27 March 2020

A report published today by the Fraser of Allander Institute on household finances has revealed that it will be the lowest earners and the self-employed that will bear the brunt of the financial implications of the COVID-19 pandemic.

The report shows that:

Half of all people in poverty are in working households and two thirds of children in poverty live in a working household.

Depending on the nature of the employment, these households could see falls in their income as a result of COVID-19 and social security is unlikely to entirely offset the full decrease in earnings.

While there are statutory targets to tackle child poverty in Scotland, even pre COVID-19, the statistics released today show that Scotland is still far away from meeting these targets.

A fall in income for households at the bottom of the income distribution scale will reduce living standards and will add to the Scottish Government’s difficulty in meeting its child poverty targets.

Alongside reports of shortages at food banks and vital services shutting down, for households at the bottom of the income scale just getting by could become very difficult in the coming weeks .

Commenting, Scottish Labour Finance Spokesperson Rhoda Grant said:

“ Even before the economic ramifications of the COVID-19 pandemic are felt, this report shows clearly the immense financial strain that more deprived households are under.

“It is clear that it will be these households that will bear the financial brunt of the COVID-19 pandemic and that there exists the clear and present danger that these households may slip into poverty.

“Scottish Labour fully understands the exceptional circumstances that the Scottish Government is operating under and we welcome much of the help provided to households by the Finance Secretary and the Chancellor thus far. However, more must be done to protect the financially vulnerable.

“It will be of paramount importance in the coming weeks that those in need apply for Universal Credit and access the Scottish Welfare Fund via their local authority.

“Scottish Labour is willing to work with the Scottish Government to investigate what more we can do to provide financial safety to the most deprived households and we are prepared to do all we can to prevent child poverty and hunger rising in this time of crisis.”
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