By stewartb – a long read

This draws attention to the state of poverty and inequality in the UK. It’s also intended to help fill what might be called the ‘perspective void’ left by the Unionist media – both commercial and (so-called) public service – in Scotland.  

In a recent blog post for TuS, poverty and income inequality in the UK was compared with other western democracies. It identified a number of smaller nation-states with substantially lower poverty rates and less inequality than the UK, places not unlike Scotland once independent.

See ‘On poverty and inequality: how England’s voters have chosen for the UK to be!’,

22 September 2022. (https://talkingupscotlandtwo.com/2022/09/22/on-poverty-and-inequality-how-englands-voters-have-chosen-for-the-uk-to-be/ )

In this post the focus shifts to the rates of poverty evident across the nations and regions of the UK. Arguably, a review of this kind is timely in the wake of the recent ‘mini-budget’ delivered by the UK’s self-proclaimed ‘new’ Tory government, the one with radically different policies from those that secured a General Election victory for the Tories in 2019 – this ‘new’ Tory government that not even England voted for!

Commenting on the recent budget announcements, the Resolution Foundation, the think-tank focused on those on low and middle incomes, stated on 24 September: ‘Between 2021-22 and 2023-24, the number of people living in absolute poverty is on track to rise by 2.3 million, including 700,000 children.’

The evidence – House of Commons Library

We can now readily compare and contrast levels of poverty in the populations across the nations and regions of the UK thanks to a new briefing published 29 September by the House of Commons Library (HoCL).

Source: House of Commons Library (2022) Poverty in the UK: statistics (https://researchbriefings.files.parliament.uk/documents/SN07096/SN07096.pdf)

The chart below (Chart 26) uses data for the 3 year period 2017/18 to 2019/20, so before the effects of the Covid pandemic. The rate for those on relatively low income after housing costs (AHC) in Scotland is 19%, the second lowest rate across the UK’s nations and regions.  (Full definitions of terms can be found in the HoCL document.)

The second portion of Chart 26 shows statistics on the number of children in relatively low income families. The AHC rate in Scotland at 24% is the lowest rate of any UK nation or region, bar NI.

The next HoCL chart shows data on ‘persistent low income’ over the period 20016 to 2020. Both before and after housing costs, the rates in Scotland are amongst the lowest of any nation or region.

More evidence – from the Joseph Rowntree Foundation

The Joseph Rowntree Foundation (JRF), described as ‘an independent social change organisation working to solve UK poverty’, regularly publishes authoritative, data-rich reports on poverty in the UK. Its 2022 review of UK poverty was published earlier this year.

Source: JRF (2022) UK Poverty 2022 – the essential guide to understanding poverty in the UK.  (https://www.jrf.org.uk/report/uk-poverty-2022 )

The JRF’s evidence is offered here through a series of quotes (with my emphasis) and data tables taken from this 2022 report.

On the benefits systems across the UK: the JRF states ‘The benefit systems in Scotland and Northern Ireland are increasingly different from each other and from the rest of the UK, with mitigations against some of the most poverty-increasing welfare reforms of the last decade and, for Scotland, a new Scottish Child Payment which will be doubled from April 2022 and will help make progress towards its Child Poverty Act target. While JRF modelling suggests more action is needed to reach that target, it is noteworthy that these are the two countries with the lowest poverty rates in the United Kingdom, .…’

On housing costs: the JRF states ‘Scotland has a slightly lower rate of poverty (19%) than England (22%) and Wales (23%) and around the same rate as Northern Ireland (18%). Housing costs are a key factor in the lower rate of poverty; renters in Scotland disproportionately live in the lower-cost social rented sector (59% of renters are in social rented, compared with 45% of renters in the rest of the UK). Social renters in Scotland also have lower rents, with low-income renters spending on average (median) £83 a week on housing costs compared with an average of £102 in England and £101 in Wales.’

The three year (2017-20) figures show that the poverty rate in Scotland is the same as for England and NI (all lower than Wales) before housing costs. Scotland has a lower rate than England and Wales by 3-4 percentage points after housing costs (AHC). The poverty rate in Scotland (AHC) is 6 percentage points lower than England’s NE region, 8 percentage points lower than the UK’s capital.  Of course the effective poverty rate – the impact on pockets – is that after housing costs are taken into account.

