Economic policies need to do more to tackle inequality – Poverty Commission

The Scottish Government needs to “match ambitious words with equally ambitious action” when making economic decisions, Scotland’s Poverty and Inequality Commission has said.

Despite committing to the concept of “inclusive economic growth” four years ago, research suggests that there has been no significant difference to how the Government’s economic policies are created.

A study by the independent economic think tank IPPR Scotland found that economic policies are not doing enough “to have a significant impact on levels of poverty and inequality in Scotland.”

Chairman for Scotland’s Poverty and Inequality Commission, Douglas Hamilton, said: “Inclusive growth – that is growth that benefits all and unlocks people from poverty – is essential at a time when we face a rising tide of in-work poverty.

“We welcome the Scottish Government’s adoption of inclusive growth, but the Commission wanted to understand whether it has marked a fundamental shift in the way policies are prioritised, made and implemented.

“What we found is that despite a high level of commitment to make this new economic agenda work, very little has changed.

“There is still a lack of clarity around what inclusive growth means, making it all things to all people. As a result, it appears to be more of a concept than an approach that results in real change in people’s lives.

“National strategies aren’t being easily understood or translated at a local level, further stifling the adoption of inclusive approaches to growth.

“We see a lot of goodwill towards this agenda, now it needs to be translated into action.”

The commission suggested that the Scottish Government sets “clear and consistent inclusive growth objectives” for new initiatives such as the Scottish National Investment Bank and the Scottish Centre for Regional Inclusive Growth, in addition to being part of future infrastructure spending.

Rachel Statham, economic analyst at IPPR Scotland, added: “We know that a fairer economy is a stronger economy.

“But for Scotland to realise its ambitions to deliver inclusive growth – that narrows inequalities and builds fairness into our economy – then we need to see stronger action from Government.

“To deliver a fairer and stronger economy in Scotland, we need a clearer definition of what we mean by inclusive growth, we need a better evaluation of inclusive growth policy in practice, and we must look at how new and existing powers over tax and the wider economy can make a difference.

“We need to match ambitious words with equally ambitious action.”

Public Finance Minister Kate Forbes said: “We agree with the Poverty and Inequality Commission that Scotland’s economy needs to deliver greater prosperity on a more equal basis.

“That’s why, despite a £2 billion reduction in Scotland’s block grant, we are focused on our objective of building a fairer and more prosperous country and eradicating child poverty.

“The Scottish Government supports inclusive growth whereby our economy grows in a way that benefits everyone.”