Why Scotland cannot afford to keep one million people in poverty

Campaigners have designated this weekend as a time for reflection on poverty in Scotland. It comes at the end of Challenge Poverty Week, a seven-day national campaign led by the Poverty Alliance to highlight the impact of poverty on every aspect of life, from transport to housing, health to food. It probably passed you by.

Poverty is one of those words that politicians bandy about on a regular basis, often carelessly. No one likes poverty. Everyone wants to end it. Indeed, First Minister John Swinney recently announced that his “single greatest priority” is the eradication of child poverty. But here we are in the autumn of 2024, the 25th year of the Scottish Parliament, living in the world’s sixth-largest economy and there are one million Scots – one in five of us – living in poverty. How can this be?

The reasons are as complex as they are deeply entrenched. Poor health. Disability. A labour market – and a society – that doesn’t value vocational skills. Low-income jobs. A social security system that leaves single adults surviving 64 per cent below the official poverty line. The national housing emergency that sees unaffordable market rents and a shortage of social housing. Children going to school without breakfast. Teenagers leaving school without hope.

‘Moral stain on our society’

Generational poverty scars working-class communities across our nation, and not just in urban housing schemes. The view from a bedroom window in a rural community may be more attractive than that from the seventh storey of a high-rise block, but the poverty still saps your soul and destroys your health, whether you live in Possilpark or Perthshire.

There is no dearth of policy ideas to tackle poverty. The highly respected Joseph Rowntree Foundation published its annual Scotland report at the start of Challenge Poverty Week. This year it set out plans to reform the social security system, but the foundation, which sees ending poverty as a moral cause, examines how every area of public policy affects poverty, from AI to savings and debt. Others in the field, such as the Child Poverty Action Group, are equally as thoughtful, with a range of ideas and practical actions that could, if not eradicate poverty completely, reduce it significantly.

Politicians need to turn their words about eradicating child poverty into real action (Picture: Gareth Fuller) | PA

Why the SNP's claim it has lifted 100,000 children out of poverty is not all it seems

And if we are to believe politicians, they are as determined as anti-poverty campaigners and think-tanks to tackle the causes of poverty. Only four months ago, during the general election campaign, Keir Starmer told the Big Issue magazine that poverty is a “moral stain on our society”.

“We’ll have an ambitious, wide-ranging child poverty strategy,” he said, adding that his government would, among other things, ensure work is secure for all and slash fuel poverty. “We will deliver the change our country needs with an ambitious agenda to bring hope and opportunity to the next generation, and ensure everyone is better off with Labour,” he said.

Keynesian economics

A few weeks later, the new Labour Chancellor, Rachel Reeves, announced an end to the universal winter fuel payment for pensioners, leaving millions on meagre workplace pensions without their annual safety net. So much then for Starmer’s claim that he was going to be as “bold as Clement Attlee”, the post-war Labour Prime Minister who established the NHS.

Attlee had one advantage that Starmer lacks – a political and social consensus to rebuild Britian. His Health Secretary, Nye Bevan, could not have introduced free health care in 1947 without the support of people across society.

A Conservative government could not have built 300,000 homes a year in the 1950s without common consent. Keynesian economic policies – where governments play an active role in the economy instead of letting the free market reign – were embraced by both Labour and Conservative politicians in the decades after the Second World War.

And crucially, it is what the people wanted. Could the same be said today when applied to tackling poverty, or are we all too focused on our own financial survival to care that a single parent on benefits is ‘punished’ for having more than two children?

Mandelson on escaping low-growth trap

Two nights ago, I attended a talk given by that most New Labour of politicians, Peter Mandelson. His lecture, hosted by leading think-tank Reform Scotland, focused on ways to rebuild Britain’s faltering economy. He argued, eloquently, that the new government needs to invest to escape the cycle of low growth we are trapped in after a decade and more of financial and political shocks, from Brexit to the cost-of-living crisis after Covid. And he said that investment must be in people – human capital – as well as physical infrastructure, net-zero transition and technological breakthroughs.

I doubt if Mandelson was consciously arguing for significant government investment in an anti-poverty strategy, but that is in effect what he was saying. Scotland cannot become a high-growth, productive nation while one in five of its population is living in poverty.

Our economy cannot flourish with so many people living below the breadline, in poor housing, unable to afford childcare, suffering chronic ill health. It is just plain good economic sense to invest in people with a more adequate social security system, better public services, skills training, affordable housing, and yes, even AI. As was pointed out to me earlier this week, it would be a simple thing to produce an AI financial tool to quickly calculate if someone is entitled to pensioner credit and the winter fuel payment, instead of the current form with its 240 questions.

For far too long politicians have simply wrung their hands, wailing about poverty and how much they abhor it. News releases instead of action. Shamefully, it has become a weapon in the constitutional battle that still divides our nation.

And those of us lucky enough not be one of the million Scots mired in poverty have tried our best to ignore it. But poverty on this scale makes all of us poorer – Scotland can no longer afford it.