Chief Constable Jo Farrell gave a wide ranging update on how Police Scotland is delivering for the public during a meeting of the Scottish Police Authority Board yesterday (Thursday 22 February).
The Chief outlined the implications of policing’s budget allocation and discussed necessary criminal justice reform and the need to reset the parameters around Police Scotland’s role in responding to mental health incidents.
CC Farrell also shone a light on policing’s response to serious offences and securing important court outcomes; seizing illegal drugs; road traffic enforcement or picking out the unsung proactive community policing and prevention we know the public values.
The Chief also discussed joint work with the Authority to progress a programme of change across policing in Scotland.
CC Farrell said: “Change can be unsettling but we are building Police Scotland from a position of strength and we must clearly explain the changes to the public – and our officers and staff – so they can be confident in their police service.
“I have asked Deputy Chief Constable Jane Connors to lead our programme of change, focused on delivering service transformation at pace, prioritising the frontline, removing back-office duplication, and creating capacity to deal with new and increasing threats.
“The change programme will inform how we shape, train, enable, equip and deploy our greatest asset – that is our workforce, our officers and staff – to best meet the evolving needs and complexities of our diverse communities at best value.
“Our primary investment will always be in police officers. As Chief Constable, entrusted with significant public funding, I have a duty to ensure I maximise the number of experienced officers available to the frontline through the right investment in non-warranted support.
“So we will carefully examine which roles can and should be done by police staff, enabling a wider range of people access to a policing career and allowing even more of our officers to return to frontline and operational policing roles.
“Our aim is – must be – to bring the frontline of Scottish policing to the strongest position possible within the resources available.
“I think that’s my duty as Chief Constable, I think it is what the Authority would expect and demand. Providing the highest possible level of safety and security with the funding available is what the people and communities of Scotland deserve and would expect.”
The Scottish Children’s Services Coalition (SCSC), an alliance of leading providers of specialist care and education to vulnerable children and young people, is calling on the Scottish Government to deliver a budget for mental health on 19th December.
The call comes as the latest waiting time figures from Public Health Scotland, published yesterday, indicate that 147 children and young people had been waiting over a year for treatment from child and adolescent mental health services (CAMHS) in the quarter ending September 2023.1
The figures also show that a total of 5,344 children and young people were still stuck on waiting lists to start treatment at the end of that quarter.
Just 75.6 per cent of patients with mental health problems were seen within 18 weeks from referral to treatment at CAMHS. This falls short of the Scottish Government’s waiting time target of 90 per cent being seen within 18 weeks.
This comes against the background of an increasing level of violent incidents in the classroom, a result in part due to the current mental health emergency, exacerbated by the Covid lockdown and cost-of-living crisis.
A report out from the Scottish Government last week found that more than a third of staff had been at the receiving end of verbal abuse in the preceding seven days, and a poll from the largest teaching union, the EIS, revealed that 63.2 per cent of respondents said there are daily incidents of violence or aggression from pupils aimed at teachers.
However, it should be noted that despite this challenging situation, only 0.66 per cent of the total NHS budget was spent on CAMHS in the 2021/22 financial year.2 Indeed, only 8.78 per cent of total NHS budget was spent on mental health services, a decrease of 0.34% in the past decade (from 9.12 per cent in 2011/12).
The SCSC is calling the Scottish Government to up its game in the budget and make the treatment of mental health issues a key national priority, prioritising spending and avoiding a potential lost generation of children and young people with mental health problems.
Even before the Covid-19 pandemic, cases of poor mental health in children and young people were at unprecedented levels, with under-resourced services struggling to keep pace with growing demand, leaving an increasing number of vulnerable individuals unable to access support. Children and young people are still battling with the long shadow of lockdown, and the rising cost of living is adding to the pressure.
A spokesperson for the SCSC commented: “The latest figures highlighting that more than 5,300 children and young people are still waiting for treatment from mental health services, with 147 waiting over a year, is extremely alarming.
“We are facing a mental health emergency and many of our children and young people are at breaking point, with stress and anxiety reaching alarming levels as they battle with the long shadow of lockdown and the rising cost of living.
“This is also having a major impact on classroom behaviour, impacting the young people concerned, their fellow pupils and staff.
“Each one of these statistics is an individual, and we would urge the Scottish Government to up its game and make the adequate resourcing of mental health services for our children and young people an absolute priority in the forthcoming budget.”
‘Early grip’ of budget to ensure best value for residents
The City of Edinburgh Council has begun budget setting early in an extra effort to ‘futureproof the services which matter most to residents and deliver them more efficiently’.
A report published this week outlines high level proposals for how the council will ‘innovate to lower costs and provide best value for the people of Edinburgh’ when it sets its next budget.
As it is developed further, the Financial Strategy and Medium-Term Financial Plan will provide a forward look and action plan to address the city’s longer-term financial challenge – while staying true to Edinburgh’s core values, priorities, and commitments made in the council’s business plan.
With a focus on improving services where possible rather than reducing them, the initial proposals are based on:
An assumed Council Tax rise of at least 3 per cent;
A programme of internal change involving a new system to better support HR activities;
More efficient use of Community Transport;
Exploring new income and trading opportunities;
Making the best use of the council’s estate so that it has fewer but better buildings;
Managing contracts and partnerships more efficiently and at lower cost;
Driving down costs by embracing digital solutions.
This early planning comes just a few months after Councillors controversially agreed a Lib-Dem budget for 2023/24 set against a backdrop of real-terms reductions in core government grant funding.
Councillor Mandy Watt, Finance and Resources Convener, said:We’re proud of our commitment to making Edinburgh a greener and fairer city, and to getting the basics right. And we’re equally proud of our track record of strong financial management. This strategic approach prepares us for the challenges that we’ll face over the coming years.
“The work we do now will pave the way for protecting and enhancing our investment in Edinburgh’s future, which we’ve committed to in the council’s Business Plan. We need to make this investment, whilst also prioritising the day-to-day services residents say matter most to them right now.
“Local authorities have suffered a decade of continuous real term income cuts from central government and Edinburgh is no exception. In fact, Edinburgh remains the lowest funded council per head in Scotland, despite the unique pressures which come with being Scotland’s capital city – our projected population growth, the climate crisis, and our well documented housing shortage.
“The Scottish Government could do more to support Edinburgh. Fast tracking the Transient Visitor Levy, and allowing councils to decide what to use the income for, would make a huge difference to our finances.
“I know that financial planning can cause concerns, particularly amongst our workers, so I want to make it absolutely clear that I remain committed to the council’s longstanding approach to no-compulsory redundancies.
“A further report re-affirming this will be brought to a meeting of the Policy and Sustainability Committee in August and we will continue to engage with Trade Unions throughout the ongoing budget process.”
HOUSEHOLDS ACROSS EDINBURGH SUFFERING FROM TORY-MADE COST OF LIVING CRISIS
The Chancellor must use next week’s budget to tackle the Tory-made cost of living crisis harming households across Edinburgh, Tommy Sheppard MP and Deidre Brock MP have said.
