Tag: Economy

Further reductions in short-term lets ‘could cost Edinburgh economy £57m’

Warning from the self-catering sector that a punishing regulatory framework will simply cost jobs and do nothing to resolve Edinburgh’s housing crisis

A new independent analysis shows short-term lets make a substantial economic impact in Edinburgh while only making up a tiny percentage of the total number of properties in the city.

BiGGAR Economics, a respected Edinburgh-based consultancy, calculated that the city’s short-term let sector generated £154m in GVA and supported 5,580 jobs in 2023, with guests spending more on local goods and services than the average visitor, particularly in hospitality, tourism and retail sectors.

Jointly commissioned by Justice for Scotland’s Self-Catering and STL Solutions, BiGGAR’s report lays out the economic and fiscal impacts of STLs in Edinburgh, its wider sectoral impact supporting business and tourism activity, and also assesses its effect on housing supply.

The report concludes that the share of secondary lets – properties entirety rented out entirely to guests rather than owner occupied – account for just 0.8% of dwellings in Edinburgh. Moreover, the number of long-term empty properties continues to rise, including in the period after licencing was introduced, with the city remaining a hotspot for empty housing.

The study comes as Edinburgh Council consult on their licensing scheme and the Scottish Parliament’s Local Government, Housing and Planning Committee will shortly take oral evidence from stakeholders on the Scottish Government’s STL implementation update report.

The key headlines include:

  • The self-catering sector is estimated to generate £154m GVA and supports 5,580 jobs.
  • A decrease in just 0.5% in the number of secondary let properties would have massive ramifications for the local economy, losing £57m in economic activity.
  • Empty properties far exceed the number of short-term lets in the city, with secondary lets making up just 0.8% of dwellings in Edinburgh compared to 4% for empty homes.

While it focuses on Edinburgh, the report will undoubtedly be of interest to other local authorities monitoring the impact of their short-term let regulations.

The findings have been shared with Edinburgh Council and the Scottish Government. The self-catering industry is committed to evidence-based policymaking, ensuring that robust and reliable data underpins public policy affecting the self-catering industry and wider tourism sector.

The industry continues to argue that the Scottish Government’s short-term let regulations have produced unintended consequences for the sector while failing to meet its underlying policy objectives, and Edinburgh’s approach in particular has been beset by three legal setbacks, most recently with the Council’s u-turn on issuing three-month suspensions on licensing applications.

Graeme Blackett, Director of BiGGAR Economics, said: “This independent research has found that the economic impacts of short-term lets will tend to be greater than residential use.

“This is a result of guest spending in the local economy, for example in the hospitality sector. The guest spending supports jobs in the Edinburgh economy, as well as sustaining a greater range of hospitality and other local businesses than would otherwise be the case, contributing to the quality of life for residents.

“The short-term lets sector is contributing at least £154 million to the Edinburgh economy each year. Our research also found that short-term let properties account for only 1.5% of Edinburgh’s housing stock, with secondary lets at only 0.8%, too low a proportion to have a meaningful impact on the local housing market.”      

Fiona Campbell, CEO of the ASSC, said: “This major research study verifies that secondary lets are a huge economic driver for the capital, supporting over 5,500 jobs, and providing a much-needed boost to other local tourism and hospitality businesses.

“It outlines a proper holistic assessment of Edinburgh’s unique housing market, showing that secondary lets only account for 0.8% of housing stock. For us, the message is clear: you can’t solve a housing crisis by producing a crisis in Scottish tourism by decimating local businesses.

“Instead, we’ve got to build our way out and tackle the increasing problem of empty homes. We sincerely hope that this independent study can help refocus the policy agenda and inform the ongoing regulatory discussions.”

Iain Muirhead, Co-Founder of STL Solutions, said: “Short-term lets play a crucial role not only in supporting Edinburgh’s thriving tourism industry, which benefits all residents, but also in accommodating hundreds of visitors each year who come for economically important purposes such as work, festivals, and the education sector.

“We hope that local councillors will take this report into consideration when shaping local policies, especially planning regulations, to ensure a balanced approach is achieved. As the report indicates, overly restrictive measures could lead to the emergence of a black market, undermining the objectives of a well-regulated licensing scheme.”   

