Press release: Is trust a must for a brighter economic future?

“Trust plays a crucial role in a successful economy.”  says Charlie Woods, the author of the latest David Hume Institute Discussion Paper launched today ahead of an on-line event on Thursday 23 May at 1.30pm. Is this being overlooked by business and political leaders who are seeking solutions to weaker than desired economic performance?

DHI Director, Susan Murray, will be joined in this webinar conversation from New York by Dr David M. Bersoff, from the Edelman Trust Institute, Charlie Woods, the paper’s author, and leading mediator John Sturrock , who works to build trust in negotiations.

David will share the global context on trust from the 2023 Annual Trust Barometer to help explore the relevance of trust to the economy and the labour market.

At a time when the majority of Scots are concerned about household finances, think Scotland is heading in the wrong direction economically and are pessimistic about our economic future, are we paying sufficient attention to the potential of increasing trust to boost economic performance?

David Hume Institute Director Susan Murray says:

“Research shows a strong relationship between levels of trust in society and economic performance with more trusting societies generating more income per person than others. Thinking differently about what helps boost economic performance might reveal we have been looking for too long in the wrong places to find the Holy Grail of a more productive Scottish workforce.”

The webinar is free to watch here.

ENDS

Notes to Editors

• For media enquiries contact Shelagh Young, David Hume Institute, shelaghyoung@davidhumeinstitute.org

• The Discussion Paper: Is Trust an undervalued ingredient for a thriving economy? Is available here

• The 2023 Annual Trust Barometer can be found here

• The David Hume Institute is an independent think tank based in Scotland. The charity was established in 1985 to increase diversity of thought on the economy and related public policy. Find out more on our website

Blog: Budgeting to save a global asset

Ahead of the UK budget Shona McCarthy, Chief Executive of the Edinburgh Festival Fringe Society, reflects on the latest Understanding Scotland economy insights and asks our leaders to lift their heads up from the ongoing crises and take a longer view.

While both UK and Scottish Governments have much to do to address current suffering, the key to sustainable economic growth and wellbeing includes investing in our cultural capital. 

A report by the Lords Communications Committee recently stated that creative industries should sit at the heart of the UK’s economic growth plan and criticised senior politicians for failing to spot its potential.

Investment in culture, which makes up a tiny 0.8 per cent of the Scottish Government budget, has been steadily declining year on year, comparative to other UK nations. This is despite its obvious pre-pandemic economic contribution. The sector has been hit hard by the loss of European funding which has not been replaced at the same level by the new UK Government funds. A rumoured injection of £8.6m for Edinburgh Festivals in today’s budget will be a welcome boost.

In 2019 the creative industries employed over 90,000 people in Scotland with the previous year’s economic contribution measured at £4.6 billion in GVA and £4 billion in exports. But as the sector tries to recover from the debt and ravages of covid, sustaining this contribution and growing the culture and creative sector over the coming years, will require similarly sustained investment, something which does not look likely in the current climate.

Of course governments should be responsive to the electorate’s priorities. It’s no surprise that in the recent Understanding Scotland survey, people in Scotland placed the cost of living and anxieties about NHS performance high on the list when asked to name the issues that most concern them. But we also know from Creative Scotland research across Scotland that 84% believe that it is right that there should be public funding of arts and cultural activities in Scotland. 98% of the Scottish population engaged in cultural activity during lockdown. 93% believes that creative activity is essential for children and young people’s learning and well-being. Alongside addressing immediate concerns is it too much to ask that our political leaders keep their eye on the long game? 

Current challenges and the way governments respond will have long-term economic consequences. In the same Understanding Scotland survey over 60% of Scots said they were cutting down on leisure spending in response to rising costs. In terms of income this could be a knockout blow for those venues and creative practitioners already placed in jeopardy by the impact of the pandemic. As far as the Edinburgh Fringe is concerned I fear there is a sense that it will always be there. The Fringe began as a platform for inclusion and freedom of expression. And it is the very nature of its openness and inclusivity that has caused it to grow organically over 75 years to include more artists, more creatives, more voices from every walk of life and every nation. As we have seen with the plight of the Film Festival this year, we can’t afford to just take it all for granted.

