Scotland’s improving poverty rate – worth one cheer?

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Nick Bailey
University of Glasgow

The recent media coverage of poverty has focussed on growing problems of severe hardship and destitution. The cuts in welfare benefits have been made worse by rising costs, falling real wages and reductions in public services. There is a real crisis for many households and the growing demand for food banks is one symptom of this, as Scottish Government research has shown [1]

If we look at official statistics, however, there is a rather different story which can be told – and it’s a good news story for a change. After a century and more when Scotland has been one of the ‘poor relations’ within the UK, it now has a poverty rate which is lower than the national average. On a ‘low income’ measure for 2011/12, the Scottish poverty rate is 18 per cent compared with 22 per cent for the rest of the UK. On a ‘deprivation’ measure for 2012, it is 29 per cent compared with 33 per cent .[2]

This isn’t actually news – the relative improvement in the Scottish poverty rate occurred around 2003/4 and has been maintained every year since then, as official statistics and other sources demonstrate. But somewhat surprisingly, it hasn’t had much comment.

The improvement occurs because there has been a steady fall in the poverty rate for working age people in Scotland while the UK poverty rate for this group has been unchanged. For people 65 and over, Scotland has long had a lower poverty rate than the rest of the UK. As the UK poverty rate for older people has fallen over the last 10 years, Scotland’s poverty rate has fallen at the same rate – the relative position has not altered.

It should go without saying but this is limited grounds for celebration, certainly not “three cheers”. The UK still has a worse poverty rate than most of the older member states of the EU so Scotland has just managed to overtake one of the ‘back markers’ in the field.

It might be worth a couple of cheers, however, if we could say that the improvement was the direct result of particular policy interventions in Scotland. If that was the case, we might expect we could continue doing these things and make more progress. The evidence suggests, however, that the improvement has little to do with policy – at least, little to do with policy made in Scotland.

First, within the working age population, the improvement occurs for those in households where someone is in work rather than those in workless households. This suggests that a major factor driving the change is the improvement in Scotland’s economic position relative to the rest of the UK. But earlier research suggests that devolution has played little part here. Recent economic trends in Scotland have been similar to those in northern England. That’s why we also see relative improvement in the poverty rates for the northern English regions, not just Scotland.

Second, another significant factor appears to be housing costs. In both the social rented sector and in the private housing market, the cost of housing in Scotland has fallen relative to England and affordability (comparing local house prices to local wages) has improved. Again, however, this is not the result of policy in Scotland. Rather, rising costs in England are the result of policy choices there, as well as of a failure of policy there to cope with housing demand pressures, notably in London and the South East.

So one cheer then? I think so – and not just because there’s been so little else to cheer recently. If nothing had changed – if Scotland had continued to have a higher poverty rate than the UK – around 200,000 more people would have been living below the poverty line in Scotland in 2011/12. What’s more, now we have had such a clear demonstration of the importance of housing costs, we can hope that policy will give this area greater importance in future.

[1]  Click here for details

[2] For details see Bailey, N (2014) Lower poverty in Scotland: pinning down the change by clicking below

TO VIEW THE REPORT IN FULL PLEASE CLICK Lower Poverty in Scotland report