Ralph Averbuch, Spokesman for JfSCC, said: “This report clearly demonstrates that full time Scottish Self-Catering operators have never been the issue. Yet we have been hounded as if killing off this vital part of Scotland’s tourism offering would be a magic cure for decades of government missteps.

“Politicians of all colours felt we were useful scapegoats but this economic analysis pinpoints that the problem is population growth and insufficient affordable house building. This problem will never be resolved by attacking a group which makes up less than 1% of Edinburgh housing.

“What’s needed is bold government action on housebuilding. Politicians have pretended that a crackdown on Scotland’s self-caterers is bold. It’s not. It’s been a master class in misdirection.”

Economic Impacts of Short-term Lets in Edinburgh 18Oct24Download

Fraser of Allander Institute update

Budget speculation, the economy returns to growth, the impact of cuts, and the disability employment gap

Three weeks still to go, and speculation about what will be in the Budget on 30th October continues (writes Fraser of Allander Institute’s MAIRI SPOWAGE, SANJAM SURI and EMMA CONGREVE).

Will the Chancellor change her fiscal rules? It looks likely that there will be some movement on this, whether in the definition of debt or something more fundamental, however much that could undermine their commitments in the manifesto.

Will there be increases in Capital Gains Tax? The speculation on this has reached fever pitch, with some stories suggested rates from 33% to 39% are being considered. (Interestingly, when we look at the ready reckoners from the HMRC, changes of this magnitude in some forms of CGT actually may result in less revenue when behavioural effects are taken into account). There certainly seems to be expectations out there in the economy that the rate may change, with lots of signs that disposals have increased hugely in anticipation.

Will there be increases to employer national insurance contributions? There has been much discussion about this, given the commitment of the UK Government not to “raise taxes on working people”, and due to the fact that the PM would not rule this out this week. A 1 percentage point rise in employers NICS would raise almost £9bn according to the ready reckoner (although we think that doesn’t include the additional costs to departments).

We’ll be going into the detail of some of these issues in the run up to the Budget, so there will be plenty for you all to chew over as we wait… and wait… for the Budget.

UK Economy Returns to growth in August

Data released this morning showed that the UK economy posted its first monthly GDP increase since May 2024. ONS reported this morning that monthly real GDP grew 0.2% in August 2024.  There were no revisions made to the “no growth” months of June and July.  While monthly numbers were in line with consensus forecasts, they show an economy that has slowed down from the beginning of 2024.

The good news is that growth in August came from all key sectors- with services rising by 0.1%, and production and construction rising by 0.5% and 0.4% respectively. Crucially- August was also the first time all three sectors positively contributed to growth since March 2024.

A more granular breakdown of service sector growth indicates that the biggest positive contribution came from the professional, scientific, and technical activities subsector- where monthly change in output was +1.6% from the previous month.  Despite overall growth in services sector- seven subsectors saw decline in economic activity- with arts, entertainment, and recreation falling 2.5% over July 2024.

The production sector grew by 0.5% in August after hefty decline of 0.7% in July. Despite a rebound in August, the production output is essentially flat since the end of May 2024. The biggest contributor to production sector came from 1.1% rise in manufacturing activity- driven by transport equipment manufacturing However, mining and quarrying output declined 4.0% over July 2024- continuing their downward trend since end of December 2023.

What is the impact of cuts in spending?

When the Scottish Government presented their Fiscal Statement to parliament in early September, the Cabinet Secretary for Finance said that impact assessments had been done to understand the impact that the announced cuts could have on different groups.

These assessments were not published at the time, but finally were published last week. We welcome the publication of these, and although there are lots of criticisms that could be made of the assessments, it is good to see this transparency. One area of weakness is assuming that if funding was maintained at previous levels, there will be minimal impact, which assumes that previous levels was the correct level… so why was the budget being increased in the first place?

One of the main things to note though is the lack of analysis of cumulative impact on groups. A number of “minimal impacts” could still add up to something significant if they are affecting the same group.

Final report of the parliamentary Inquiry into the disability employment gap published

In 2016, the Scottish Government published A Fairer Scotland for Disabled People, which outlined how the government intended to shape policy – especially labour market policy – for disabled people living in Scotland.

