The New Economics Foundation (NEF) published in January 2022 a research report entitled: ‘CLOSING THE DIVIDE: HOW TO REALLY LEVEL UP THE UK’. In many respects from a Scotland perspective it’s a disappointing piece of work: notwithstanding its title, much of the content only refers to the English regions.
However, there is one chart in the NEF report (Figure 1) that does includes information on Scotland – and it’s interesting! It shows the extent to which the gap in disposable incomes – between highest and lowest halves of the UK’s income distribution – has changed since 2019:
On the average for the lower 50% of the income distribution, based on the NEF’s analysis the change in Scotland has been minimal: it is close to the degree of change reported for the East and South East of England. Only London has experienced a positive shift in the average for the bottom 50%. All other parts of the UK have seen a fall, often a substantial one, with the greatest drop being in NW England. Indeed the northernmost regions of England have fared worst on this metric.
On the other hand, the average change since 2019 for the top half of the income distribution in Scotland, although positive, is only just higher than in NI and similar to that in NE England.
The net effect is that based on this metric of change in average disposable household incomes, the gap between the average for the lowest earning 50% and the highest is narrower in Scotland than anywhere else in the UK, albeit just narrower than in NI.
But it is also ‘interesting’ to review what the NEF report says about this chart: ‘Those families in the top 50% of disposable incomes nationally have seen their living standards improve across the board, though fastest of all in London and the South East. Meanwhile, families in the poorest 50% of the income distribution have seen their incomes fall, in real terms, everywhere except for London and eastern England.’
Yes, ‘the poorest 50% … have seen their incomes fall, in real terms, everywhere except for London and eastern England’. But does the chart not show that the fall in Scotland is pretty much close to zero – in CONTRAST to all other parts of the UK outside the greater south east?
Based on this metric, and intuitively, a ‘one nation’ levelling up agenda that is set and implemented by a Tory government in Westminster – one which aims to bypass Holyrood, let’s remember – is unlikely to be optimal for the specific economic circumstances challenging Scotland.
Earlier reports here on attempts to narrow the income gap: