SCOTLAND's super-poor are now 10 per cent worse off than they were when Tony Blair came to power - while the super-rich thrive.


Dramatic new analysis has exposed the yawning gap between the country's extremes of poverty and wealth - despite more than a decade of minimum wage and tax credits.

The groundbreaking work, by economists David Bell and David Eiser, reveals that richest one or two per cent of Scottish society saw their real income shoot up by more than a quarter between 1997 and 2013.

But they found the poorest three or four per cent experienced a drop in real income of about a tenth, despite huge net growth in the economy over the decade and a half.

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Meanwhile, in what they describe as a "nuanced" picture, their research found that those just above the super-poor, households earning between 10-30% of the national average had done well over the 15 years.

Their real incomes were up 15 per cent, more, proportionately, than those of any income group bar the super-rich, partly thanks, say Prof Bell and Mr Eiser, to Labour-era reforms such as the minimum wage and working tax credits.

But booming wage rises for financiers and business leaders - and get-tough benefits cuts - have seen dramatic changes at either extreme of rich and poor.

Mr Eiser said he believed inequality is getting worse. He said:

"Our most recent population-wide data runs until early 2013.

"But it seems almost certain that inequality will have increased since then. The recession and its aftermath saw a large increase in the proportion of insecure work - part time work, temporary work, and out-sourced agency self-employment."

Prof Bell and Mr Eiser's findings, by the Centre on Constitutional Change for Edinburgh's David Hume Institute, will be published soon.

But the two economists are already posing a series of suggestions on how the Scottish Government can use existing powers - and those about to be devolved - to tackle such inequality.

They look at what the SNP administration could do to overhaul of Scotland's "regressive" council tax system under current powers into a meaningful system to tax property and land.

But the pair also suggest that Scotland could raise the upper rate of income tax to 50 per cent when it gets the ability to do so.

And Mr Eiser believes Holyrood, if empowered to do so, could increase the minimum wage from £6.50 to £7 an hour without hurting employment.

First Minister Nicola Sturgeon has increasingly adopted progressive rhetoric in recent years and during last months' general election established herself as the UK's leading opponent of austerity.

The Scottish Government stresses that Scotland is more equal than the rest of the UK using the so-called Gini co-efficient, which measures inequality in income distribution.

The UK is currently one of the most unequal countries in the OECD, the club of developed capitalist economies, according to Gini figures, ranking 29th out of 34. Only America, Turkey, Chile, Mexico and Israel are worse. Scotland, according to the Scottish Government, would rank 20th in this league table, behind Korea and France but ahead of Canada and Italy.

Stephen Boyd, assistant secretary of the Scottish Trades Union Congress, said: "It's very encouraging that the First Minister places such high priority on reducing inequality.

"It is, however, essential that the Scottish Government now starts to develop and implement a credible programme which cuts right across the range of current and forthcoming powers.

There is nothing to prevent the Scottish Government radically reforming local taxation or starting to set out plans for more progressive income tax."

A government spokeswoman said: "Tackling inequality, along with building a prosperous and competitive economy, is at the heart of the Scottish Government's commitment to creating a better country for all. The two go hand in hand - the wellbeing of the nation depends on everyone being able to have a share in the prosperity we create.

"Responsibility for the National Minimum Wage is reserved to Westminster. We are doing everything we can to promote the Living Wage, working towards having 500 Accredited employers by the end of March 2016 and we support bringing the National Minimum Wage in line with a Living Wage.

"The Scottish Government has fully funded the Council Tax Freeze since 2008-09 and is committed to do so for the lifetime of this Parliament helping all of Scotland's council tax payers. We want to develop a fairer and more progressive local tax based on the ability to pay, and that is why, with our local government partners, we have established the cross-party commission on Local Tax Reform to examine fairer alternatives to council tax. As the Commission is independent of the Scottish Government, it will be for the members of the Commission to decide how they approach their remit. It will report in the Autumn.

"The Scottish Government supports reintroduction by the UK Government of a 50p top rate of income tax. However, under the powers over income tax devolved by the Scotland Act 2012, the Scottish Parliament could not introduce a 50p rate in Scotland without also increasing the basic rate for those on low incomes by 5p."