1. The Recovery? What recovery? STUC Highlands and Islands Conference 2014

2. Content Current state of the Scottish economy/labour market Highlands and Islands labour market Has austerity worked? What’s to come?

3. CURRENT STATE OF THE SCOTTISH ECONOMY AND LABOUR MARKET

6. Manufacturing, 2007 – Q4 2013

7. Manufacturing, 2007-Q4 2013

8. Employment and Unemployment rates (%), Scotland 2007-Dec 2013

9. Change in employment rate (%), 2008 peak – Dec 2013

10. Change in employment rate (%), year to Dec 13

11. Underemployment (level) Scotland, 2007-Dec 2013

12. Change in FT/PT work, 2004-2014

13. Reasons for working PT, 2004-2014

14. Employees/self-employed jobs, 2007- 13

15. HIGHLANDS AND ISLANDS LABOUR MARKET

16. Employment Rate (%), 2007-Dec 2013

17. ILO unemployment rate (%) 2007 – Dec 2013

18. Unemployment rate, WM constituency area, 2007- Dec 2013

19. WAGES & LIVING STANDARDS

20. Real wages, 2009-2013 Total Full- time Part- time Median worker MaleFemaleMaleFemaleMaleFemale Annual loss (%)-7.7-8.2-7.1-5.8-6.8-8.8-7.6 Annual loss (£)-1993-1406-2002-1372-545-789-1760

24. Median wage (£), 2013

25. HAS AUSTERITY WORKED?

26. Record on the deficit 2010-112011-122012-132013-142014-152015-16 June ‘10 forecast 14911689603720 Actual increase 137.1121120108 (forecast) 96 (forecast) 79 (forecast)

27. Record on net debt 2010-112011-122012-132013-142014-152015-16 June ‘10 forecast 61.967.269.870.369.467.4 Actual increase 60.566.474.274.5 (forecast) 77.378.7

28. Record on GDP growth 201020112012201320142015 June ‘10 forecast 1.22.32.82.92.7 Actual growth 0.80.90.21.92.7 (forecast) 2.3 (forecast)

30. Record on business investment 201020112012201320142015 June ‘10 forecast 1.48.110.010.99.58.2 Actual increase 0.82.93.9-1.28.0 (forecast) 9.2 (forecast)

32. WHAT’S TO COME?

35. The IFS view… “It is…a Budget which leaves us with as little sense as we had before of quite how the very large public spending cuts still in the pipeline will actually be delivered”. The IFS also drew attention to, and questioned the consistency and effectiveness of an approach in which, “Permanent tax giveaways have been “paid for” by temporary revenue raisers and unspecified spending cuts”.

36. Back to the Future…OBR outlook March 2014 Growth will outperform its autumn 2013 forecasts in 2014 and 2015 but will then fall back below previous forecasts between 2016-2019; The consumer will continue to drive growth but higher consumption will rely on a falling savings ratio rather than strong income growth; House price inflation will continue to outpace income growth; Household gross debt to income will spring back to pre-2008 levels by 2018; Real hourly earnings will not exceed 2008 levels till at least 2016 (given this is a forecast for average hourly earnings it’s reasonable to assume that median wages will take even longer to achieve pre-recession levels)