Report blames Coalition for Scots poverty

A NEW report on poverty in Scotland has blamed the UK Government for worsening the social divide but warned that even under independence Westminster would still “constrain” the way the country is run.

The first report by the newly-formed centre-left Scotland Institute warns that thousands more people both in and out of work in Scotland are facing poverty thanks to the “deliberately chosen policies” of the Coalition government on low pay and welfare cuts.

Examining the constitutional options, the paper says a more powerful form of  devolution might give a Scottish Government a greater ability to tweak policies as it sees fit. But it warns that a Scotland which continues to use the pound, and lives within the UK’s framework, would always be “constrained” in what it can do.

The report, written by academic Roger Cook, says that if people want a more left-wing approach to reducing poverty in Scotland, then the best method is to change government at Westminster.

It concludes: “The ideal is a UK-level government that is prepared to turn its back on the neo-liberal economic and social policies that have done so much damage and then a Scottish Government that can adapt that wider framework to meet the particular challenges faced in Scotland.”

The Scotland Institute was set up by Scottish entrepreneur Azeem Ibrahim last month, with backing from former chancellor Alistair Darling and ex-SNP Enterprise Minister Jim Mather. It describes itself as a “progressive” think-tank which aims to  produce papers on policy in the run-up to the independence referendum.

The paper sets out the increasing wealth gap in Scotland, using existing evidence to claim that one in five people in Scotland are at risk of slipping into poverty. It also warns that 17 per cent of people in work are now living in relative poverty.

Solutions include an increase in the “living wage” and tax and welfare increases, to ensure that both the working and non-working “poor” get a significant boost to their household income.

Dr Cook argues that while the Scottish Government has sought to reduce the wealth gap in Scotland, the distribution of powers in Scotland shows that “there is little that can be done to directly address the source of poverty under the current devolution settlement”. All it can do, he says, is to “offset some of the worst aspects of the Coalition’s policies.”

A policy of devo-max, under which most tax and spending decisions would go to Holyrood, would enable it to boost tax and welfare spending, the report says, providing “more scope to address some aspects of social exclusion”.

On independence, while the “main gain” would be the ability to craft a separate tax system, it argues that “whether this could be delivered, given the likely continuation of UK-wide movement of goods, capital and people is less clear.”

It concludes that social exclusion will continue to rise so long as the Coalition government’s policies continue.

A spokesman for Deputy First Minister Nicola Sturgeon insisted last night that “welfare and pensions spending will be more affordable with independence”, pointing to  figures which show Scotland spends 40 per cent of revenues on “social protection”, compared to 42 per cent for the UK.

But Scottish Labour leader Johann Lamont responded: “This report shows that Alex Salmond’s plans have nothing to do with addressing poverty or solving any of Scotland’s other problems.

“He has tailored his plans not to meet Scotland’s needs, but instead to try to con Scots into buying his flawed prospectus. “

She went on: “The starting- point should be what does Scotland need to do and how do we do it. Salmond’s starting-point is how do we leave the UK and everything else is secondary.”

John Dickie, head of the Child Poverty Action Group, said: “It really is vital that positive ideas about how we address these causes of poverty are at the forefront of public policy thinking and at the heart of debates about our constitutional future.”

Martin Crewe, director of Barnardo’s Scotland, said: “There has never been a more urgent need to put in place

opportunities for families to pull themselves out of poverty.

“Not to do so will run the risk of failing as a society and developing a permanent class of excluded and impoverished children and the resultant poor social outcomes that this creates.”