Polling carried out by Survation in partnership with campaign group 38Degrees revealed the stark impact of rising costs imposed on households in recent months, with findings showing in Edinburgh East: 21% of people have missed rent payments in the last six months, 32% haven’t been able to afford to turn the heating on, and 21% fear they may have to use a foodbank.
Meanwhile, in Edinburgh North and Leith the figures are even higher, with 22% of people have missed rent payments over the same period, 41% unable to afford to turn the heating on and 28% are worried they may have to use a foodbank.
Commenting, Edinburgh North and Leith MP Deidre Brock, said: “All eyes are on next week’s budget to see what support is on offer to assist households through a cost-of-living crisis of the Tories’ making.
“People and families across Edinburgh are suffering from a toxic mix of inflation, soaring energy costs, rising mortgage rates, and Tory austerity and cannot afford continued inaction from the UK government.
“If the Chancellor wants to provide, he can start by cutting the Energy Price Guarantee to £2000 and maintaining the £400 Energy Bill Support Scheme to the summer, a move that would save households £1,400.
“The fact thousands of my constituents are missing rent payments, are living without heating through the cold months, are relying on foodbanks is a disgrace that should shame the Tories into taking serious action – but I won’t hold my breath.”
Tommy Sheppard MP for Edinburgh East added: “These figures have soared, like costs, under Westminster Tory rule and we’re unlikely to see what families desperately need from a party that throughout its existence has lacked the political will to help the most vulnerable.
“In Scotland we’ve used our limited powers to support households, including with the introduction of the Scottish Child payment, described as ‘game-changing’ by leading charities. But it shouldn’t be for the SNP Scottish Government to constantly have to mitigate the worst of Tory rule.
“The impact of the Tory-made cost of living crisis has set out further proof that only with the full powers of independence can we offer real support through difficult times and secure just economic prosperity that works for everyone in our society.”
Health charities and NHS clinicians have united in a call for the Scottish Government to reverse a cut to the funding of a vital stroke treatment that significantly reduces long-term disability.
More than 150 stroke clinicians have backed a call from charities Chest, Heart & Stroke Scotland (CHSS) and the Stroke Association for the reinstatement of £7m to the national thrombectomy service funding.
An open letter to the Cabinet Secretary for Health and Social Care ahead of the Scottish Government budget next week, says the 50% funding cut and a recruitment freeze is a mistake.
The letter says the savings, which amount to less than 0.1% of Scotland’s total health budget, will create far greater costs, when Scots missing out on the “extraordinarily effective” medical treatment end up needing longer hospital stays, community rehabilitation and social care services.
Thrombectomy is a highly specialised procedure that involves physically removing the blood clot in the brain which has caused a severe stroke. The treatment is suitable for about 10% of stroke patients. People are more likely to walk and talk again, return to work and live their lives to the full.
The Scottish Government has previously committed to rolling out a national thrombectomy service, which would see around 800 stroke patients receive the procedure each year. It is expected to save the health and social care system up to £47,000 per patient in the first five years – a total saving of £37.6m to the NHS.
Ruth Hector, 36, from Stirling said: “I had a stroke at the age of 30. I lost the ability to walk and talk in an instant. I was too young to have a stroke and to feel trapped inside my own body, was scary and hard to comprehend.
“I was taken to The Royal Infirmary in Edinburgh, where after investigations I was able to receive a thrombectomy. After receiving that, I was able to talk perfectly, write and walk around within hours. It felt like I had made a full recovery. I was so thankful for receiving that treatment, I dread to think what it would have been like otherwise.
“I then had another stroke and for some reason wasn’t able to receive a thrombectomy. My recovery has been good with the second stroke, but nowhere near as good as the outcome after thrombectomy.
“I believe everyone should have access to this life saving treatment. My independence is everything. I’m working now, I take part in fundraising events, so truly believe I’m contributing to society and that feels good.”
CHSS and the Stroke Association are jointly calling for the Scottish Government to commit to continuing to fund the service and recruit the staff necessary for a national rollout.
Jane-Claire Judson, CHSS Chief Executive, said: “CHSS and the Stroke Association are united in our plea to the Scottish Government to stand by its commitment to a national thrombectomy service.
“It is unthinkable that the Scottish Government will deny Scots a treatment we know will make a huge difference to their lives for the sake of a small short-term budget saving.
“Hundreds of Scots who have a stroke each year should be able to trust they will get the best possible medical attention and chance of making a full recovery.”
John Watson, Associate Director Scotland at the Stroke Association said: “Thrombectomy saves brains, money and lives. It can change the course of recovery from stroke in an instant, and is one of the most effective medical interventions ever developed.
“We understand the financial pressure the Government is under, but to cut a service that improves patients’ lives while saving money would be a serious mistake. The current resource crisis should lead to thrombectomy being prioritised, not cut.
“That is why we, alongside CHSS and clinicians at the coal face, are calling on The Scottish Government to reinstate its funding for a national thrombectomy service.
“The financial savings of having this procedure are undeniably positive, but the potential outcome without it, could have devastating consequences for stroke patients, including severe disability or death.”
Dr Vera Cvoro, Consultant Geriatrician and Stroke Physician, Honorary Senior Lecturer at The University of Edinburghsaid: “Thrombectomy is the single most effective treatment we have for stroke. Many patients that come to hospitals with a stroke could benefit from this treatment that prevents disability.
“This can mean being able to walk again, talk again and even going back to work. We have the expertise to deliver such treatment and it should be available to all people living in Scotland.”
TUC: ‘we look set to remain trapped in the doom loop of austerity politics’
Tackling inflation is top of the priority list to stop it eating into paycheques and savings, and disrupting business growth plans.
To protect the most vulnerable the Chancellor unveiled £26 billion of support for the cost of living including continued energy support, as well as 10.1% rises in benefits and the State Pension and the largest ever cash increase in the National Living Wage
Necessary and fair tax changes will raise around £25 billion, including an increase in the Energy Profits Levy and a new tax on the extraordinary profits of electricity generators.
Decisions on spending set to save £30 billion whilst NHS and Social Care get access to £8 billion and schools get an additional £2.3billion reflecting people’s priorities.
To deliver prosperity, he’s also committed to infrastructure projects including Sizewell C and Northern Powerhouse Rail, along with protecting the £20billion R&D budget.
The Chancellor has today (Thursday 17th November) announced his Autumn Statement, aiming to restore stability to the economy, protect high-quality public services and build long-term prosperity for the United Kingdom.
Jeremy Hunt outlined a targeted package of support for the most vulnerable, alongside measures to get debt and government borrowing down. The plan he set out is designed to fight inflation in the face of unprecedented global pressures brought about by the pandemic and the war in Ukraine.
