Scots firms need new baby boom

By Ian Fraser

The Sunday Times

December 31st, 2006

SCOTLAND faces economic stagnation by the middle of the century unless it takes radical steps to slow the decline in its working-age population, the Scottish Council Foundation (SCF) has warned.

In a report titled “A constructive response to Scotland’s changing population”, the think tank’s Linda Boyes, Andrew Harris and Jim McCormick recommend that Scotland introduces a Scandinavian approach to maternity leave and childcare to arrest its declining fertility rate.

The authors say a “significant increase in affordable child-care and support for working families to the level typically offered in the Nordic countries” would persuade more Scots couples to have children. They add that Nordic countries spend 4% of GDP on measures to support families, double the UK level, and that this has helped sustain higher fertility rates in those countries.

The report, which was funded by BT, also recommends that the number of immigrants into Scotland should be trebled from the 4000 per year outlined in the Scottish Executive’s Fresh Talent initiative to 13,000 net immigrants annually. “Migration on this scale would not only allow us to maintain the size of the workforce but also begin to address our consistently low fertility rates.”

Other proposals include persuading a greater proportion of economically inactive people of working age – including lone parents and the over 50s – to enter the workplace. SCF director Jim McCormick said the measures would produce “a new type of prosperity for Scotland that is more widely distributed across generations and between different groups”.

However, business organisations were sceptical about some of the proposed remedies. Andrew Watson, spokesman for the Federation of Small Businesses, said small firms would struggle with longer maternity allowances. “Moving to a Scandinavian model would exacerbate the problems that small businesses already face, for example when finding cover for employees who are on maternity leave.”

David Lonsdale, assistant director of CBI Scotland said: “We’re convinced that firms will continue to adopt family friendly and flexible working policies which will be to the benefit of both employer and employee. But overwhelming them with onerous employment legislation is neither in the interests of firms or their staff.”

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Posted by Ian Fraser on Dec 31 2006. Filed under Article Library. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry