The aviation, oil and tourism sectors depressed by the Pandemic, Falkirk continues to shine but Scots’ wages drop the most in the UK

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Job losses have begun to accelerate especially in those sectors most affected by the pandemic.

Rolls Royce has confirmed the locations of the job losses it is to make this year. Last month the Derby-based firm said 9,000 jobs were to be cut, mostly in its Civil Aerospace division. Around 700 of these roles will go at Rolls-Royce, Inchinnan.

BP has announced plans to cut 10,000 jobs following a global slump in demand for oil due to the coronavirus crisis. The firm has not said how many jobs will be lost in the UK but it is thought the figure could be close to 2,000, BP’s North Sea HQ is in Aberdeen.

In the tourist sector, c1,800 jobs are under threat at the Macdonald Hotel chain as it looks to cut costs because of the pandemic. The chain has 31 hotels across the UK, 11 of them in Scotland, and currently employs c2,200 people. Crieff Hydro group, which includes Crieff Hydro, Peebles Hydro and Ballachulish Hotel has given notice that 241 staff face redundancy at the start of August.

The Scottish government’s chief economist Gary Gillespie has warned that Scotland’s economy may not return to pre-pandemic levels until the start of 2023. Official figures show that, in the first half of May, almost a fifth of businesses were temporarily closed and more than 750,000 workers were being furloughed.

Ex-banker Benny Higgins, chair of the Scottish government’s economic recovery panel, has recommended that a new agency be set up to take stakes in firms in financial distress.

The Stats

This month the ONS published regional household disposal income figures for 2018. Total gross disposable household income (GDHI) in the UK in 2018 was £1.4bn. Of that, 86.3% was in England, 7.6% was in Scotland, 3.8% was in Wales and 2.3% was in Northern Ireland.

The average UK income per head after direct and indirect taxes were taken off was £21,109.  England was the only country above the UK average at £21,609 but growth in incomes was best in Scotland and Northern Ireland at 5.1% and 4.7%. England’s growth was the same as the UK at 4.6%; Wales grew by 4.4%.

At a regional level, London had the highest GDHI per head where, on average, each person had £29,362 available to spend or save; the North East had the lowest at £16,995 which compares with a UK average of £21,109. Scotland was £19,572.

At a local level, Kensington and Chelsea and Hammersmith and Fulham had the highest GDHI per head at £63,286 with Nottingham the lowest at £13,138. All the top 10 local areas were in London or the South East with the bottom 10 within the North West, Yorkshire and The Humber, East Midlands, West Midlands, and Northern Ireland regions.

The wealthiest part of Scotland was Edinburgh with incomes of £23,374. This ranked the city 34th out of 179 districts of the UK.

The poorest areas of the country were Glasgow at £17,145, beating East Ayrshire at £17.316. Glasgow was ranked 132nd in the UK, Nottingham and Leicester were bottom.

In terms of regional growth, the largest increase was in London at 5.2% with the smallest in the East Midlands at 3.6%. Scotland was 5.1%.

At the local level, Kensington & Chelsea and Hammersmith & Fulham was again best in the UK with growth of 7.6% whereas Luton was the worst and only grew by 0.9%.

In Scotland, income growth in Falkirk was the third highest in the UK at 6.6% with East Dunbartonshire a regional second at 6.3%. West Lothian was the worst regional performer with growth of 3.0%, a ranking of 159th.

Labour

More data from the ONS showed unemployment in the country was 30,000 higher at 127,000 between February and April; the big uplift of 1.1% took the rate to 4.6%. Despite narrowing the gap with the West Midlands (4.8%), at 5.2% the North East was still the highest; Northern Ireland had the lowest rate of 2.3%, with the UK rate at 3.9%.

The South East had the highest employment rate again at 79.5% which compared with 74.3% in Scotland where 2.7m are employed; the UK rate was 76.4%.

Public sector employment in Scotland increased by 1.2% in March to 562.000, which was 21.3% of the workforce. At 25.2% Northern Ireland had the highest level of public sector employment which compared to 13.9% in London which was the lowest.

In March, average earnings in Scotland fell by £37 to £611 per week. London had the highest average earnings of £847 and the lowest average earnings of £537 were recorded in Northern Ireland.

Earnings in the NE increased the most in the UK by £60 per week whereas the biggest drop in wages was £37 in Scotland.

In the UK overall, average earnings grew by 1.7% or by 0.4% after inflation. If bonuses are included real pay fell by 0.4%.

The public sector saw the highest estimated growth, at 3.2% for regular pay, while negative growth was seen in the construction sector, estimated at negative 1.8%. Both the wholesaling, retailing, hotels and restaurants sector and the manufacturing sector saw very weak growth at 0.1% for regular pay.

Housing

Estimates of private sector rents for the year to March 2020 were published by the ONS this month.

The median monthly rent was an all time high of £700 in England between 1 April 2019 and 31 March 2020. London had the highest median monthly rent at £1,425 with the North East the lowest at £495. Within local authorities the difference in monthly rental price between the most and least expensive was nearly £2,100.

Data for the 12 months to May 2020 showed private rental prices paid by tenants in the UK rose by 1.5%, unchanged from the previous month. Rental prices grew by 1.5% in England, 1.2% in Wales and 0.6% in Scotland.

Rental prices increased the most in the South West of England, up by 2.5%, with the lowest price growth in the North East of England at 0.8%, Scotland recorded 1.2%.

Given the closure of the housing market following lockdown the ONS has suspended its property price index until further notice.

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