TYPICAL hourly pay in Scotland has overtaken the rate in England for the first time since records began, according to a new think tank report.

In a report due out on Wednesday, the Resolution Foundation puts the median rate at £11.92 an hour north of the border compared to £11.84 south of it.

The Foundation, which aims to improve living standards for low- to middle-income families, says pay has grown faster in Scotland than any other region or nation of the UK over the last two decades.

However it also warns Scotland still has a significant problem with around 1 in 5 workers on low pay, and may struggle to maintain the higher median pay rate over England.

The Foundation defines low pay as less than two-thirds of the median hourly rate.

The analysis, part of a report called The State of Working Scotland, shows that in 2002 typical hourly pay in Scotland was 7.2 per cent lower than in England.

By 2009, the year of peak real earnings across the UK, the gap had narrowed to 2.9 per cent.

The post-crash pay squeeze was then less severe in Scotland than England, even though falls in employment were sharper, causing the typical rate south of the border to fall behind.

Other than for those at the very top of the scale, earnings growth in Scotland has also been stronger across all pay scale for the past 20 years.

The report credits steady growth, high employment and improving productivity in the early and mid-2000s for Scotland’s strong pay performance before the economic crisis.

For Scotland’s new-found ‘pay premium’ to endure, strong jobs growth will be essential, the Foundation says, and recommends that policies to boost employment should be a key part of the forthcoming Holyrood election debate.

It also warns that, even though the new higher minimum wage for over-25s will help around 500,000 Scots workers from April, by 2020 around one in six in Scotland will still be low paid.

That reinforces the need for a wide-ranging strategy to tackle low pay, it says, such as encouraging more employers to pay the higher - but voluntary - living wage.

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 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.”

Roseanna Cunningham, the SNP’s Fair Work Secretary, who will help launch the report, said: “We welcome these figures that show the work we are doing to support the labour market and tackle low pay issues in Scotland is continuing to make a difference.

“While employment law remains reserved to the UK Government, the Scottish Government continues to do everything we can to further improve employment standards and promote good working practices, including the Living Wage of £8.25 an hour.

“We now have more than 440 Living Wage-accredited employers and more than 80 per cent of Scots now receive the Living Wage or higher, which shows businesses are recognising the benefits of fair work and better pay.”