The JRF also notes: ‘The private rented sector also lacks the security provided by the longer-term tenancies, stronger protections against eviction, tighter regulation and social ethos of the social rented sector. Private renting households in England, Wales and Northern Ireland can be evicted ‘without fault’ by private landlords, which results in greater insecurity of tenure for the higher proportion of households in poverty now living in the sector. Scotland abolished no-fault evictions for new tenancies in 2017.’

Adding: ‘While many social renters receiving housing benefit or housing entitlement under Universal Credit are entitled to have all housing costs covered, the continued implementation of the removal of the spare room subsidy (known as the ‘bedroom tax’) and the maintenance of the benefit cap at a fixed rate will result in reduced entitlement to support for housing costs. This will mean many people have to raid their non-housing-related benefits to cover housing costs. Scotland and Northern Ireland have maintained mitigation payments for the bedroom tax which will continue to support those who have claimed support.’

The table below reports changes in rates of poverty over the longer term. It shows what the JRF terms a ‘muted’ change in most nations and all regions across the UK since 2007-2010. The JRF notes this period of limited change coincides with Tory imposed austerity. The rates in Scotland in 2007-10 had shifted to be one of lowest relative to other parts of the UK: by 2017-20 its rate was at the lowest level in the UK bar NI.

 

More recent evidence – from the Department for Work & Pensions

Further insights into the levels of poverty and geographic inequality across the UK more recently can be gained from the following official report:

Source: Department for Work & Pensions (31 March 2022) Children in low income families: local area statistics, financial year ending 2021 (https://www.gov.uk/government/statistics/children-in-low-income-families-local-area-statistics-2014-to-2021/children-in-low-income-families-local-area-statistics-financial-year-ending-2021)

When viewing what follows it is relevant to note the caveat in this DWP report: ‘Comparisons across countries or years is not advised for FYE 2021. Consequently, statistics below show local area variations within each country for FYE 2021 only.’ The difficulty in making comparisons across years is understandable given unique circumstances in 2021 due to the Covid pandemic. It’s not so clear why comparisons ‘across countries’ within the same year present a similar problem. Nevertheless, what follows should be taken as indicative only. In any event, the relative position of Scotland in these latest DWP statistics is not out of line with its relative position in the statistical distributions reported above for earlier years. 

The local authorities with the highest proportions of children aged under 16 in Relative and Absolute low income families, FYE 2021 is shown below: in England (left side), Wales (centre) and Scotland (right).  The ‘worst’ case in Scotland – Glasgow City – has rates of 24.6% and 20.2%. Yes, too high!  The red line has been added to help bring perspective.

 

In Wales a small number of local areas have rates higher than the highest in Scotland. By contrast at least 10 areas in England exceed the highest (the worst) rate in Scotland: the rate of relative poverty in Manchester at 32.5% (10th highest rates In England) is c.8 percentage points higher than Glasgow City.

The same DWP source reports on children in low income families (LIF) at the level of national populations:

• ‘In FYE 2021, there were 2 million children aged under 16 in low income families in England in Relative low income and 1.64 million in Absolute.
• ‘In FYE 2021, there were 83,000 children aged under 16 in low income families in Northern Ireland in Relative low income and 62,000 in Absolute.
• ‘In FYE 2021, there were 146,000 children aged under 16 in low income families in Scotland in Relative low income and 119,000 in Absolute.
• ‘In FYE 2021, there were 147,000 children aged under 16 in low income families in Wales in Relative low income and 101,000 in Absolute.’

These data are tabulated below for ease of inspection: rates are calculated using mid 2021 population estimates from the Office for National Statistics (ONS).

Children in low income families (LIF), Financial Year Ending 2021

	England	NI	Scotland	Wales
Population (mid 2021 estimate by ONS)	56,550,000	1,896,000	5,466,000	3,170,000
Number: children in relative LIFs	2,000,000	83,000	146,000	147,000
Number: children in absolute LIFs	1,640,000	62,000	119,000	101,000
Rate %: children in relative LIFs	3.5	4.4	2.7	4.6
Rate %: children in absolute LIFs	2.9	3.3	2.2	3.2

Further evidence – on child poverty

The End Child Poverty coalition was set up in 2003 to ‘leverage the work of a wide range of groups all of whom shared the objective of eradicating child poverty in the UK’. It consists of c.80 organisations, charities, trade unions and faith groups. Its website provides useful collations of statistics on rates of poverty in the UK by geography and over time.

What follows in this section comes from: http://endchildpoverty.org.uk/child-poverty/  

Firstly, on the present distribution of rates of child poverty across the UK, the map below is derived from the DWP/HMRC publication ‘Children in low income families: local area statistics’ (March 2022) on the number and percentage of children aged 0-15 years who are living in households with below 60% median income before housing costs. The data provided in the map also uses the DWP/HMRC’s local indicators combined with information about housing costs at the local level to estimate poverty rates after housing costs by Westminster constituency. The map is shaded to highlight the differences in poverty rates – the darker the shading, the higher the child poverty rate.

The following chart shows the percentage of children in poverty (after housing costs) in the nations and regions of the in 2020/21. The figure for Scotland – yes, too high – is nonetheless noteworthy when compared to those for other parts of the UK.

There is a 13 percentage point difference between the rates for Scotland and for example,

Wales: this amounts to a rate in Wales 62% higher than in Scotland. Have Labour governments in Cardiff been unconcerned about child poverty? I am confident they have not but such engrained social ills are hard to shift with limited powers when within a nation-state which demonstrates high levels of poverty and income inequality by  international standards.

The next table provided by endchildpoverty.org show rates of child poverty (AHC) since 1996/97. (The time series for Scotland and the time when the SNP came to power in Holyrood are highlighted in blue.) The rates of child poverty in Scotland are and have long been lower than most other parts of the UK. And they have been substantially lower than in Labour-governed Wales for a very long time, including in the period of SNP government in Scotland.

(For the avoidance of doubt, this point is made NOT to take a swipe at Labour in Wales but rather to suggest that a less ‘outrage’ on social policy directed against the SNP Scottish Government may be in order from the Labour Party!)

To aid inspection, the cells shaded in yellow show those years and places where the rate of child poverty was lower than in Scotland. For over a decade, the rate in Scotland has been relatively low if not the lowest of all nations and regions.

Impact of UK government policy

A report for the End Child Poverty Coalition by the Centre for Research in Social Policy at Loughborough University summarises data on local child poverty after housing costs. The data are for the year ending March 2021, covering the first year of the Covid-19 pandemic. It utilises statistics from the ‘Households Below Average Income’ (HBAI) data released annually by the DWP, considered to be the official poverty statistics for the UK.

Source: Stone, J. (2022) Local indicators of child poverty after housing costs, 2020/21. Centre for Research in Social Policy Loughborough University

The key findings in the report are:

• child poverty was down overall in the UK in 2020/21, but is likely to be a temporary improvement related to the additional support provided to low-income families during the Covid-19 pandemic delivered by the £20 uplift to Universal Credit

• there is substantial regional variation in the AHC poverty rates. Child poverty has continued to increase in the North East and Wales, and the North East has now overtaken London to have the highest AHC child poverty rate in the UK
  
• at a local level, local authorities and constituencies in London continue to dominate the top 20 areas with the highest AHC child poverty rates. Rates are also high in other large urban local authorities and constituencies, including in Birmingham and Manchester, and in areas of the North East

• the statistics highlight major inequalities in rates of child poverty both between and within ‘regions’ of the UK, indicating that ‘levelling up’ is far from becoming a reality in the case of child poverty.
  
  

Noting the impact of the temporary increase to Universal Credit being reflected in the overall poverty statistics for 2020/21 – the percentage of children in poverty fell markedly, from 31% to 27% – the report argues that on the one hand ‘this could be regarded as encouraging evidence that a policy that put more money in the pockets of low-income households had a positive impact on rates of child poverty’. However, on the other hand, ‘it is likely that the reversal of this policy 18 months later will have, in turn, reversed this beneficial effect’.

