Meeting of the Parliament 01 November 2022
I thank all those who contributed to the Social Justice and Social Security Committee’s inquiry, and I thank organisations for the helpful briefings that they have provided to members ahead of the debate.
It is vital that we understand the challenges that are faced by people on low incomes and the debt problems that that drives, in particular in the context of the global cost of living crisis, which is placing more and more people further into debt, with the accompanying misery that that produces.
Prior to the outbreak of the Covid-19 pandemic, it was estimated that 600,000 people in Scotland were in debt. The real problem is that the pandemic has not only exacerbated money problems for people in Scotland, but is now driving them. Across the UK, the cost of living has been increasing since 2021. In September this year, inflation rose to a 40-year high of 10.1 per cent. Naturally, it is those in low-income households who are worst affected by that increase in inflation. High food and energy prices are among the consequences of high demand from consumers, supply chain issues and—most importantly, as we need to recognise—the fallout from the war in Ukraine.
Those who are living on low incomes are more likely to be in debt. Around half of low-income and middle-income households have at least one debt; in comparison, the figure is less than two in five for higher-income households. One of the key messages that came out of the inquiry from those with lived experience concerned the vital role that advice services have to play and the role that early intervention can and must play. The role of local authorities in supporting and providing such advice to individuals and families on low incomes is important.
Cutting council budgets and services harms the poorest in our society. Sometimes the Parliament does not recognise that enough. COSLA has already warned that further cuts to council budgets and services will mean the removal of services for the most vulnerable in our society.