Hansard

I welcome the opportunity to discuss the Social Security Committee’s report on in-work poverty. Last week, the Office for National Statistics released figures that show that Scotland is following trends across the UK, with employment at record highs and unemployment at record lows. That is undoubtedly to be welcomed, but many people in work still find themselves in low-income employment and without the opportunities and rewards that, we all hope, work should provide.

Wage growth, of course, is an important metric. As we emerged from the most recent recession, the period of exceptional growth in employment was not matched by similarly positive levels of wage growth, although that trend shows signs of reversing. Across the UK, the gains in employment are being consolidated and there are real-terms increases in wages that appear to be sustainable. As the independent Office for Budget Responsibility reported at the time of this year’s spring statement, wage growth has been revised up to 3 per cent or higher in each year of its forecasts. However, those in the chamber need little reminding that as wages increasingly grow ahead of inflation, it is productivity growth that will make a real impact on the incomes of working people in this country and establish a strong economy. In that regard, although there is more work to do across the UK, productivity remains a more acute problem in Scotland than it is on average in the UK, despite the Scottish Government’s pledge to put such issues front and centre in its economic policy.

As the committee heard, no one factor of itself can address poverty. In-work poverty is heavily concentrated in a relatively small number of sectors, which nevertheless can be large employers, so we should look at the particular issues that arise in those sectors and at what support the Government could offer. We should also bear in mind the fact that relative income poverty is a necessarily narrow measure and that analysis of one metric alone is likely to ignore particular problems in our economy. In remote and island communities, for example, the higher cost of living has a considerable impact on how people can spend their incomes.

The current statistics measure income poverty before and after housing costs. That is certainly important, as increasing housing costs are a major drain on household incomes, particularly for young people, who are less likely to own their own home and more likely to find themselves in the rental sector and exposed to changes in the property market. However, that analysis ignores a whole suite of additional expenses, including energy costs and transport costs, that reduce disposable incomes for families, particularly in my region.

I have mentioned not only employment and wages but opportunities in the workplace. In discussions about the levers that are necessary to address low pay, the Scottish Government has often brushed over the most obvious and most important area, which has been within its control since the advent of devolution; that of education and skills. Building good-quality and high-paying work will require effort to be targeted at ensuring that people have the skills to succeed in the labour market. That is not just an issue for young people who are entering employment for the first time; it is about providing opportunities for people who are established in their careers to reskill and develop in line with their aspirations. Increasingly, a skilled workforce will be essential in our rapidly changing economy.

Although it is tempting to see the issue from the point of view of investment in our future productivity, there is also an individual angle, which is about creating a society in which people have choices and can grasp opportunities without being held back. Employability is one part of that, and the committee has welcomed the Scottish Government’s commitment to providing employment support for people who move into work. Although we have seen early figures from the newly devolved employability programmes, there has been a troubling lack of detail, which has hampered any real examination of their performance so far.

The committee noted the positive impact of Jobcentre Plus work coaches in supporting people who are moving into work or looking to progress in their careers. Clearly, there is a need for services to work together in a positive way to achieve the best outcomes. Public services are at their best when support is personalised and reflects individual needs.

The report does not examine personal debt despite debt being a consideration in relation to a number of the outcomes for households with low incomes. For those on the lowest incomes or those whose incomes are made up largely of income-assessed benefits, sizeable debt repayments will always have the effect of pushing incomes below tolerable levels.