Scotland Outstrips England Over Pay

17 January 2016, 06:00

Typical pay in Scotland is higher than it is in England for the first time on record, a think tank has revealed.

Workers in Scotland typically receive £11.92 an hour, compared with £11.84 south of the border, according to the Resolution Foundation.

Analysis by the independent think tank found pay in Scotland had grown faster than any other part of the UK over the last two years.

In 2004, typical hourly pay in Scotland was 7.2% lower than in England but strong growth in the middle of the last decade reduced the gap to 2.9% by 2009 - the year that real earning peaked.

While wages were squeezed during the recession, this was less severe in Scotland, helping the gap narrow further.

The findings were released ahead of a major new report from the Resolution Foundation on The State of Working Scotland, which will be published later this week.

The think tank argued steady growth, high employment and improved productivity in the early and mid 2000s were likely to have been the driver of Scotland's strong performance on pay prior to the recession.

When the recession hit, workers in Scotland suffered less as a result of the squeeze on wages but it had sharper falls in employment, the foundation added.

For Scotland to maintain its pay advantage over England, the think tank said a return to strong jobs growth is essential, adding action to boost employment should be key in this year's Holyrood election.

It also called for action to improve pay for the one in five Scottish workers who earn less than the low pay threshold.

Conor D'Arcy, policy analyst at the Resolution Foundation, said: ''As recently as a decade ago, typical workers in England earned significantly more than their counterparts in Scotland.

''But years of stronger pay growth in Scotland means that the English pay premium has now become the Scottish pay premium for the first time ever.

''Scotland's impressive pay performance has been underpinned by high employment and steady economic growth, particularly in the run-up to the crash. But its recent employment and growth record has been less impressive.

''While Scotland's strong pay growth has been good news for many workers, it is still the case that one in five employees are low-paid.

''With the higher minimum wage for the over-25s expected to reduce rather than eliminate low pay, tackling this long-standing problem should be a top priority for parties in the run-up to May's election.''