Politicians can’t accept that poverty is a result of economics

When a government is more than a decade into a strategy and then announces that it is going to review the basis on which the statistics that measure the success of that strategy are calculated, alarm bells should ring. This is never a good sign, and it isn't with news that we're about to see a review of child poverty statistical methodology in Scotland.

The Scottish Government has certainly said some bold things about child poverty and is continuing to do so. It first set very ambitious goals for child poverty reduction in 2014 and is currently committed to reducing child poverty below 10 per cent by 2031.

This is the problem; they are now 14 years into what they claim is a bold and detailed plan to achieve this, and so far, the statistics are pretty well identical to when they started. In fact, they're worse – the Government's own measures state that rates of absolute poverty have risen from about 22 per cent of children to about 23 per cent.

The Scottish Government isn't helping with its ongoing narrative. At the time of the announcement of the targets, Common Weal warned that they were going to be very difficult to meet. Poverty is, in effect, the ultimate measure of the aggregate failings of society. There is a dominant, but no single cause of poverty, and that dominant cause is in effect the underlying principles by which society works - our economic model.

What this means is that making serious progress on poverty cannot really be achieved without serious progress on housing, crime, employment, infrastructure, public services, education, transport and much more. But none of that will even have any impact if the main underlying cause remains unaddressed.

In reality, the primary feature of poverty over an extended period is that each form of economic organisation has its own pretty 'sticky' level. You can see the recent trends clearly in the graphs on pages eight and nine of this link – there was a slight fall between the very late 1990s and about 2003 but poverty rates since have remained more or less static.

The really telling graphs, however, are found in the second line graph of this report. For almost all of the Wilson, Heath and Callahan governments, rates of poverty are mostly in the 14-15 per cent range. In the first five years of the Blair administration, they brought poverty down a couple of points as various benefits moves (Working Family Tax Credits) and the Minimum Wage were introduced.

Then, for the remainder of the Blair years and over the Brown/Cameron/May/Johnston/Truss/Sunak years, poverty remains stuck in the low 20 per cent range. In between is Thatcher. In her first term, poverty was stuck at the high end of the range seen in the preceding 20 years, then in her second term, she unleashed the 'Big Bang' changes to Britain's economy.

In so doing, she transforms poverty. In her second term, she began with poverty rates of 15 per cent and five years later left them at 25 per cent. There is a massive, structural and permanent change to poverty. It goes too far, so Blair takes the edge off by a couple of points – and then it sticks.

What we are really seeing is two different economic systems, each with its own 'sticky' rates of poverty. The post war Keynesian economic system produces an endemic 14-15 per cent poverty; the neoliberal system that replaces it has a 21-23 per cent endemic poverty rate. Recalculating the basis of poverty statistics clearly doesn't change that. Cash payments (like the very welcome Scottish Child Payment) only partially disguise the underlying problem.

That is the economic settlement and if that remains unchanged, the outcomes will remain unchanged. And the Scottish Government remains obstinately wedded to what are basically Thatcherite economics, which in Scotland use the pseudonym 'Foreign Direct Investment'.

So when the Cabinet Secretary for Social Justice says there is a 'credible path' to bringing child poverty down to ten per cent in the next four years (which has never ben achieved in the post-war years) having failed to do so over the last decade, and that this 'credible path' is the same one we've been travelling and involves no action on the economy at all, it lacks credibility.

Unless politicians learn that you can't tackle poverty without tackling the problems of the economic system, they will remain as figures without anything sensible to say. Only economic reform will work.