Research reveals pay in Scotland has grown faster than in any other UK nation or region

Scottish employees are being paid more per hour on average than their English counterparts for the first time since records began, research has found.

The study by independent think-tank the Resolution Foundation, The State of Working Scotland, found typical pay in Scotland is now £11.92 per hour, while employees in England are paid £11.84 per hour on average.

The analysis found pay in Scotland had grown faster than any other nation or region in the UK over the past two decades, with the North East experiencing the second-fastest wage growth.

Earnings growth in Scotland has been stronger than England across all pay levels, with the exception of remuneration for those at the very top.

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."

The report found that in 2004, typical hourly pay in Scotland was 7.2 per cent lower than in England. However, strong wage growth in the mid-2000s reduced the gap to just 2.9 per cent by 2009 – the year real earnings peaked before falling across the UK.

The foundation said steady growth, high employment and improved productivity in the early and mid-2000s were likely to be the driver of Scotland’s strong pay performance pre-crisis. The country subsequently experienced a shallower pay squeeze in the aftermath of the financial crisis than the rest of the UK, the organisation believes.

Coming out of the downturn, a return to strong jobs growth would be essential to maintain Scotland’s pay advantage over England, and action to boost employment should be a key issue in the upcoming Holyrood election, the foundation added.

It also warned one in five workers in Scotland still take home wages that are beneath the low pay threshold, estimating that one in six workers across Scotland would still be classified as low paid in 2020, despite the new higher minimum wage for over 25 year olds which takes effect this April.

Commenting on the findings, a UK government spokesperson, said: “Our long term economic plan has created the conditions under which Scotland is thriving as part of the UK. In Scotland, growth is strong and wages are rising as part of the UK’s growing economy. The new national living wage will provide a further boost – up to 230,000 people in Scotland are expected to benefit by 2020 once it is introduced in April this year.

“The analysis by the Resolution Foundation shows that Scotland is better off as part of the UK, which is why are committed to delivering the Smith agreement in full, ensuring that Scotland and the rest of the UK continues to thrive.”

The Smith agreement relates to the devolvement of powers from the United Kingdom parliament to the Scottish parliament following the 'no' vote in the 2014 Scottish independence referendum.