One of the key goals this report outlined was reducing the gap in the employment rate between disabled and non-disabled adults. In 2016, 80.4% of non-disabled working aged adults were employed in Scotland, compared to 42.8% of disabled working aged adults, making for an employment gap of 37.5 percentage points. The government’s goal was to cut this gap in half by 2038.

In 2023, the Economy and Fair Work Committee in Scottish Parliament launched an inquiry into how this policy goal was going. In fact, in 2023, it seemed like it was going quite well.

The gap was down to 30.3 percentage points, which was actually ahead of schedule: if progress were linear, the disability employment gap would drop by about 0.85 percentage points each year, meaning that it would be 31.5 percentage points in 2023.

However, the inquiry turned up less-than-optimistic findings, which have been published in a report out today from the Scottish Parliament.

Two of our economists at the FAI, Allison Catalano and Christy McFadyen, contributed to this inquiry through a fellowship with the Scottish Parliament Information Centre (SPICe). Their work, which we published back in January, found that the majority of the change in disability employment is due to a rise in disability prevalence, rather than any specific policy.

Their report also highlighted some significant data issues: people with different types of disability have vastly different capacities for employment, vastly different support needs within employment, and vastly different rates of employment. Yet, in Scottish data and policymaking, disabled people are often treated as a singular entity, meaning that it is not possible to understand where policy interventions might be most effective.

The final inquiry publication highlights our work and a variety of other issues which will need to be addressed in order to improve work access for disabled people, all of which can be found here. They have produced 44 recommendations to improve employment prospects for disabled people.

Making Scotland a global green finance hub

Taskforce identifies four areas for action

Deputy First Minister Kate Forbes will collaborate with financial institutions to ensure Scotland becomes a global centre for green and sustainable finance and investment. 

A new report from the Scottish Taskforce for Green and Sustainable Financial Services makes 31 recommendations on how the public and private sectors can encourage and fund green investments and tackle the climate emergency.

It stresses the Scottish finance industry is particularly well placed to reap “profound benefits” from becoming a global hub and identifies four areas for action – policy, promotion, investment and skills.

Suggested initiatives include:

  • work to ensure Edinburgh and Glasgow sustain and improve their rankings in the Global Green Finance Index
  • new initiatives to attract more financial institutions to build their sustainable businesses in Scotland
  • collaboration across sectors and academia to improve the skills of Scotland’s workforce in sustainable finance

Deputy First Minister Kate Forbes, who addressed the Ethical Finance Global Summit in Edinburgh yesterday , welcomed the findings. Ms Forbes said: “This report is a decisive action plan as we progress towards making Scotland the natural home for green and sustainable finance.

“The financial services sector is key to delivering the benefits of the transition to net zero and we will use this route map to work together and ensure that Scotland – one of the world’s oldest financial centres – is able to maximise the opportunities ahead of us.

“This report, complementing our Green Industrial Strategy and the action we are taking such as developing a series of investment opportunities and launching an online investment portal in 2025, will make Scotland more attractive for investment.”

Taskforce Chair David Pitt-Watson said: “Climate may be the greatest challenge facing humankind. Addressing it will require a huge investment and the services of the finance industry.

“Finance is a jewel in Scotland’s industrial crown. So not only should there be many opportunities for green investment in Scotland, from wind to housing, there is also a huge opportunity for its financial services industry to serve the world.

“The Taskforce has already stimulated a considerable amount of action. And there is so much more to do. This report is a strategy for Scottish finance to play its proper role in addressing the climate challenge.”

Chief Executive of Scottish Financial Enterprise (SFE) Sandy Begbie said: “The work of the taskforce is a great example of collaboration between government and industry to enhance Scotland’s reputation as a global green and sustainable finance centre.  

“There are significant recommendations in the report and I am pleased that today marks the start of a formal partnership between the Global Ethical Finance Initiative (GEFI) and SFE to take them forward. GEFI will leverage its considerable global footprint while SFE will use its leadership position here in Scotland and our key relationships in London.”

The Scottish Taskforce for Green and Sustainable Financial Services report.