Arguably, this places the value of the Scottish Child Payment in important context: child poverty can be tackled by making direct money transfers to the poorest families but only the Scottish Government has acted in this way, mitigating once again Westminster-derived social security policy.

The Loughborough University report lists the 20 UK local authorities and 20 UK parliamentary constituencies with the highest child poverty rates, after housing costs, in 2019/20, the latest year for which data were available. All the local authorities and all the constituencies are in England. The UK child poverty rate is given as 27%: in the 20 local authorities with the highest rates, the figure ranges between 38.9% and 51.4% of children in poverty after housing costs. Amongst the English constituencies with the highest rates, the figure ranges between 56.1% and 47%.

Perhaps these shocking statistics begin to explain the relatively high levels of poverty in the UK relative to other OECD countries as illustrated in the earlier blog post on TuS: ‘On poverty and inequality: how the UK is but doesn’t need to be!’

Looking at changes over recent times, the Loughborough University report notes: ‘… one of the most striking findings this year is that the overall AHC child poverty rate has continued to increase in the North East, with the rate overtaking London. Rates in Wales have also increased markedly for the past two years.’

This report has shown that during 2020/21, a period of substantial disruption in many areas of life due to the Covid-19 pandemic, child poverty remained a major issue across the UK despite the additional support provided to low-income families via the £20 uplift to Universal Credit.

This is not to say that the Universal Credit uplift did not have a positive impact – it did. Child poverty fell overall in the UK for the first time in a number of years, demonstrating that a boost to the incomes of low-income families via cash transfers does alleviate poverty. The report adds: ‘Nevertheless, wide variation between local areas in the impact of this policy and of the trends in child poverty, has shown that this is only part of the answer. In particular, areas affected by already high rates of unemployment and in-work poverty, particularly in the North East of England and in Wales, saw substantial increases in child poverty both before and after housing costs between 2019/20 and 2020/21. The rate of child poverty after housing costs in the North East now outstrips London.’

Current context

And matters are set to get even worse it seems. The Resolution Foundation published this on 24 September 2022: ‘Chancellor delivers ‘southern comfort’ statement with HOUSEHOLDS IN LONDON AND SOUTH EAST GAINING THREE TIMES AS MUCH as those in the North from tax cuts next year’.

Findings from its ‘Blowing the Budget’ report also include this forecast of increased child poverty and income inequality (with my emphasis):

– ‘The scale of tax cuts for the richest five per cent is enough for their incomes to grow by two per cent next year (2023-24). However, THE OTHER 95 PER CENT OF THE POPULATION WILL GET POORER AS THE COST-OF-LIVING CRISIS CONTINUES’

– ‘2.3 MILLION PEOPLE FALL BELOW POVERTY LINE. Between 2021-22 and 2023-24, the number of people living in absolute poverty is on track to rise by 2.3 million, including 700,000 children.’

It’s worth recalling

I’ll end by recalling these statements from the Joseph Rowntree Foundation, the charity devoted to ‘creating a prosperous UK without poverty’:

First from 2019: ‘The Scottish Government’s decisive and compassionate move to bring in the new Scottish Child Payment is the lifeline children and their families need, and is a BEACON OF PROGRESSIVE POLICY for the rest of the UK.’ (my emphasis)

‘This rightly has been LAUDED AS A LANDMARK MOMENT and the MOST PROGRESSIVE POLICY BROUGHT IN SINCE DEVOLUTION 20 years ago. We’ve now seen the Scottish Government decisively put words into action and we believe this will be a foundational step in turning the tide on child poverty in Scotland. Once fully rolled out, over 400,000 children will benefit, and 30,000 children could be freed from poverty.’

The JRF offers this important context: ‘Poverty in Scotland is rising and WE KNOW MUCH OF THIS IS DUE TO A REDUCTION IN THE LEVEL OF SUPPORT MANY PEOPLE ARE GETTING FROM THE UK SOCIAL SECURITY SYSTEM.’

