Extreme Inequality

Like many members in the Parliament, I have always thought of myself as a progressive politician. I was brought up in the expectation that progress—economic, social and political—was not just desirable but almost inevitable and that, with our advances in science and technology, our society would advance in mutual prosperity, understanding and tolerance.

I have not lost my optimism that we can make it so, but the evidence from the past 30 or 40 years has provided a salutary reminder that we have to choose to make it so. Yes, we are a far wealthier nation and, if we measure wealth in material goods—televisions, mobile phones, cars—it is clear that we have prospered. However, on so many other measurements, the gap between rich and poor, between the haves and have-nots, has increased.

Audit Scotland has pointed out that, while our overall life expectancy has increased over the past decade, the better-off have benefited most. The difference in average life expectancy between women living in the least deprived areas in comparison with women living in the most deprived areas has risen from approximately 6.5 years to approximately 7.5 years. Similarly, the overall death rate from cancer fell by 12 per cent between 2001 and 2011, but the gap between the most and least deprived areas has again widened.

It is not just on health that we have failed to make progress on tackling inequality. We are proud to have one of the most equitable education systems in the developed world, yet the findings of the 2007 Organisation for Economic Co-operation and Development report on the issue still hold true—in Scotland, who you are is far more important than what school you attend, so far as achievement is concerned.

The new campaign from Oxfam and the report “Even it up: Time to end extreme inequality” are a powerful and welcome reminder of the task that is before us. In fact, the report offers some consolation, in that we are clearly not alone in Scotland, but it is not the consolation that we might want to hear. As the report points out, seven out of 10 people on the planet now live in countries where economic inequality is worse than it was 30 years ago.

The report is full of evidence and research that fascinates and horrifies but which I hope potentially inspires us to action, too. To give just one example, members might be familiar with the line, “We’re all in this together.” It turns out that, as a statement of fact, those words are wider of the mark than even I suspected. Oxfam highlights that, since the start of the financial crisis, the number of billionaires in the world has more than doubled. Here we are, knee-deep in austerity and trying to do what we can to mitigate the impact of the welfare cuts and yet, with every day, the obscenely rich are getting obscenely richer. As a sobering contrast, how many members read the report from the Trussell Trust earlier this week that revealed that the number of Scots turning to food banks in the last year has also more than doubled?

I cannot do justice to the many juxtapositions between rich and poor that are illuminated in the report. However, the key point is not simply that such inequality is offensive and morally repugnant but that it is damaging to us all. It is damaging to poverty reduction, it stifles social mobility, it undermines economic growth, it holds us back in the fight against climate change and it compounds one of the most long-standing and deep-seated inequalities: that between men and women. Many of us have taken encouragement from the new First Minister’s implementation of a 50:50 approach to gender balance at Cabinet level but, as I reminded members last week, just as we slap each other on the back for our commitment to progressivism, the pay gap between men and women in this country is widening again. If we are not constantly aware of the hill that we are trying to climb, we will slip backwards.

Extreme inequality reveals itself in many destructive ways, from poor health and illiteracy to levels of violence, but I want to return, as the Oxfam report does, to the central issue of economic inequality. The global scale of the problem suggests that we need to take action at global level. Earlier this year, Oxfam and others reported that the combined wealth of the 85 richest people in the world is the same as the wealth of the poorest half of the world’s population, which is approximately 3.5 billion people. One answer that has been suggested by economists such as Thomas Picketty is a wealth tax. Oxfam has calculated that a tax of 1.5 per cent, for example, on the wealth of the world’s billionaires would raise £74 billion, which would be enough to get every child into school and deliver health services in the poorest 49 countries.

While supporting those global initiatives, we should look closer to home. In Scotland, three families have more wealth than the poorest 20 per cent of Scots put together. Another statistic that is also quoted by ministers is that fewer than 500 people own more than half the land in Scotland. A land reform bill will come before the Parliament in this session. Do we not need to ask ourselves how we can use that piece of legislation to tackle that particular inequality?

Poverty wages are clearly central to the issue. I doubt that I have to convince anyone in the debate about the importance of implementing the living wage, but what are we doing about wage differentials? We cannot address extreme inequality if we simply help those at the bottom—we need to look at the gap between what those at the top earn and what those same people pay their employees. When I proposed using the Procurement Reform (Scotland) Bill to minimise wage ratios between the highest and lowest paid, the then Deputy First Minister spoke warmly about such an approach and then promptly asked colleagues to vote against it. I will not pretend that there are easy answers to any of these complex issues, but the point is that we could take a different approach.

Here in Scotland for example, the finance secretary has imposed a wage freeze or a 1 per cent cap on public sector workers for each of the past four years, yet our university principals have enjoyed a median increase of more than 4 per cent on salaries that were already approaching or exceeding a quarter of a million pounds. Need I point out that our universities are the same publicly funded institutions that are currently employing staff on zero-hours contracts?

