On the 28th August, the Glasgow Fabians held a pint and politics evening. We were delighted to be joined by Paul Sweeney MP and Andrew Hilland, prospective parliamentary candidate, who spoke to the group on how the next Labour government can tackle child poverty;
“This evening I’m going to speak about child poverty. And I want to say five things.
First, child poverty is the greatest social injustice of our generation.
Second, it is being caused and perpetuated by Tory austerity and SNP timidity.
Third, the previous Labour Government offers two lessons as to how we should tackle child poverty.
Fourth, Nye Bevan gives us a clue as to how we might pay for this.
Fifth, championing radical action to address child poverty is not only the right thing for Scottish Labour to do, but also presents a political opportunity.
The greatest social injustice of our generation
What do we mean by child poverty? The Child Poverty Action Group defines child poverty as growing up in families without the resources to “obtain the type of diet, participate in the activities and have the living conditions and amenities” which are the norm in 21st Century Scotland. A more technical definition, used by the UK and Scottish governments, is that children are considered to be in poverty if they live in households with less than 60 per cent of median household income.
For these children, this can mean living in a cold and cramped home; missing out on school trips or after school activities which their friends take for granted; growing out of their school blazer before their family is able to buy a new one; and even going hungry.
Almost one in four of Scotland’s children (230,000) are officially recognised as living in poverty. This is significantly higher than in most other European countries.
And it’s projected to rise in the coming years, with the Institute for Fiscal Studies forecasting that more than a third of children in the UK (5.2 million) will be living in poverty by 2022.
An April 2018 report for the Scottish Government – Forecasting Child Poverty in Scotland – reveals that almost two Scottish children in every five could be in poverty by 2027-28. That would represent a doubling of poverty in Scotland from 210,000 in 2010 to more than 400,000 during the 2020s.
Child poverty is the greatest social injustice of our generation. And it’s accelerating out of control.
Tory austerity and SNP timidity
There are three principal causes of poverty in the United Kingdom today: worklessness; low wages and underemployment; and inadequate benefits.
Households in which no-one is in paid employment are most likely to experience poverty, with 73 per cent of children in workless households in the country living in poverty.
But we’re also seeing a rise in in-work poverty. Prime Minister Theresa May claims that “work is the best route out of poverty”, yet two-thirds of children growing up in poverty live in a family where at least one person works. While there is an upward trend in terms of rates of employment in Scotland, changes to the quality and nature of work mean that employment is by no means a guaranteed route out of poverty.
And despite being intended as a safety net against poverty, the reality is that many families in receipt of social security benefits are living below the poverty line.
It was recently revealed that the UK government has secretly drawn up plans to investigate whether its own policies are to blame for the sharp rise in food banks.
Two of the most senior officials at the Department for Work and Pensions have been tasked with overseeing the study, which will run for a year and cost £217,000. Tory ministers have consistently refused to accept that austerity-driven welfare reforms may have been responsible for the huge increase in people needing emergency help.
But if you speak to anyone working on the frontline, it’s painfully obvious that the polices of the Westminster Government are to blame. Eight years of Tory austerity has taken its toll. Cuts to social security and tax credits, and the freezing of child benefit, are driving the dramatic increase in child poverty in Scotland.
So too is the rollout of Universal Credit, a new social security payment which is bringing together six means-tested “legacy” benefits (including unemployment benefit, tax credits and housing benefit) into one benefit paid monthly to claimants. The original aim was one that Labour supported: to simplify and streamline the benefits system, improve work incentives, tackle poverty among low income families, and reduce the scope for error and fraud. But the project has been hollowed out by cuts and beset by administrative failures, with the result that many people have been forced into debt and rent arrears, and have had to turn to food banks to survive. The Trussell Trust recently reported that, in the past year, food bank referrals rose 52 per cent in areas where the Full Service of Universal Credit has been introduced in the previous 12 months, compared to a 13 per cent rise across the UK as a whole.
What’s more, a recent National Audit Office report suggests that Universal Credit may actually cost more to administer than the previous system of benefits it replaces, with current costs running at £699 per claim, against an ambition of £173 per claim by 2024-25. The bitter irony is that the Tories send people to foodbank on the basis that “they are not best able to manage their finances” – that’s a real quote from Michael Gove – while ministers waste billions of pounds of public money with impunity.
But the SNP, for their part, have failed to take meaningful action to tackle child poverty in over a decade in power. Earlier this year, Douglas Hamilton – the Scottish Government’s top advisor on poverty – cautioned that while rhetoric in Scotland is progressive, “we don’t have the actions to match up to that.”
And the recent report the Scottish Government commissioned – Forecasting Child Poverty in Scotland – is blunt about the failure of the SNP to address rising poverty, despite the substantial powers the Scottish Parliament now has. The report concludes in the starkest of terms: “the tax and social security reforms recently announced by the Scottish Government will not fundamentally change the overall trajectory of child poverty in Scotland.”
Two lessons from the previous Labour Government
Child poverty raises a fundamental question as to what we are prepared to tolerate as a society. It is a basic principle of fairness that every child should have the best start in life. Where you are born should be no barrier to your future. In 2018, no child in Britain should have to grow up in poverty.
There is a clear moral case for action on poverty, but also a sound economic one. Both the IMF and the OECD have highlighted how poverty acts as a drag on economic growth. Action on child poverty today can strengthen our economy, improve productivity and reduce pressures on the public purse.