It is astonishing to think the ticket-selling collective of Edinburgh’s Festivals in August are now equivalent in value to a FIFA world cup, and second only to the Olympic Games every single year. 

If cities were bidding now to host what Edinburgh delivers every August, there would be enormous competition.

If the arts were treated like a major sporting event, at least £100m of UK government investment would be on the table to cover the cost and supporting infrastructure. Even comparing, to the much smaller, Eurovision Song contest the UK Government pledged £10m to support the winning city.  

The Edinburgh Festivals are a UK asset, valued world wide which we need to treasure. The arts are a vital part of the UK economy and we need everyone to help us survive. 

ENDS

This article was published in The Scotsman on 15th March 2023

Sharing thumbnail image - Pianodrome (2018). Photo: Andrew Downie. Edinburgh Festival Fringe Society.

Blog: Shan Saba's view from the west

Shan Saba, Director of Scotland’s leading recruitment agency Brightwork Staffline, Founder, Scotland Against Modern Slavery and Board Member of the Refugee Survival Trust reflects on the latest Understanding Scotland Economy insights.

According to the latest Understanding Scotland Economy research people in the west of Scotland are more likely to believe that Scotland is moving in the wrong direction than those in the north and east.

We already know that growing up in Glasgow can be bad for your health so is that why optimism dwindles the further west you live? Or should we be asking if those poorer life chances sharpen people’s wits leading to a less positive but possibly more realistic picture of our future? As a "Weegie", perhaps I am better placed than those who are not from Glasgow to comment.

There is certainly little to celebrate in the fact that eight out of the ten most income-deprived areas in Scotland are all on the west coast (according to the Scottish Government SIMD 2020). Understanding Scotland shows that 46% of people living in Scotland’s most deprived neighbourhoods would not be able to meet an unexpected living expense of £100. This highlights how fragile personal economic situations have become and how people are responding. The research also records a rise in people looking to change jobs or increase their working hours in order to earn more money. 

Is this good news for our fragile labour market which has certainly been affected by difficulties in recruiting across several sectors in recent times?  It is hard to be sure. The dust has not yet settled from the storms caused by Brexit, the Covid pandemic, and the ongoing cost of living issues. The initial labour shortages caused by the departure of European workers translated into higher wages and improved working conditions in manufacturing, agriculture, and hospitality. It has even led to a relaxing of the UK government's stance on immigration. For example, social care workers have been added to the shortage occupation list. 

International students' numbers have had a considerable impact on UK immigration and the world of work. These students have eligibility to work in the UK, although with restricted hours, and they are now much more common in those sectors that were badly affected by the initial labour shortages. It is not uncommon to see African, Indian, and Pakistani nationals being bussed to work in manufacturing and distribution sites across Scotland, which makes me wonder what those Brexiteers who campaigned on an anti-immigration platform think of what has been achieved?

So what about those UK workers that Boris Johnson had proudly said would get up and take on the jobs that needed doing? In certain areas of Scotland, we have seen a slight increase in the availability of "home-grown" workers becoming available due to downsizing or redundancy, and sadly, people who desperately need to top up their income by taking on second or even third jobs to cover their increased household costs.

Overall the news is not great. Firstly because these people alone are not enough to fill the gaps and perhaps more importantly, because labour exploitation has been recorded at its highest level in Scotland since records began in 2002. Desperation can lead people to take on work that is undocumented, and the nature of that work is exploitative at its core.

A quick search on social media for cash-in-hand jobs will bring up plenty of options that can allow you to earn some quick cash with ease. Given the high numbers of people that this survey reveals to be in a seriously precarious economic position, there will undoubtedly be many who are at risk of becoming exploited.