Source: https://www.jrf.org.uk/blog/scottish-child-payment-will-turn-tide-child-poverty  

These statements from the JRF were written before the Scottish Government announced its intention to double the Scottish Child Payment! Later, Chris Birt, deputy director for Scotland at the JRF was reported in an STV online news article (14 July, 2021) stating:

‘If this cut to Universal Credit goes ahead in October, ALL THE PROMISED DOUBLING OF THE SCOTTISH CHILD PAYMENT WILL ACHIEVE IS TO REVERSE THE EFFECTS OF THIS DAMAGING CUT.’

The cut went ahead! However much discontent with progress in Scotland to end child poverty there may be, the perspective provided by the evidence laid out above should severely restrict the negative impact of those that gaslight Scotland on social policy matters.

What happens to Scotland’s economy, the resourcing of its public services and the sufficiency of its social security safety net continues to be dependent to a large extent on decisions taken in Westminster and on how the UK economy performs in response.  It is Westminster governments that have control over all monetary and most fiscal powers, as well as powers over energy, labour markets, immigration, international trade etc. 

The Scottish Government does have some, but severely limited agency: it can and clearly does make a beneficial difference measured in a UK context but these are probably marginal differences when viewed internationally.

Scotland’s prevailing constraints and dependencies were described recently in a publication from the Institute for Fiscal Studies (IFS):

‘… the challenges of projecting the finances of a government (the Scottish Government) that has to run a balanced budget, and whose funding depends to a large extent on decisions by the UK government.’ (my emphasis)

‘…. the Scottish Government which cannot borrow or accumulate debt in the same way as the UK government. Instead, it would have to tackle any budget gap on a year-by-year basis.’

And whilst referring to upcoming work by the Scottish Fiscal Commission (SFC) the IFS notes: ‘… the SFC plans to look at how the Scottish Government’s long-term fiscal outlook would differ under different assumptions about population and demographic change, and different assumptions about UK government spending decisions.’  

The significance of this latter point – on having to rely on ‘assumptions’ about what a Westminster government might do in future – has only been reinforced (to put it mildly!) by recent fiscal and economic policy changes by the ‘new’ Tory government!  And the significance of this point is of course reinforced by the earlier one viz. ’whose funding depends to a large extent on decisions by the UK government’!  Here the IFS is neatly encapsulating the Scottish Government’s much constrained agency – the double whammy of the Union – on tackling poverty and inequality, and indeed on a host of other matters of public policy.

Source: Phillips, D (2 Sept 2022) How could a falling population affect the Scottish Government’s funding? (https://ifs.org.uk/articles/how-could-falling-population-affect-scottish-governments-funding )

End note

Given the political climate we in Scotland have to endure whilst in the UK, on a range of important issues there is arguably an ongoing need to improve public awareness of context and perspective, to fill the void left by the corporate media and the BBC. There is also a need to counter the recurring Unionist assertions of a (somehow uniquely!) failing Scottish Government;  to push back the carping from the Labour Party in Scotland as it attempts to deny the present Scottish Government’s progressive achievements; and, candidly, the now endemic negativity in Unionist quarters about most things in Scotland.

Context and perspective gained though comparative analysis is a perfectly normal, ‘respectable’ research objective. The purpose of comparison is not to settle for a Scotland just a wee bit better than elsewhere, a wee bit better than (say) England: it is quite different. It is to assemble authoritative third party evidence to help counter the gaslighting of Scotland. And as the evidence reveals, Scotland is not always ‘the best’ – far from it – but it does measure up remarkably well relative to other parts of the UK.

I say ‘remarkably’ because it is another part of the UK – specifically England – whose electorate ‘benefits’ from having governments a majority chooses, governments that always have access to all fiscal and monetary powers necessary to effect change should they wish.

But of course if all this evidence – this filling of the ‘perspective void’ – is not known by many or most of the voting public in Scotland, it might as well not exist!

Whilst within the UK, Scottish governments and parliament in Edinburgh, with limited powers and constrained agency, will struggle to reach the lower rates of poverty evident in smaller, northern European countries. Whilst Holyrood may be able to deliver marginal beneficial differences from what happens in England, it’s a different matter to deliver on substantially different policy aspirations from those emanating from Westminster. Devolved governments bucking in a substantial, sustainable manner UK (i.e. England) trends in order to rival best international standards is probably an impossible ask!