3 Views Of The Economy And Living Standards
3.1 This chapter summarises trends in:
- Scottish Government priorities for action
- Perceptions of whether the economy has weakened or strengthened and whether standards of living in Scotland have increased or fallen in the past 12 months
- Perceptions of who is responsible for changes in the economy and standards of living
- Who is credited with perceived improvements, and who is blamed for a perceived fall in the economy and living standards.
3.2 As has been highlighted in Chapter 1, a more positive picture of both the UK and Scottish economy began to emerge in 2013, increases in GDP in the UK were reported and there was evidence to suggest that the recovery in Scotland also gained momentum. However, commentators both north and south of the border were still being cautious in interpreting these indicators as evidence of an underlying improvement.
3.3 Since the recession started in 2008 wages have increased at a lower rate year on year than inflation. Most recently, according to ONS figures for the year ending April 2013 wages increased by 2.1% on average, whilst over the same period inflation, as measured by the Consumer Price Index, increased by 2.4%. Public sector workers in Scotland had their pay frozen in 2011 and 2012. In 2013 a one per cent cap on the cost of the increase in basic pay for staff earning under £80,000 in the public sector was introduced (Scottish Government, 2012b).
3.4 In addition, for those reliant on benefits there have been changes in the welfare system. These include a reduction in housing benefit for people deemed to have a spare room, (the so-called 'bedroom tax'), and the reassessment of people on long term sickness and disability benefits. This latter change has meant some people have been reassessed as fit for work and are no longer entitled to claim additional disability benefits. The real term decrease in wages coupled with the reduction in benefits for people in certain groups, mean that some people across the UK are having to manage on lower incomes.
3.5 At the same time the cost of living has continued to rise. In the three years from October 2010, household energy prices have increased by around 37% (Citizens Advice, 2013), and between 2007 and 2013 the cost of food rose by 10.2% more than the price of all goods (as measured by the consumer price index) (Institute of Fiscal Studies, 2013).
3.6 These changes in pay, welfare benefits and the cost of living have not impacted on everyone, but have had a negative impact on specific groups, according to the Joseph Rowntree Foundation (JRF) (Padley & Hirsch, 2014). In particular, the JRF report showed that poverty levels increased for couples with no children and for single people under 35 during 2011-12.
3.7 The Scottish Social Attitudes survey asks about attitudes to both the economy and to living standards, as well as collecting information about peoples' perceptions of how they are managing on their present income. This allows us to examine the relationship between how people perceive the relationship between their own situation and that in the wider economy, and how this has changed over time.
Priorities for government action
3.8 First we look at where people place the economy in terms of the Scottish Government's highest priority, comparing priorities before and after the recession in 2008 (Table 3.1). In 2007, prior to the recession, about a quarter of people (27%) thought that the Scottish Government's highest priority should be to cut crime, whilst about one sixth thought that it should be to improve people's health (17%), to help the economy to grow faster (16%) or to improve housing (16%). Since 2009, and the start of the recession, helping the economy to grow faster has been chosen by over one-third as the highest priority. Since 2009, the proportion choosing the economy as the highest priority has been more than twice the proportion choosing any other topic. The findings in 2013 were consistent with this post recession pattern, with 35% of people choosing the economy as the highest priority for action.
3.9 Prior to 2009, cutting crime was consistently chosen either most often, or second most often as the highest government priority for action: chosen by 27% of people in Scotland in 2007. Since 2007 there has been a reduction in the proportion of people choosing crime as the highest government priority. In 2013, only 10% of people in Scotland thought that cutting crime should be the Scottish Government's highest priority, the lowest level ever recorded.
|Help the economy to grow faster||14||16||33||37||36||35|
|Improve people's health||24||17||13||15||16||18|
|Improve standards of education||16||12||15||12||15||18|
|Improve the environment||6||5||3||3||2||1|
|Improve public transport||2||1||1||1||*||1|
Base = all respondents
* Prior to 2009, this question asked about the 'Scottish Executive'
Note: not all columns add to exactly 100% due either to rounding or because of small proportions saying either 'don't know' (0.5% in 2013) or giving some other top priority (3% in 2013).
