UK sales 'support 530,000 Scottish jobs'

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office worker with headsetImage source, PA
Image caption,
Most of Scotland's export demand supports employment in the services sector

More than half a million jobs in Scotland are supported by sales to the rest of the United Kingdom, according to analysis from economists.

The Fraser of Allander Institute study estimated that about 530,000 jobs were directly or indirectly related to sales from Scotland to the rest of the UK.

This was more than four times greater than the 125,000 jobs linked to the rest of the European Union.

The research was commissioned by the UK government.

The Scottish government said the findings ignored the fact that trade was a two-way process.

The UK government had asked the institute to estimate the number of jobs in Scotland linked to the demand for exports from the rest of the UK, the rest of the EU and other international exports.

Fraser of Allander said its economists used the most recent input-output data published by the Scottish government - for 2013 - alongside the Scottish government's export statistics to compile the report.

It concluded that in 2013:

  • 528,707 jobs were supported by exports to the rest of the UK
  • 125,206 to the rest of the EU
  • 177,553 to the rest of the world.

It said this meant that 24% of Scotland's total employment was supported by trade with the rest of the UK. The equivalent figure for trade with the rest of the EU was 5.7%, and for the rest of the world was 8.1%.

Overall, most of Scotland's export demand supports employment in the services sector (62.6%), with 30.1% supported by exports in the manufacturing sector and 7.3% in the agriculture sector.

Fraser of Allander said that, although its figures were only estimates, it believes they give a "relatively robust indication of the employment supported by Scottish exports".

And it stressed that its technical analysis, methodology and the writing of the results was "undertaken independently", despite the research being requested by the Scotland Office.

'Prevent new barriers'

The report follows Scottish government figures published earlier this year which showed Scotland's trade with the rest of the UK were worth almost £50bn in 2015 - four times as much as sales to the EU.

The data showed sales to other parts of the UK increased by £2.1bn (4.4%) over the year to an estimated £49.8bn, while exports to other countries in the EU increased by £520m to approximately £12.3bn.

Responding to the Fraser of Allander study, Scottish Secretary David Mundell said the figures demonstrated the value of the UK market to Scottish businesses.

He added: "As we leave the EU, it is vital we maintain the integrity of the UK market and prevent any new barriers to doing business across the UK.

"We have seen recent worrying figures showing the Scottish economy contracting, compared to the UK economy growing overall.

"So, at this time, it is more important than ever that Scotland's two governments work together for the benefit of people in Scotland. That is what people in Scotland expect, and to what I am committed."

'Economic stability'

The Scottish government said its analysis suggested that more than 500,000 jobs in the UK were supported by exports to Scotland from the rest of the UK.

Economy Secretary Keith Brown said: "Analysis also shows Scotland is the rest of the UK's second largest export market, behind only the US, with exports worth over £50bn.

"It is quite simply nonsense to suggest that the rest of the UK would cease trading with Scottish firms if we were inside the single market but outside the UK.

"As we have consistently made clear, Scotland does not face a choice between exporting to the EU or the UK - we can, and should, do both.

"This is why we will continue to pursue a way forward which retains our place in Europe's single market which is vital to protect economic stability, jobs and inward investment."