This response to The Smith Commission tries to answer the question of how further devolution to Scotland could enable faster, more sustainable progress towards this goal.
- Devolution of powers is not intrinsically a surer route to poverty reduction. A great deal depends on the macroeconomic environment, combined with the will, culture and delivery capacity which favours this goal – preferably across all tiers of government.
- Addressing the drivers of poverty needs to be built into the new devolution settlement as far as possible. These pressures are to be found in the jobs market and in housing, as well as the cost of essentials like childcare and energy and in elements of welfare reform.
- The next phase of devolution needs to create appropriate incentives to invest in poverty-reducing approaches, with the revenue (annually managed expenditure) savings from improved outcomes retained by the Scottish government, and the costs of additional spending (or arising from poorer outcomes) met from within the Scottish budget
- Any new social security powers need to be matched with appropriate fiscal and economic powers. This is to ensure the Scottish parliament has the opportunity to use these powers to meet Scottish circumstances and is accountable for the impact of such decisions.