21/01/2014 Newsnight Scotland


21/01/2014

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remarks he makes from the factual context in which they're made. Thank

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you very much. Tonight on Newsnight Scotland, an

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independent Scotland would have to take radical measures to tackle

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income in equality. But is that the right target? And confused,

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apparently we are, we will hear results of a detailed poll on

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attitudes to independence. Good evening. The boffins at

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Stirling university have been looking at what an independent

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Scotland could do to lessen income inequality, the answer, it seems is

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not a great deal. Raising income tax or benefits would have a limited

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effect. In a moment we discuss whether Scandinavian levels of

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equality are achievable or even desirable.

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Stoic other part of the report. In an on

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The poor always with us, but who are the pure? Were these people pure? --

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poor. Is she pure? Debbie is working a short-term contract as a midwife.

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Husband is a scaffolder but even with two wages, it is a struggle.

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Obviously, the children are into various hobbies. We have to think,

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how many miles on my doing, and will likely able to get to work next

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week? It is very restrictive. Because you literally would not have

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been able to fill up the car until you get the next pay check?

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Absolutely. I the credit union set up a branch in Wesco bright eight

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years ago after the collapse of the fair tax savings scheme. You have

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elderly people making a choice as to whether or not to put the heating on

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or make a meal. Locally, we have a good programme, but even at

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Christmas, we had a local council opening schools to guarantee

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children got a hot meal. We live in a wealthy country and yet we have a

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divided between those that have and those that have not, and it is

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becoming increasingly wide. Today's report warns that tackling

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inequality in Scotland means more and tweaking tax and spend. Fiscal

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policy in itself is not a panacea for inequality. We need to think

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about having a strong labour market that pays decent wages, and offers

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decent training and progression opportunities for employees. And

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there are bound to be people that say that we will have more freedom

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to do that as an independent country. Undoubtedly, Scotland will

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have greater freedom to exercise policy levers and labour market

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levers and interventions as an independent country but it is not

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simple in the case of pulling a few fiscal switches after independence

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and suddenly having a Scandinavian style level of inequality.

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Politicians on both sides of the independence debate have,

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predictably enough, seized on the findings. It is an interesting

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report but it is concluding ultimately that reducing taxes or

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taking fiscal measures is not the way to deal with inequality. We are

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actually much better staying within the United Kingdom to do that.

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Having the ability to integrate tax and benefits to avoid the kind of

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property traps that people often fall into right now, making sure

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that we are focusing on preventative policies and reaping the benefits of

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those policies to reinvest in transforming society, these are the

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things that you do with the extra powers. But we have a yawning gap

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that we rich and pure that has been created under the Westminster

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system. The argument is that if we want to tackle that, it will not be

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automatic or easy, but we need the powers of tax and welfare to do

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that. But who says that we need to tackle inequality? What is wrong

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with having some people who are considerably richer than the rest of

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us? You need some level of inequality in the economy to give

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people the incentive they need to work and invest. But there is also a

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point where the level of inequality starts to have detrimental

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consequences on health and stress and levels of debt and so on. The

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point at which we reach that tipping point, there is a great deal of

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debate about. I've never known a food bank to open in Wesco bright.

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But there is. -- West job right. That is a situation that many people

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find themselves in. Struggling, trying to make ends meet. People not

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getting wage rises. The cost of living has dramatically increased.

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Fuel, rent, everything is going up. Nothing is coming down. One thing is

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coming down and that his wages. -- that is wages. You can demolish

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the slums and rebuild the cities, but perhaps reshaping society is a

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real challenge. I'm joined now from London by Duncan

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Exley, who is Chief Executive of campaigning think tank, The Equality

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Trust, and from Edinburgh by Ben Thomson, chairman of think tank

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Reform Scotland. There is a context to put this into. And it is a pretty

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big issue. The share of national income going to Labour rather than

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capital, which was rather stable, has been starting to shift since the

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1990s towards capital and away from labour income. In almost all the

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advanced countries of the world, and China, there is a huge international

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issue. There is, but the UK is one of the worst countries for income

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inequality. It is seven worse out of the OECD 34. -- seventh. We are

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reaping the problems of that. It is damaging our economy and damaging

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our society. It is damaging businesses and it means that

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ordinary people will have less of a chance to have the opportunity that

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richer people have. But economists are arguing over why there has been

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this change over the past 20 or 25 years. There are various

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explanations to do with the opening up of labour markets in China and

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the former communist countries, to do with advances in technology. To

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do with the weakening of trade unions. It is not obvious with these

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explanations are that there is a set of policies you could adopt that

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would affect them. There are some factors that are basically

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globalisation, but countries have a choice. Governments have a choice

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over what they put in place to respond to globalisation. If you

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look at Germany, they have put in place measures to concentrate on

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building up small firms, to encourage industries which bring in

