Oxfam’s “Our Economy” Report

– in the Scottish Parliament on 4th September 2013.

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Photo of Elaine Smith Elaine Smith Labour

The final item of business is a members’ business debate on motion S4M-07111, in the name of John Wilson, on welcoming Oxfam’s “Our Economy” report. The debate will be concluded without any question being put.

Motion debated,

That the Parliament welcomes the report by Oxfam, Our Economy, which sets out Oxfam’s vision for the economy in Scotland; notes that this report calls on policymakers, politicians and people in business to look toward the poorer sections of society who still do not benefit from economic growth in Scotland; recognises the report’s recommendation for greater control to be given to communities over how regeneration happens in local areas, such as Central Scotland; applauds Oxfam’s commitment in encouraging employers to pay a living wage, and praises Oxfam’s ongoing work on reducing what it considers the ever-widening salary gap between those at the top and those at the bottom.

Photo of John Wilson John Wilson Scottish National Party

First, I draw members’ attention to my declaration in the register of members’ interests. I should also point out that, at the beginning of the year, I had the opportunity to meet at the Pearce Institute in Glasgow representatives of certain organisations—Tea in the Pot and GalGael—that are mentioned in Oxfam’s “Our Economy” report. I found the discussion enlightening and the report reflects a number of issues that were raised with the Local Government and Regeneration Committee.

I welcome those in the gallery who are listening to this debate and thank all members from all political parties who signed my motion and allowed the debate to take place. Although my interest in tackling poverty is of long standing, it has been strengthened by Oxfam’s work in this area, especially its “Our Economy” report. In many ways, this debate is important in that it not only examines the economy in a traditional sense with reference to economic growth but highlights the vital point that growth and trickle-down economics are not reaching everyone in society, particularly those on the lowest incomes and suffering from poverty’s most debilitating effects.

For example, the report refers to the fact that, over the past 25 years, the top 1 per cent of United Kingdom earners have had real-terms income increases of up to 117 per cent while the incomes of the poorest 10 per cent have increased by only 47 per cent. The report highlights the need for a new vision of prosperity, underlining its arguments with approaches taken by various Governments and Oxfam partners around the globe and recognising the requirement to look beyond gross domestic product.

We must also ensure that community empowerment is not just a slogan that is utilised when we want to impose top-down community engagement. The fact is that society has evolved over the years. However, like the report, we need to recognise that the economic orthodoxy is failing many of our people and communities.

The gaps in equality are not just the result of people not working hard. As the report highlights, more than 40 per cent of those who live in poverty are in work. As I have stated in the chamber on numerous occasions, a step change is required in tackling the blight of in-work poverty. As the report highlights, in-work poverty as a proportion of all poverty in Scotland is on the increase. The number of people in in-work poverty has grown from around 255,000 to 280,000.

I come to the debate from a background of involvement in the voluntary sector, but I have also witnessed first hand the work of various agencies that have operated in Central Scotland to try to alleviate poverty. Some of those organisations have been very successful in creating opportunities for communities, but it is clear that others have failed to deliver. Where there have been issues about the success or otherwise of those organisations, we must allow communities the space and opportunity to learn from the mistakes and move forward.

It is significant that the idea of a living wage, which I have previously debated in the chamber, is gaining traction. Recent research by the Jimmy Reid Foundation quite rightly sums up the difficulty when it says that the issue is

“not a problem of high taxes but of low pay”.

As the “Our Economy” report details, businesses in the United Kingdom that pay below the living wage cost society between £5.9 billion and £6.3 billion a year in extra benefits and lost taxation. One need only look at the role of Barclays Bank, which is not normally a financial institution that I would rush to praise, in implementing the living wage in London.

On financial institutions, the financial crisis that developed over five years ago has meant a need to develop real alternatives, such as credit unions, to provide an alternative to payday loans. The work that credit unions do in Central Scotland demonstrates the difference that they can make in many communities. They help to get people, especially in deprived areas, to develop their own solutions rather than fall prey to doorstep lenders or payday loan companies. People talk about community empowerment. That is real action.

The difficulty is that some communities or interest groups can lobby better than others. There needs to better monitoring of how public moneys are spent and where they deliver the desired outputs for the communities that they are supposed to serve.

The co-operative sector is small in Scotland compared with other European countries, but that was not always the case. Strong mutual businesses such as building societies had a sturdy community ethos but were lost to many communities because of financial greed. As businesses, co-operatives and social enterprises can and should take a more long-term view rather than be short term in their approach, and they should not try to mirror the private sector.

As has been stated previously, it is vital that we as a society do not repeat the same mistakes and that we start to learn from the past. Regeneration should not involve just looking at the physical built environment. There may well be a point in building new houses, but the basic community structure needs to be in place. A relevant focus should be placed on community or localism, as some people in another place would put it. However, that may well lead us into another and more substantial debate about what we actually mean by “community”.