If improved public health Scotland-wide is our goal, then maybe the West Coast pessimists are the modern day equivalent of canaries in coal mines. They might be warning us that there is nothing healthy about a toxic mix of in-work poverty and growing labour exploitation.

Press release: Scots’ pessimism about economic conditions remains

• Almost nine in ten (88%) Scots think that economic conditions are worse than they were a year ago. While two thirds (66%) of Scots say economic conditions will get worse in the next 12 months, this figure has dropped from 81% expressing the same sentiment in November 2022, starting what could be the beginning of an upswing in public opinion on the topic

• A majority (55%) of people believe Scotland is heading in the wrong direction. This is the first time a majority of people have expressed this opinion since Understanding Scotland began

• A quarter (25%) of people are not confident they would be able to pay for an emergency expense of £100 without having to take out a loan or borrowing money, pointing to an alarming level of financial precarity in Scottish households

This iteration of the Understanding Scotland Economy series, produced in partnership between the David Hume Institute and the Diffley Partnership, gathered economic attitudes and insights from more than 2,000 members of the Scottish adult population. 

Fieldwork was conducted the week prior to Nicola Sturgeon’s resignation, with results providing a snapshot of public opinion at the outset of ongoing SNP leadership campaign rather than following the announcement of the First Minister’s resignation. 

The new Understanding Scotland polling reveals a mixed picture of public opinion on the economy: while overwhelming pessimism coupled and evidence of harsh financial realities for households persists, people’s predictions for the next year appear less dire than in previous waves of data collection. 

Scotland’s Challenges...

The majority of people (52%) identify healthcare and the NHS as one of the three most important issues facing Scotland today. This is followed closely by the cost-of-living crisis (45%). There has been increased interest in education and schools as a key issue (cited by 15% of respondents compared to 9% in November 2022), correlating with coverage of strike action in the media recently. Interest in other topics covered in the media, such as gender recognition reforms is limited: only 6% of respondents view this as one of the top three issues facing Scotland. 

Scots continue to struggle to make ends meet. Almost six in ten (58%) of people report dissatisfaction with their income covering the cost of living, and 46% are dissatisfied with their ability to meet household bills. Most people continue to report taking action to reduce spending both in and out of home, 60% report not turning the heating on when they otherwise would have done to save money and 61% cutting down on leisure activities in response to rising prices and inflation. One in five (20%) have cut down on meal/portion sizes to save money.

Additionally, labour market activity continues to be shaped in reaction to rising prices: one in five (20%) of people have changed or looked at changing jobs to earn more money, 12% have taken on more hours or paid work, and 7% have tried, unsuccessfully, to take on more hours/paid work. 

Felt unequally...

Financial fragility is not felt equally by the population. While a quarter of Scots are not confident that they could pay an emergency expense of £100 without having to borrow or take out a loan, this rises to over a third (36%) of households with children and 46% of households in the most deprived areas. For an emergency expense of £500 uncertainty in the ability to pay out of pocket rises to 45% of all households, 60% of households with children, and 66% of households in the most deprived areas. 

In response to the cost of living crisis, people are being forced to engage in risky financial behaviours which could lead to increased financial fragility in future: over four in ten (42%) have taken money out of savings to cover higher costs, 41% put less money than usual into savings (with an additional 5% having stopped paying into a pension), all while a similar proportion (43%) reduced their donations to charity. With a quarter (25%) of people using credit cards when they otherwise would not have done and almost a fifth (18%) using ‘buy now pay later’ payment plans, the debt accrued during the cost-of-living crisis could extend its impact on the most financially vulnerable in Scotland. Nonetheless, just over half (52%) of people have hope that their own financial situation will, at the very least, not worsen in the next year.