The Equality Trust has estimated that none of the large companies that bid for public service contracts pays its chief executives less than 59 times United Kingdom median earnings. We are using public money not to reduce inequality but to increase it. Is it really the case that we want one rule for the rich and another for the rest of us?

This is not about envy. It is not about suppressing ambition or capping aspiration. It is not even about blame. It is about balance and reasonableness. It is about ending exploitation. It is about recognising that our communal and individual wellbeing and prosperity depend on our taking action to reduce inequality.

We like to portray ourselves as a progressive country, but if we are truly to become the progressive beacon that we want to be, we need more than warm words and good intentions.

I could not wish for a more timely occasion to hold this members’ business debate than the day when the Government outlines its programme for government, because Oxfam has highlighted a programme to which we can all sign up. Here is a vision for Scotland that has the potential to unite us across party lines and that can unite civic Scotland, businesses, trade unions, churches and voluntary organisations. Now is the time to end extreme inequality in Scotland.

Perhaps Nigel Don can explain how Renfrewshire Council manages to ensure that people are paid the living wage.

I congratulate Ken Macintosh on securing time for the debate and on his speech this evening. I very much welcome Oxfam’s report “Even it up: Time to end extreme inequality”.

It is clear to everyone in the chamber that inequality is, as Barack Obama has called it,

“the defining challenge of our time”.

Global inequality has been on the rise for decades. Even in developed countries with high levels of wealth redistribution such as the UK, the level of income inequality is persistently high.

It is also clear that politicians at every level of government have a part to play in the elimination of poverty and inequality, and in that context I turn to the Scottish Government, which I believe already has the powers to take substantial action. In childcare, housing, education and healthcare, all the powers are available now. As has been much commented on today, we are suddenly able to bring about the transformational childcare change that we were told could be delivered only in an independent Scotland. I welcome that, but I think that we can deliver such change across a range of other policy areas and I believe that we should work together to do so.

In her inaugural speech as leader, First Minister Nicola Sturgeon declared that it would be her “personal mission” to tackle poverty and inequality. I believe that all members share that view, so let us all work together to deliver that. The Scottish Government will be judged on its actions, not its words, so let me review some of its actions since 2007.

There are 6,000 fewer beds in Scotland’s hospitals, 4,000 fewer teachers and 140,000 fewer college places. All those things contribute to poverty and inequality. Since 2008, 70,000 public sector jobs have been lost, and since 2007 the Scottish Government has stripped £1 billion away from local anti-poverty work. We know that the council tax freeze is underfunded, leaving local government to bear the brunt of public spending cuts and forcing it to cut services.

Meanwhile, the cost of living, particularly the cost of childcare, is rapidly on the rise. Since 2008, the cost of a basket of essential goods has risen by 28 per cent; and, since 2010 alone, childcare costs have risen by 27 per cent. At the same time, wages are not keeping pace with inflation, and the minimum wage is more than £1 behind the living wage of £7.85. Nearly 300,000 people in poverty are working and half of poor children have a parent in work. In-work poverty is a persistent and growing problem that we need to address.

Committing to a living wage; expanding educational opportunities; increasing childcare provision and making it affordable and flexible; and tackling in-work poverty and inequality—those are all matters that are well within the Scottish Government’s powers to tackle.

I said in the previous debate that we had five opportunities in this year alone to support the living wage and the Government said no five times. We have the power to do something about the living wage now. Therefore, I welcome very much the proposals set out today by the First Minister. However, we had the opportunity to legislate and to help 400,000 low-paid workers, 64 per cent of who are women. I remember the debate on the Procurement Reform (Scotland) Bill. We talked about equal pay audits and zero-hours contracts. The proposals on those issues were all dismissed by the Government; all were voted down. Talk is cheap; it is action that counts.

The motion mentions progressive taxation. If we are to believe the press reports on the Smith commission it looks as though income tax will be devolved. Will the Scottish National Party support progressive taxation? Will it support a 50p top rate of income tax for the richest people to help the poorest? I ask the minister to respond on that issue.

I will finish with one of my favourite quotes from Professor Joe Stiglitz:

“inequality is not inevitable. It is not ... like the weather, something that just happens to us. It is not the result of the laws of nature or the laws of economics. Rather, it is something that we create, by our policies, by what we do.”

I could not agree more. There is no greater ambition for Government than delivering social justice and ending inequality. I challenge the Government to work with us to do so.

I am very grateful to Alex Johnstone for taking part in the debate and for flagging up the issue of global inequality, but I ask him to reflect on what the report says. It talks about not only global inequality—that is, the inequality between nations—but extreme inequality within nations. Indeed, that is its main focus. In other words, it addresses not just the difference between the wealth of Britain and that of sub-Saharan Africa, but the differences between the wealthiest people in Britain and the poorest people in Britain, and between the wealthiest people in sub-Saharan Africa and the poorest people in sub-Saharan Africa.

I congratulate Ken Macintosh on his eloquent and passionate statement about why we need to do something to tackle the obvious inequality that exists in this country and throughout the world.

