By Russell Bruce
Most of us feel reasonably comfortable if a bit squeezed. We hear a lot about inequality, fuel poverty, cuts to the benefits of the disabled, the rise of foodbanks. But how much do we really think about whether our society could be fairer?
With the independence referendum we have an opportunity to re-examine what it is to be part of Britain and how British we may or may not feel and how that links with our Scottish identity.
Britain is the fourth most unequal country in the world. We come after Mexico, the US and Israel. How many of us think about that when we hear Britain is the fourth most unequal country in the world.
I know, I have quoted this statistic twice in the same paragraph. The problem with statistics that shock, is it is too easy to ignore them. Just figures. And what does belonging to the fourth most unequal country really mean anyway?
After all average incomes are rising so we must all be getting a little better off. But there is a problem with averages. They are affected by outliers in the section of society that is receiving very large income increases. The top 20%. The top 10%. The top 1%.
If we are so unequal then, the bottom 20% and even groups above them must be doing really badly. Surely that is not the case. This is Britain after all. We must be doing better than lots of other countries like France, The Netherlands, Germany, and Denmark.
The sad fact is Britain falls way below these countries. The lowest 20% have incomes of around 75% of the lowest 20% in these countries that we would normally compare ourselves with.
In the UK, the poorest fifth of the population have an average net income of just $9,530, much lower than the poorest fifth in other North West European countries such as Germany ($13,381), France ($12,653), Denmark ($12,183) or the Netherlands ($11,274).
In fact, the poorest people in the UK are closer to the poorest in former Eastern bloc countries, Slovenia and the Czech Republic.
We are closer to Greece than we are to Norway or Germany as our graph shows. If we set the benchmark with Norway at 100, then Germany is 90, and the UK comes out at 64.
Scotland is a wealthy country. We can change our priorities and work towards a more equal society. But to do that we need to have access to all the taxes and revenues we currently send to the Treasury in London.
The video at the end of this article sets out in stark detail the impact of income inequality. The approach of the present Westminister government is to tackle the cost of social welfare by making cuts in the level of support. The problem with this approach is it makes the situation worse and increases the level of inequality.
The core role of government is to provide security, wellbeing and a stable society in which all have the opportunity to prosper fairly.
An alternative strategy is to concentrate on growing the economy. More people in work equals more tax revenue. Higher tax revenues are then realised without having to actually raise tax rates and the deficit in government accounts is reduced. Those on lower income levels spend more, often all, of their income and that adds to economic activity and further growth. Social and economic policy therefore moves towards an equilibrium solution.
Many in work are increasingly reliant on tax credits. This can have the result of depressing wages, effectively supporting low pay. It can become a permanent subsidy to the employer and trap the employee, reducing the will to seek a better job because of the potential loss of the tax credit. Fair annual increases in the minimum wage and a gradual move to a living wage will not only counter the trend of increasing inequality, but add to economic activity and tax revenues.
If a job is worth doing, it is worth getting paid for it.
There are more efficient methods of encouraging employers to hire. This is not to say there is no place for tax credits, but rising dependence is a stark indication of a society out of balance.
As the video produced by Income Inequality Briefing shows, it is not just the lowest 20% that are doing less well in British society. It is most of us.
So if you are one of the 99% you need to vote YES for a fairer society