Ian Murray comments on Scotland’s latest GDP figures

Scotland’s onshore GDP grew by 0.3% in July 2024 according to statistics announced by the Chief Statistician yesterday. This follows no growth in June 2024 (revised up from -0.3%).

In the three months to July, GDP is estimated to have grown by 0.3% compared to the previous three month period. This indicates a slight decrease in growth relative to the increase of 0.6% in 2024 Quarter 2 (April to June).

The two industries which made the biggest contribution to overall GDP growth in July were Manufacturing and Information and Communications Services, both of which contributed 0.1 percentage points of growth to headline GDP.

The monthly statistical publication and data is available from the Scottish Government’s website.

Growing Scotland’s net zero economy

Green Industrial Strategy unveiled

A focused strategy has been launched to place Scotland at the forefront of the net zero economy, with targeted actions to secure growth and investment.

Delivered as part of the Programme for Government, the Green Industrial Strategy sets out five priority areas where efforts and resources will be concentrated.

These are:

  • maximising Scotland’s wind economy
  • growing the hydrogen sector
  • developing the carbon capture, utilisation and storage sector
  • supporting green economy professional and financial services
  • attracting clean energy intensive industries such as datacentres

A range of specific actions include hosting a Global Offshore Wind Investment Forum next Spring, working with the sector to develop hubs of hydrogen production and demand and working with public and private partners to drive investment in key projects.

Deputy First Minister Kate Forbes and Acting Cabinet Secretary for Net Zero and Energy Gillian Martin unveiled the Strategy during a visit to Flowcopter, a company developing drones which can be used in the offshore wind sector.

Ms Forbes said: “The global transition to net zero provides opportunities across every part of our economy through a strengthened partnership between the public and private sectors.

“This Green Industrial Strategy spells out where we believe the greatest opportunities lie, and where we will focus our attention and resources.

“It provides certainty for businesses – both at home and abroad – by demonstrating where and how we will work to reduce barriers to investment and, where appropriate, share risk and reward.”

Ms Martin said: “Scotland’s energy sector will play a crucial role in growing the economy and delivering on our net zero targets.

“We have already committed up to £500 million over five years to develop the offshore wind supply chain.

“This will build further on Scotland’s strengths to generate growth in well paid jobs and exports, to enable us to deliver on our Programme for Government priorities of high quality public services, eradicating child poverty and protecting the planet.”

Managing Director of Flowcopter Peter McCurry said: “The rapidly growing green energy sector represents a real opportunity for Flowcopter to not only scale-up our business, but create even more high-tech jobs as part of a Scottish supply chain.

“Flowcopter has successfully developed an uncrewed cargo drone for remote logistics. Through this, we came to recognise the huge potential to drastically reduce operations and maintenance costs for the offshore wind industry.”

The Green Industrial Strategy.

Chancellor vows to work in partnership with business ‘to fix the foundations’

The Chancellor ‘ushered in a new era of business partnership’ yesterday (29 August) as she met business groups together for the first time as Chancellor.

Rachel Reeves told senior business leaders that just as they had worked together in opposition to write their plans for government, they will work together now to deliver them.

In her first meeting with the BCC, CBI, FSB, Make UK and IoD as Chancellor, she said that businesses will be at the heart of delivering the government’s growth mission, as it takes action to fix the foundations of the economy to rebuild Britain and make every part of the country better off.

Ahead of October’s Budget, Reeves promised to ‘co-design’ policy with business on shared priorities to boost growth, pointing to the same approach being taken for designing the National Wealth Fund. 

She pledged to establish a new British Infrastructure Council to advise government on how to support more investment into UK infrastructure projects, and work closely with business to bring down barriers to growth and investment.

Reeves told senior business representatives the Treasury’s door was always open to valuable business insights on the opportunities and challenges they face. 

She added that the Business Secretary is committed to the new Industrial Strategy Council having a strong business voice and is also consulting with business on the details on Plan to Make Work Pay.

Business representatives also gave their views on what a successful partnership with government could look like and areas to prioritise to help their members grow and invest. 

Speaking after the meeting, Chancellor of the Exchequer Rachel Reeves said: “Under this new government’s leadership, I will lead the most pro-growth, pro-business Treasury in our history – with a laser focus on making working people better off. 

“That can only happen by working in partnership with businesses: big, medium and small. I want to continue the strong partnership we built with business in opposition now we are in government to deliver on our shared goal of fixing the foundations of our economy, so we can rebuild Britain and make every part of the country better off.”

Stephen Phipson CBE, CEO of Make UK, the manufacturers’ organisation said: “The Chancellor promised that she would engage properly with business and today was more evidence that the promise is being honoured.

“It was very welcome to have the Chancellor highlight further progress in delivering an Industrial Strategy with assurances that the governing Council would have a strong business voice.  

“In order to build confidence for businesses to increase investment, it is critical we keep this momentum going and see more detail on the delivery as well as vision. UK Manufacturers are fully behind the government’s growth agenda and look forward to working in partnership with government to achieve it.”

Shevaun Haviland, Director General of the British Chambers of Commerce said: “Today’s meeting was a valuable opportunity to reaffirm our commitment, on behalf of the businesses across our Chamber network, to work in partnership with Government. 

“We outlined our priorities for the Autumn Budget, recognising the public finance challenge. Boosting economic growth and investment is crucial, while maintaining a fiscal environment that protects the UK’s business competitiveness. 

“We welcome the Chancellor’s pledge to work with us on plans for an industrial strategy and to boost infrastructure investment. 

“We look forward to more discussions with the Chancellor and the Treasury team ahead of her statement on October 30th”

Tina McKenzie MBE, Federation of Small Businesses Policy Chair, said: “Today’s meeting was a crucial partnership moment, and I was pleased to raise issues and growth ideas from FSB members up and down the country, in every local community.

“You don’t get growth, jobs or wealth creation without UK small businesses; this was a core feature of our discussions in Opposition.  

“Now as the Chancellor and her team turn to the Budget, the diversity of UK businesses – 99% of which are the small, micro or self-employed that we represent – needs reflecting in Government policy-making just as much.”

CBI CEO Rain Newton-Smith said: “Businesses are the engine of growth and will be central to achieving the government’s mission to boost the UK economy. It’s why the CBI welcomes the Chancellor’s promise to co-design policy with the business community.

“Together, we can find shared solutions to shared problems – to increase productivity and business investment – in turn, improving living standards.

“The CBI is proud to work in close partnership with the Treasury, providing a cross-economy voice to help remove the roadblocks holding back investment and sustainable growth.”

Jonathan Geldart, Director General of the Institute of Directors, said: “For the government to successfully deliver its growth mission, it will be crucial that it works in partnership with business.

“Therefore, we look forward to building on the productive relationship that we have developed with the Chancellor, to ensure that the priorities and challenges of businesses and entrepreneurs are understood and acted upon.

“Specifically, as we approach her first Budget in the autumn, we are calling on the Chancellor to take time to get policy design right for the long-term, to deliver the stable tax and policy framework needed to support business confidence and investment.”

Ian Murray underlines Westminster government mission for growth

The latest Scottish GDP stats were published yesterday here for the month of June and here for Q2 of 2024.

Responding to the latest figures, Scottish Secretary Ian Murray said: “Scotland is critical in the UK Government’s mission for economic growth, as the Chancellor underlines today in Glasgow where she’ll meet with key members of the business community to turbocharge Scotland’s regeneration.

“Rebuilding is at the root of everything we do but the £22billion black hole in spending left by the previous government – the worst economic inheritance of any incoming government since the Second World War – means that tough decisions are ahead to achieve stability.

“We are making work pay, ensuring the national minimum wage is a true living wage. And with the end of exploitative zero-hours contracts, workers will have increased job security.

“Backed by £8.3bn of UK Government investment, Scottish-based GB Energy will bring jobs and opportunity for all parts of the UK and trade talks have resumed globally to forge stronger links with our international business partners.”

  • Scotland’s onshore GDP is estimated to have fallen by 0.3% in June. This follows growth of 0.2% in May.
  • In the three months to June (Quarter 2), GDP is estimated to have grown by 0.6% compared to the previous three month period (Quarter 1). This is a slight increase on the Quarter 1 growth rate of 0.5%.