I do not disagree with Nigel Don—I think that global action is required by large companies and by Governments. Oxfam has outlined the sobering and shocking fact that in 2013, seven out of 10 people lived in countries in which economic inequality was worse than it was 30 years ago.

Let us think about the technological advances that have been made in the world in the past 30 years. My children and grandchildren laugh at me when I reflect on how the world has changed, even in my working life. When I left IBM to commence a teaching career, I went into a school that was the same as schools throughout the country. Computers did not exist, and mobile phones were not on anyone’s horizon. The human race has progressed so much, but when we cast our eyes around the world we still see the sheer extremes of inequality, poverty and deprivation.

We very rarely take the time to reflect on the fact that many of the things that we in this country take for granted in the run-up to Christmas—the commercial and consumer goods that we will want to exchange with each other as we remind everyone to have a happy Christmas or, for those who are of a religious nature, to reflect on the religious significance of the event—are produced by child labour in squalid conditions and on poverty wages. We very easily forget the hundreds of women and child workers who died in the clothing factories in Bangladesh, and we forget the squalor that many people in factories throughout the world are working in to give us something that we simply take for granted. When we compare country with country and society with society, we see that inequality has deepened and become worse.

Even within countries, there is shocking inequality. In a debate last week that was led by John Wilson, I said that as a welfare rights officer I worked in communities where the stark consequences of Government action were all too obvious. One of the things that we neglect at our peril is that much of what happens is the result of conscious decisions by individuals and politicians to make things happen as they do.

Another shocking fact is that in 21st century Scotland one of the councils in my constituency, Renfrewshire Council, has had to set up a commission on tackling poverty. With all the material wealth that surrounds us, why should any council in this country have to consider something like that? However—in this, I am no different from anyone else in this Parliament—when I look at my constituency, I see communities just a few miles from each other, such as Brookfield and Linwood, where all the statistics on poverty and deprivation stand in sharp contrast. In fact, in some parts of Scotland, the contrast is even worse than it is in those two communities.

As a result, the subject becomes a matter of political will. I say to Nigel Don that politicians are all too keen to hide behind the advice of lawyers when it suits them. What Renfrewshire Council did was a matter of political will. It used its scarce resources to make it clear that it wants its contractors to pay the living wage. The consequence was that the council had to compensate the contractors through their contracts. The Scottish Government could do the same thing with its contractors, if it had the political will.

Let us not hide behind lawyers or weasel words. Instead, let us make it clear that there are issues that we can resolve if we have the will to do so.

It is my pleasure to speak on the Oxfam report “Even it up: Time to end extreme inequality”. I thank Ken Macintosh for securing the debate.

Oxfam estimates that the richest 85 people in the world own as much as the poorer half of the world population. That frightening figure dramatically illustrates extreme inequality in the world.

Economic inequality prevents those who live in poverty from meeting their basic needs, such as access to food, clean water, education and healthcare, and means that they lack opportunities to improve their quality of life.

The report looks at increases in inequality in countries and states that

“the poorest struggle to get by while their neighbours prosper.”

Across the world, seven out of 10 people live in countries where the gap between rich and poor is greater than it was 30 years ago. I accept that some people will earn more than others, but economic inequality means that people do not have equality of opportunity and a fair chance to have a better future. It is vital that the poorer in society have enough. The Oxfam report highlights that in 2014

“the UK top 100 executives took home 131 times as much as their average employee, yet only 15 of these companies have committed to pay their employees a living wage.”

That is quite shameful.

One way in which we could tackle economic inequality in Scotland, and specifically in Glasgow, would be to address the high unemployment rates in many ethnic minority communities. We should act to find solutions to facilitate more employment and, if necessary, more education for such citizens. The 2011 census showed that, in Scotland, the unemployment rate for Africans was 22 per cent; the rate for Caribbeans was 16 per cent; and the rate for Asians was 11 per cent. In comparison, the rate for the indigenous white community was 8 per cent. The numbers are higher in Glasgow constituencies, with an unemployment rate for the African community, for example, of 32 per cent, whereas the rate for the indigenous white population is 11 per cent. That is a difference of 21 per cent, which is a horrendous figure. We talk about what is happening overseas, but we should talk about what is happening in Scotland.

Employment inequality here is facilitated by similar factors: a lack of education and insufficient housing and healthcare. That is not the equality that the Scottish Government aspires to—or is it?

Earlier this afternoon, I asked the Minister for Housing and Welfare a question on housing and on overcrowding in particular, and she suggested that everything is reasonable and going okay. I suggested that she visit my constituency to see what poverty and overcrowding actually mean for some families—to see what it means to be in a family where the children have no opportunity to do their homework or have a social or private life. Those are the families who suffer injustice and who lack opportunities. I again invite the minister to visit some of those families to get first-hand experience of what it is really like on the ground, so that we can try to reverse the trends that people in Glasgow are facing today.