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Inequality in Scotland

Posted by Lisa MacReady Media Officer, Oxfam Scotland

20th May 2014

Ryan McQuigg, Policy and Public Affairs Manager at Oxfam Scotland, takes a closer look at inequality.

When it comes to inequality, there is no shortage of statistics to be shocked at: 

  • The five richest families in the UK are wealthier than the bottom 20% of the entire population - more than 12.6 million people - put together.
  • The richest 85 people across the globe share a combined wealth of £1 trillion, as much as the poorest 3.5 billion of the world's population.

Now we have a new figure to add to the list.

The Scottish Government has just published an analysis of wealth inequality in Scotland. It suggests the wealthiest 10% of households in modern day Scotland own 900 times more wealth than the least wealthy 10%.

But why should Oxfam or indeed you, I or society as a whole care about inequality?

We think extreme inequality is bad for everyone - not just because it is morally unacceptable but also because it is bad economics. In their recent report, the International Monetary Fund stated that 'countries with high levels of inequality suffer lower growth than nations that distribute incomes more evenly'. It warned that inequality can make growth more volatile and create the unstable conditions for a sudden slowdown in GDP growth.

Meanwhile, the Equality Trust has produced graphs which show that societies with more income inequality can have higher infant death rates, higher rates of mental illness, higher incidence of drug use and higher high school drop-out rates. They also imprison a larger proportion of their population and have higher rates of homicide than other societies. 

We think inequality is creating a vicious circle where wealth and power are increasingly concentrated in the hands of a few, leaving the rest behind. It is allowing the wealthy to 'capture' government policymaking, meaning the rules are constantly rewritten in favour of the rich - an example being lower taxes for high earners.

The good news is that such glaring inequality is far from inevitable; it is a result of political choices that can and should be reversed. But this requires both political leadership and will.

It was therefore heartening to see the Scottish Parliament focus on Scotland's wealth inequality in debate  led by the Scottish Greens in May. 

Patrick Harvie MSP stated that the purpose of the debate was to "agree a goal to reduce wealth inequality". We know that a single debate will have little impact but there were signs that Scotland's politicians are beginning to make a concerted effort to tackle inequality.

Labour's Jackie Baillie MSP talked about the need for progressive policies to share and redistribute wealth, as well as about the notion of a living wage. Encouragingly, this gained cross party support despite differences over how to implement it.

Meanwhile, Lib Dem Leader Willie Rennie MSP said he wanted to find solutions to inequality and that he wanted radical thoughts on how to bring this about.

Oxfam Scotland already has some thoughts - many of them outlined in our report 'Our Economy' - including the creation a Poverty Commissioner for Scotland to ensure people in poverty have greater voice, power and influence.

We would also want the Scottish Government to embed the principles of our Humankind Index into the way they measure success - including the National Performance Framework.

The Index, which was developed following a widespread public consultation, moves beyond a narrow focus on economic growth to focus on what really matters to Scots, including decent housing, improved health and a pleasant local environment.

But we also believe we should balance the books on the shoulders of those who can most afford it rather than targeting the most vulnerable through cuts to welfare.

That means ensuring people and companies pay their fair share of tax and exploring more progressive taxation, including on wealth.   

Whether around the world, across the UK or here in Scotland - we should all be shocked at the scale of inequality but that is no longer enough, we need political action. 

Blog post written by Lisa MacReady

Media Officer, Oxfam Scotland

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