GERS stats ‘show higher public spending for Scotland as part of UK’

The annual Government Expenditure and Revenue report underlines the collective economic strength of the UK, says Scotland Office Minister Kirsty McNeill

The collective economic strength of the UK means higher spending on public services in Scotland, according to new figures released today [14 August].

The Scottish Government’s Government Expenditure and Revenue (GERS) figures show that people in Scotland benefit from £2,417 more per head of additional spending compared to the UK average, as a result of the redistribution of wealth throughout the UK.

In 2023-24, £88.5 billion in tax receipts was raised in Scotland through devolved and reserved taxation, with £111 billion in public spending for Scotland. That works out to 8.1 per cent of UK revenue and 9.1 per cent of spending.

The figures also reveal that the ‘notional deficit’ in Scotland grew to around £22 billion, or 10.4 per cent of GDP, more than double the UK deficit of 4.5 per cent of GDP.

The UK Government is committed to retaining the Barnett Formula and funding arrangements agreed with the Scottish Government in the Fiscal Framework, which enables this higher spending for Scotland, and working in partnership with the Scottish Government to drive economic growth in Scotland.

UK Government Minister for Scotland Kirsty McNeill said: “These figures underline the collective economic strength of the United Kingdom.

“By pooling and sharing resources across the UK, Scots benefit by £2,417 more per head in public spending than the UK average. That means more money for schools and hospitals, if the Scottish Parliament chooses to invest in those areas.

“Ensuring economic stability and then delivering economic growth are two of the driving missions of the UK Government. We have reset relationships with partners across the UK, and want to work closely with the Scottish Government to produce better results for people in Scotland.”

The Scottish Conservatives added: “Today’s GERS figures underline the huge benefits Scotland gains from being part of the United Kingdom.

“Every single person is almost £2,400 better off because of higher spending on Scotland’s public services.”

Better Together? The GERS figures can be found here.

TUC: It’s Gender Pension Gap Day – and we need to talk about Carers Credit

Today is Gender Pension Gap Day – the point of the year from which, if women received their pension at the same rate as men, they wouldn’t get another penny until January.

The fact that we reach this point in the middle of the summer holidays is a stark illustration of the levels of inequality in our pension system.

At just under 37.9 per cent, the gender pension gap is much wider than the gender pay gap and, according to annual research by Prospect, it has barely budged in recent years (it stood at 40.7 per cent in 2015-16 when the trade union started measuring it).

The result is that, taking into account all forms of pension, retired women today have incomes around £7,000 a year lower than retired men.

What causes the gender pensions gap?

There are three main drivers of the gender pensions gap:

  • Different lifetime working patterns that mean women are more likely to take time out of the labour market or work part-time, most often because of unpaid caring responsibilities
  • The gender pay gap, exacerbated by a workplace pension system that excludes many low earners altogether
  • Differing levels of state pension entitlement

The impact of unpaid caring

Previous TUC analysis has highlighted the role of the pay gap – and a workplace pension system that excludes many low earners – in leaving women poorer in retirement.

But the most significant factor in the wildly unequal pension outcomes for men and women is the first bullet point – women are much more likely than men to spend time out of work or working part-time because of caring commitments than men.

This matters because our pension system is designed so that the typical worker will get around half the retirement income they need from the State Pension and half from a workplace pension.

National Insurance credits generally recognise the value of unpaid work such as caring so that people continue to build up state pension entitlement, but those out of paid work stop building up their workplace pension.

These contribution gaps are the biggest factor in women with a defined contribution pension approaching retirement having a pension pot less than half the size of men on average.

How wide is the ‘economic activity gap’?

New TUC analysis shows that women are vastly more likely than men to be out of paid work – and therefore unlikely to be building up a workplace pension – because of caring responsibilities.

This disparity can be seen in every age group, and is particularly wide for groups who face additional barriers in the labour market, such as disabled women and BME women.

Overall, women are 4.5 times more likely than men to be economically inactive – the Office for National Statistics’ term for people neither in or looking paid work – because of caring responsibilities.

The chart below shows that rates of economic activity due to caring responsibilities peak between the ages of 25 and 44, with more than one in 11 women aged 35-39 in this category.

The gap is highest in the late 20s, with women aged 25-29 more than 14 times more likely than male counterparts to be out of paid work because of caring commitments.

