Scotland’s Inequality Gap Widening, Researchers Say  

June 19, 2015

The gap between rich and poor in Scotland widened considerably between 1997 and 2013, according to a research report carried out by economists from the University of Sterling.

Some figures from the research are yet to be revealed but the headline finding is that the richest people in Scotland saw their incomes increase by 25 per cent in the 16 years after 1997, while income levels among the country’s poorest fell by around 10 per cent.

Professor David Bell and research fellow David Eiser looked at the respective financial positions of the poorest 5 per cent of Scots and the richest 2 per cent during their designated period.

For the very poorest in Scotland, rules around eligibility for state benefits are blamed in part for reducing income levels, while the rich were found to be getting richer largely as a result of rising pay among financial service and business sector executives.

“Our most recent population-wide data runs until early 2013, but it seems almost certain that inequality will have increased since then,” David Eiser commented.

Another issue highlighted by the researchers was the increase in the number of Scots whose employment position became insecure in the years after the financial crisis of 2008.

According to Eiser, the growing prevalence of part-time work, temporary work and self-employment has contributed to seeing the income levels among Scotland’s poorest 5 per cent drop significantly in recent years.

More positive findings from the research show that the introduction of the minimum wage and working tax credits have helped to boost the incomes of Scots who are bracketed just above the nation’s poorest.

In fact, with the exception of those in the ‘super-rich’ category, people who are categorised just above ‘super-poor’ apparently saw the sharpest rise in earnings of any demographic between 1997 and 2013.

Reflecting on their own findings, the pair of Scottish academics behind the recent research called for the “badly designed and unfair” council tax system to be overhauled.

“There is a wide agenda for the Scottish Government to work with if it wants to tackle inequality,” said Eiser.

“But in many areas of tax, welfare and regulation policy, the Scottish Government and Scottish MPs will have to content themselves with an influencing role at UK level.”

John Baird

Insolvency Adviser

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