This wave of Understanding Scotland paints a picture as Scotland gets set to welcome a new First Minister: the cost-of-living crisis continues to impact everyday behaviours, and healthcare and rising prices remain top of the public’s priorities. Nonetheless, amidst widespread disillusionment, a slight glimmer of reduced pessimism for the future in terms of the economy can be found. 

Mark Diffley, Founder and Director of Diffley Partnership, said: “It is clear that the ongoing cost of living crisis is still being felt acutely, and unequally, across Scotland. As we have seen in previous surveys, the impacts of the crisis go beyond immediate financial concerns and continue to have impacts on employment, health and levels of anxiety. A new question on being able to deal with unexpected bills reveals significant unevenness in financial resilience, illustrating that while 4 in 10 of the population would not be confident of meeting an unexpected bill of £500, this rises to two-thirds (64%) of those who live in Scotland’s most deprived communities.”

Susan Murray, Director of the David Hume Institute said: 

“The survey shows a significant number of Scots continue to be unable to cope with the everyday cost of living and are losing sleep over their finances. Even more are unable to cope with an unexpected bill or emergency costs. These results should not be taken lightly. If people are too tired or stressed to concentrate at work, the economy as well as individuals suffer. Living in acute stress affects people’s health and public spending, with the NHS likely to bear the brunt.” 

Understanding Scotland is a quarterly survey tool measuring the most important facets of our lives and decision-making in Scotland: our society, economy, and environment developed by Diffley Partnership and Charlotte Street Partners. Understanding Scotland: Economy is produced in partnership with the David Hume Institute.

Image credit: Sharing thumbnail image - photo credit Emil Kalibradov free from Unsplash 19.12.2024.

Press release: Scots continue to cut spending

22nd November 2022

Image credit: Photo by Andrew Seaman free from Unsplash 22.11.2022

New research published today by the David Hume Institute and the Diffley Partnership on economic attitudes and behaviours has revealed widespread pessimism about Scotland’s economic outlook.

• 9 in 10 Scots (93%) believe general economic conditions are worse now than they were this

  time last year and 77% believe the situation will deteriorate further over the coming year. 

• 6 in 10 people (62%) are planning to spend less on restaurants and hotels and 58% are

  planning to cut down on leisure and culture spending over the next 12 months.

• Almost 1 in 2 (48%) plan to spend less on clothing and footwear.

• 7 in 10 (68%) already report not turning the heating on when they otherwise would have

  and nearly 1 in 5 (17%) of people have skipped meals to save money

• Intentions to cut spending have increased for every good and service listed in the survey

  since Understanding Scotland began, posing a big challenge for the Scottish economy and

  particularly the hospitality sector.

The new Understanding Scotland polling has found that 8 in 10 (79%) of people view the economy as it is currently organised as working primarily in the interests of the wealthy, while 65% of people feel their financial situation has worsened over the past year.

Wrong direction?

Just under half of people (49%) believe that things in Scotland are heading in the wrong direction, the highest percentage providing this answer since Understanding Scotland was launched last year. Dissatisfaction with income levels remains high, with almost 1 in 2 (46%) of people dissatisfied with their income level and a further 55% dissatisfied with their income’s ability to cover the cost of living.

People from the most deprived areas are also being increasingly pushed into financial precarity. One in five (20%) have had to borrow money from family or friends and 19% have used a buy-now-pay-later scheme when they otherwise wouldn’t have. This is despite 22% of this group having changed or looked at changing jobs to earn more and 15% trying, unsuccessfully, to take on more hours/paid work.  

During these tough times, 2 in 5 (40%) of people have reduced their donations to charity, while rising prices and inflation are pushing 1 in 5 (22%) of people to cut down on portion sizes to save money.

People from the most deprived areas plan to reduce spending on essentials further this next year: almost 2 in 5 (37%) plan to spend less on eating out and household goods and services (38%).

Parents feel the pinch

Parents, in particular, are feeling the pressure of current economic turmoil: almost 2 in 3 (64%) are dissatisfied with the ability of their income to cover the cost of living and nearly 3 in 10 (28%) reflect that their current financial situation is much worse than it was 12 months ago. This pressure has resulted in more than 1 in 3 (35%) of parents losing sleep due to stress or anxiety about personal finances and higher percentages of parents reporting borrowing money from family or friends and using credit cards or buy now pay later schemes than people without children.

Amidst predictions of further tough times to come following the Autumn Statement, these statistics raise questions of how much worse things can get and how current economic conditions will impact other issues of rising concern among survey respondents, such as poverty and inequality and healthcare and the NHS.

Reflecting on the findings, Mark Diffley, founder and director of Diffley Partnership who conducted the research, said:

“The public in Scotland continue to have widespread concerns about both the of the state of the economy and their ability to cope with the ongoing cost of living crisis.

Although concern and anxiety are widespread, we continue to see those in the most precarious situations feeling most vulnerable and ill prepared, particularly those who live in the most deprived parts of Scotland.

Despite a modest fall in pessimism about the economy over the next year, policymakers and business will be concerned with the finding that spending on non-essential items, like leisure, eating out and holidays, is likely to fall significantly over the coming year.”

Susan Murray, Director of the David Hume Institute, who helped to develop the survey, added:

“The cost-of-living is continuing to have prolonged effects in the ways in which people are choosing to spend their money. Hospitality and culture industries are being hit hardest as people cut back spending due to rising food and heating costs.

Although Scots are less pessimistic about the state of the economy next year, we are still witnessing significant financial stress among families with more than one third of parents losing sleep due to financial stress.”

ENDS

Notes to editors:

1. Designed by the Diffley Partnership, the survey received 2,191 responses from a representative sample of the adult population, aged 16+, across Scotland. Invitations were issued online using the ScotPulse panel, and fieldwork was conducted between the 3rd - 8th November. Results are weighted to the Scottish population (2020 estimates) by age and sex.

2. About Understanding Scotland: Understanding Scotland is a high-quality quarterly survey that delivers insights into Scottish behaviours and attitudes towards society, the economy and the environment. The survey fills a vital gap in research, providing the socioeconomic insights and indicators needed for effective decision-making, with regularity and timeliness.

Press release: New research finds risk overload

28th September 2022

Image credit: Photo by Michael Shannon free from Unsplash on 28.09.2022

Risk overload and a deep lack of trust are storing up future financial problems, new research finds:

We have become a nation of overburdened sceptics when it comes to managing our financial wellbeing, which is storing up massive issues for the future, according to a new study by the David Hume Institute. 

As few as one in ten (11%) “entirely trust” the UK Government when it comes to getting advice or guidance on financial matters – with levels of trust in the Scottish Government faring no better.  Only two in ten (21%) trusted “companies which provide financial products such as pensions” as a source of information.

Through a series of one-to-one online interviews, group discussions and a commissioned survey of over 1000 people living in Scotland, the research also found that 36% of people surveyed said they did not know who they could trust for advice or guidance. Of particular concern were those immediately affected by recent pension reforms, with 28% of over 65s and 32% of those aged 55 to 64 stating they did not know who to trust. 

Following a clear shift in responsibility for financial security from government and institutions to the individual, another 32% did not know what advice or guidance could help them.

Sources of advice which were praised in one-to-one interviews for their quality, trustworthiness and independence included Martin Lewis and Citizens Advice Bureau, while over half (52%) in the survey identified family and friends as their source of reliable information.

However, the study, The Great Risk Transfer, also found that stress, fear, stigma and embarrassment were holding back many people from seeking guidance and undermining their ability to absorb relevant information about the matters that affect their wellbeing, be that pensions, insurance, future health provision, housing or employment.

Consequently, the report concludes that financial risks are intensifying, creating an unfair and increasing burden on the individual. Government policy built on the premise that more choice is always good now needs to be reviewed: many people do not have more choice, just much more risk and less of a safety net should things go wrong in their lives.

