This wasn’t a week to lift the mood of the nation.
On Wednesday, the Chancellor delivered a Spring Statement which could push more than 250,000 people – including 50,000 children – into poverty.
On Thursday, it was confirmed that the Scottish Government had missed its interim target to reduce child poverty to 18 per cent by 2023/24. Earlier in the week, IPPR Scotland published analysis which found that the 2030 target is also highly unlikely to be hit.
Remember, ‘eradicating child poverty’ is the First Minister’s number one priority. Do things have to be this way?
There’s no denying that the Chancellor has been dealt a weak hand. She inherited a stagnant economy, creaking public services and government finances under severe strain. Trump’s policies have increased global economic uncertainty. Any Chancellor would find it difficult to plot a course through these challenges.
But she has contributed to her own woes by boxing the government in with commitments not to raise major taxes. Her observance of self-imposed fiscal rules borders on the religious.
The world has changed, not least because defence spending will have to rise to address very real – and rising – security concerns. The Chancellor was right about this much.
Government policy must now quickly adapt. As things stand, it is almost inevitable that the Chancellor will again struggle to meet the fiscal rules at the autumn budget.
Further social security cuts can only inflict real pain and result in rising future costs. Therefore, the focus must now be on generating higher tax revenues. IPPR Scotland has consistently argued that taxes will have to rise to deal with the cost of an ageing society and climate challenge.
Government at all levels needs to think long-term about who should bear these costs. Measures such as closing loopholes in capital gains and inheritance tax will raise revenues without breaking election commitments. Options for other wealth taxes must be explored.
In the longer-term, there is no serious approach to the public finances that doesn’t involve us all paying more through income and other taxes.
A silver lining on this week was that we saw the difference that progressive policies can make to peoples’ lives. Despite the Scottish Government missing its target, child poverty did fall in Scotland while rising elsewhere in the UK.
This was largely due to the impact of the Scottish Child Payment.
The Scottish Government should now bring forward a clear plan with costed policies that will ensure Scotland meets its 2030 child poverty targets. The UK Government must demonstrate it is serious about tackling the issue in its upcoming child poverty strategy.
Tax and spend policies must be set within a credible long term strategy, not knee-jerk reaction to fickle economic forecasts.
Stephen Reid is director of IPPR Scotland, a progressive think-tank “working towards a fairer, greener, and more prosperous society”
To sign up to the Daily Record Politics newsletter, click here