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Pay in Scotland

Recent surveys indicate that pay settlements may fall following calls from the Bank of England to restrain wages. In this briefing, we look at some of the key issues for Scotland.

The STUC analysis of the Pay As You Earn Real Time Information (PAYE RTI) data for Scotland paints a more detailed picture of pay than the broad-based headlines generated by employer surveys, often based on small samples. We also need to look at pay over a longer period. They highlight that real pay in Scotland increased in the second half of 2023 but remains below where it was two and a half years ago. The typical worker in Scotland is £1,923 worse off due to pay not matching CPI inflation between April 2021 and December 2023. Using RPI inflation, the typical worker is £3,990 worse off.

Assuming RPI-adjusted real-terms pay grows at the same rate in the second half of 2023, it will take 64 years for workers to recover the £3,990 in lost earnings between April 2021 and October 2023, according to RPI inflation. Had unions in Scotland not taken strike action, these figures would be even worse. Workers throughout Scotland secured more than £4 billion in pay and pension settlements in the past 18 months of industrial disputes.

With the UK Government failing to raise living standards, it is incumbent on the Scottish Government to pursue a different approach as the STUC and others have recommended. It must start by investing more in our public services – ensuring our key workers see a decent cost of living pay award in 2024 and protecting those on low incomes against cuts to the crucial local services they depend on.