And we know from recent history that rising poverty is not inevitable. It’s a result of political choices. New research by the Resolution Foundation shows the number of children living in poverty fell from 3 million in 1998 to 1.6 million by 2010, as the Labour Government met its goal to reduce the number of children in poverty by a quarter by 2004 and came close to the 2010 goal of halving it.
There are two lessons from this. First, if you want to reduce child poverty, cash transfers are essential. Second, these transfers should be targeted to the people who need them the most.
This is the case for tax credits. Indeed, a recent IPPR Scotland report found that the most effective means of reducing child poverty using existing benefit payments would be increasing the child element of Universal Credit, with more than twice the impact of increasing child benefit for the same investment. Specifically, the IPPR found that topping up the child element of Universal Credit by £50, in combination with ending the two-child limit and benefit cap, would cost around £390 million per year, and would bring 45,000 children out of poverty. The Scottish Government has the powers under the Scotland Act 2016 to do this. It should use them.
Of course, there is a raft of measures that would help alleviate child poverty in Scotland, including the introduction of a real living wage of £10 per hour; increased provision of affordable, high quality childcare; ensuring that every child has a decent, secure and heated home; and for all councils to follow the lead of Labour-controlled North Lanarkshire in providing free meals to all children who need them 365 days a year.
But the success of the previous Labour government in tackling child poverty shows that enhanced tax credits are absolutely essential.
The language of priorities
There are many ways we might pay for this, from a more radical use of the Scottish Parliament’s income tax powers, to the introduction of a wealth tax. But the point I want to make today is a different one: the rise of child poverty in Scotland, and the SNP’s failure to make any inroads in addressing it, should make us think seriously about the value of some of the Scottish Government’s universalist programs. As Nye Bevan said, “The language of priorities is the religion of socialism.”
Holyrood spends billions of pounds more than the equivalent in England each year. Almost none of it goes to helping the poorest in our society, even though the Scottish Parliament has the powers to do that. Instead, most of it funds free stuff, irrespective of whether people can afford to contribute. I want to put forward just a few illustrative suggestions of areas where money would be better spent in building a fairer and more equal Scotland.
First, under EU law, the Scottish Government is legally required to provide free tuition to EU students, because it’s free to Scottish students. The SNP have announced their intention to continue with this policy post-Brexit, despite the fact we’ll no longer be legally required to do so. It will cost £93 million a year, and only 17 per cent of Scots agree with it. We should reverse the Scottish Government’s policy, and put this money towards waging a war on poverty.
Second, the over 60s currently travel free on buses in Scotland. The retirement age is 65. This means that in many cases the Scottish Government is giving free bus passes to people who are either in work or have been able take early retirement. Hypothetically, a 62-year-old lawyer in Edinburgh earning £100,000 is entitled to free bus travel from Morningside into the City. We should consider raising the age of eligibility to 65.
Third, the cost to Scotland’s NHS of providing free prescriptions was 1.3 billion in 2017/18. Paracetamol and aspirin were the fourth and eighth most commonly issued prescriptions, despite both being available over the counter for a fraction of the cost. We should think about limiting free prescriptions to those who can’t afford to pay for them.
To be clear, I support universal services in principle. But when there’s a child poverty epidemic – as we’re currently witnessing in Scotland – we need to ask whether universal programs are always the best use of limited resources. The Scottish government should commission a review on the cost of universal services, to facilitate a more informed debate about priorities.
A political opportunity
My final point is that championing radical action to address child poverty is not only the right thing for Scottish Labour to do, but also presents a political opportunity.
Since 2014 the SNP have claimed that an independent Scotland would be uniquely progressive: only through separation could we achieve social justice. This message accounted for the surge in support for independence in 2014, and their success in the elections that followed. But with the publication of their Growth Commission report – which would commit an independent Scotland to £100 billion more debt during the 2020s and tie them to a decade of austerity – the SNP have confirmed what many of us have been saying for years: that their real priority is not social justice, but independence. As a party, we should be shouting from the rooftops that: first, Labour is now Scotland’s only social justice party; and second, if we’re to have any chance of eradicating child poverty, we need to both preserve the £10.3 billion annual fiscal transfer we receive from being part of the UK, and use the tax and benefit powers of the Scottish Parliament to their fullest extent.
In Lanark and Hamilton East – where I stood as a candidate at last year’s general election – we gained thousands of votes from the SNP, while losing a similar number of votes to the Tories. These aren’t necessarily “Tory voters” in an ideological sense – in many cases, they are people who have voted Labour all of their life, but who defected to express their opposition to a second Scottish independence referendum. They often don’t associate the Scottish Conservatives with the UK government when it comes to fundamental issues like Brexit or austerity. Yet having stood at last year’s general election as “Ruth Davidson’s candidate” (the suggestion being that they were a different kind of Tories), the reality is that the Scottish Tory MPs vote with the UK Government at every opportunity. They never put the interests of Scotland above the interests of the Conservatives. Scottish Labour must be absolutely relentless in exposing the damage that austerity is causing to communities across Scotland, and in holding the Tories – including the Scottish Tories – to account.
I’m very proud to be standing as a parliamentary candidate for Labour, the only party who will fight to eradicate child poverty in Scotland and across the UK. That fight must be central to everything we do”