John Swinney must hold his nerve and keep tax high for the wealthy

If John Swinney’s challenge as SNP leader is to unite his party, his challenge as First Minister is to find goals parliament will support and – harder still – the cash to achieve them.

John Swinney wants to “build the economy, support jobs, address the cost-of-living crisis, improve the health service and tackle the climate crisis”, he says. Above all, he wants to “eradicate child poverty”. A shopping list like that will require a wagonload of gold.

Mr Swinney doesn’t have it. He can’t spend what he hasn’t got so while he’ll hope to make progress on all of them, some of those promises will go unmet. He has to prioritise and we’re being left in no doubt about what comes first: child poverty.

Humza Yousaf has handed power to John Swinney (Image: free)

Is that the right call? Absolutely. Can he achieve it? Yes, but only if he and the Holyrood parliament direct a lot of cash into it.

However you look at it – morally, politically, economically – eradicating child poverty is number one.

The moral argument is overwhelming. Child poverty is a disgrace in a country as rich as Scotland. It’s a repudiation of the ideals the modern parliament was founded upon.

The Scottish Government target is for fewer than 10 per cent of children to be living in relative poverty (in homes on 60 per cent of median income or less) by 2030.

Around a quarter of children currently live in these circumstances, many in working households.

The effect of this is only too clear. For some, it means going to bed hungry. It means keeping your coat on when you come home from school because your parents can’t afford to use the heating. It means watching your friends go off to football or gymnastics without being able to join in. It means missing out on holidays. It typically means falling behind your peers at school. It means feeling stressed and marginalised.

Head of Scotland at Save the Children Claire Telfer and her colleagues see the impact on families all the time. She says: “We must never accept as the norm that one in four children are living in poverty.”

Yet we have been living with it for many years. In a country that needs to grow its economy and expand its tax base, this makes no sense at all. As Telfer says: “Imagine what every child could achieve, and what we could achieve as a nation, in the next quarter of a century if we made child poverty a thing of the past.”

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Tackling poverty pays rich dividends. Families spared the stress of poverty have better health. Children are better able to reach their potential at school and beyond. There is no credible strategy to boost the Scottish economy that doesn’t involve tackling our high levels of poverty.

And achieving the Scottish Parliament’s 2030 goal, though difficult, is politically realistic. For a start, it’s a goal supported by all the parties at Holyrood. John Swinney can muster the votes for bolder action.

As SNP leader, he knows that focusing on this, while UK Labour refuses in advance of the election to ditch the hated two-child benefit cap – which is actively pushing children into poverty – makes sense politically as well as morally.

Critically, he also knows that existing Scottish Government policies work – they just don’t go nearly far enough. Measures like free school meals, free bus travel for children, the expansion of childcare and above all the Scottish Child Payment, are making a difference.

It’s intolerable that a quarter of children in Scotland live in poverty, but in England it’s a third.

So the policies are having an effect but the latest child poverty figures suggest progress is far too slow. It stalled during and after the pandemic. When the 2023/24 figures are published in February, reflecting an expansion of the child payment late last year, they are expected to show a further drop in the number of children living in poverty. Without a serious cash injection and a sustained effort, though, progress is expected to grind to a halt again after that.

Save the Children Scotland, the Child Poverty Action Group and others want to see the Scottish Child Payment urgently increased from £25 to £30 a week per child and £40 by the end of this parliament. Humza Yousaf promised the bump to £30 but later went back on it. Mr Swinney, having made this his priority, has to deliver.

You won’t find any politicians at Holyrood claiming it’s not worth it or the approach is wrong, but it will cost a great deal of money. The Scottish Government is already expected to spend twice the amount on the child payment this financial year (£427m) compared to last, reflecting a £5 increase in its value and wider rollout of the scheme last year.

'It’s intolerable that a quarter of children in Scotland live in poverty, but in Sunak's England it’s a third' (Image: free)

Tough choices on spending and maintaining tax divergence with the rest of the UK will be necessary to fund the boost to £40. Further cash will be required for employability support (due to face a £30m cut next year), childcare, more social housing and better home insulation, which are key to cutting child poverty.

You can see how difficult it will be to pay for all this, but if you make eradicating child poverty your priority, this is what it takes.

SNP ministers’ willingness to tax the wealthy at a higher rate has prompted objections from business leaders, but Mr Swinney’s government should hold steady. Working more constructively with business cannot mean giving it a veto on desperately needed measures to tackle poverty, educational and health inequalities.

Can child poverty really be eradicated? The answer has always been yes. Mr Swinney says he has the political will – now he has to prove it.