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people who are skilled and where there are people who have decent

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pay, as opposed to what we have here which is one of the highest levels

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of people on low pay in the developed world. That is the sort of

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choice that governments can make when they are encouraging different

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countries. Perhaps one of the most interesting things about today's

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report was that usually all this discussion about inequality is to do

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with tax levels and the rest but they wanted to focus on, in the

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conclusion of the report, they said it is market incomes, in other

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words, before any income. Market incomes are more equal in

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Scandinavia than Britain. That raises a set of issues that are not

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being addressed. I'll agree with that. There are a lot of different

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factors that go to make up this. There were two interesting things

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from this report. If you take out the south-east and, the UK fares

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much better and is actually on the average of the OECD countries. It is

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not to say that we should not make it an aim to improve pay

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inequality, and also improve poverty. That is a separate thing.

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And not to say that we should not see growth in GDP as the be all and

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end all. When we look at the Nordic model, one of the things that people

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have to take into account is that it is not just economic factors. It is

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also a real different attitude and culture in Nordic countries, which

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are the best in the world. The measure of inequality is the lowest

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in the Nordic countries. Partly, that is to do with culture. And that

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takes a long time to change. I wonder, everyone quotes the

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Scandinavian countries, other is another fact about the Scandinavian

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countries, apart from them being equal, which is that they are among

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the richest countries in the world. When the UN looked at things like

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whether people were happy with their lives, the correlation with him

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rich, in a rich country, seemed much from her than the correlation with

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being in a country that was very equal. By and large, in rich

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countries, unequal like the United States, which is unequal, or whether

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it is Denmark, which came out as the most satisfied. There is an obvious

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benefit from being a rich country rather than a developing country.

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But if you compare rich countries with each other, the ones who are

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more equal the ones where they have fewer health and social problems,

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where the economies tend to be more stable, and where people tend to get

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along better with each other. Those societies are the ones that people

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say they prefer living in. These things are very difficult to measure

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in any adequate way. A lot of those things are quite easy to measure.

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You can measure life expect the sea and obesity and drug use. There are

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lots of measures you can have a look at. And when you look at those, and

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they are including us, and they come out better. The other aspect of this

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is that the debate in Scotland, and in Britain generally, about

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Scandinavia, is, oh my gosh, they are very equal and that is great and

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we want to be like that. But actually, of all of the OECD

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countries, the one with the fastest-growing inequality is

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Sweden, even though it is still a more equal society than ours. The

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debate in Sweden and Denmark is, well, we have got this society and

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it does not seem to be working. What can we hang onto? It is odd that

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three out of four of the Scandinavian countries are run by

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centre-right governments. There was about 70% of GDP in the public

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sector, now falling to 51%, broadly in line with the UK. One of the

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secrets they do have is that public sector power and the provision of

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the public sector is done at a much more local, community level, which

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is something that a lot of people miss. People are prepared to share

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more because they feel more part of their communities. All of education

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and health, by and large in Scandinavian countries, is not only

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done at a regional level, which would be similar to our regional

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councils, but pushed right the way down to municipalities. In Sweden

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there are about 300, which have real control. People feel more

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comfortable about being part of a real community which has power to do

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the things that they want to do. Briefly, one of the things the OECD

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identified was strong labour markets, countries with collective

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bargaining, strong trade unions to push wages at the end of the day,

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they say, to be more equal. Things like works councils and the way

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things are organised in places like Germany, do you think it's

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realistically within our capability in Britain to change what an effect

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of a culture of labour relations? A lot of those things have been things

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that, to be honest, some employers have got it into their heads that

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there are some big superstars, who deserve to be rewarded very richly

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and that the rest of us are basically costs to be reduced. They

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have sold that sort of idea to a lot of politicians and to a lot of

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investors and a lot of commentators. Actually, that's one of the most

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profoundly antibusiness things I can think of, because it means for most

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people, there is very little recognition or reward for hard work.

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There are means that can be put in place rather than just expecting

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people to change what they think, which is about working in a German

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model, where they have ordinary workers on the committee that's

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decide how much the top people get paid. So it brings some perspective

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to it. Those sorts of measures are ones that we could do here without

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any trouble. We have to leave it there. Thank you

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both very much. So, after what already seems like an

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eternity, discussing the finer points of Scottish independence, it

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seems little of it is having any impact on voters. Those are the

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findings from the latest Social Attitudes Survey. It suggests that

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what matters most is the money in our pockets.

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Being ?500 better off would convince more than half of voters to support

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independence with under a third against, conversely only a minority

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would say yes if they thought they'd be ?500 a year worse off. Here's the

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rub, less than one in ten agree with the 'Yes' campaign that they would

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be personally better off. A greater minority accept the argument that

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they'd be worse offer. Most feel it won't make any difference or they

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just won't know. Lack of knowledge appears to be a theme in this

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report. The campaigns have apparently left most people unsure

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what would happen in the event of independence, a six-point increase

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on the previous year. When you dig deep e, only -- deeper, only one in

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five say they know a great deal or quite a lot about independence, and

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a much larger number say they don't know very much or anything at all.

