the autumn 2014 independence referendum, so that we have all the job-creating powers at the disposal of the Scottish Parliament and government, instead of being on the receiving end of Westminster economic mismanagement.”

An unnamed Labour spokesman blamed the Tory government’s economic policies for “cutting too hard, too fast.”

The study is an amended version of the CEBR’s October report, which claimed that the Scottish economy was being held back partly by businesses being deterred by the threat of independence.

“Scotland is being held back not only by government cuts and by businesses deterred by the threat of independence,” it said, adding then that it expected Scottish unemployment to rise to 8.6% by 2016.

However in the six intervening months Scotland has attracted significant inward investment and now ranks as one of the most successful areas in the UK, with only the south east performing better.


# Louperdowg 2012-05-08 07:24
From Rob Harbron's LinkedIn page:

I'm a young economist and econometrician, currently working as an Economist at the Centre for Economics and Business Research (Cebr).

I have gained tremendous experience collating and building original datasets from a wide range of sources. I have much experience in building models to represent everything from government corruption levels, national GDP and individual retailer store sales and fast-moving consumer good unit sales. This analysis and modelling has been done across a range of computer packages, including Excel, Access, Stata, and in-house software.

I have experience with writing lengthy reports to communicate my findings in an academic style, as well as writing short and punchy reports more suitable for the business world.

My professional goal is to become an industry-leading economist and renowned expert, heading up important projects for a world-class consultancy.
# Triangular Ears 2012-05-08 08:13
For "building original datasets" read "making stuff up".
# scotsgal 2012-05-08 13:38
Excel and Access are not that advanced as far as computer programmes are concerned and are only as good as the information put in . I have never used Stata but again the calculation of statistics is only as good as the information used. The problem with numbers is you can get them to say what ever you want if you are smart enough and there are always unknowns, like perhaps a sudden break through in green energy, just as an example. So long as the Scottish economy continues to prove him wrong I will be more than happy.
# Aplinal 2012-05-08 07:26
This is a right-wing think tank, is it not? Nuff said.
# tartanfever 2012-05-08 08:06
Regardless of the reports veracity , everything thats contained within it is a reason in itself for independence.

We do have a jobs market that relies too heavily on the public sector, thats because of London-centric governance and infrastructure spend. It's the same in the north east of England and other regions.

We need to be able to have the controls of economy to be able to attract business to Scotland and create jobs here. As the SNP have always said, who's best placed to look after the needs of the Scottish people ? - ourselves

It is Westminster alone who shoulder the burden of this dreadful state of affairs, it is Westminster that put us in this position and unfortunately, Westminster will keep us here.

Thats the message of this report.
# MajorBloodnok 2012-05-08 08:17
Why does the press give these 'think' tanks such creedance? They're stuffed full of borderline LSE graduates (or similar) with no experience other than being in think tanks and barely an ounce of human understanding between them.

This is the same lot that moaned that bank holidays were a drain on the economy and we needed fewer holidays - presumably by the same calculations working 24 hour days and 7 days weeks would increase economic output four-fold.
# Leswil 2012-05-08 08:24
Come on guy's, we must expect doom and gloom in bucket loads, Westminster tentacles are everywhere and more devious lot you could not find. They use and influence all kinds of reports, committees, editorials, media, etc. There is nothing they will not try to twist to serve their purpose.
Expect more and more of this stuff, we just have to let it whizz by us and we will have the last laugh.
# scottish_skier 2012-05-08 09:00
John Kenneth Galbraith springs to mind.

"Economic forecasting was created to make astrology look respectable."

And with respect to right-wing think tanks..

"The modern conservative is engaged in one of man's oldest exercises in moral philosophy; that is, the search for a superior moral justification for selfishness."
# pmcrek 2012-05-08 09:41
When the entire world economic system collapsed bringing business and economies to their knees, the CEBT were sitting about scratching their heads wondering what happened.

Not exactly a good track record on crystal ball gazing have they.
# Cattanach69 2012-05-08 10:06
The forecasts are entirely accurate people! It is the bare minimum price of staying in the Union, although I suspect it will actually be costlier than they forecast!
# Angry_Weegie 2012-05-08 10:29
According to the BBC's UK item about the same report, UK wide unemployment is set to rise to 10.7% by 2016. Based on that, Scotlanf will be 1% better off.

I've written to the BBC asking for an explanation of the Scottish headline.
# Triangular Ears 2012-05-08 10:44
By the CEBR's own track record then, the UK will be third world country sometime BEFORE 2050 then?
# Angry_Weegie 2012-05-08 11:17
Well on the way. I'm not sure it will take so long.
# GrassyKnollington 2012-05-08 10:45
get gunned up, buy a jeep and a big alsatian, head for Mexico. There's a storm coming....

No wait, that's Terminator.

Anyway be very afraid Scotland, there's a right wing think tank coming to get you.
# Jim1320 2012-05-08 10:46
Just another typical right wing think tank painting by numbers effort. The percentage of Scottish workers in the Public Sector is a little higher than the UK as a whole (about 3%) because we have not privatised water, council services etc.,

However, we have a Government that is trying to preserve services and has committed to no compulsory redundancies. England has a cuts mad, privatise it if you can Government, that is looking to make wholesale redundancies in the Public Sector. There may well be increasing unemployment but the failure to recognise that there are two separate Governments with quite different policies makes the report flawed.

I think young Rob is going to struggle to make an impact if can't nuance such simple determiniants. He has lazily concluded that the UK Government wants to cut the Public Sector, the Public Sector in Scotland is higher (although not markedly) therefore they will get more cuts.

# proudscot 2012-05-08 13:11
You know, I never realised until now that Private Fraser in Dad's Army was an arch-unionist - I should have known from his oft repeated quote: "Doomed ... we're a' doomed I tell ye ..."
# jurist 2012-05-08 14:16
This CEBR outfit has quite a bit of previous of running down the Scottish economy in the guise of econometric forecasting. That their pronoucements get any coverage flatters them quite a bit.

Anyone who has worked as a forecaster will know that to give a forecast four or five years out lacks credibility. If this came out of the Fraser of Allander Institute I'd give it more credence. They use an input/output model - in my opinion, more reliable than an econometric model. Not to be too parochial, but I don't think an English based econometrician knows squat about the Scottish economy. He's probably using fairly crude Scottish data sets and gets a fairly crude result.
# Nautilus 2012-05-08 17:34
Everyone on Newsnet Scotland take note of this report and when it is proved wrong in 2016, ram it down their throats. Discredit this already discredited organisation who make the figures fit their hypothesis.
# MacSenex 2012-05-08 21:24
I struggled to find this report on the website.

Scotland's percentage of public sector employees is less than any Nordic country.

All these countries have enjoyed substantial growth in income and population which
demands an answer from the report's author

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