Inequalities of fact
After the launch of the Scottish Government’s white paper, the SNP tweeted “We want Scotland to be independent because being part of one of the most unequal countries in the developed world isn’t acceptable”. Yes Scotland supporters were tweeting the same message too, claiming that the UK was the ‘fourth most unequal nation in the developed world’.
Earlier this morning on BBC 5 Live, Yes Scotland campaigner Robin McAlpine, the Director of the Jimmy Reid Foundation, took it to the next level and proclaimed the UK ‘had the largest degree of geographical inequality of any developed country”.[i] What was the source of this ubiquitous SNP ‘fact’?
Page 44 of the Scottish Government’s white paper tells us: “Within the UK, Scotland is part of an increasingly unequal society. The UK ranks 28th out of 34 nations in the OECD on a measure of overall inequality”. So according to the Scottish Government, the UK is the seventh most unequal OECD country – Mr McAlpine and Yes tweeters may wish to read the white paper more closely.
But perhaps not. Because the statement is still purposively misleading and inaccurate.
Let’s start with the observation that the OECD don't measure ‘overall inequality’ with the statistic quoted; it is one of four OECD indicators in relation to income inequality. On a scale on inequality, the other three indicators place the UK in positions 9th, 10th and 12th out of the 34 OECD member states.[ii] Being in the second quartile isn't 'one of the most unequal'.
The key issue to appreciate is that the white paper selects only one income indicator using a ‘Gini co-efficient’. This is a simple measure between 0 and 1, where 0 means everyone within a country have precisely the same disposable income and 1, which equates to the impossible scenario where just one person has all of a nation’s income, while others have none.
The misuse of quoting Gini statistics without an explanatory context should be avoided because they measure relative wealth, so for example in 2010 the Netherlands and Bangladesh had the same Gini co-efficient but it would be completely misleading to suggest Bangladesh was as equal as the Netherlands given the stark contrast in basic quality of life and economic opportunities.
It is also important to note that even amongst OECD member states the Gini co-efficient variance between a number of countries is relatively minor. The graph below illustrates the difference in income inequality using the Gini co-efficient between EU member states – the difference between the UK, France, Italy and Spain is very small; as is the difference with the EU average.
The SNP intentionally mislead by referring to ‘developed’ countries in their official media statements and soundbites. This term refers to a much bigger pool of countries than the 34 OECD members. The World Bank has 188 members and describes 75 of these as ‘developed’ or ‘high income economies’.[iii] Other measures of inequality are undertaken by the United Nations Development Programme, who produce a range of indices, including the Human Development Index (HDI), which includes life expectancy, quality of education, and income. The UK is the 26th best country on the HDI measure out of 169 countries, with Denmark placed 19th, and Austria 25th. [iv]
Returning to the SNP’s use of the OECD’s 2010 Gini income indicator, one should always remember that this indicator does not have any regard to the availability of public or third sector infrastructure and services – so the existence of the UK’s first class National Health Service, local authority public services, and access to schools, housing, colleges and university education are irrelevant to this indicator.
If one looks at other OECD indicators, for example, growth in net disposable household income in 2012, the UK comes out as the fourth highest with a positive growth, while the majority of other OECD members reporting for this period are in negative growth.[v] The UK can do much better if a Labour Government is returned in 2015.
In conclusion there are two key points to be made about the SNP’s claims that the UK is 'one of the most unequal countries in the developed world’. It isn’t! Not in the developed world, and not even on the sole OECD Gini indicator it isn’t. The SNP, as always misrepresent and omit. And as I've illustrated, equality cannot be meaningfully represented by one single income indicator while ignoring all of the more positive factors that don’t fit in with the SNP’s story to sell ‘independence’ to Scots. So why mislead the people of Scotland?
Secondly, and perhaps most importantly, what have the SNP being doing to reduce income inequality in Scotland over the last six years? Has it escaped their attention they have been in Government and could have introduced their free child care policy (announced today) which would have enabled more women in Scotland to reduce income inequality by being able to work and progress in their chosen careers? And what about replacing council tax? What about using income tax powers? What about redistributing wealth instead of the obsession with lower corporation tax? What about using their £170m underspend? Why cut funding to Scottish colleges preventing Scots getting skilled up and into better paid jobs? What about taking some of the responsibility for once?
[i] 3.15 mins in – BBC iPlayer http://www.bbc.co.uk/programmes/b03j9wq2
Glasgow, 26 November 2013