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It's difficult to predict which way the don't knows will turn, but a

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clear majority feel they should have the option of voting for a more

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powerful Scottish Parliament within the UK. The tricky matter for them

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is that this isn't an option. I'm joined by Professor John Curtice,

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who is research consultant at ScotCen Social Research, which

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carries out the Scottish social attitudes study. Very briefly, what

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we were talking about before, inequality, you've done research.

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Are there any noticeably different attitudes in Scotland about people

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being prepared to put up with higher taxes to get more equality than

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there are in England? Let me give you statistics from the survey out

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this evening, which casts doubt about the degree to which Scotland

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really wants more equality or thinks independence would bring more

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equality. Only 16% of people in our survey said that if Scotland as a

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result of independence the gap between rich and poor would narrow,

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we also now find that 52% of people in Scotland think that unemployment

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benefit is too high and puts off people from getting work, which is a

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record figure for Scotland. The truth is that Scotland has shared in

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what we know from UK social data, which is that people are tougher on

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welfare. Scotland is not immune from that change. OK. Now, your 500 quid

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question. I get the idea this is a proxy for the economy being

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important. You say to people, would you like more money, they generally

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say yes. Yeah, if that were all to the survey, you'd be right. But

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underneath those questions, which are yes, very hypothetical, is a

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crucial reality. That is that if people think that indeed Scotland's

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economy would be better under independence, which around a third

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of people in Scotland think would be the case, you're very likely, people

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say yes, we will vote yes. Conversely, if you think the economy

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is going to be worse under independence, then, 75%, 80% of this

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group say no, we will vote no. It's not just the hypothetical that

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reveals that the financial implications, economic implications

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as people perceive them make a difference, it's also they're clear

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in terms of the decisions that people have already made. There is

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no other issue which more clearly different hates those who have --

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differentiates those who are going to vote yes. I wonder if it's fair

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on the politicians, isn't it just the nature of the case, you can't

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imagine a case that the 'Yes' campaign could make for saying

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you're going to be ?500 better off that would be so cast iron that the

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'No' campaign would say, oh, my gosh, yes, you're absolutely right.

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Therefore people are going to be confused. If that's all we were

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arguing about, you might be correct. What we're arguing is that yes, the

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economy matters. It's crucial to voters. It's become more important.

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At the same time, there are lots of other things such as Europe, the

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currency, how you pay for child care, which politicians have been

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arguing about in detailed, abstract academic arguments. These seem to be

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passing voters by. Yes and no voters agree with Europe. Yes and no voters

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don't disagree about the currency. Yes and no voters don't disagree

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very much about the issue of welfare, including unemployment

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benefits. The point is the campaign is focussing on issues that are not

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central to voters' voters' interests. There more don't knows?

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There aren't more don't knows but plenty of people in the survey

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reveal that they have an idea of what they might want to do, but are

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not necessarily absolutely sure what they're going to do. Thanks very

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much. Tomorrow's front pages: The Scottish Daily Mail - first class

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monstering. Royal Mail chairman launches blistering attack on

:19:26.:19:31.

Salmond's divisive and sad independence plans.

:19:32.:19:35.

The Scotsman, Assad's mass killings are Syria's Holocaust. And the Daily

:19:36.:19:38.

Telegraph, Clegg's wife told him he let down women. That's all for

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tonight. I'm back tomorrow. Until then, from all of us on the

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programme, good night. Hello there. Last night fog was the

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issue. Don't it's rain. It will be a damp start across eastern parts of

:19:57.:19:59.

the UK. Gradually things improve. For most of us we'll settle into a

:20:00.:20:03.

reasonable day of sunshine and showers. There will be lengthy

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brighter spells across Northern Ireland. We will see a line of

:20:07.:20:09.

showers pushing into western Scotland, the last of the overnight

:20:10.:20:12.

rain clearing into the Northern Isles. In between we see brighter

:20:13.:20:14.

spells through the spine of Scotland and northern England. A few showers

:20:15.:20:18.

around, but they'll move through quite quickly. Brightness for the

:20:19.:20:22.

Midlands too. It might be a struggle for eastern most counties of

:20:23.:20:26.

England. The overnight rain only very gradually easing away. It stays

:20:27.:20:29.

chilly here. In the brighter spells, further west, temperatures will

:20:30.:20:32.

respond, up to eight or nine degrees. The breeze shouldn't be too

:20:33.:20:35.

strong. There will be showers around. They won't last that long

:20:36.:20:39.

and there's a good chance where you are, you'll avoid most

:20:40.:20:40.

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