Commenting on the study’s findings, Susan Murray, Director of the David Hume Institute, said:

“Trust is clearly a barrier to seeking advice but there are also other cultural and emotional factors at play, including stress and embarrassment and lack of knowledge that stop people from dealing with the financial risks that impact their lives. 

“The research highlights how governments and employers have shifted the burden of financial risk increasingly to the individual who is expected to understand and manage the many choices they face when it comes to pensions, health, housing and employment. Yet in reality, circumstances can not only limit choice but can also mean that many do not know the myriad of decisions they have to make. Indeed, a good choice today could easily be a bad choice tomorrow and without government safety nets, a huge problem awaits us all in the not-so-distant future unless we begin now to talk more openly about money and re-evaluate where the burden of risk is falling.”

“Many of the participants in the research described the barriers but most expressed a strong desire for improved access to relevant information and guidance. Trust in non-profit sector providers, especially Citizens Advice Bureau, was significantly higher than the most trusted financial services providers. So, while the answer is not simply more information, long-term stable funding for the most trusted providers must clearly be a strategic priority if the goal is to better equip people to manage financial risk.”

The research was commissioned by the Institute and Faculty of Actuaries (IFoA). Nicholas Chadha, who is part of the Scottish Board of the IFoA, said:

“This is a powerful independent report from the David Hume Institute based on rich research and compelling individual testimony. While primarily based on evidence from Scotland, the challenging recommendations clearly have wider application and resonance.  As part of our public interest commitment, we look forward to a vigorous debate on the findings at a time when the challenge to individuals and communities to understand and calibrate risk is so vital to their financial wellbeing.”

ENDS

Watch the recording of the research launch event:

Notes to Editors:

• The Great Risk Transfer: have we got the balance right? was part-funded by the Institute and Faculty of Actuaries Scottish Board Endowment Fund.

Press release: nine in ten Scots anticipate a recession and worsening inflation

Press release from the David Hume Institute and the Diffley Partnership

30th August 2022

Image credit: photo by David Clarke free from Unsplash 30.08.2022

Overwhelming majority say UK and Scottish governments have done too little to help with soaring prices, as nine in ten Scots anticipate a recession and worsening inflation.

New research produced in partnership between the David Hume Institute and the Diffley Partnership on economic attitudes and behaviours has revealed widespread anxiety and pessimism about Scotland’s economic outlook.

• 8 out of 10 people are cutting down on non-essential items and leisure, and over a quarter of people are skipping or cutting down on meals to save money

• 3 in 10 people in Scotland are now losing sleep over their finances

• The overwhelming majority think support from the UK (89%) and Scottish (73%) governments thus far has been insufficient

The Understanding Scotland survey found that 87% of people in Scotland expect the soaring cost of living to cause a recession, and more than nine in ten expect things to get worse before they get better.

Despite households’ best efforts to cut their outgoings, the support on offer from governments is widely seen as inadequate. 64% of people report feeling worse off now than over the past year, and 57% say their income does not satisfactorily cover their cost of living, rising to 73% and 71% respectively in the most deprived neighbourhoods.

Eighty per cent of people have cut down on leisure and/or non-essentials, and over a quarter of people are skipping or cutting down on meals to save money. Despite these efforts to economise, including by foregoing basic necessities, 89% and 73%, respectively, say that the UK and Scottish governments have done too little to help.

There is particular hostility towards energy companies: 95% of people think they have done too little to help people cope with rising prices, and a fifth of people think that the single biggest cause of soaring inflation is companies maximising their profits. This is only just behind the war in Ukraine at 21%, and ahead of pandemic-related supply chain issues at 12%.

Rising prices, in the absence of further support, have seen large numbers of people pushed into greater vulnerability and riskier behaviours. Two in five have depleted their savings, and over a third (35%) have taken on debt and/or borrowed money. The latter figure rises to 44% in the most deprived neighbourhoods, 20 percentage points higher than in the most affluent. 

