Humza Yousaf’s tax pledge could help to lift 20,000 children out of poverty, leading think-tank finds

The new first minister’s proposal to introduce a new tax band could help raise the money needed to lift 20,000 children from poverty, according to analysis published today by think-tank IPPR Scotland.

During the SNP leadership election, Humza Yousaf pledged to create a new band of income tax for earnings between £43,662 and £125,140. He stated the revenue raised could be used to fund increases to the Scottish Child Payment.

IPPR Scotland has analysed this pledge by modelling a new rate of income tax of 45 per cent for people in the top 10% of gross full-time earnings – those who earn above £58,285. This would represent just a 3-percentage point increase on their current rate.

The think tank found that this change would raise an additional £257 million.

Their analysis shows that this is almost enough - £4 million away - to fund increasing the Scottish Child Payment to £40 per week. That would be enough to lift 20,000 children out of poverty – over and above the 40,000 children expected to be lifted out of poverty with the payment set at £25 per week.

Today’s analysis follows the publication of recent figures that showed a quarter of a million children in Scotland are trapped in poverty, meaning that progress toward Scotland’s targets to eradicate child poverty is stagnating.

Researchers at IPPR Scotland say this underlines the urgency needed for the Scottish government to go further, faster to meet its responsibility to the children of Scotland by meeting Scotland’s child poverty targets. Meaning following through on commitments like Yousaf’s tax pledge and increases for the Scottish Child Payment in addition to exploring progressive new wealth taxes and delivering the guarantee of a minimum income below which nobody in Scotland will fall.

Director of IPPR Scotland, Philip Whyte, said:
“Lifting 60,000 children in Scotland out of poverty is not only morally right but it would also ensure Scotland meets its interim child poverty target in the coming year and set a clearer path towards our final targets in 2030. But political will, investment and action is needed.

“While we won’t be able to see any change to tax rates until the next budget this shows what is possible – but it also shouldn't stand in the way of moving quickly where we can now, including further increases for the Scottish Child Payment.

“The evidence is clear: Going further on progressive taxes in Scotland can loosen the grip of child poverty. Humza Yousaf made ambitious proposals to tackle child poverty in his leadership pitch – he must now deliver them in government.”

ENDS