Challenging the government’s policies on inequality and poverty

Earlier this year Naomi Eisenstadt was appointed as the Scottish Government’s Adviser on Poverty and Inequality. It’s easy to be cynical about such appointments – will they really make a difference, or will they be used simply to publicly validate pre-determined policy choices?

In a fascinating lecture this evening, organised by Poverty Alliance as part of Challenge Poverty Week, Ms Eisenstadt spoke about what she sees as the biggest challenges facing Scotland in addressing inequality and poverty, and what the Government could do about it.

At the heart of the lecture was the idea that addressing poverty and inequality requires difficult choices. And it was clear that Ms Eisenstadt will not shy from challenging the Scottish Government about the choices it is making now, as well as those it will have to make in the future.

A recurring theme was how to strike the balance between public services that are universally provided and those that are targeted, i.e. means tested. While accepting that some services should be universal, and that deciding where to draw the line is tricky, Ms Eisenstadt was clear that she thinks the Scottish Government should ‘re-think’ its universalism policy in some areas.

Given the ‘current position fiscally’, she would not support the current universal free school meals policy. She thinks it’s ‘disgusting’ that she herself receives a Winter Fuel Payment. This view is particularly relevant given that Winter Fuel Payments – and the £185m annual funding associated with them – are due to be devolved to the Scottish Government following the Smith Commission recommendations. The inference was that she feels similarly towards the Scottish government’s free HE tuition fees policy. But, recognising that the Scottish Government are unlikely to budge from their commitment to this, she argues for an equivalent level of funding ambition for non- academic post-16 education routes.

A number of Ms.Eisenstadt’s key policy ideas could be progressed by the Scottish Government today, funding issues notwithstanding: more investment in affordable and quality childcare (with the emphasis on quality); investment in social housing combined with rent controls in the private rented sector; investing in infrastructure as a way of providing training opportunities for young people.

It was less clear where revenue might come from to fund these policies. Ms Eisenstadt feels there is little scope to raise revenue or achieve greater redistribution by increasing income tax when this is devolved to Scotland, given likely voter objection. And reform of council tax was not mentioned once, despite this poorly designed, regressive-tax being under the full control of Holyrood. If she was advising the UK Government, Ms Eisenstadt would argue for substantial increases in inheritance tax, so that advantage cannot be passed from one generation to the next; but this is a non-starter for a Conservative government.

Perhaps the most controversial proposal was that efforts to tackle poverty should not concentrate too heavily at the very bottom of the income distribution, where the average cost of intervention is high and outcomes uncertain. Better to focus on addressing poverty slightly closer to the poverty line. In practice this means addressing in-work poverty. But even if you accept this as a focus, there seemed relatively little focus on how we might do this. In-work poverty is caused by a complex set of interactions between demand for and supply of labour, and labour market institutions and regulation. These issues didn’t get much coverage.

Of course it would be unreasonable to expect all issues to be covered, and plenty of other issues were discussed, from poverty in rural areas to reform of VAT. Towards the end of the Q&A, Ms.Eisendstadt was asked at the end if she thought the First Minister was open to her proposals. Unsurprisingly, Ms. Eisenstadt said she thought she was. Given how persuasively and honestly she makes her case, I don’t doubt her. But even if specific ideas are not pursued, it seems clear that Ms Eisenstadt will not shy from challenging the government when she thinks it right to do so. This is an adviser who could make a difference.

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