THE size of recent Scottish welfare reforms is “not really appreciated” and they represent a “really quite significant” change, a director at one of the UK’s leading economics research bodies has said.
Tom Waters, the head of income, work, and welfare at the Institute for Fiscal Studies (IFS), made the comments during an online broadcast examining “living standards, poverty and inequality in the UK: 2023”.
It came in the wake of the publication of an IFS report, funded by the Joseph Rowntree Foundation, which said the UK Government’s policy of giving occasional, lump-sum payments was less effective at fighting poverty than permanent uplifts to benefits.
On a live stream discussing the report and answering audience questions, Waters was joined by research economists from the IFS including Thomas Wernham.
Wernham was asked to address: “What evidence is there that devolved Scottish Government welfare payments are having a positive impact on poverty reduction?”
He replied: “The Scottish Government has made several changes to the welfare system using devolved powers so there is increasing divergence with the rest of the UK. The main effect of that is to increase the income of households with children.
“The Scottish Child Payment and Best Start Grants are providing quite significant amounts of money to lower income households with children, around £2000 per year extra.”
The Scottish Child Payment sees every child aged 16 given £25 per week for living costs, while the Best Start Grants are three one-off payments: the Pregnancy and Baby Payment, the Early Learning Payment, and the School Age Payment.
Wernham said that it was too early for there to be official statistics into the impact of these payments, but he said it was fair to expect them to be driving down poverty rates.
The IFS economist said: “These are very significant amounts of money so it seems highly likely that these payments are going to be reducing poverty, and in particular child poverty to some extent.
“I think Scottish Government modelling suggests it could be around a 5% decrease in child poverty, and something of that magnitude does seem quite reasonable given that these are a significant boost to the incomes of lower income households, funded by increases in taxes on higher income households.”
Commenting afterwards, Waters said that getting official data together on the impact of the payments would be “really important” work.
The IFS associate director told viewers: “Indeed. I think it’s an area where it’s perhaps not really appreciated, at least outside of Scotland, how big some of these reforms are.
“For low income families, specifically low income families with children, we’re talking about a really quite significant change in the size and the shape of the level of support the Government provides.
“Evaluating that in the coming years and its impacts I think is going to be a really important thing to do.”
Child poverty figures published in March showed that rates are lower in Scotland than in the rest of the UK. That data predated the full roll-out of the Scottish Child Payment.
