USE OF the Salvation Army’s Lerwick food bank has mushroomed alarmingly in recent years amid benefit cuts and stagnating pay levels.
Shetland News asked each of the four constituency candidates in this week’s election to give their views on tackling inequality and the importance of the living wage.
Liberal Democrat Tavish Scott said his party would ask those earning more to pay a penny extra in income tax to raise £500 million a year to “transform the education of young people across the country” because “in many cases inequality starts at school”.
“Those on the lowest incomes will pay nothing more but the money it will raise will help all children reach their potential,” Scott said.
“The Salvation Army continues to help a number of Shetland families and households with its food parcels but the fact it’s seen such a growth in demand highlights the need for more to be done at a local and national level to address inequality.”
Chancellor George Osborne last year announced an increase in the national minimum wage, though other think tanks pointed out the level still falls short of what is advocated by the Living Wage Foundation.
Scott said he supported the foundation’s call for a rate of £8.25 an hour for all.
“In Shetland there is a particular need to make sure that wages reflect the cost of living although support also needs to be in place for smaller local businesses if they are to meet this,” he said.
“Many workers will have been pleased to receive an increase in their wages to at least £7.20 but this increase excludes workers under 25 who now receive 50p less an hour than their older colleagues. This is unacceptable.”
Labour’s Robina Barton agrees, saying any rise in the minimum wage is to be welcomed but “we want to be moving to the living wage”.
“It is demonstrated as being good for workers, and good for businesses in terms of staff productivity and staff retention, and it is applied from the age of 18,” she said.
“I don’t think it’s fair that the minimum wage should be lower for people under 25, as is currently the case. This strikes me as discriminatory.”
Barton continued: “I was very pleased to hear that Scalloway Hotel had become a living wage employer. I am also opposed to zero hours contracts which, while they can suit a minority of people in terms of their flexibility, can be hugely exploitative.”
She said Labour also backed a penny rise in income tax and an increase in the top rate to 50p for those earning over £150,000 a year to address inequality.
“It will make the very well off a little less wealthy, and provide money to invest in services like education and healthcare, which ensure that others are able to improve their life chances and job prospects,” Barton said.
“I also think that we need to be doing more to prevent people and corporations from evading taxation.”
Tory hopeful Cameron Smith, however, said recent figures published for Scotland showed a decrease in income inequality – a Scottish Government report noting this was down to “increases in incomes at the bottom of the distribution and decreases at the top”.
He said that was partly explained by increases in employment and a shift from part-time to full-time work, with more than seven in 10 jobs created in Scotland being full-time posts.
“Here in Shetland we need to make sure that our colleges have the capacity to deliver training for young people; that we support our important industries like fishing, crofting and oil and gas, and also that we are an attractive place to develop business opportunities, from decommissioning to creative industries,” Smith said.
He went on to say the Tories’ “national living wage” was making a significant impact by directly increasing the wages of around 500,000 employees in Scotland.
By 2020 it will reach £9 per hour, which Smith pointed out exceeded the level promised by the SNP last year, and will “continue to increase in line with the recommendations from the Low Pay Commission, independent of government”.
He said that had to be seen alongside the continued increase in the level of tax-free personal allowance, which “represents a cut in income tax for 2.3 million people across Scotland”.
Taken together the two measures “represent a real improvement for workers, and that’s why the announcement of the national living wage was welcomed by the director of the Living Wage Foundation in the budget in 2015”.
The SNP’s Danus Skene said that, until Margaret Thatcher’s arrival in office in 1979, throughout the twentieth century income disparities had been “modestly reducing”.
By the time Skene co-authored a report on wealth and inequality entitled ‘Just Sharing’ for the Church of Scotland in 1988, “it was already evident that the policies of her Tory government were opening up inequalities markedly”.
That trend has continued through the Major, Blair, Brown and Cameron governments, he pointed out.
“Recent economic research suggests that inequality of wealth and income is actually inefficient for the health of the economy as a whole,” Skene said.
“The balance between direct progressive taxation, particularly income tax, and indirect taxes that are not redistributive in their effect must be changed. Wealth taxes, particularly inheritance tax, should be increased and made less avoidable.
“Taxation is a subscription to membership of a national community. That community has an obligation to ensure that everyone is fed, housed and educated – and has enough income to be so.”
He said there should be no distinction between a “minimum” and a “living” wage – “what is the point of a ‘minimum wage’ if it is not enough to live on?”
“It is, sadly, true that in some sectors of the economy, employers may have a strong case that they cannot pay the ‘living’ wage and remain competitive, even thought at this point it is only £1 an hour above the minimum wage,” Skene continued.
“Government should use the taxation system – notably tax credits – to overcome difficulties in any sector where it is possible to establish that wages above the minimum cannot normally be paid.”