The Chancellor of the Exchequer Jeremy Hunt said: “There is a global energy crisis, a global inflation crisis and a global economic crisis. But today with this plan for stability, growth and public services, we will face into the storm. We do so today with British resilience and British compassion.
“Because of the difficult decisions we take in our plan, we strengthen our public finances, bring down inflation and protect jobs.”
To protect the most vulnerable from the worst of cost-of-living pressures, the Chancellor announced a package of targeted support worth £26 billion, which includes continued support for rising energy bills. More than eight million households on means-tested benefits will receive a cost-of-living payment of £900 in instalments, with £300 to pensioners and £150 for people on disability benefits.
The Energy Price Guarantee, which is protecting households throughout this winter by capping typical energy bills at £2,500, will continue to provide support from April 2023 with the cap rising to £3,000. With prices forecast to remain elevated throughout next year, this equates to an average of £500 support for households in 2023-24.
Working age benefits will rise by 10.1%, boosting the finances of millions of the poorest people in the UK, and the Triple Lock will be protected, meaning pensioners will also get a rise in the State Pension and the Pension Credit in line with inflation.
The National Living Wage will be increased by 9.7% to £10.42 an hour, giving a full-time worker a pay rise of over £1,600 a year, benefitting 2 million of the lowest paid workers.
The Chancellor also announced a £13.6 billion package of support for business rates payers in England. To protect businesses from rising inflation the multiplier will be frozen in 2023-24 while relief for 230,000 businesses in retail, hospitality and leisure sectors was also increased from 50% to 75% next year.
To help businesses adjust to the revaluation of their properties, which takes effect from April 2023, the Chancellor announced a £1.6 billion Transitional Relief scheme to cap bill increases for those who will see higher bills.
This limits bill increases for the smallest properties to 5%. Businesses seeing lower bills as a result of the revaluation will benefit from that decrease in full straight away, as the Chancellor abolished downwards transitional reliefs caps. Small businesses who lose eligibility for either Small Business or Rural Rate Relief as a result of the new property revaluations will see their bill increases capped at £50 a month through a new separate scheme worth over £500 million.
To protect high-quality front-line public services, access to funding for the NHS and social care is being increased by up to £8 billion in 2024-25.
This will enable the NHS to take action to improve access to urgent and emergency care, get waiting times down, and will mean double the number of people can be released from hospital into care every day from 2024.
The schools budget will receive £2.3 billion of additional funding in each of 2023-24 and 2024-25, enabling continued investment in high-quality teaching and tutoring and restoring 2010 levels of per pupil funding in real terms.
All other departments will have their Spending Review settlements to 2024-25 honoured in full, with no cash cuts, but will be expected to work more efficiently to live within these and support the government’s mission of fiscal discipline.
To improve public finances, from 2025-26 onwards day to day spending will increase more slowly by 1% above inflation, with capital spending maintained at current levels in cash terms. This means departmental spending will still be £90 billion higher in real terms by 2027-28, compared with 2019-20 while £30 billion of public spending will be saved.
To raise further funds, the Chancellor has introduced tax rises of £25 billion by 2027-28. Based around the principle of fairness, all taxpayers will be asked to contribute but those with the broadest shoulders will be asked to contribute a greater share.
The threshold at which higher earners start to pay the 45p rate will be reduced from £150,000 to £125,140, while Income Tax, Inheritance Tax and National Insurance thresholds will be frozen for a further two years until April 2028. The Dividend Allowance will be reduced from £2,000 to £1,000 next year, and £500 from April 2024 and the Annual Exempt Amount in capital gains tax will be reduced from £12,300 to £6,000 next year and then to £3,000 from April 2024.
The most profitable businesses with the broadest shoulders will also be asked to bear more of the burden. The threshold for employer National Insurance contributions will be fixed until April 2028, but the Employment Allowance will continue to protect 40% of businesses from paying any NICS at all.
In addition, the government is implementing the reforms developed by the OECD and agreed internationally to ensure multinational corporations pay their fair share of tax. And as confirmed last month, the main rate of Corporation Tax will increase to 25% from April 2023.
To ensure businesses making extraordinary profits as a result of high energy prices also pay their fair share, from 1 January 2023 the Energy Profits Levy on oil and gas companies will increase from 25% to 35%, with the levy remaining in place until the end of March 2028, and a new, temporary 45% levy will be introduced for electricity generators. Together these measures will raise over £55 billion from this year until 2027-28.
To ensure fiscal discipline while providing support for the most vulnerable, the Chancellor has introduced two new fiscal rules, that the UK’s national debt must fall as a share of GDP by the fifth year of a rolling five-year period, and that public sector borrowing in the same year must be below 3% of GDP. Overall, the Autumn Statement improves public finances by £55 billion by 2027-28, and the OBR forecasts both of these rules to be met a year early in 2026-27.
To ensure prosperity in the future, the Chancellor recommitted to the £20 billion R&D budget and made numerous infrastructure commitments. Sizewell C nuclear plant will go ahead, with the EDF contract to be signed at the end of the month, providing reliable, low-carbon power to the equivalent of 6 million homes for over 50 years.
The Chancellor also confirmed commitments to transformative growth plans for our railways including High Speed 2 to Manchester, the Northern Powerhouse Rail core network and East West Rail, along with gigabit broadband rollout.
Plans for the second round of the Levelling Up Fund were confirmed, with at least £1.7 billion to be allocated to priority local infrastructure projects around the UK before the end of the year.
In further efforts to level up the UK, a new Mayor will be elected in Suffolk as part of a devolution deal agreed with Suffolk County Council, and the government is in advanced discussions on mayoral devolution deals with local authorities in Cornwall, Norfolk and the North East of England.
Many of today’s tax and spending decisions apply in Scotland, Wales and Northern Ireland.
As a result of decisions that do not apply UK-wide, the Scottish Government will receive around an additional £1.5 billion over 2023-24 and 2024-25, the Welsh Government will receive £1.2 billion and the Northern Ireland Executive will receive £650 million.
As a result of today’s tax and spending decisions, the Scottish Government will receive around an additional £1.5 billion over 2023-24 and 2024-25.
The Chancellor has reconfirmed the UK Government’s commitment to work with the Scottish Government on options to improve the A75, in line with the findings from the Union Connectivity Review.
He also confirmed that funding for the UK’s 9 Catapult innovation centres will increase by 35% compared to the last funding cycle, this includes the offshore renewable catapult in Glasgow.
The Chancellor of the Exchequer Jeremy Hunt said:“This Autumn Statement will help deliver economic stability across the UK. We’ve made tough decisions to tackle inflation, but we’re committed to protecting the most vulnerable against the rising cost of living.
“Scottish familieswill receive billions of pounds of UK Government support, such as inflation-matching increases in benefits and the state pension, and the Scottish Government is receiving an additional £1.5 billion over the next two years to help protect vital public services and drive prosperity through the challenging times ahead.”
Scottish Secretary Alister Jack said: “We are facing complex global challenges, and the Chancellor has had to take some difficult decisions. By reducing our borrowing, tackling the root causes of inflation and putting our public finances on a stable footing, we will create the economic stability we need for our long-term prosperity.
“As we promised, we have put in place extra support for those who need it most, with support on energy bills and increases in pensions, benefits and the National Living Wage.
“The Scottish Government will receive an additional £1.5 billion, to help support public services in Scotland. We are also putting extra money into two key projects in Scotland. Catapult will help grow our offshore energy capability, and a feasibility study to upgrade the A75 will pave the way for much improved connectivity between Scotland, Northern Ireland and England.”
COMMENT and REACTION
Households ‘paying a steep price for UK economic mismanagement’ – Swinney
The UK Government’s Autumn Statement fails to address the pressure on devolved budgets to help people with the cost of living crisis, support public services, and finance fair pay offers, according to Deputy First Minister John Swinney.
Reacting to Chancellor of the Exchequer Jeremy Hunt’s fiscal announcement, Mr Swinney expressed dismay at his failure to address the impact of inflation on the Scottish Government’s budget, when businesses and households continue to face financial uncertainty and £1 billion in savings have had to be found to help those who need it most.
The Deputy First Minister said: “Today’s statement shows that households across Scotland are paying a steep price for the economic mismanagement of the UK Government, with average household disposable incomes forecast to fall by 7% in real terms according to the Office for Budget Responsibility.
“This would erode just under 10 years of growth in living standards, taking them back to levels not seen since 2013-14, meaning they would not recover to pre-pandemic levels until after 2027-28 – a devastating indictment of the UK Government’s management of the economy.
“Inflation is eating away at the Scottish budget, and due to the lack of additional funding in 2022-23 and the financial restrictions of devolution, we have had no choice but to make savings of more than £1 billion.
“I welcome the Chancellor’s decision to increase benefits in line with inflation from next financial year and retain the triple lock on pensions – both measures we have consistently called for. However, the higher energy price cap from April is still unsustainable for many households.
“The proposals may limit the impact for some consumers, but the UK Government needs to carefully consider the affect a £500 rise in energy bills will have on those who are in or at risk of fuel poverty. And there’s still no certainty on how businesses struggling to stay afloat will be supported from April after the Energy Bill Relief Scheme ends.
“The constant U-turns on tax by the UK Government have made planning for the Scottish Budget more challenging this year. We will take time to consider the implications for Scotland before setting out our own plans as part of the normal budget process.
“I am pleased the Chancellor has finally listened to our calls to tax more of the windfall gains in the energy sector, but he should have gone further to remove the poorly targeted investment allowance, which only serves to encourage short-term investment in fossil fuels rather than promoting long-term, sustainable energy solutions.
“This leaves me with the difficult task of setting Scotland’s Budget for 2023-24 with no hope of financial flexibility to make a real difference in the lives of those who need it most.”
HEALTH
Amanda Pritchard, NHS Chief Executive, said:“When the government – and the country – face such a daunting set of challenges, we welcome the chancellor’s decision to prioritise the NHS with funding to address rising cost pressures and help staff deliver the best possible care for patients. This shows the government has been serious about its commitment to prioritise the NHS.
“The NHS is already one of the most efficient health services in the world and we are committed to delivering further efficiencies, with over £5 billion already freed up for reinvestment in patient care this year.
“NHS staff are delivering a huge amount in the face of record demand with 10% more GP appointments than before Covid, an extra 35 million in a year, more support than ever for peoples’ mental health and the highest level of cancer checks while transforming peoples’ lives with innovative treatments such as laser therapy for epilepsy and genetic testing for sick babies and children.
“While I am under no illusions that NHS staff face very testing times ahead, particularly over winter, this settlement should provide sufficient funding for the NHS to fulfil its key priorities. As ever, we will act with determination to ensure every penny of investment delivers for patients.”
SCHOOLS
Leora Cruddas CBE, Chief Executive, Confederation of School Trusts said:“We are delighted that the Government has prioritised schools in the Autumn statement.
“We know economic times are tough. But investment in the education of our children is an investment in our future.
“Schools and school trusts have the talent and expertise to find innovative and cost-effective ways to keep improving education and supporting their local communities, and the announcement today will help them to plan ahead.”
INFLATION
Helen Dickinson, Chief Executive, the British Retail Consortium, said: “High inflation remains a major threat to the UK economy and we support the government’s objective of bringing this down.
“Inflation is making people poorer, damaging consumer confidence and holding back demand. It pushes up the costs to businesses which further increases prices for consumers. As the retail industry enters the crucial Christmas period, it is vital that inflation is brought to heel.”
NATIONAL LIVING WAGE
Bryan Sanderson, Chair, Low Pay Commission, said:“The rates announced today include the largest increase to the NLW since its introduction in 2016 and will provide a much-needed pay increase to millions of low-paid workers across the UK, all of whom will be feeling the effects of a sharply rising cost of living.
“For a full-time worker, today’s increase means nearly £150 more per month. The tightness of the labour market and historically high vacancy rates give us confidence that the economy will be able to absorb these increases.
“Businesses also have to navigate these economically uncertain times and by ensuring we remain on the path to achieve our 2024 target, employers will have greater certainty over the forward path. These recommendations have the full support of the business, trade union and academic representatives who make up the Commission.”
BUSINESS RATES – ONLINE SALES TAX
Baldock, CEO, Currys plc, said:“We’re happy that the Treasury listened to our concerns on business rates, and acted quickly.
“I’m also delighted at the ditching of the Online Sales Tax, which would have added costs for consumers and depressed business investment. We will continue to support customers and colleagues through this cost-of-living crisis, keeping prices low, jobs well-paid, and helping everyone enjoy amazing technology.”
James Lowman, Chief Executive, Association of Convenience Stores (ACS) said:“We welcome the freeze of the business rates multiplier for another year. The extension and increase in the retail, hospitality and leisure relief scheme will be warmly welcomed by small business in particular.
“Scrapping downward transition will help the businesses most adversely impacted by the pandemic and other market factors, and the Supporting Small Business Scheme will help those who have grown their business to the point where they lose some business rates relief they previously claimed.
“This package of business rates measures meets our asks to the Chancellor and we are delighted that he has listened. We will continue to work with the Treasury and other departments on modernising the whole business rates system.”
A spokesperson for ASOS said:“We welcome the Chancellor’s decision to rule out an Online Sales Tax after considering the evidence and arguments.
“Like other online retailers and major High Street names, we opposed this new sales tax which would have added significant business costs against the backdrop of the current challenging economic environment and risked higher prices, so this decision is good news for consumers and businesses alike.”
Reserch & Development
A spokesperson for GSK said:“We welcome the Government’s continued commitment to increase investment in R&D and boost incentives for businesses to invest in innovation.
“Given the challenging economic circumstances we face, it’s even more important that the Government continues to take steps to secure the UK’s leadership in science and technology, including life sciences which are a key source of jobs and growth, and we look forward to working with the Government to deliver this ambition.”
Richard Torbett, Chief Executive, The Association of the British Pharmaceutical Industry (ABPI), said: “The Chancellor has delivered a pragmatic Autumn Statement, taking some tough decisions while recognising the vital role innovation must play in setting the economy back on the path to recovery.
“The decision to protect spending on research and development, as well as increasing the R&D expenditure credit from 13 to 20 percent are both essential to boosting the UK’s share of global pharmaceutical R&D spending and investment.
“The life sciences industry is uniquely well-placed to deliver the innovation-led growth the UK needs. To realise this opportunity, the government must continue striving to make the UK a more competitive and attractive place to invest. This journey is already well underway, but we need to raise our ambitions even further if we are to truly make the UK a life science superpower.”
SOLVENCY II
Hannah Gurga, Director General, The Association of British Insurers (ABI), said:“We strongly welcome these changes to the Solvency II regime which will allow the UK insurance and long-term savings sector to play an even greater role in supporting the levelling up agenda and the transition to Net Zero.
“Meaningful reform of the rules creates the potential for the industry to invest over £100bn in the next ten years in productive finance, such as UK social infrastructure and green energy supply, whilst ensuring very high levels of protection for policyholders remain in place.
“More broadly, it will encourage a thriving and competitive industry which will ultimately benefit the UK economy, the environment and customers. This meets the objectives that HM Treasury set out to achieve and which the industry has supported throughout.”
TUC: Working people take the hit for Tory economic failure
In his Autumn Statement today, Jeremy Hunt, the fourth Conservative Chancellor this year, announced that the UK economy is in recession. The documents that accompanied his statement warned of half a million job losses. Staggeringly workers face in 2022 and 2023 the worse years of a pay crisis that is now reckoned to be lasting basically for two decades.
Rightly protections were announced against further energy price rises, and social security protection was uprated in line with inflation. The government took the advice of the low pay commission to increase the minimum wage to £10.42 an hour.
But this support is paid for by steep cuts to departmental budgets from 2024-25 onwards. And immediately there was no extra money to support public servants in the face of double-digit inflation.
As Frances O’Grady said: ““This is a recession made in 10 Downing Street, which will put jobs at risk and hit workers’ wages. We are all paying the price for the last decade of Tory governments, which decimated growth and living standards.
“Today’s statement shows it will be two decades until real wages recover. Millions of key workers across the public sector – who got us through the pandemic – face years of pay misery as departmental budgets are brutally squeezed.”
Real pay and jobs
The OBR forecast expects that the real pay squeeze that’s already in its fourteenth year is set to last another five. Real average weekly earnings aren’t expected to go back above 2008 levels until 2027 – a 19-year pay squeeze that’s hit workers hard and is longer than any other since the Napoleonic times. The statement itself did little to help. The minimum wage has increased, but by less than inflation and still below the level of a real living wage. There was nothing to suggest public sector workers will get pay rises to help face the rising cost of living, after a decade in which their pay has been squeezed time and time again.
In terms of the labour market, the OBR has forecast a sustained fall in employment, still flatlining economic participation, and a rise in unemployment, which is not expected to return to the pre-crisis level until beyond the end of the forecast period in 2027. In terms of headcount the rise in unemployment is half a million – though the Bank of England is forecasting that it will rise by double this.
Policies to support working people and households
Ahead of the disastrous mini budget we called for protection against rising bills, with any costs shared fairly. And we called for a plan to grow the economy. The most prominent feature of the Chancellor’s plan was also the most worrying – to celebrate Nigel Lawson’s big bang that scrapped regulation on the city and set the trajectory to the global financial crisis.
Protection against inflation
A universal protection against rising energy bills was replaced with a more targeted approach, with bills now allowed to rise to an average of £3,000 p.a. (up from £2,500), but extra support for those on means tested benefits, pensioners, and disabled people. But energy are not the only bills that are soaring – CPI inflation is now at a forty year high of 11.1 per cent. Food inflation is at a record level, fuel prices are very high and prices are up across the board. The ONS reported this week that inflation rates hitting the lowest earners are three percentage points higher than those for the highest earners.
Benefits
Chancellor said, ‘I am proud to live in a country with one of the most comprehensive safety nets anywhere in the world.’ This comment is beyond belief, as since 2010 this Government have implemented cuts which have decimated the social security system.
The benefit uprating by the Chancellor today has been the bare minimum. The standard out of work benefit is now worth just 13% of average weekly earnings. And the basic amount of universal credit will be worth £43 a month less than in 2010 even after this uprating is in place.
The state pension has fared better than working age benefits thanks to the triple lock, but ours remains one of the least generous in Europe. So the decision to return to the triple lock formula and increase pensions by CPI inflation after this year’s real terms cut, and to increase pension credit in line with prices too, was the bare minimum.
The autumn statement also contained a strong hint that the government was preparing to axe its formula linking state pension age rises to improvements in life expectancy and bring forward its planned increase. The savings to government – and cost to the public people – of this move would dwarf the impact of pension increases resulting from the triple lock in any given year.
The minimum wage will be raised to £10.42 in 2022/23. Significant increases are needed especially after real terms declines over the last couple of years. But the announced increase will still leave the real value of the minimum wage 1.1 per cent below where it was two years before. The government must, instead, put the minimum wage on a growth path to £15 as soon as possible.
Infrastructure investment
The Chancellor warned that capital investment was too soft a soft target for austerity (like under George Osborne), then proceeded to cut planned spending by £5bn in 25-26, £9bn in 26-27 and £15bn in 27-28.
This will have major impacts on delivering the infrastructure needed to keep people moving, the UK economy competitive, and to hit climate targets.
Taxing wealth and windfalls
The Chancellor was duty bound to hit the better off. But these were not big changes in the great scheme of things. The biggest hits came on the energy profits levy and the electricity generator levy, raising £14bn in 23-24 and £11bn in 24-25. The wider hit from the 20% income tax thresholds will earn the Treasury a cool £6bn a year, compared to less than £1bn raised from lowering the threshold for paying the top rate of tax. All these changes are however dwarfed by the reversal of Rishi Sunak’s health and social care levy which costs £16-£17bn a year.
More pay misery for millions of public sector workers and the services they deliver
A strong economy relies on strong public services. Welcome words from the Chancellor as he set out his fiscal statement. Yet, warm words failed to match spending plans.
The Chancellor confirmed government would stick to cash spending plans set out in the Comprehensive Spending Review 2021. Meaning departmental budgets would not be adjusted to account for soaring inflation, placing unsustainable pressure on public services and creating more years of pay misery for the millions of key workers across the public sector who got us through the pandemic.
Analysis carried out by NEF for the TUC ahead of the budget showed, departmental budgets needed an additional £43 billion just to remain at the level set out in the Comprehensive Spending Review 2021 and keep public sector pay in line with the cost-of-living. This did not materialise.
Some relief was provided for key government departments such as the NHS, social care and schools. Nothing for public sector pay rises or cash starved areas like the court system, prisons, HMRC and local government.
Schools will receive an additional £2.3 billion in funding for 2023-24 and 2024-25, representing an overall spending increase of 4 per cent, returning per pupil spending to 2010 levels.
But no additional funding was provided for adult education, where spending fell by 49 per cent between 2009 and 2019 – surprising given the Chancellor’s emphasis on the importance of skills to economic stability and growth.
Nor for the cash-strapped early years sector, where the number of providers fell by 4,000 between 1 April 2021 and 31 March 2022, in large part due to a toxic combination of unsustainable funding levels and soaring costs for essential expenditure such as energy and food.
Health and social care will receive additional funding of around £7.5 billion. An estimated £1.6 billion of the money identified for social care requires local authorities generating additional revenue through rises to council tax.
At a time when millions of households are struggling with the cost-of-living, it is hard to see how councils will do this without putting even more financial strain on families.
Councils in areas of high socio-economic deprivation, often the most cash strapped when it comes to social care, will have the hardest time raising additional revenue.
The additional £3.3 billion for the NHS represents less than 1% of it’s overall budget. A drop in the ocean. Only a fraction of what our NHS and its workforce needs this winter. With NHS vacancies at a record-high, one in ten posts unfilled, what the health system desperately needed was investment in its workforce.
Indeed, across the public sector, what was needed and missing from today’s fiscal statement was a recognition that after twelve years of government imposed pay restraint and real terms pay cuts, our public sector workforce are on their knees. To deliver world class, high-quality public services, we need to treat the people that deliver them, with respect and dignity. That starts with spending plans that deliver cost-of-living proof pay rises in 2022 and beyond.
Public spending, GDP and the government finances
In spite of all this pain, the biggest risk is still the economy. Here the OBR have let the government off lightly. While the recession means a decline in GDP next year of 1.4 per cent, activity recovers quickly into 2024 and then continues at rates that would be exceptional given the experience since 2008. When asked at their press conference why the forecasts were so much stronger than those of the Bank of England, the OBR offered – ‘ask the Bank’.
This vigour comes in spite of much higher than anticipated central bank interest rates, virtually unchanged government support on the immediate horizon, and heavy austerity into the future (at the press conference the OBR equivocated whether it was comparable to Osborne’s).
In a way we are lucky. Better projected GDP outcomes protect against the need for even tougher austerity, given the vogue for fiscal rules. Nonetheless the government have also accepted a fairly substantial increase in borrowing over coming years, with public sector debt is expected to peak at 97.6 per cent of GDP in 2025-26.
There are no game changers here, and there is very little protection against a steeper deterioration. In the meantime workers face yet another severe reduction in the standard of life. But sadly nothing here is new. Until we have a government that has a serious plan to put work before wealth, we look set to remain trapped in the doom loop of austerity politics.
We know that today’s choices weren’t inevitable. There is a better plan to grow the economy, protect our public services, and get wages rising. Now we need a government prepared to deliver it.
Monday morning seems like an age ago, and the political circus is likely to continue into next week (writes Fraser of Allander Institute’s MAIRI SPOWAGE).
On Monday, the new chancellor undid pretty much every tax measure in the ex-Chancellor and soon-to-be ex-PM’s “mini”-budget. Only those already legislated for will proceed (the scrapping of the health and social care levy and the stamp duty cuts in England will still happen).
Although the PM has resigned, it still looks like the Fiscal Plan will be presented on 31st October, which is an interesting political situation given that presumably means that Jeremy Hunt will remain as Chancellor whoever wins the leadership election over the next week. But perhaps the last wee while has taught us that presuming anything is foolish!
For Scotland, the extra funding that was going to be generated by these tax measures for the Scottish Budget has now largely disappeared, with only the stamp duty reductions generating additional funding for Scotland.
This presents significant challenges for the Deputy First Minister in managing an already very stretched budget.
Economic Case for Independence published
Somewhat overshadowed by events at Westminster, the Scottish Government published the third in their series of papers to set out a new case for independence on Monday. This paper, “A stronger economy with independence” was expected to set out the economic case, covering issues such as currency, trade, and public sector finances.
We published analysis of the paper on Monday – and look out for our Guide to the Economics of Independence which we’ll be publishing soon and updating as more information is released by the Scottish Government.
Inflation goes back above 10%
The Office for National Statistics (ONS) published September inflation data, which showed that CPI inflation had gone back into double digits, running at 10.1%.
Underneath the headline rate, food and non-alcoholic beverages inflation is now estimated to be 13.1%. There was a slight downward pressure from motor fuels, as the prices at the pumps fall back from the peaks they reached in July.
These data still do not capture the energy price rises households are now experiencing as of 1st October, so expect there to be further increases in the rate when that data is published next month.
Interestingly (well, if you are interested in economic statistics, come on!) it may be that the change in the way the government is supporting households on energy may change the outlook for inflation. If, as is expected, the help after April is more targeted as cash transfers to those households most in need, then this will not put downward pressure on the actual price of energy.
We’ll be looking out for the OBR and Bank of England’s (3rd November) view on the pathway for inflation given these changes.
New Public Sector Finance Data published this morning (Friday)
ONS have also put out the latest public sector finances release, which contains public finance statistics (including deficit and debt) up to September 2022.
These have the first statistics on revenue generated by the Energy Profits Levy, which shows that £2.7 billion was generated from this tax in the year to date. It will be interesting to get the OBR’s independent view of the likely take from this tax over the next few years – and obviously to see if the Chancellor chooses to extend this in some way in the Fiscal Statement.
More broadly, it contains up-to-date statistics on the size of the UK National Debt. Debt has reached £2.5 trillion, which is equivalent to 98% of GDP – levels not seen since the 1960s.
This reminds us of the challenging fiscal environment, which sets the backdrop for the statement by the Chancellor in 10 days time.
No confirmation on the Scottish Government’s Emergency Budget Review
As we write this, we have no confirmation whether the Scottish Government’s Emergency Budget Review (EBR) will go ahead next week, as previously indicated.
Remember, this review is to look at in-year (2022-23) spending to balance the budget in the face of higher than expected (at the time of the last budget) inflationary pressures, particularly in relation to the public sector pay bill.
We wrote yesterday about employability support, one of the areas that John Swinney has already indicated will be cut. A number of questions remain to be answered. and we hope the EBR will be clear in laying out the evidence considered when deciding where the axe will fall.
The response to whatever is set out by the UK Chancellor on the 31st October will come in the Scottish Government’s draft budget for 2023-24 on the 15th December. For fiscal fans, the fun is due to continue for some months yet!
Free and cut-price things to do over the Easter holidays
Which? is advising families facing cost of living pressures on how they can save money over the Easter holidays with these handy hacks for free, or cut-price, activities.
1. Enjoy a meal out with ‘kids eat free’ offers
When dining out as a family, it is worth checking if nearby restaurants offer discounts for children. Many restaurants and cafes run ‘kids eat free’ offers during the holidays. Which? found several popular chains offered discounts at certain times, including Yo! Sushi, The Real Greek and Morrisons Cafe.
2. Visit a theme park for less
Check the prices at attractions in advance, to save. For example, Which? found an adult day pass bought on the day at Alton Towers costs £62, but only £34 when bought in advance – a 45% saving.
Shoppers can also save money on days out at theme parks and attractions up and down the country when purchasing groceries at the supermarket.
Which? found that some Carex handwashes have vouchers for half-price entry for Alton Towers, Chessington World of Adventures and Sea Life Centres and Sanctuaries valid until May 31 2022.
Meanwhile, selected Kellogg’s cereal packs and snacks offer ‘adults go free’ vouchers for Merlin attractions valid until June 2022.
Tesco Clubcard holders can convert points into Tesco Reward Partners Vouchers, which can be used for as much as three times the saving at theme parks, wildlife parks and more.
3. Learn something new at a free gallery or museum
Many UK national galleries and museums are free to enter and are an easy way to entertain the family for a day out. Which? members highly rated: St. Fagans National Museum of History in Cardiff, Beamish: The Living Museum of the North in County Durham, National Railway Museum in York, Royal Air Force Museum in Cosford, Shropshire and the National Museum of Scotland in Edinburgh.
Just remember they may need visitors to book a free ticket before arrival.
4. Burn off the Easter chocolate with some sport
There are many free sporting activities available up and down the country during the holidays. It’s worth checking local council websites for opportunities, some offer free swimming lessons for children, for example.
Alternatively, Parkruns are free weekly events, held every weekend in hundreds of locations around the UK. There are 5k events on Saturday mornings, and junior runs for children on Sundays.
Tennis for Free also offers free tennis sessions for all ages in public parks around the country.
5. Watch the latest movies at a discount
Some cinema chains offer discounts for family films at certain times, usually in the morning. Odeon’s ‘Odeon Kids’, Picturehouse’s ‘Kid’s Club’, and Vue’s ‘Mini Mornings’ all offer discounts for both adults and children.
For example, Vue ‘Mini Morning’ tickets cost £2.49 or £2.99 if you buy online (£3.49/£3.99 at the venue).
Film fans can also get cinema discounts with dining cards Gourmet Society and Tastecard. Both offer up to 40% off some cinema chains and currently offer 90-day free trials.
Anyone who buys a policy through the price comparison website Compare the Market will get 2 for 1 cinema tickets on a Tuesday or Wednesday for a year – those who may have bought a policy recently should check if this offer is available to them. It is also worth checking if your phone provider offers cinema discounts.
O2 customers have access to O2 Priority and can often claim free Odeon tickets to use on Sundays and Mondays. Three Mobile customers can claim £3 adult cinema tickets for Cineworld or Picturehouse using the Three+rewards app and Vodafone customers can get two adult tickets for £7 at most Vue cinemas to use each week, using the My Vodafone app.
6. Catch a theatre show for less
Although usually an expensive outing, it is possible to bag cheaper theatre tickets. Local theatres often host touring West End productions for a fraction of the cost of London shows.
Which? found tickets for The Book of Mormon in Leeds Grand Theatre starting at £15, while prices begin at £40 in London on the same date.
Most theatres offer cheaper tickets for under 30s. For example, the National Theatre offers £5 tickets if you’re under 18, and £10 tickets if you’re under 26.
Every Monday at noon, a number of tickets for Disney shows (The Lion King/Frozen) are available for £25 through DisneyTickets and some shows, including Hamilton, run daily lotteries to enter, with winners able to purchase tickets for between £10-£35 for a performance that week.
Apps such as TodayTix can save visitors up to 66% on certain shows. Which? found tickets for Roald Dahl’s Matilda on Thursday 7 April for £25.
Often, seats at the back of the theatre cost less, but it is worth checking if the view is obstructed. Seatplan allows visitors to check out the view before purchasing tickets.
7. Take the train to save on days out
Some train companies offer cheap train travel for children travelling with an adult. For example, Southeastern, Chiltern Railways, London Northwestern and West Midlands Railway will allow up to four children (aged 5-15) to travel for £1 on a single or return journey when joined by an adult in off-peak times.
Which? found an adult and two children could go from London to Margate and back on Southeastern services for under £30, with the children’s tickets costing £2. If two adults are travelling, they could save money with a railcard – the two together card costs £30 upfront but also saves a third on rail fares for a year.
National Rail also offers 2 for 1 tickets at a range of attractions nationwide including Thorpe Park, Chessington World of Adventures and London Zoo when purchased with a train ticket.
8. Take advantage of local libraries
As well as borrowing physical books for free, most libraries allow users to borrow e-books and audiobooks. Some can also grant access to digital magazines and newspapers. Check local library offers via on the local council website and sign up for free.
9. Explore the great outdoors
Take advantage of the free parks up and down the country. Check out the Which? guide on the best national parks in the UK. Alternatively, plan a walk using Which?’s guide to the best UK walks.
Those in search of adventure could try geocaching tracking co-ordinates on a smartphone app to find hidden boxes known as ‘caches’. The National Trust has 10 places to try.
10. Seek out free local events
Many local councils offer free events during school holidays, so it is worth checking their websites. Search the local council’s name followed by ‘half-term activities’ to see what’s going on in that area. It is always worth checking out the local council’s website.
For example, Which? saw that Manchester City Council will be running springtime craft sessions and Haringey Council in London will offer free Easter workshops for teens aged 11-16 in creative writing, drama and film.
Natalie Hitchins, Which? Home Products and Services Editor, said: “With the rising cost of living taking its toll on household finances, millions of families are looking to cut down on their spending. However, there are plenty of fun, cheap and free activities you can do during the Easter holidays that don’t need to break the bank.
“Theme parks offer discounted entry if you book in advance, and there are plenty of deals on offer ahead of the Easter holidays. Many cinemas and theatres also offer discounts for children. It is worth checking if your local council is running free events or workshops, while parks and museums are free to enjoy at your leisure.”
‘A failure of courage, a failure of compassion and a failure of justice‘ – Peter Kelly, The Poverty Alliance
Chancellor announces Spring Statement tax cut for 2.4 million Scottish workers through rise in National Insurance thresholds – saving the typical employee over £330 a year.
Unveiling plans to give families further help with the cost of living, Rishi Sunak also slashes fuel duty on petrol and diesel by 5p per litre for the next 12 months.
Spring Statement also sets out measures to help businesses boost investment, innovation, and growth – including a £1,000 increase to Employment Allowance to benefit around half a million SMEs across the UK
The UK Government is providing an additional £45 million to the Scottish Government next year as a result of measures announced by the Chancellor today.
