How the political parties can help create a prosperous, poverty free Scotland

17th Feb 2016

Launching a new manifesto to reduce poverty in Scotland, JRF associate director Jim McCormick says everyone has a role to play in the heavy lifting of poverty reduction.

The choices made by the next Scottish government can help to put Scotland on a long-term pathway to lower poverty levels. JRF’s manifesto briefing affirms the need for an all-age plan to boost incomes and cut the cost of essentials, but also to improve the education, housing and work prospects of low-income families. It will take the contribution of employers and housing providers, banks and energy companies, local government and the third sector, to succeed.

Poverty is costly, risky and wasteful - and it is a problem that can be solved in a wealthy country. Because the root causes of poverty are so varied, the response needs to be as broad as possible.

Our proposals start with childhood. Over the next decade, we estimate an extra £500 million will need to be invested in childcare to maximise its anti-poverty potential. The priorities are to improve quality (not just expand hours), extend support throughout the year and control costs to ensure childcare is more affordable. We propose a single funding system similar to Denmark’s, to replace the confusing plethora of current schemes. This would require all childcare funding to be devolved to Scotland, as well as Wales and Northern Ireland. Costs should be removed for low-income families and capped at no more than 10 per cent of net incomes for the majority.             

For work to offer a surer route out of poverty, further expansion of the living wage is needed especially in sectors like care, retail and hospitality which account for half of all low paid jobs in Scotland. But by itself, that would not be enough. We also recommend: progressing into better jobs should be the central purpose of a new Advancement Service, targeting those stuck in low-paid work or with the fewest skills. Funding models need to support apprentices from diverse backgrounds to access – and complete – higher quality frameworks. Our work persuades us that City Deal programmes in Glasgow & Clyde Valley and other Scottish cities can use procurement more effectively to ensure better employment opportunities for people and places facing poverty.      

However, we also understand that poverty occurs when people lack the resources to meet their needs, so we focus just as much on driving down the costs faced by low-income households as well as their incomes:

  • We propose an alternative property tax to replace the Council Tax, set in proportion to current values and backed by a more effective rebate scheme for the low paid.
  • A rolling loans scheme for private landlords would help to drive up safety standards and energy efficiency, with the potential benefit of lower energy bills for tenants and low cost to the public purse.
  • When income tax powers are devolved, we believe Winter Fuel Payment should be taxable. This would enable resources to be targeted more effectively towards low-income pensioners and would generate some resources to expand fuel poverty programmes.             

In short, we know a great deal about the causes of poverty and how to fight it: there is no excuse for fatalism or inaction. The challenge now is to all parties to set out their plans that will drive down levels of poverty and make sustained progress.