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Scottish recovery confirmed with highest wages outside south-east

Scotland remains the highest-paid region of the UK outside London and the South East, new figures from the Office for National Statistics (ONS) have revealed

Scotland remains the highest-paid region of the UK outside London and the South East, new figures from the Office for National Statistics (ONS) have revealed

The ONS's 2012-13 Annual Survey of Hours and Earnings (ASHE), released this month but covering the period until April 2013, shows that Scotland's gross median weekly wage is £508.30 for full-time employees.

Analysts have claimed that the figures presage a return to real private-sector wage growth in 2014 after four years of cuts and freezes.

In what will be seen as ­confirmation of the overall picture of a recovering Scottish economy highlighted by the Scottish Government's chief economist last week, the ASHE figures show private-sector wages rebounding by 3.0% in Scotland, significantly higher than the UK's 1.9% rate.

As expected given Government-imposed pay policy both north and south of the Border - as well as the more damaging impact of the recession on company pay packets - the rebound in private-sector pay outstrips the 2012-13 growth in public-sector pay, which manages only 1.9% in Scotland and 1.6% in the rest of the UK.

Labour market analyst Paul Teasdale told the Sunday Herald: "The figure for Scotland is consistent with the recent figures from ONS showing that Scottish Gross Value Added (GVA) per head is high relative to the rest of UK, and confirms that the labour market in Scotland continues to perform relatively strongly.

"The median wage in Scotland is relatively high because the mix of jobs in Scotland includes a high proportion of professional jobs, and because comparing job for job, wages are typically higher in Scotland."

Stephen Boyd, assistant secretary of the STUC, hailed the new figures as "better than anticipated", seeing them as evidence of improvement.

"The Scottish labour market has performed well relative to the UK as a whole," he said. "It is reasonable to assume that real wage growth will turn positive next year."

However, Boyd said that the figures should be seen in the context of lower per capita employment rates, higher unemployment, and "record levels" of underemployment.

He said: "Real wages have now fallen for four years in a row, a situation without parallel in modern times, with the median worker in Scotland now £1700 worse off than if wages had kept pace with inflation since 2009."

ASHE also confirms that regional disparities within Scotland are becoming more deeply embedded and that low earners have suffered much steeper falls in their pay than those in the upper part of the distribution.

The £508.30 median for weekly pay in Scotland is 98% of the £517.50 for the whole UK, but this figure is skewed by the exceptional levels of pay in London (£657).

The overall median pay rise of 2.1% on the 2012 figure in Scotland was in line with the increase of 2.2% for the UK in a period that also saw a small increase in employment.

THE ONS reports that the UK gender pay gap (comparing hourly rates for full-time employees) widened to 10%. But in Scotland the trend towards narrowing the gap continued. The median for women is now 7.4% below that of men.

In a separate release, highlighted last week by the Scottish Government, ONS data covering the August-October 2013 period also pointed to a fast-improving picture for the Scottish labour market.

The data showed Scotland outperforming the UK on unemployment, employment and inactivity and with 83,000 new jobs, the largest year-on-year increase in ­employment levels since April-June 2007, before the recession.

The data also showed unemployment falling by 0.5% for the autumn period, while the number of people claiming Jobseeker's Allowance is 23,300 lower than a year ago.

Commenting on the latter figures, Cabinet Secretary for Finance John Swinney said: "2013 has seen significant improvements for the job market in Scotland and recent employment figures show continued improvement over the last year in numbers of people in employment.

"While too many people remain out of work and more needs to be done, recovery in employment to levels not seen since 2008 shows that the policies of the Scottish Government to create jobs and boost the economy are making progress."

As 2014 gets under way, statistics on the health of the Scottish economy are likely to provide ammunition for both sides of the debate on Scottish independence.

The Yes campaign is likely to suggest that full, non-monetary economic powers will further consolidate Scotland's performance and prove the viability of an independent state. The No campaign, meanwhile, is likely to point to Scotland's burgeoning success under the status quo.

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