Views on the economy and standards of living from 2006 to 2013
3.10 The Scottish Social Attitudes survey includes questions that allow us to track the impact of the recession on peoples' perceptions of the state of the economy, and on standards of living. Findings from 2013 show that people were more likely to say the economy has become weaker over the last 12 months than that it has become stronger, and that the majority of people in Scotland thought that the general standard of living for people in Scotland has declined over the same period .
3.11 People were asked to think back over the last twelve months and say whether they thought the economy had got stronger or weaker, and whether the general standard of living in Scotland had increased or fallen. Figure 3.1 shows that around a quarter of people (24%) thought that the economy had become 'a lot' or 'a little' stronger in the previous twelve months. A higher proportion, around a third, felt that the economy had become 'a little' or 'a lot' weaker (35%), with a further 31% feeling the economy had stayed the same.
3.12 People in Scotland expressed more negative views about the general standard of living in Scotland than the economy. 58% felt that the standard of living in Scotland had fallen 'a little' or 'a lot' in the past twelve months compared with only 35% of people who felt the economy had become weaker. And only 16% of people felt that the standard of living had increased in the past twelve months. This is perhaps not surprising given the increases in the cost of living and the below inflation level wage rises that have been taking place every year since 2008.
Base: All respondents. Sample size: 1497
3.13 In order to track these changes over time Figure 3.2 shows the 'net balance' score for people's views on the economy and general standard of living. These were calculated by subtracting the proportion of people who said the economy, or living standards, have declined from the proportion who said they have improved in the past twelve months. In 2013, the 'net balance' score for the economy was -11 compared with -42 for the general standard of living in Scotland.
3.14 Prior to the recession in 2008, more people felt that the economy was getting stronger than thought it was getting weaker (positive net balance scores of 10 in 2006 and 19 in 2007). However, in 2009, following the recession, the net balance score dropped to -64. Perceptions of the economy did improve from this point but remained extremely negative between 2010 and 2012, only rising in 2012 to a negative net balance score of -44. Perhaps reflecting the more positive news on the economy, in 2013, people's views of the economy improved considerably giving a net balance score of -11.
3.15 The decrease in negative attitudes to the economy which we found in 2013 did not, however, carry through to people's views on the general standard of living in Scotland. The net balance score for general standards of living in Scotland in 2013 was -42. Unlike views on the economy that have been steadily improving since 2009, there is no evidence that views on the general standard of living were any less negative in 2013 than they were at the start of the recession. This is probably a reflection of the continuing impact of below inflation wage rises and increases in many of the basic living costs e.g. food and fuel.
Base: All respondents.
Perceptions of ability to live on present income
3.16 Although the majority of people in Scotland in 2013 felt that living standards had fallen in the last 12 months, there has been no change between 2011 and 2013 in the proportion of people who said they were living really comfortably, or comfortably on their present income (Figure 3.3). Just over half of the people in Scotland (53%) in 2013 said that they were living really comfortably, or comfortably on their present income. A further 30% said they were neither comfortable nor struggling, with only 16% of people saying they were either struggling or really struggling on their present income. These figures were similar to those in 2011. Taken over a longer time period, however, it is clear that changes have occurred. In particular, the proportion of people who said they were struggling on their present income has increased over time from the pre-recession level of 9% (in 2007) to about 1 in 6 (16%-17%) from 2010 onwards.
Base: All respondents
Sample size: See Table A.19 in Annex A
3.17 Are people's views on the general standards of living in Scotland related to their own personal financial situation? Figure 3.4 shows that people who said they were struggling, or really struggling, on their present income were more likely than those who were comfortable, or really comfortable, to believe that standards of living in Scotland have fallen in the past 12 months. Over two-thirds (69%) of people who were struggling on their present income believed that the standard of living had fallen in the past 12 months, compared with 53% of those who were comfortable. This suggests that there is a relationship between people's own personal financial situation and their perception of the general standard of living in Scotland.
Base: All respondents. Sample size: 1497
Who gets the credit and who gets the blame for changes in the economy and general living standards?
3.18 In addition to asking people whether they thought the economy and living standards had strengthened or improved or whether they had weakened or fallen in the previous 12 months, we also asked people what they thought this was mainly the result of. In 2013, 24% of people thought that Scottish Government policies were responsible for changes in the economy, 28% chose UK Government policies, and 27% chose 'some other reason' (see Table A.20 in Annex A). Since 2011 there has been a significant decrease in the proportion of people who said that changes in the economy were due to UK Government policies (38% in 2011 compared with 28% in 2013). There has been a corresponding increase of 8 percentage points in those saying that the changes were for 'some other reason' (19% in 2011 compared with 27% in 2013). However, in relation to changes in the general standard of living in 2013 only 11% of people thought these were due to the Scottish Government, 44% to the UK Government and 28% to 'some other reason'. There has been very little change in these figures since 2011.
3.19 To further explain differences between peoples' views on who is responsible for changes to the economy and living standards, we explored who people think is responsible for a stronger economy and who for a weaker economy and similarly for living standards. Those who thought the economy had got stronger, were divided into those who 'credit' this economic improvement to Scottish Government policies, those who 'credit' this to UK Government policies and those who 'credit' some other reason. Similarly those who thought that the economy had weakened or living standards had fallen, were divided into people who 'blame' the Scottish Government for a weaker economy or a fall in living standards, those who 'blame' the UK Government and those who 'blame' some other reason.
3.20 Previous SSA reports (see Given and Ormston, 2007a, Ormston and Sharp, 2007a, Ormston, 2010, Ormston and Reid, 2011 and Ormston and Reid 2012) showed that consistently there has been a 'reverse symmetry' in who people 'credit' and who they 'blame' for changes in the economy and living standards. People who thought the economy has improved were much more likely to credit this to the Scottish Government than to the UK Government and conversely people who thought the economy has weakened were more likely to blame the UK Government than the Scottish Government. In spite of the fact that consistently since 2000 more people thought that the UK Government has most influence over how Scotland is run (see Chapter 2), people in Scotland were still much more likely to credit the Scottish Government with improvements in both the economy and living standards.
3.21 Figure 3.5 shows that in 2013 nearly three times as many people credited the Scottish Government with a stronger economy than credited the UK Government: 47% credited the Scottish Government compared with 16% who credited the UK Government. And more people thought that the economy had become stronger due to 'some other reason' (26%) than thought this was due to the UK Government (16%).
3.22 The findings from 2006 onwards show the same overall pattern, with the Scottish Government much more likely to be credited with improvements than the UK Government. The proportion of people who credited the Scottish Government has reduced from a high of 69% in 2011 to 47% in 2013, similar to the proportion recorded in 2006. This decrease was not accompanied by a corresponding increase in the proportion crediting the UK Government, rather it seemed to be related to an increase in the proportion of people who thought that the strengthening economy was due to 'some other reason'. The proportion who thought the credit was due to 'some other reason' has increased from a low of 10% in 2011 to 26% in 2013, the second highest level recorded since 2004.
3.23 The SSA report of 2011 findings (Ormston & Reid, 2012), suggested that the increase from 39% in 2010 to 69% in 2011 in the proportion who credited the Scottish Government with economic improvements may be related to people having more positive attitudes towards the Scottish Government in general. The 2013 findings also lend weight to this hypothesis, albeit in the reverse direction. In 2013, there was a decrease in the proportion of people who credited the Scottish Government with economic improvements, and this coincided with a general post-election decrease in the extent to which people expressed positive attitudes towards the Scottish Government in general.
Base: All those believing that the economy has strengthened in the past 12 months.
Sample size in 2013: 364
3.24 The blame for a weaker economy and falling living standards has consistently been more likely to be given to the UK Government (Figure 3.6). In 2013, 45% of people blamed the UK Government for the falling economic standards and 54% blamed them for the fall in living standards. This compared with 15% blaming the Scottish Government for a weaker economy and only 6% blaming them for a fall in the general standards of living. The proportion believing that a weaker economy is due to 'some other reason' has ranged between a third and a quarter since 2010. We can only speculate on what the 'other reason' is that people are thinking about, but given the global nature of the economic recession and the interconnectedness of global markets and finances, it is perhaps not surprising that 29% of people in 2013 believed that when the economy has weakened that this cannot be contributed to an individual government's policies.
