John Dickie, head of the Child Poverty Action Group Scotland, talks about how a different taxation and benefits system can help end child poverty. The Whose Economy? seminars, organised by Oxfam Scotland and the University of the West of Scotland, brought together experts to look at recent changes in the Scottish economy and their impact on Scotland's most vulnerable communities. Held over winter and spring 2010-11 in Edinburgh, Inverness, Glasgow and Stirling, the series posed the question of what economy is being created in Scotland and, specifically, for whom? To find out more and view other Whose Economy? papers, presentations and videos visit: http://www.oxfamblogs.org/ukpovertypost/whose-economy-seminar-series-winter-2010-spring-2011/

1. A taxation and benefits
system to end child
poverty
Whose economy? Seminar
11 November 2010
www.cpag.org.uk/scotland

2. A taxation and benefits system to
end child poverty
• Whose economy now? Child poverty
and our current system
• Progress to date: What’s worked and
what’s not worked?
• Looking ahead: a tax and benefit
system to end child poverty

3. CPAG in Scotland
• Raising awareness
• Influencing policy
• Maximising family incomes

4. Whose economy now? Child poverty
and our current system
• 260 000 (1 in 4) Scotland’s children
officially recognised as living in poverty
(2008/09)
•undermining their health, education, life
chances and childhoods
• unusually high child poverty
• And
all this before 2010 Budget and
CSR assault on family incomes…..

5. New challenges
• £18 billion cuts to welfare, including:
− Uprating using CPI not RPI
− Child benefit frozen, and restricted
− New DLA assessment to cut £1.1b
− Contributory ESA limited to one year
− Council tax benefit reduced by 10%
− Housing benefit reductions, caps and
restrictions
− Cuts to child tax credit
−Cuts to working tax credit
− Health in Pregnancy grant scrapped
− maternity grant restricted to first child

6. New challenges
• “tax and benefit changes are regressive
rather than progressive across most of
the income distribution” (IFS)
•Treasury’s analysis shows both welfare
cuts and public service cuts announced
regressive
•families in bottom 40% incomes drop
by over 5% by 2012/13, with drop of
7% for poorest (IFS)
− Britain's top 1000 saw collective wealth
increase by £73billion in year to 2009/10

7. What’s worked?
Real progress:
Child poverty fell by 600 000, in Scotland 100 000
Why?
• Defining child poverty and setting targets
•Benefits: tax credits and increases to universal
child benefit
• Labour market: NMW, in work support
• Services: investing in early years and childcare

8. What’s not worked?
•W2W agenda: unbalanced approach to rights
and responsibilities, and too often failed
•Over-reliance on work. Increasing in-work
poverty.
• Stigmatising language eroding public support
• Problems with complexity, take up,
administration and adequacy of benefits
• Failure to tackle underlying inequality
• extraordinary inequality in pay distribution
• a tax system allowing the wealthy to
accumulate…whilst the poorest pay
disproportionately more

9. What would work: a tax and benefit
system to end child poverty

10. Benefits: Manifesto for Change
Scottish Campaign for Welfare Reform
• • Increase benefit rates to a level where no one is
left in poverty and all have sufficient income to lead
a dignified life
• • Make respect for human rights and dignity the
cornerstone of a new approach to welfare
• • Radically simplify the welfare system
• • Invest in the support needed to enable everyone to
participate fully in society
• • Make welfare benefits in Scotland, suitable for
Scotland.
•http://www.cpag.org.uk/scotland/SCOWR-
Manifesto.pdf

11. Increase benefit rates
•benefits should match Minimum Income
Standards, what public think is the
minimum required to enable an individual
to meet their needs and live with dignity
• those who are ill or disabled should get
additional help to cover the extra costs
incurred through ill health.

12. Respect for human rights
and dignity
•urgently review ESA and changes made
to move lone parents off income support
• Support carers by up rating Carers
Allowance to Minimum Income Standards
•Make benefit and job seeking services
accountable at a local level to service
users

13. Radically simplify the
welfare system
•Harmonise the tax credits and benefit
systems, as much as possible, so that
people can move in and out of work
without financial disruption
• Substantially up rate the earnings
disregard to remove barriers to paid
employment
•Extend universal benefits, e.g. making
child benefit pay equally for every child
- simpler, easier to administer and
without stigma than means testing

14. Invest in support needed
•Make employment in benefit and job
seeking services more fulfilling and
better rewarded
• Give guaranteed access to a well
resourced wide range of employment
services to all those who are seeking
work, including non claimants
• Invest in free or affordable, accessible,
high quality childcare focused on the
wellbeing of the child,

15. Suitable for Scotland
• Ensure that all welfare system takes
account of the different legislative
framework in Scotland and is integrated
with devolved childcare, education,
training provision.

16. Taxation to end child poverty
•Make tax policy more progressive.
proof taxation decisions for their
redistributive effect.
• Increase the role of income tax
• Reduce VAT consumption tax
• Tax unearned wealth transfers such as
inheritance
• Review council tax, but replacement
must be both fairer and raise necessary
resources for local services.

17. Conclusion
• Progress on child poverty had stalled even
before the economic crisis.
• If serious about an economy that will end child
poverty we can’t just return to where we were.
• The welfare benefit system must be mended;
and greater use made of universal benefits in
tandem with progressive taxation.
• We need to move away over-reliance on
means testing of benefits for those at the
bottom and the unfettered accumulation of
excessive wealth at the top.
• Will also require a different kind of labour
market with more equal pay distribution.

18. To view all the papers in the Whose
Economy series click here
To view all the videos and presentations
from the seminars click here