Child poverty pledges require bold action to redirect resources and address corporate welfare

This guest blog from Professor Stephen Sinclair, co-Director of the Scottish Poverty and Inequality Research Unit at Glasgow Caledonian University, reflects on the step-change required to deliver the child poverty targets.

This blog post also appears on the Policy Scotland website

To meet its own ambitious child poverty goals, the Scottish Government must be politically courageous in focusing public services where they are most needed, and ensuring employers play their part.

By renewing its commitment to eradicate child poverty (effectively revoked by the UK government in the Welfare Reform and Work Act 2016) and enshrining this pledge in legislation, the Scottish Government has shown moral leadership. The Poverty and Inequality Commission’s initial recommendations are practical and evidence-based and, if implemented effectively, would improve the circumstances and prospects of many thousands of children across Scotland.

However, it is no criticism of the Commission to note that even the contribution which the proposed measures would make will not be sufficient in themselves to place Scotland among those countries with the lowest levels of childhood deprivation. To achieve that position requires a step-change. Both the Scottish Government and the Commission implicitly recognize this. The Commission’s report observes that the target to reduce relative child poverty below 10% in Scotland is ‘ambitious and extremely challenging’, given that it has not been less than 19% in recent years. In fact, it suggests that successive welfare cuts and uncertain economic prospects make the task all but impossible. However, this sobering recognition should not lead to despair but appreciation of the scale of change required to decimate child poverty, and the resolve to bring this about. To do so, the Scottish Government must make the case for action public and visible, and avoid the mistake of previous UK governments of ‘doing good by stealth’, which cannot survive setbacks nor changing fortunes.

The Commission notes that reducing child poverty requires measures which go beyond benefit reform: ‘reaching the targets through use of devolved social security powers alone is not realistic and would require billions of pounds of additional spending’. In any area of life, security is not assured merely by assisting people after they have been harmed but protecting them from harm in the first place. So it is with poverty and deprivation: effective social security involves what Adrian Sinfield describes as ‘upstream’ measures which reduce vulnerability caused by life-stage changes and other shocks which tip many households into poverty.

To help protect children and their families from poverty, bold action is required in at least two areas: firstly, focusing mainstream public services on areas of greatest need; secondly, requiring employers to take more responsibility for preventing poverty.

Some public services have an ‘inverse care law’: provision and uptake favour more affluent, engaged and articulate communities at the expense of disadvantaged groups and areas. The effect is that such services can exacerbate inequalities. The Scottish Government must consider the distributional impact of resources beyond those aimed specifically at addressing poverty, and redirect them to help lower income households and disadvantaged communities. One example of this is concessionary transport. This currently costs around £192 million a year and principally benefits older people. While laudable in many ways, is the most effective use of resources, or could this support be better directed towards lower income households rather than older ones? The Scottish Government has recently consulted on this issue, and proposed free bus travel for Modern Apprentices aged under 21. The Poverty and Inequality Commission recommended providing free transport to young people receiving Educational Maintenance Allowance. Upholding the principle that need rather than voice (or longevity per se) should determine who benefits from public resources requires political courage, and is a test of the Scottish Government’s resolve.

The Commission notes that almost two-thirds of children in poverty in Scotland live in a household where someone is in some form of employment. While this is not the same as low pay, nevertheless, too many employers fail to provide jobs of sufficient quality and reward. The Scottish Government’s promotion of the Business Pledge and Living Wage are positive developments, but more than voluntary initiatives may be required to ensure that employers fulfil their social responsibilities. Many companies benefit from large subsidies and tax-funded corporate welfare (in the form of grants, tax allowances and rebates, loan guarantees, and so on) while providing relatively little social return. For example, Working Tax Credits are partly a subsidy to low paying employers, costing an estimated £11 billion in the UK. Taxpayers and employees are entitled to receive more in return for this subsidy, such as training which enables staff to increase their skills and employment prospects, or more flexible jobs for those with care responsibilities. Although tax credits are a reserved matter, the Scottish Government has the capacity to shape the business environment and corporate culture.

If it takes a village to raise a child, it takes a whole society to raise all children out of poverty. The Scottish Government must lead this endeavour, but all social partners must contribute to ensuring that future generations encounter poverty only in museums.


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