I recognise the good work that Oxfam is doing throughout various communities in Scotland and throughout the world. In particular, I welcome its contribution in stimulating the debate on the future direction of Scotland and addressing the issues of deprivation and poverty that many thousands of individuals and families face. “Our Economy: Towards a new prosperity” is the starting point for many of us to re-examine what we want to achieve in a prosperous independent Scotland.

The Deputy Presiding Officer:

I am afraid that the debate is oversubscribed, but if members limit their speeches to around three minutes, I may be able to call everyone.

Photo of Iain Gray Iain Gray Labour

I congratulate John Wilson on getting this debate. I was keen to take part in it for the fairly obvious reason that, prior to being elected to the Scottish Parliament, I spent 12 years working for Oxfam and so have some experience of where the ideas in the “Our Economy” report have come from. In that time, the thing that I was always proudest of and which I thought was most unique about Oxfam as an organisation was just how wide and deep its reach was at both ends of the spectrum.

For example, it was certainly possible to visit Oxfam programmes in many countries around the world where reaching the community involved might require travelling by small plane, then by truck and then by dugout canoe and then by walking for sometimes many hours. The community might seem remote and beyond the reach of an organisation that started in Oxford, but the truth was that, on every occasion, at the end of the trip there would be a community where Oxfam was not only known and understood but welcomed and respected.

Equally, at the other end of the spectrum, Oxfam was always an organisation that could knock on doors at the highest levels of society, be that in London, Geneva or Washington and be it Government doors, those of the International Monetary Fund or the World Bank, or those of academia and the offices of the most respected economists in the world. Oxfam remains an organisation that is listened to and understood.

I make that point to show that behind the “Our Economy” report is an enormous experience of community engagement and economic understanding, and a great deal of experience of using powerful tools to engage with communities and to get from them their experience and turn that into a policy agenda that can make a real difference to their lives. It is exactly that kind of approach that Oxfam has taken in Scotland in order to produce its report.

Another point about that kind of work undertaken by Oxfam is that it is successful. I think that many people see agencies such as Oxfam as living in a world of permanent despair in which nothing ever gets better and it responds to ever-worsening crises, but that is not true. Over time, many of the communities with which organisations such as Oxfam work do find ways to strengthen themselves and create sustainability. I remember almost 25 years ago visiting communities facing problems in Chile, which was just emerging from the Pinochet years and the austerity programme that had been imposed on it. Those communities used the tools and possibilities presented to them and succeeded in moving forward.

The Oxfam report is one that we should listen to. It has come at the right time because we have seen in recent weeks many supposed signs of recovery—for example, slightly better employment figures and some economic growth—but those of us who are prepared to look behind the headlines see that many of the jobs that have been created have zero-hours contracts and are part time and temporary; they do not provide the kind of security and confidence that people need to be able to go on and build a stable family life. Many of those jobs pay poverty wages that are less than the living wage. Today, we have seen a report from the Resolution Foundation that shows that the proportion of the workforce in Scotland being paid less than the living wage is increasing, not falling.

The Deputy Presiding Officer:

I am afraid that you must conclude.

Photo of Iain Gray Iain Gray Labour

There are many challenges in the Oxfam report for many sectors of society, but the challenge for us is not tonight but next week when our budget comes forward; the challenge is to take on board the report’s lessons and challenges and respond to them as the budget works its way through the Parliament.

The Deputy Presiding Officer:

Thank you. Before I call Mary Scanlon, can I make another plea? If members’ speeches take four minutes or more, I will not be able to call everybody who wants to speak in the debate.

Photo of Mary Scanlon Mary Scanlon Conservative

I, too, thank John Wilson for securing the debate. The Oxfam report is indeed wide ranging and it is difficult to do justice to it in a short speech. I congratulate Oxfam on its 50th anniversary in Scotland.

As an economist, I would like to see more research and robust data on the recommendation that communities be given greater control over how regeneration happens in local areas. On page 7 of the report, it is recommended that more land and assets be community owned and managed. We need all the information that we can get on how communities could benefit in terms of addressing poverty and reducing inequalities. My party and I are very much in favour of community-owned land and assets. They exist widely across the Highlands and I am very aware of them, but I am not aware of the research. Highlands and Islands Enterprise’s brief includes the pursuit of social benefit as well as economic regeneration, and it would be helpful to have information on that as well.

The recommendations on page 29 of the report include:

“Tax havens, offshore earnings and loopholes which allow avoidance should be pursued and closed.”

