Former prime minister Gordon Brown has said poverty is the most critical and divisive issue facing Scotland as he called on business and governments to take urgent action to address the problem.

“I’m seeing poverty in my own home area that I thought I would never see again in my lifetime,” said Mr Bown who grew up in Kirkcaldy. The Fife town was hit hard by the decline of industries such as mining and textiles.

“It’s poverty that’s seeing schoolchildren going to school ill-fed and hungry … it’s poverty that’s seeing nurses and even teachers and others having to queue up at food banks after a back-breaking day at work simply to get stuff to make ends meet,” said Mr Brown.

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Speaking at a conference in Edinburgh, Mr Brown underlined the scale of the problem as he expressed fears that things could get worse in coming months as high energy costs and inflation take a toll on households.

“We’re now seeing what I don’t think we saw physically at least in the 50s and 60s, we’re seeing mental illness on the rise, we’re seeing family break up in a way we haven’t seen before, we’re seeing children being put into care … I see it getting worse this year and worst next year unless some actions is taken,” cautioned Mr Brown.

He noted: “The amount of money being given to charities is halving.”

Mr Brown told the Advertising Association conference that businesses could play a vital role in helping to tackle poverty by supporting initiatives such as the Multibank scheme he has helped to establish in Fife.

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“We have a new idea that I would like to see you publicise because it started in Scotland. That is the idea of the Multibank … which is the food bank, the clothing bank, the furniture bank. It’s a baby bank all rolled into one so we can make provision for families.”

The Fife multibank has distributed goods worth around £20 million.

Businesses can donate surplus goods to multibanks, which also provide environmental benefits by helping avoid waste.

“This is a pollution solution as well,” said Mr Brown, who was prime minister from 2007 to 2010.

He also said the benefits system is making the problem of poverty worse and singled out the Universal Credit system introduced by the Conservative Government.

“Half the people on Universal Credit are not actually getting the benefits they are entitled to because they are subject to deduction,” complained Mr Brown.