Base: All those believing that the economy has weakened in the past 12 months.
Sample size in 2013: 529
How do views of the economy and living standards differ between groups?
3.25 As discussed above, around a quarter of people in Scotland (24%) thought that the economy had improved over the past 12 months. Around half of these people, 47%, (representing 12% of the population overall) thought that these improvements were due to Scottish Government policies. In this section we explore how those who thought that the economy had improved over the past 12 months due to the Scottish Government's policies varies by subgroups.
3.26 The figures discussed in this section are informed by regression analysis, which looked at what factors were significantly and independently associated with thinking that the Scottish Government should be credited with economic improvements. The following factors were explored:
- level of education
- party political identification
- how Scottish or British you feel
- who you think has most influence over how Scotland is run
- how politically left or right wing people are.
3.27 There were no significant differences by income, level of education or who people think has the most influence over how Scotland is run. Those that were more likely to credit the Scottish Government for a stronger economy were men, older people, SNP supporters, people with a stronger Scottish identity and those on the left of the political spectrum (Table 3.2). In more detail:
- 14% of men compared with 9% of women credited the Scottish Government with economic improvements
- Those aged 55 or more were more likely to credit the Scottish Government with a stronger economy compared with other age groups
- SNP supporters were more than twice as likely as supporters of all other parties, and supporters of no political party, to credit the Scottish Government: 25% of SNP supporters compared with 10% of Labour supporters and 5% of Conservative supporters
- 16% of those who identified as 'Scottish not British' or 'More Scottish than British' credited the Scottish Government with economic improvements compared with 4% of those who identified as 'More British than Scottish' or 'British not Scottish'
- People on the left of the political spectrum are more likely than others to credit the Scottish Government with economic improvements. 17% of people on the left of the political scale credited the Scottish Government, compared with 8% of those in the centre and 9% of those on the right.
|% believing Scottish Govt is responsible for a stronger economy||Sample size|
|National identity||Scottish not British/More Scottish than British||16||807|
|Equally Scottish and British||7||432|
|More British than Scottish/ British not Scottish||4||166|
|Left-right political scale||Left||17||477|
Note: only factors where the difference is significant at the 95% level are shown in the table above
3.28 A separate regression analysis was conducted to explore what factors were associated with blaming the UK Government for a weaker economy. As already discussed, 35% of people in Scotland thought that the economy had weakened in the past 12 months. 45% of these people thought that the UK Government policies were responsible for the weakening economic position, representing the views of 15% of the total population. This analysis explored the same factors as the analysis described in Paragraphs 3.25-3.27 above.
3.29 Those that were more likely to blame the UK Government for a weaker economy were women, middle-aged people and people with standard grade level education compared with those with no qualifications. People on high incomes were less likely than those on low incomes to blame the UK Government as were those on the right of the political spectrum (Table 3.3). In more detail:
18% of women compared with 14% of men thought that the UK Government was to blame for a weaker economy. People aged 35 to 54 years old, compared with those over 65 were more likely to think that the UK government is responsible for a weaker economy
In terms of education it was those who have standard grades compared with those with no qualifications who were more likely to blame the UK Government for a weaker economy: 23% compared with 15%
Those who were less likely to think that the UK Government is to blame were people in the highest income group. 7% of people in the highest income group compared with 23% in the lowest income group thought that the UK Government was to blame for a weaker economy
And people on the left of the political spectrum were more than twice as likely to blame the UK Government, 21%, than people on the right, 9%.
|% believing UK Govt is responsible for a weaker economy||Sample size|
|Income||Up to £14,300||23||346|
|Over £14,300 to £26,000||19||303|
|Over £26,000 to £44,200||14||241|
|No recognised qualification||15||360|
|Left-right political scale3||Left||21||477|
Note: only factors with a significant relationship are shown
1Education is only marginally significant (p=0.070)
2Party identification is only marginally significant (p=0.063)
3Left-right political scale is only marginally significant (p=0.075)
Email: Wendy van Rijswijk
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