Presentation on the Scottish economy

Output (GDP) started to fall in second quarter 2008

Technical recession confirmed once output had fallen for 2 consecutive quarters

Now officially the longest recession in modern times – but growth will soon resume

Research shows that recessions resulting from financial crisis tend to be longer and deeper – 5 years before GDP & employment recover?

Employment fell by 56,000 in the year to September ‘09

ILO unemployment rose by 67,000Youth unemployment rose by 75%

between Aug ‘07 and Aug ‘09Repeating the mistakes of the past?This recession is different – impacts

yet unclear

6% fall in GDP Manufacturing badly hit – 13% fall in

output; Export-orientated sectors worst affected

–25% decline in chemicals; electronics, transport equipment & mechanical engineering between 10-20%;

Construction, financial services & real estate/business services – all associated with property/finance roots of recession

Figure 1: Scottish and UK Quarterly GDP Growth, 1998q2 to 2009q1

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Per

cen

t

Scotland

UK

• PACE National Redundancy Initiative- Improved Website and Helpline 0808 100 1855 - 240+ Companies, 14,400 individuals assisted - ESF Approvals and increased staffing

• Revised ILA Offer support for Individuals earning up to £22k

• Redundant Apprentice Interventions- Clearing House system to support displaced Apprentices- Adopt an Apprentice - £2k recruitment incentive - Safeguard an Apprentice, sector focus £75 per week

• Increased Customer Demand- Visits to Centres up 10%- Call Centre Activity up 40%

• 7,800+ New Apprenticeships, representing an 80% increase in new starts

• Introduction of New Level 2 MA’s e.g. Civil engineering

• Innovate with an Apprentice 2 for 1 Offer and new Life Science MA

Framework

• Invest in an Apprentice to stimulate 1st time recruitment in SMEs

• Supporting Job Growth, integrated support Packages

• Pilot of Business Improvement Techniques VQ

Towards Growth

• Need to keep services Agile and Responsive to Labour Market demands and opportunities

• Improved Transition Programmes for “Mature” Employees

• Co-Creation of Services with:- Business - Industry Advisory Boards- Scottish Funding Council

- Trade Unions- Individuals

• Smarter systems to Inform service development

• Build capacity and deliver on Skills Utilisation

The ‘Credit Crunch’- Sept ’07- end of housing and credit bubbles

2008 commodities bubble – rising oil and food prices

The financial crisis following the collapse of Lehman Bros Investment Bank in Sept 2008

Sudden and massive collapse in global demand

First truly global recession

Bankers, other financial intermediaries, regulators, central banks...

A failure of politics A failure of ideasDefinitely not the workers – those

who are now paying with their jobs

Maintain government spending Support those hardest hit by recession Fix the financial system Rebalance towards manufacturing Redistribute wealth – rising inequality

breeds economic instability Greening the economy, creating

sustainable jobs

The deficit - why is it rising rapidly? Falling tax revenues, the upfront costs of the bank bailout, rising social spending and fiscal stimulus

The stock of debt – not high by historical or international standards

Does the government have to cut spending now or in the future?

Can the government raise more revenue?

Campaign for action to keep people in jobs & to create new jobs

Action to maintain and indeed increase investment in skills

Facility time for trade union representatives

Maintaining enthusiasm for trade union learning!