The impacts of soaring prices are not being felt equally across society. Rather, they are hitting the already vulnerable hardest, with 73% of people in the most deprived fifth of neighbourhoods reporting that they feel worse off now than over the past year, compared to 60% in the most affluent areas.

While 80% of people believe that salaries and wages should rise in line with inflation, only a third say they would feel comfortable asking their employer for a pay rise and far fewer - less than 7% - have actually done so. Women, young people, and those in part-time work - already more likely to be in low-paid positions - are especially uncomfortable doing so. The ‘wage-price spiral’ counterargument - that higher wages only serve to drive up demand and inflation - does not appear to have much traction, with only 4% of people deeming this the primary cause of inflation. Only eight per cent of people believe that pay should not rise in line with inflation, a tenth of the proportion that said it should.

Reflecting on the findings, Mark Diffley, founder and director of Diffley Partnership who conducted the research, said:

“It is unusual to see the public mood being so unambiguously bleak. Financial pressures and anxiety at soaring prices are widespread across society, but particularly acute for those who are already most vulnerable. Across all demographic groups, and especially in more deprived communities, a clear majority are saying that the response to date from the UK and Scottish governments alike are simply not enough.”

Susan Murray, Director of the David Hume Institute, who collaborated on the survey, added:

“Since we started this survey, sadly most people have seen their financial situation deteriorate. With three in ten people now losing sleep due to financial stress, and over a quarter skipping or cutting meals, there are obvious consequences for the economy, labour market and people’s health. Eighty per cent of people have already cut down on non-essentials and leisure, and over a fifth have taken on or tried to take on more work, but it’s still not enough. Despite their best efforts, two-thirds of people say their money simply isn’t going far enough, and most expect things to get considerably worse before they get better. We need a concerted package of targeted support, and we need it now.”

ENDS

Notes to editors:

1. Designed by the Diffley Partnership, the survey received 2,227 responses from a representative sample of the adult population, aged 16+, across Scotland. Invitations were issued online using the ScotPulse panel, and fieldwork was conducted between the 4th - 8th August. Results are weighted to the Scottish population by age and sex.

2. About Understanding Scotland: Understanding Scotland is a quarterly survey tool measuring the most important facets of our lives and decision-making in Scotland: our society, economy, and environment developed by Diffley Partnership and Charlotte Street Partners. Understanding Scotland: economy is produced in partnership with the David Hume Institute.

Blog: The business of sleep

by Susan Murray, Director, David Hume Institute

25th May 2022

Image credit: Photo by Peopleimages from iStock 30.06.2022

One in four people are already losing sleep over their finances and the cost of living crisis hasn’t fully hit yet.

This is bad news for people’s health and the economy.  The long term health implications are well known for individuals living in a state of acute stress, with lack of sleep increasing the risk of health conditions such as obesity, heart disease and depression.  Relationships suffer and the likelihood of family breakdowns increase.

These negative effects cause short and longer-term harm to the economy, as well as increasing public health costs. Lack of sleep affects your ability to make decisions and reduces productivity.

The cost of living crisis is already affecting individual lives and our research shows worrying signs for business too.  

70% of people have already cut back spending on anything that isn’t essential.  With the majority of Scotland’s business being small and medium sized, this reduction in spending will have a big impact.

Business leaders also have Brexit, labour and skills shortages, higher energy costs and supply chain issues to manage. Some have enjoyed unprecedented profits in recent times but others haven’t yet recovered from the pandemic.  There are tough times ahead for many businesses in Scotland and for some, there isn’t any slack in the system. 

It is understandable that many are calling on the UK treasury, bolstered by increased tax receipts, to step in swiftly with a basket of interventions aimed at reducing the length and depth of the recession.  In the long term we need to create more resilience in the system, but with an increasing number of people experiencing hunger and struggling to heat their homes, looking to the long term now feels like a luxury.

