Memo to Mr Cameron – look to Scotland, where unemployment is falling

As Ed Miliband today used Prime Minister’s Questions to press David Cameron over today’s disastrous unemployment figures, there is just one area of the country that registered a fall in unemployment.

The data by region (pdf) shows unemployment in Scotland fell 0.2% compared with a UK wide increase of 0.3%. This takes unemployment in Scotland to 7.5%, compared with a UK rate of 7.9%.

Furthermore, the number of people described as economically active increased by 20,000 over the same period, even though the number of people claiming Jobseeker’s Allowance was 145,700 in August – an increase of 1,200 over the month.

Whilst the Scottish secretary, Michael Moore attempted to take the credit for the UK government’s policy decisions which he claimed were creating jobs, increasing unemployment across the rest of the UK is a clear signal, as Labour have argued, that the coalition’s policies are hurting and not working.

To understand the more positive picture north of the border, it would be best to look at the decisions the SNP government have made on the economy in contrast to Westminster. The appointment in May of Alex Neil as Cabinet Secretary for Infrastructure and Capital Investment sent a clear message Alex Salmond’s government saw public investment as a key mechanism for supporting and enabling growth and job creation.

Likewise, Whitehall’s decision just days after the SNP victory to provide the Scottish government with immediate authority to borrow at least £300m annually from the Treasury to help boost Scotland’s economic recovery was not only a recognition in Westminster of the realities of the SNP mandate – it was also a boost for Salmond’s continued case that government spending has a major contribution to  dragging the country out of its economic malaise.

All this as David Cameron continues, like a broken record, to insist government spending needs to be reigned back and the private sector allowed to take fill the gaps.

The reality, however, is that just as the government is seeking to cut back, so too are families. What business is ever going to start up or create jobs when families simply do not have the money or inclination to be spending more? How could any CEO or small business owner ever consider taking on more staff when the demand simply isn’t there?

The first minister argued:

“Among all the nations and regions of the UK, Scotland was the only place with falling unemployment over the quarter, and we also have the largest decline in the unemployment rate over the year. Indeed, the rise in Scottish employment over the year of 36,000 encompasses the entire UK-wide figure of 24,000.

“But as the claimant count rise indicates, more needs to be done and there are no grounds for complacency. We are building jobs and recovery in Scotland, and the UK government must implement a Plan B if our recovery is not to be derailed.

“In our refreshed economic strategy this week, we set out how we are focussing our efforts on accelerating recovery, creating jobs and developing a more resilient and adaptable economy. We have established a new strategic priority – the transition to a low carbon economy – building on Scotland’s competitive advantage in this vital area, and reflecting the excellent opportunity we have to secure investment and jobs in the low carbon sector.

“But we also need action from the UK government – a Plan B – to protect Scotland’s economic recovery and jobs. This must focus on the areas where Scottish Government action has made a difference: increased capital expenditure, improved access to finance for medium and small sized businesses, as well as the introduction of measures to boost consumer confidence and economic security.

“The Scottish government also needs greater access to the key levers of economic growth, such as corporation tax and borrowing powers. This would enable us to do even more to enhance investment and jobs in the Scottish economy, and give Scotland a major competitive edge.”

The UK Government could do worse than learn from its Scottish neighbours.