I am pleased to say that the United Kingdom Government has called for tax loopholes to be closed and for companies to pay their fair share. In July, David Cameron called on world leaders to get behind a global crackdown on tax avoidance and

“break down the walls of corporate secrecy”.

The United Kingdom Government has also branded aggressive tax avoidance, which is mentioned in the report, unacceptable, and in June it brokered an agreement with the UK’s overseas territories and Crown dependencies to sign up to a tax evasion clampdown. I am sure that that is welcomed throughout the chamber.

The increase in the personal allowance to £10,000, which will also take thousands more Scots out of taxation, is welcome. Personally, I hope that the threshold of earnings before liability for tax will continue to rise in future years to ensure that there is higher disposable income, particularly for the lower paid.

The first paragraph of the report states:

“the reality for many Scots is a cocktail of high mortality, economic inactivity, mental and physical ill-health, poor educational attainment, and exclusion from the decisions that affect them.”

I am particularly drawn to mental health issues. I remind colleagues that, in Scotland, 43 per cent of people who are on benefits have a mental health problem. Although we can debate—and we do—the rights and wrongs of welfare benefits, we should not lose sight of the thousands of people who live in poverty, and many in isolation, who need and deserve better diagnosis, care, support and treatment.

Finally, I have been pleased to participate in the national performance framework discussion forum, chaired by John Swinney, which is looking at the issue. It does indeed have cross-party support.

The Deputy Presiding Officer:

I call Jean Urquhart, who has to leave—

Photo of Kenneth Macintosh Kenneth Macintosh Labour

On a point of order, Presiding Officer. Would it be in order for me to move a motion to amend standing orders to allow all members who wish to participate in the debate the time to do so?

The Deputy Presiding Officer:

There is provision for that and I will come to it later but, even so, we are quite short of time.

I call Jean Urquhart, who has indicated that she has to leave the chamber for pressing business.

Photo of Jean Urquhart Jean Urquhart Independent

Thank you for your consideration, Presiding Officer.

I, too, congratulate John Wilson on securing this important debate. I am pleased to have the opportunity to speak in favour of the motion and to speak on Oxfam’s important efforts to explore the means by which we can remove the economic barriers to social justice in Scotland. I wish in particular to add my support for the humankind index, which is detailed in Oxfam’s “Our Economy” report, and for the community-led approach that is designed to empower poorer communities with the means to transform their local economies for the better.

For too many people in Scotland, work is no longer a route to a better life; some 40 per cent of those who live in poverty are in work. Put simply, that is because there is an emphasis in the UK economy on wealth creation over the development of adequate mechanisms to distribute wealth fairly. The work of non-governmental organisations such as Oxfam is critical in providing research on how we can address the issue.

As members know, Oxfam’s humankind index is designed to move away from gross domestic product as a measure of human wellbeing. In the 30 years preceding the financial crash in 2008, Scotland averaged GDP growth of 2 per cent a year, but a quarter to a third of Scots continued to live in poverty. That indicates that an alternative is not only required, but is urgently required. Oxfam’s humankind index, which is based on widespread consultation, offers that alternative. It measures human wellbeing on issues that matter to people—health, housing, a good local environment and reasonably satisfying work. From the economy, people want suitable quality employment and security of income. All those issues are important to people because they allow us all to live happier and more secure lives.

We must endeavour to ensure that we pay great attention to the issues that have been highlighted by the humankind index and that we do all that we can to foster the new prosperity that is detailed in “Our Economy”. It is really important to note that the extensive research shows that having money is not a priority; therefore it makes no sense to base all our economic policies on GDP.

I also lend my support to the report’s assertion that state agencies such as Scottish Enterprise must be governed by a socioeconomic duty and should replicate the Highlands and Islands Enterprise brief in order to pursue social and community development in every region.

Across Scotland, only 22 per cent of people feel that they can influence decisions in their areas, therefore regeneration needs to be genuinely community-led and we must not rely simply on public and private sector partnerships. That means that, as policymakers, we have a key role in helping communities to shape their local economies and environments, and we have to have the activity and policy that are needed to fulfil the demand for good jobs and a living wage, thus ensuring stable communities in which folk can take pride.

Additionally, we must empower communities with the mechanisms to challenge government policies and private sector actions that fail to take into account their socioeconomic and equality requirements. Although I support Oxfam’s assertion that delivery of the Scottish National Party’s manifesto pledge to recreate the Scottish land fund would benefit from a focus on providing adequate support to ensure that poorer communities can benefit, I encourage Oxfam to conduct a similarly informed study of all aspects of land reform, which I believe is so relevant to the wealth and wellbeing of the nation.

The recommendations in “Our Economy” appeal to the social democratic nature of Scottish politics and society. We must not only support those recommendations, but act on them to give our communities the mechanisms that they need in order to design local economies that are based on the needs of local industry and people, as well as on the principles of economic and social equality.

