1. Child Poverty Action Group Scotland
The Importance of Social Security
Jonathan Bradshaw
Glasgow
19 May 2016

2. Argument Tory Government mantra “Work is a way out of poverty”
But it is not enough
For families with children, even when working full-time on the National Living Wage, social security/cash benefits are vital.
In fact they contribute about half of net income
They are being cut: frozen, benefit cap, two child limit, rent limits, other cuts to UC
That is why 68% of Scottish children in poverty (AHC) have someone in employment
The Westminster govt mantra on child poverty is that work is the best way out of poverty. Hence benefit cap and two child limit. Work is a way out of poverty. But for families with children even if they work full-time on the minimum wage it is not enough without family benefits which contribute half of net in work income. These benefit have been and are being cut. That is why in-work child poverty has been increasing. 68% of poor children in Scotland have someone in work.

3. ONS (2017) Average incomes, taxes and benefits by decile groups of NON-RETIRED households WITH CHILDREN, 2015/16 UK
The next two slides show how important social security benefits are. This shows the composition of incomes for families with children. On the bottom decile ss contributes 57% of net income and 40% for the second decile

4. Contribution of wages and benefits to net disposable income couple plus 2 one earner 50% average earnings 2014 OECD Tax Ben
This shows that UK is no unusal in this respect OECD data on taxes and benefits couple with two children with one earner on low wages benefits contribute more than 40% of net income

5. Before housing costs (BHC) After housing costs (AHC)
Scotland child poverty rates by working status of parents 2015/16 Source: Own analysis DWP (2017) Households below average income
Before housing costs (BHC)
After housing costs (AHC)
All lone parents 30 44
All couples with children 15 21
Lone parent working full-time 14 28
Couples with children both working full-time 9 12
Couples with children one parent in full-time work 25 36
Workless lone parent 51 62
Workless couple 54 66
This table gives the child poverty rates in Scotland lone parents have a higher child poverty rates as couples with children. If the lone parent works full-time the poverty rate is lower but still over 28% AHC. If both parents in a couple work full-time the poverty rate is 12% AHC and if one parent works it is 36%

6. Composition of child poverty in Scotland Source: on analysis of HBAI 2015/16
BHC
AHC
Lone parents
Couples
All
All adults in work
33.9
43.3
39.6
21.1
45.4
36.1
At least one adult in work, but not all
16.0
41.1
31.1
19.8
37.4
30.7
Workless households
50.1
15.6
29.4
59.1
17.2
33.2
100.0

7. Trends in the Child Poverty Act targets UK
Child poverty has begun to rise after the reductions achieved in the last decade. We are not on track to meet the Child Poverty Act targets

8. Impact of child benefit increase on number of children in poverty in Scotland £ per week per child Source: Own analysis of HBAI 2015/16
Those of us concerned about these issues look to Scotland for hope. We are desperate for the Scottish Govt to use its powers to mitigate this by increasing social security for children in Scotland If the Scottish Government was to increase child benefit by £5 per child per week 30,000 children would be lifted out of poverty AHC and if the increase was £10 per child per week the poverty 45,000 children would be lifted out of poverty. The costs of these increases would be £256 million per year and £511 million per year. A £5 increrase would reinstate the real value of child benefit to what it was in 2009 before austerity

9. Conclusion Increases in the minimum wage are welcome
But for families with children it is undermined by freezes and cuts to social security benefits
The Institute for Fiscal Studies expects UK relative child poverty to increase from 19% in /15 to 27% in 2021/22 before housing costs and from 29% to 36% after housing costs.
Scotland must use its devolved powers to increase child benefits if it is to
Meet its 2030 child poverty targets and
Continue to set an example to the rest of the UK!