Whilst the big actions rest with government, if you have money and are not on the breadline, are you thinking about the impact of your spending or charitable giving?  

Making conscious choices with money - a priority people told us last year as part of the Action Project, is now even more important. 

With so many people in work using foodbanks and skipping meals - work is clearly not a guaranteed way out of poverty.  If you employ people, what support are you offering the lowest paid in the organisation?  Big employers like John Lewis are openly speaking about the range of measures they have put in to help their lowest paid staff.

In small businesses it can be harder to offer holistic support to employees - and we have thousands in Scotland. For small businesses cash flow is often critical for keeping their heads above water.  Although only a drop in the ocean in terms of the issues facing small businesses, paying invoices on time can make a big difference and saves hours of time chasing up payments.

Some rules are making it harder for those that are struggling most, and here regulators have a role to play. For example higher standing charges for prepayment energy customers.  I can understand Martin Lewis’s anger at Ofgem - it seems as though our energy market is in desperate need of an overhaul.  

The Understanding Scotland - Economy research shows the cost of living crisis is already affecting the majority of people in the country - a minority have savings and a cushion for the hard times ahead.  Let’s hope the pending announcement from the Treasury does something rapidly to help or the prospect of a peaceful night’s sleep is a long way off for many people.

Blog: Can Scotland’s young people help bring home the harvest?

Blog by Susan Murray, Director, David Hume Institute

7th April 2020

The global economy is in sudden and severe recession.  Before Covid-19 everyone was talking about the labour market and migration.  Now, just a few weeks on, the debate is very different.  

Farmers are now desperately looking for people willing to harvest crops in Scotland. Recruitment websites have been set up to target redundant hospitality industry workers and farmers are trying Facebook posts to recruit workers.

Could young people who no longer have school work and exams come to the nation’s rescue to help bring home the harvest for everyone?

Until recently it was normal for people of all ages in Scotland to help with the harvest.  The legacy of this remains in the school holiday timings – an earlier summer holiday than England, a September weekend and in some parts of Scotland an extended October holiday. It was also normal for young people to have part-time jobs whilst still in education.  

Initially, any new recruits obviously won’t be as quick as the skilled migrants but thousands of young people will have been cooped up inside for weeks, surely there is a ready supply of labour?  Any new scheme would need to ensure it was in-line with government guidance on social distancing and correct health and safety but this would be a win-win.

There has been a steady decline in recent years of young people undertaking work while studying.  It used to be normal for young people to get Saturday and holiday jobs as soon as they were old enough.  Many had paper rounds from the age of 13 or worked in shops from 15 years old.  These jobs taught important life skills and encouraged independence, as well as ensuring a short distraction from the pressure of school work.

A recent report from UK Commission for Employment and Skills (UKCES) and London Economics “The Death of the Saturday Job” showed a stark decline in young people working while studying. Exam grades have become the sole focus for many young people, whilst employers bemoan the lack of transferable skills of new entrants. 

The stark decline of earning while learning in the UK has not been seen in other OECD countries like Germany, the Netherlands, Australia, Switzerland and Denmark. This lack of exposure to working environments means young people are not developing life and employability skills in the same way as their peers in other countries.  

Even for those young people already in work, an IFS report shows the under 25s and women will be most hit by the impact of Coronovirus shutdowns.

Encouraging available young people to help with the work that desperately needs doing could be the answer if we are to avoid losing a harvest and young workers to a post Coronvirus slump.  Having a daily purpose can help avoid depression and develop skills that lead to higher earnings in future.  

The evidence in both reports is compelling.  

Even without the immediate desperate need for farm workers in Scotland, youth employment – earning while learning - is important and should to be encouraged.  

Image credit: sharing thumbnail image - photo by Lance Grandahl free from Unsplash 19.12.2024.