For me, the most interesting thing about Oxfam’s report is the list of priorities that came from the people whom we talk about as being somehow “other” because they are in poverty. Surely we can listen to those priorities now and take heed of the report.

Photo of James Dornan James Dornan Scottish National Party

I thank John Wilson for securing the debate on Oxfam Scotland’s “Our Economy” report, and I wish happy 50th birthday to Oxfam Scotland. As this important report says,

“Poverty is unjust and unacceptable” and

“there is nothing inevitable about Scotland’s level of poverty” particularly in the west of Scotland where, as has been noted by the World Health Organization, there is a 28-year gap in life expectancy around the Glasgow area. That is a frank manifestation of the poverty that blights areas of my home city.

Oxfam’s report is clear in its belief that the quest for economic growth above all else is the main reason why the rich are vastly richer than the poor. Oxfam suggests that the theory of trickle-down economics has proved to be useless, and that creating wealth without adequate ways of redistributing it leaves the rich to get richer with no positive impact on the poor.

In looking to combat that, Oxfam has developed the humankind index to assess Scotland’s prosperity in better terms than just GDP. The report recommends that the Scottish Government embed the humankind index in impact assessments and policy discussions so that the social worth of a project is considered alongside its economic benefits. In many ways, that is already happening in Scotland. Internationally acclaimed Nobel prize winning economist Joseph Stiglitz has commended the Scottish Government’s efforts to develop better performance measures, and notes that Scotland is a world leader in having wellbeing as a policy consideration. I have no doubt that there is a long way to go, but we have made a good start.

That was echoed in the Carnegie UK Trust’s report, “Shifting the Dial: From wellbeing measures to policy practice”, which also notes Scotland’s leading international role in considering wellbeing at policy level. It is therefore clear that the Scottish Government is committed to ensuring that people are at the heart of its policy decisions.

The report also raises justified concerns about the amount of in-work poverty, which has skyrocketed during the past decade. Of the 700,000 people in Scotland who are living in poverty, 120,000 are pensioners, 300,000 are out of work, and 280,000 are in work but do not make enough to pay for life’s essentials. Just yesterday, we heard about the soaring number of people who are having to use food banks. That is, in 21st century energy, people and resource-rich Scotland, a scandal.

In part, that occurs because the minimum wage is too low and does not pay even for a bare minimum standard of living. As Oxfam notes, that situation is being exacerbated by issues such as the bedroom tax and welfare reform, which it is clear have been pushed through by politicians who have little grasp of the challenges that are associated with their policies. That point was illustrated yesterday by my colleague Christina McKelvie, who quoted a response from Lord Freud saying that people with motor neurone disease could either take in a lodger or just work more hours in order to pay the rent shortfall that is due to money being taken off their housing benefit. It beggars belief, but it highlights the disconnect between some Westminster politicians and ordinary lives.

Oxfam Scotland recommends moving to the living wage as a replacement for the UK minimum wage, which is £2 per hour lower. The Scottish Government has done all that it can, within its powers, to address the issue of low pay. In 2012, the minimum Scottish Government wage was a living wage of £7.23 per hour, which compares with a minimum of £5.63 when it came to power in 2007. However, we must ensure that we do all that we can to continue to exert pressure for the minimum wage to be raised to a living wage. That would lift thousands of people out of poverty, cut the benefits bill and help to kick-start the economy.

At its heart, Oxfam Scotland’s call is for a transformative structural change that would embed Scotland’s economy as a servant of the people instead of its being the other way round. Clearly, key elements of that are that we have a truly progressive redistributive taxation system and that we actively challenge tax avoidance and evasion, which the report says cost Westminster £120 billion a year—or 40 times the cost of benefit fraud.

Where the Scottish Government has had the power to introduce progressive taxes, such as the land and buildings transaction tax, it has been progressive. However, without proper tax varying and raising powers of our own, Scotland’s ability to transform remains curtailed by Westminster. Oxfam says that its vision is not limited by the delineation between devolved and reserved powers, and that is how it should be—

The Deputy Presiding Officer:

Can you draw to a close, please?

Photo of James Dornan James Dornan Scottish National Party

Oxfam’s blueprint is its aspiration for Scotland, period. I share that aspiration, but to me it is clear that only one Parliament will be able to use the blueprint to make a fairer, more just and more equal Scotland, and that is this Parliament, elected by the people of Scotland.

The Deputy Presiding Officer:

Due to the number of members who still wish to speak, I am minded to accept a motion under rule 8.14.3 to extend the debate.

Motion moved,

That, under Rule 8.14.3, the debate be extended by up to 30 minutes.—[John Wilson.]

Motion agreed to.

Thank you. I still appeal for brevity in members’ speeches.

Photo of Kenneth Macintosh Kenneth Macintosh Labour

I begin by extending not just the customary congratulations to John Wilson on securing today’s debate, but my genuine thanks to him for his consistent and thoughtful contributions on tackling poverty and developing an alternative economic agenda here in Scotland.

Oxfam’s “Our Economy” report makes a powerful case for challenging the existing economic model. Oxfam is just one of several organisations that are helping to shape a new and more socially just approach in this country. From the Scottish Trades Union Congress to the Church of Scotland, and from the New Economics Foundation to Joseph Stiglitz and the authors of “The Spirit Level”, there is recognition—a plea even—that surely we should not and cannot, following a banking collapse and five years of recession, allow ourselves to return to the old ways.

Members may have heard me say it before, but little irks me more than thinking that our fiscal and economic policy is more influenced by the opinion of the credit-rating agencies, such as Standard & Poor’s or Moody’s, than it is by the level of unemployment in this country. The very people who gave AAA status to the derivatives and the sub-prime mortgages that sparked off the whole catastrophe now have the nerve to tell us whether we are spending or borrowing too much. I am not looking for retribution, but Will Hutton has highlighted the irony that not one of the bankers or financiers who have cost the people of this country billions of pounds has gone to prison for the offences, whereas tens, if not hundreds, of people who chose to voice their protest through the “occupy” movement have ended up spending time in the cells.

The Oxfam report lays out some of the political choices that lie before us if we truly want to tackle poverty and inequality, and to promote genuine opportunity and fairness for all, but none of us should underestimate the difficulty of the challenge that is before us. Unaccountable, unregulated and untrammelled capitalism may have failed this country and may have cost many people their jobs and others their pensions, but to challenge not so much the economic orthodoxy as the hugely powerful vested financial interests that hold sway in this country and across global financial markets is very difficult indeed.

As Jean Urquhart mentioned, if we just think about moving away from our common use of GDP as a measure of economic success, we can see the extent of the challenge. John Swinney has made progress in establishing the national performance framework as a set of indicators that come far closer to genuine prosperity and to focusing on our sense of wellbeing, but how many budget decisions are actually influenced by the NPF?

I am proud of Labour’s achievements in office, and I am particularly proud of our efforts in tackling poverty and reducing child poverty. However, although we grew the economy, reduced unemployment and made people wealthier, perhaps—as Mr Harvie said—that economic prosperity did not make as much of a difference in tackling inequality as we thought and hoped that it would. Now, as we live through the economic crisis, we need to rethink how we do things and create a new way that will enable the benefits of growth to be felt by the many, and not just by the few at the top.

There is a great deal in the Oxfam report that I would like to echo, but I will restrict myself to a couple of points. I have already referred to the Cabinet Secretary for Finance, Employment and Sustainable Growth’s national performance framework, which is a definite step in the right direction. John Wilson’s motion refers to wage differentials, and I particularly welcome that section of the report. Through its procurement bill, the Scottish Government could target support for companies that make a conscious effort to narrow pay differentials between the boardroom and the shop floor.

If a lack of accountability is one of the key weaknesses in our economy—if we believe that decisions around financial investment, for example, are driven more by the needs of shareholders than by those of stakeholders—different forms of ownership surely offer one way of addressing that problem. Community ownership is singled out by Oxfam, and it is an area in relation to which the Scottish Government has extensive powers. I urge the minister to use those powers, and I commend the motion in the name of John Wilson.

Photo of Chic Brodie Chic Brodie Scottish National Party

I, too, commend Oxfam on its report and thank John Wilson for affording us the opportunity to have this debate.

“Alienation ... is the cry of men who feel themselves victims of blind economic forces beyond their control ... The feeling of despair and hopelessness that pervades people who feel, with justification, that they have no real say in shaping or determining their own destinies ... Society and its pervading sense of values leads to another form of alienation. It alienates some from humanity.”

That is a quote from Jimmy Reid’s rat-race speech. I fought Jimmy Reid in an election and spent some time with him, and I know that those are not just words—he actually believed and felt them.

Mention was made of Joseph Stiglitz, who recently gave evidence to the Economy, Energy and Tourism Committee. He warned strongly that the gap between rich and poor in the UK was not sustainable and that the UK was in a particularly parlous position, which will ultimately lead to social tensions that we could only ever have imagined in our worst nightmares.

The point has been made about what happened with the banks. Earlier today, I highlighted the fact that this year’s bank bonuses—which were delayed for a month for tax purposes—come to £75.1 billion, which is two and a half times what the Scottish Government gets to run the country each year. Some 5 per cent of the UK population owns more than 85 per cent of the wealth. Oxfam has pointed out that the better-off are 273 times better off than the most deprived. Of course, a fundamental change to the structure is needed in terms of Westminster’s relationship with the banks. I commend the recommendations in the Oxfam report.

