The gulf between the haves and have nots in Scotland is deepening amid claims that the nation’s wealth inequality crisis is now out of control.
A new report from Oxfam reveals that in Scotland, the richest one per cent has more wealth than the bottom 50 per cent combined.
Across the globe, 82 per cent of wealth generated last year across the world went in the pockets of the richest one per cent of the global population, with a new billionaire created every two days.
The charity claims that high level cronyism, monopolies, unfair tax policies and tax avoidance are fuelling the global crisis, leaving millions condemned to a life of poverty.
It is now urging governments around the world, including Holyrood, to rethink economic and tax policies to help tighten the gap Oxfam’s report, Reward Work, Not Wealth, is published today as political and business elites gather in Davos for the World Economic Forum.
It highlights how the world’s 2043 billionaires’ fortunes soared by £585bn last year – enough to bring an end to extreme poverty more than seven times over.
Meanwhile the 3.7bn who make up the poorest half of the world’s population saw no increase.
Dr Katherine Trebeck, Oxfam’s Glasgow-based senior researcher said the strain of yawning inequality is also being felt in Scotland.
“This isn’t a faraway crisis,” she said. “It’s grimly apparent that the inequality crisis is out of control. The economic system is set up in a way that enables a wealthy elite to accumulate vast wealth at the expense of hundreds of millions of people who are scraping a living on poverty pay.”
In Scotland, the ten richest families or individuals were last year estimated to have a combined wealth of £14.7bn. The Sunday Times annual Rich List placed the Grant-Gordon whisky family as the richest in Scotland, with a fortune of £2.37bn, with Highland Spring owner Mahdi al-Tajir listed as having an overall fortune of £1.67bn.
Oil industry leader Sir Ian Wood and family are said to be worth £1.6bn and the Thomson family, owners of publisher DC Thomson, £1.285bn.
Meanwhile, around 430,000 Scots were paid less than the living wage of £8.45 per hour last year, with women outnumbering men by around 100,000. More than a quarter of a million Scots children – working out at one in four – are officially recognised as living in poverty.
The problem appears to be growing, with Scottish Government figures last year showing 1.05m people in Scotland were living in relative poverty after having paid their housing costs – a rise of two per cent on the previous year.
Dr Trebeck said the Scottish Government has a “golden opportunity” to lead the way in tightening the gap, however has produced contradictory policies with too much focus on increasing GDP.
“There is a lot of rhetoric. We hear a lot of talk and there are a lot of good plans and initiatives. It’s time to bed that in and translate it to action.
“It seems that GDP growth figures are at the top of the priority. But we should be able to ask more from a government than just faster GDP.
“Our economic system can be designed not for the wealthy, but in a way that creates a human economy.”
According to Oxfam, the wealth of 2043 billionaires’ around the world rose by an average of 13 per cent a year between 2006 and 2015 – six times faster than the wages of ordinary workers.
It points to excessive corporate influence on policy-making, erosion of workers’ rights and relentless drive to minimise costs in order to maximise returns to investors, all contributing to a widening gap between the super-rich and the rest.
It adds that there is “growing evidence that the current levels of extreme inequality far exceed what can be justified by talent, effort and risk-taking.
“Instead they are more often the product of inheritance, monopoly or crony connections to government.”
It particularly highlights multi million pound share dividend payments to bosses of high street clothing companies compared to meagre wages paid to staff employed in sweatshop conditions.
Mark Goldring, Oxfam GB Chief Executive, said: “The concentration of extreme wealth at the top is not a sign of a thriving economy but a symptom of a system that is failing.
“For work to be a genuine route out of poverty we need to ensure that ordinary workers receive a living wage and can insist on decent conditions, and that women are not discriminated against.
“If that means less for the already wealthy then that is a price that we – and they – should be willing to pay.”
Scottish Labour leader Richard Leonard also called for action to tackle the widening gap. He said: “The inequalities in wealth which exist globally also exist here in Scotland and the truth is we live in a class-based society in which wealth distribution is the greatest inequality of our time yet goes largely unchallenged.
“The wealth gap is widening yet investment in lifeline public services is falling. We need to tackle in-work poverty and build a high-wage, high-skill economy and give the help those struggling need. We need to change and shift the balance of economic wealth to the many rather than the few.”
However Sam Dumitriu, Head of Research at the Adam Smith Institute, disputed the Oxfam report, claiming that global inequality has fallen massively as countries like China, India and Vietnam introduce measures to increase competition, reduce regulations and property rights.
“The world’s poorest have received a massive pay rise leading to a more equal global income distribution,” he said.
“More wealth for Zuckerberg and Bezos does not mean less wealth for you or me. In fact it’s the opposite; in a free market individuals can only amass wealth by fulfilling the wants and needs of others. Work and trade does pay out for everyone involved.
A spokesman for the Scottish Government said: “We are committed to reducing the deeply ingrained inequalities that exist across Scotland and tackling the underlying causes of poverty and inequality.
“We are taking forward a number of bold measures – from our recently passed Child Poverty Act which establishes Scotland as the only part of the UK with targets to tackle child poverty, to our drive to create a fairer country through our Fairer Scotland Action Plan.
“Tackling inequalities will never be an optional extra for this government – it is core to everything we do – to make Scotland a fairer, more equal country.”