Source: TUC analysis of ONS Labour Force Survey, Q1 2024

This is perhaps unsurprising, with working mums much more likely to take time off work to look after kids.

It has a particularly large impact on pension saving, however. These are the years when workers typically have higher incomes than when they are just starting out, meaning their pension contributions are greater, but they are also far from retirement, so those contributions will remain invested for longer and have more time to grow.

The charts below show that BME women are particularly likely to be affected. While white women are four times more likely than men to be out of work looking after a loved one, the figure rises to 6.4 times more likely for BME women.

Previous TUC analysis has highlighted the impact this has on older BME women, with almost one in three who leave the labour market before they reach State Pension Age doing so because of caring responsibilities.

Source: TUC analysis of ONS Labour Force Survey, Q1 2024

And the chart below shows that people who are themselves disabled, are also much more likely to be out of the labour market because of caring responsibilities to others.

Disabled women are almost nine times more likely than non-disabled men to be in this position.

Source: TUC analysis of ONS Labour Force Survey, Q1 2024

Tackling the gender pension gap

The TUC has long called on governments to get serious about measuring the gender pension gap, and set out a plan to reduce it.

The last government did begin reporting on the gender pension gap (it’s measure looks only on the differences in workplace pension built up by men and women and put the gap at 35 per cent).

But this is only the first step, and the new government must build on this by setting out a comprehensive plan to reduce the gap

The recently announced Pensions Review is a great opportunity to do this, and we believe this should include an explicit strand on tackling pensions inequality.

We have previously made recommendations to bring more low paid and part-time workers into workplace pensions by expanding auto-enrolment, and to address the crisis in our social and childcare systems.

Time to give carers credit

But the figures above make clear that it will be difficult to improve women’s retirement incomes without improving the way our pension system recognises the value of unpaid care work.

This would require replacing the workplace pension contributions lost by those out of paid work, and there have been a number of proposals to introduce a Carers Credit that would do this.

We believe the most straightforward way of doing this is for those out of the labour market with a young child and registered carers to build up additional State Pension, on top of the flat-rate New State Pension.

This would be essentially reintroducing a feature that was removed in 2016. Before this point, people looking after children under 12 and registered for child benefit built up State Second Pension credit in addition to a credit towards the basic state pension.

When it was removed this credit was worth an extra £1.80 a week in pension in 2015-16 terms. So a worker who took five years out of paid work to raise kids, for example, would have built up almost £500 a year in additional State Pension over these years to plug the gap in their workplace pension contributions.

There is no single policy that would fix the gender pension gap, but introducing (or reintroducing) a Carers Credit would be a very significant step in the right direction.

Monthly GDP Estimates for May

The latest Scottish GDP stats are published this morning here for the month of May and here for Q1 of 2024.

Scotland’s onshore GDP grew by 0.3% in May 2024, according to statistics announced by the Chief Statistician. This follows growth of 0.2% in April 2024.

In the three months to May, GDP is estimated to have grown by 0.9% compared to the previous three month period. This indicates an increase relative to the growth of 0.5% in 2024 Quarter 1 (January to March).

Output in the services sector, which accounts for around three quarters of the economy, grew by 0.6% in May. Output in the production sector is estimated to have contracted by ‑2.2% in May. The largest contribution to overall GDP came from contraction in the output of Electricity & Gas Supply.

Scottish Secretary Ian Murray says UK Government’s key mission is growing the economy, making work pay and creating jobs and opportunity for all parts of the UK.

Mr Murray said: “Economic growth is one of the key missions of the UK Government. We inherited a dire fiscal situation, with a £22billion black hole in spending for this year alone that the previous government left us. 

It’s the worst economic inheritance of any incoming government since the Second World War and tough decisions will be required. That’s why the Chancellor is taking immediate action to achieve the economic stability vital for growth.

“The UK Government will rebuild and regrow. We are making work pay, ensuring the national minimum wage is a true living wage. And with the end of exploitative zero-hours contracts, workers will have increased job security.

“Backed by £8.3bn of UK Government investment, Scottish-based GB Energy will bring jobs and opportunity for all parts of the UK and trade talks have resumed globally to forge stronger links with our international business partners.”