It is a nonsense that an income-rich country such as Scotland has the level of poverty that it does. We have tremendous assets, not just in oil and gas and renewables but in food and drink and tourism and in the inherent capabilities of our people. It is a nonsense that unemployment is as high as it is and that we have underemployment and zero-hours contracts. The living wage is a palliative. We need to get to a high-wage, high-productivity economy—against a background in which the economic position of the banks to support a new housing bubble makes one deeply concerned.

The cabinet secretary has said that the Government will consider Oxfam’s recommendations, including its proposal for a poverty commission or tsar. I understand the rationale behind that call, but I am not sure that I agree with having a poverty tsar—I think that we should all be poverty tsars and highlight what that means. In my case, because of my interests, that will involve social enterprise, which will unleash economic opportunity and draw on social contribution. I would contrast the contribution of social enterprises and of communities to that of the banks. The standards of social behaviour and the level of added value are clearly miles apart. In the same way, I contrast carers with payday lenders—the sharks who lie just underneath the surface of lending. Attention must be drawn to the social behaviour of carers and to the care that they provide.

I will also mention the issue of communities. Never mind the macroeconomic powers, how do we give power to the communities? I am a great believer in the principle that the land belongs to the people. That principle will allow us not only to manage local economies but to eradicate social evils such as the poverty that we currently experience.

Photo of Claudia Beamish Claudia Beamish Labour

I thank John Wilson for bringing to the chamber this members’ debate on Oxfam’s report “Our Economy: Towards a new prosperity” and for his analysis.

Leading to the report, Oxfam ran a series of seminars asking the question, “Whose economy?” Whose economy is it indeed, and whose Scotland? It certainly does not belong to those who work for less than the living wage, those who look out on an urban wasteland to which they have no access and that they cannot change or those who grapple with depression, which is often exacerbated by a lack of hope.

Oxfam also asks the question, “Whose regeneration?” and reminds us:

“Scotland’s post-industrial decline has led to large pockets of deprivation. Yet often the response to this—a consumerist model of regeneration premised on the trickle-down economics—hasn’t worked.”

Yesterday, I was delighted to attend part of an inspiring Nourish (Scotland) conference, which continues today, focusing on community involvement in the growing of, and access to, affordable, local, safe, organic food and the changes and infrastructure that are needed to help that to happen. That model stands in stark contrast to the dreadful present necessity of food banks in many of our communities.

Oxfam tells us:

“Across Scotland, only 22% of people feel they can influence decisions made in their local areas.”

As a long-term community activist and, now, a member of the Co-operative group of MSPs, my contention is that one of the most important conclusions of the report is the need for our economy to move towards a more community-based, co-operative model.

I recently visited the Mull of Galloway on the southernmost tip of Scotland, which stands as an example of what a community can achieve. There are many more examples of collective action and community ownership, but there are also many examples of communities, families and individuals that are excluded, are left behind and justifiably feel abandoned. That must change, and I suggest that we must be the catalyst for that change.

The change must be measured in a way that the people of Scotland understand. The national performance framework is becoming recognised as a valuable tool to identify key indicators to allow us to measure how well we are doing on issues that really matter to the people of Scotland. John Swinney has hosted a series of round-table meetings with MSPs from across the parties, of whom I am one, and a range of stakeholders. However, the NPF will not become a mainstream means of judging how we are doing unless it involves communities and is seen to drive policy.

The Scottish futures forum should be congratulated on hosting a series of seminars on rethinking wellbeing. We must have a Scotland-wide measure of wellbeing that is reported in parallel with GDP. The complexities of how that measure should be modelled are a challenge that must not allow any more prevarication. It is significant that the Scottish universities insight institute, in partnership with the forum, the Carnegie UK Trust, Scottish Enterprise and the Scottish Government, is

“inviting expressions of interest to take part in a multidisciplinary, knowledge sharing enquiry to better understand, measure and promote the well being of individuals and society as a whole.”

The debate highlights the existence of a critical mass of determination to act. It comes from communities, a wide range of NGOs, economists, academics and across the political parties in the Parliament. There is determination to work towards a Scotland that is prosperous and flourishing for all.

In this context, Scotland can perhaps be seen as a plant. Every gardener knows that, for a plant to flourish, it is not possible to nurture part of it and ignore the rest.

Photo of Patrick Harvie Patrick Harvie Green

I add my thanks and congratulations to John Wilson for bringing the motion to the Parliament.

Although it is not a registrable interest, I make it clear that I was a member of the steering group for Oxfam’s humankind index. I was very happy to have the opportunity to get involved in that work because, for the Green movement, replacing GDP and developing alternatives that make a more holistic measurement of economic success is not only a key argument but, in many ways, a founding one. I am very glad to see both interest in that concept growing and the contribution that Oxfam has made.

Everlasting economic growth on a single planet with finite resources is not possible. The faster we come up against the limits to growth and the harder we strain against them, the more the pursuit of everlasting economic growth will harm not just people but the ecological systems that we depend on for our very survival. Throughout all the years of economic growth that the UK experienced before the current recession, inequality increased, ecological harm increased and the proportion of wealth generated in the economy that was hoarded by a tiny minority of very rich individuals and businesses increased year after year.

In the limited time that is available to me, the one argument that I will highlight from the report concerns closing the labour market divide. The inequality between rich and poor cannot be addressed simply by the living wage, although I believe strongly in providing a living wage. That inequality cannot be addressed through generous welfare provision for those who are out of work, although I believe strongly in that. The gap between rich and poor cannot be addressed by looking at only one side of the equation; it must also be addressed by looking at the hoarding of vast amounts of our country’s wealth by a tiny handful of corporate and individual hoarders.

We should act right now on the argument about linking earnings equality to state support—the fourth bullet point in the labour market divide section of the report’s executive summary. We could do that in the public sector. Our water company is publicly owned, yet its chief executive is one of the highest-paid people in the public sector. Nobody needs to be paid a third of a million pounds a year, and certainly not from taxpayers’ money. The same is true of our railway. It is not a publicly owned company, but we pay for it. We should not expect such a level of wage inequality in the delivery of public services.

We could go further and attach conditions on wage inequalities to the support—the corporate welfare—that we provide through Government grants and support services for the business community. We should not just argue for a living wage at the bottom but give a lead on closing the gap and on lower wage ratios throughout our economy. We could act on that with the full powers of independence, but we could begin now with the powers that the Scottish Parliament has today.

Photo of Adam Ingram Adam Ingram Scottish National Party

I congratulate my colleague John Wilson on securing this debate on Oxfam’s report “Our Economy: Towards a new prosperity”. The subject is fundamental to understanding the current state of our economy and society and what we as policy makers need to do to create the sustainable and socially just Scotland that most of us seek. It is clear from the report that maintaining the status quo and continuing to accept the dominant political and economic orthodoxy that has been promulgated and promoted by the City of London and successive Westminster Governments will lead us in the opposite direction, on a rising tide of inequality and poverty amid plenty.

The prevalence of food banks, payday loan shops and zero-hours contracts is all a symptom of a sick and dysfunctional society and economy. The financialisation of our economy and the credit-fuelled consumerism that it encourages have yet to be tackled effectively. Financial austerity seems to be focused entirely in the wrong areas—on the low paid and the disabled—while the rich get richer and while the bankers with their bonuses and the global companies that pay their workers buttons manage to avoid paying their taxes.

We need to restore finance to its proper role as a way of sustaining industry and prioritising financial security for individuals, and not as a speculative means of profit maximisation. Of course, we need to develop a wider industrial base that provides good-quality and rewarding jobs. We are far too dependent on industries that offer only low-paid, unskilled and unrewarding jobs. Our people deserve better.

That commonweal-type vision for economic and social development dovetails neatly with the conclusions and recommendations of the Oxfam report. Of course, policies such as regenerating the local area by developing the community’s asset base could be delivered under current constitutional arrangements, but to my mind the likelihood of that happening is vanishingly small. Independence is much more likely to liberate us from the London-dominated political orthodoxy that has led us to the current miserable pass. Next year’s vote will be vital if we are to make progress in the area.

The Deputy Presiding Officer:

I call Margaret Burgess to respond to the debate.

Photo of Margaret Burgess Margaret Burgess Scottish National Party

I congratulate John Wilson on securing the debate, because I welcome every opportunity that the Parliament has to make its voice heard on tackling poverty and inequality in Scotland. The Oxfam report outlines how crucial tackling poverty and inequality is to achieving our vision of a successful Scotland

“with opportunities for all ... to flourish”, as set out in the Scottish Government’s purpose. I absolutely agree with the report’s focus on helping the poorest in society. That is why tackling poverty and inequality is a central priority for the Scottish Government.

We are taking a long-term, preventative approach to tackling the key drivers of poverty. That includes the actions that are set out in our child poverty strategy on maximising household resources and improving children’s wellbeing and life chances. At a time when the UK Government’s austerity programme is placing households under increasing financial pressure, as we have heard from many speakers today, we remain committed to greater equality and social justice. I think that everyone who has taken part in the debate absolutely agrees with that, and I recognise the real cross-party support for John Swinney’s round-table meetings, which will reconvene to discuss the matter again.

As part of the contract between the people of Scotland and their Government, we are protecting household incomes through the social wage, free personal care, the abolition of tuition fees, the abolition of charges for prescriptions and eye examinations, and the council tax freeze. Those things all matter to families on low incomes and to those who are working and struggling to make ends meet. All the measures that we have taken are assisting those families.

I support the report’s comments on the living wage. The Scottish Government is leading by example in protecting the pay of the lowest earners—the ones for whom we have direct responsibility—and in ensuring that all staff covered by public sector pay policy are paid the Scottish living wage. We are actively encouraging all public, private and third sector organisations to do likewise. We are doing that not just because we believe that it is the right thing to do for the benefit of everyone in Scotland, but because international evidence shows that countries that achieve greater equality also perform better in economic terms. Social justice leads to social cohesion, which is a building block of economic success.

As a Government, we care about the wellbeing of the people of Scotland, how people live their lives, how they want to live their lives, and their aspirations and hopes. That is why our economic strategy and national performance framework include cohesion and solidarity targets that are designed to increase equality and reduce the disparities between different sections of our society.

I also think that our approach to regeneration reflects the report’s recommendations. We recognise the significance of local people identifying for themselves the issues and opportunities in their areas, deciding what to do about them and being responsible for delivering the economic, social and environmental actions that will make a real difference. We recognise that the changes required to make all communities sustainable will be achieved only when communities themselves play an active part in delivering change.

We have started from a strong position in Scotland, as there is already an impressive range of activity taking place throughout urban and rural communities, led by hundreds of committed local anchor organisations. They drive change across a broad spectrum that includes addressing environmental issues; promoting local economic growth; tackling unemployment; supporting vulnerable people; challenging health inequalities; and enabling arts and cultural activity. Crucially, they deliver things that local people know will make a difference.

During the recess, I visited a number of community anchor organisations throughout Scotland and saw what they were doing for the people and how they worked together to make a real difference for their communities. That is the kind of work that we all want to see.

Recently, the Scottish Government set up its people and communities fund, which aims to help a wide range of community anchor organisations to deliver outcomes that meet and respond to the needs and aspirations of local communities. It is important that we have organisations that focus on up-skilling, because people’s capability to move things forward varies among communities. We need to ensure that everyone gets those opportunities and chances.

Photo of Mary Scanlon Mary Scanlon Conservative

I, along with Claudia Beamish, sit on the national performance framework group, which is chaired by John Swinney. I thank the minister for recognising the cross-party support for that.

Will the minister welcome the fact that, in 2010, the Westminster Government launched the measuring national wellbeing programme; increased the personal tax allowance so that people can earn £10,000 before paying tax; and introduced measures to address tax avoidance? Does she agree that we could do more by making mental health a bigger priority in our health service?

The Deputy Presiding Officer:

Minister, I will give you your time back.

Photo of Margaret Burgess Margaret Burgess Scottish National Party

Okay.

We could do a lot more if we had more powers to do it. Mary Scanlon mentioned the tax uplift, but unfortunately the UK Government has, by its other actions, taken that away from people.

Photo of Margaret Burgess Margaret Burgess Scottish National Party

I am sorry—I did not answer Mary Scanlon’s point about health. Yes, health is devolved, and the Scottish Government has a mental health strategy. It takes mental health very seriously and recognises the challenges that many people with mental health issues face, which is why we have that strategy in place.

This Government is ambitious for Scotland’s communities, which is why we are introducing a community empowerment and renewal bill that will strengthen community planning, simplify the operation of the community right to buy and make it easier for communities to buy public sector land and buildings.

However, despite our efforts, our social policies continue to be undermined by the UK Government’s welfare reforms, which have been discussed a great deal today. Over the five years to 2015, Scotland will see £4.5 billion taken from hard workers on low incomes, families, those with a disability, social housing tenants and people in the most vulnerable circumstances. Those are precisely the people whom society should be helping, not harming, and protecting, not pillaging.

For our part, we are doing what we can to mitigate some of the worst impacts. Through the council tax benefit successor funding arrangement, we are providing, with our partners in local government, an extra £40 million to protect people from the UK Government’s 10 per cent cut. If we had not done that, the most vulnerable people in Scotland would pay an increased amount of council tax when others did not, which is simply not acceptable.

Members will not be surprised to hear me say that extending the achievements of this Parliament around fairness and equality would be best served by independence. Independence would give us the powers that we need to build a fairer and more prosperous Scotland and ensure that the key decisions about what we want from our society and about Scotland’s future are made by the people who live and work in Scotland.

Meeting closed at 18:24.