The Chancellor delivered a Spring Statement today that ‘puts billions of pounds back into the pockets of hard-working people in Scotland’– unveiling a series of tax cuts to ease the cost of living.
Rishi Sunak announced that National Insurance starting thresholds will rise to £12,570 from July, meaning hard-working people across the UK will keep more of what they earn before they start paying personal taxes.
The cut, worth over £6 billion, will benefit 2.4 million working people in Scotland with a typical employee saving over £330 a year, whilst the typical self-employed person will save over £250. This means the UK now has some of the most generous tax thresholds in the world.
Mr Sunak also announced that fuel duty for petrol and diesel will be cut by 5p per litre from 6pm tonight (23 March) to help drivers across the UK with rising costs. Worth £2.4 billion, this is the biggest cut ever on all fuel duty rates and means a one-car family will now save on average £100.
As a result of a cut to the basic rate of income tax for savings income, taxpayers in Scotland will see benefits worth £3 million. As other income tax rates are devolved in Scotland, the Scottish Government’s funding is automatically increased as a result of this tax cut as set out in the agreed Fiscal Framework. This is initially worth £350 million in 2024-25.
The Chancellor also set out a series of measures to help businesses boost investment, innovation, and growth – including a £1,000 increase to Employment Allowance to benefit around half a million businesses.
As a result of measures in this Spring Statement the UK Government is providing the Scottish Government with an additional £45 million through the Barnett formula next year.
Chancellor Rishi Sunak said:“We’re slashing taxes for millions of hard-working people in Scotland, getting pounds in people’s pockets and helping pay cheques to stretch further – from July more than 2.4 million in Scotland will get a tax cut with the typical employee keeping £330 more each year.
“By cutting fuel duty, we’re making it cheaper for people in Scotland every time they go to the pump, which together with the freeze means people save £100 per car on average a year.
“We’re boosting small business growth by increasing the Employment Allowance – a tax cut worth up to £1,000 for thousands of businesses.”
To grow the world’s very best talent in AI, the UK Government will partner with industry and academia to create 1,000 new AI PhDs. The Government will invest £117m to create PHDs across the UK at Centres for Doctoral Training, building on the existing three sites in Scotland. This will train a new generation of AI researchers who will develop and use AI in areas such as healthcare, climate change and creating new commercial opportunities.
Delivering the statement, the Chancellor made clear that our sanctions against Russia will not be cost-free for people at home, and that Putin’s invasion presents a risk to our economic recovery – as it does to countries all around the world.
However, announcing the further measures to help people deal with rising costs, he said the extra support could only be provided because of the UK’s strong economy and the tough but responsible decisions taken to rebuild our fiscal resilience.
The immediate financial support for people and businesses comes as part of a wider tax plan announced by the Chancellor that will create better conditions for growth and will share proceeds from growth more fairly – ensuring people can keep more of what they earn.
Mr Sunak also announced that the Scottish Government will receive £41 million more funding as there will be an extra £500 million for the Household Support Fund, which doubles it’s total amount to £1 billion to support the most vulnerable families with their essentials over the coming months.
The Chancellor also reduced the VAT on energy saving materials such as solar panels, heating pumps and roof insulation from 5% to zero, helping families become more energy-efficient.
This cost of living support comes on top of the measures that the Chancellor has already announced over the recent months to support families. This includes an over £9 billion energy bill rebate package, worth up to £350 each for around 28 million households, an increase to the National Living Wage, worth £1,000 for full time workers, and a cut to the Universal Credit taper, worth £1,000 for 2 million families.
The Spring Statement also confirms that:
A new Efficiency and Value for Money Committee will be set up to cut £5.5 billion worth of cross-Whitehall waste – with savings to be used to fund public services.
£50 million new funding to create a Public Sector Fraud Authority to hold departments to account for their counter-fraud performance and to help them identify, seize and recover fraudsters money.
Local residents across the UK will benefit from a fresh set of infrastructure projects as we open the second round of the £4.8 billion Levelling Up Fund. It will continue to focus on regeneration, transport and cultural investments.
Chancellor’s statement ‘a failure of courage and compassion’, says Poverty Alliance
Reacting to today’s Spring Statement, Peter Kelly, director of the Poverty Alliance, said: “Government should be about compassion and justice, and making sure people are able to live as full a life as they can.
“The Chancellor said his Spring Statement today was all about security. Yet his plans show a failure to comprehend the situations being faced by households across the country, leaving them with insecure and falling incomes in the face of rising costs.
“Amid a rising tide of poverty, the Chancellor could have thrown a lifeline by increasing benefits in line with inflation and by scrapping the unjust benefit cap. Instead he has provided additional funding of only £500m to the Household Support Fund which, although welcome, will quickly be consumed by the rising cost of living for families on the lowest incomes.
“The increase in the National Insurance threshold has also been presented as a support to people living on low incomes. In reality two thirds of this effective tax cut will go to middle and higher income households.
“By ignoring the tidal wave of rising living costs that is pulling so many people into poverty, the Chancellor has made clear his priorities. His tax cutting agenda will generate positive headlines, but could see another 400,000 people across the UK swept into poverty.
“Ultimately, the Chancellor’s statement is a failure of courage, a failure of compassion, and a failure of justice.”
The UK Government has not delivered the support and help that families and businesses need today, according to Finance Secretary Kate Forbes.
Responding to the Spring Statement, Ms Forbes said the Chancellor failed to help thousands of worried households facing poverty as a result of soaring energy bills and a cost of living crisis.
In 2018/19, the Scottish Government introduced a more progressive approach to tax, including a 19% starter rate band below the basic rate, ensuring those who can afford to pay a little more do so.
Ms Forbes said: “The Spring Statement has failed to address the biggest challenges facing households today. With soaring energy bills and a cost of living crisis, the Chancellor has not used his Spring Statement sufficiently to provide lifeline support that could prevent households facing fuel poverty.
“The Scottish Government is providing a further £10 million to continue our Fuel Insecurity Fund into 2022-23, which supports people struggling with their energy bills. Most powers relating to the energy markets remain reserved and Scottish Ministers have repeatedly called for the UK Government to urgently take further action to support households – including a reduction in VAT on household energy bills and support for those on low incomes.
“We are doing all we can to tackle the cost of living crisis – including doubling the Scottish Child Payment from £10 per week per eligible child to £20 next month. The UK Government should have followed our lead and matched the 6% uprate on social security benefits which the Scottish Government is adding to eight of the benefits we deliver. The Chancellor failed to match that commitment which could have provided lifeline support to thousands of households.
“On taxation, we have already acted to introduce a 19% starter rate of income tax below the basic rate, in line with our commitment to progressive taxation, which makes Scotland the fairest taxed part of the UK. We will continue to take that approach when we set taxation policy in future budgets.”
In the midst of the biggest wages and bills crisis in living memory, Rishi Sunak’s Spring Statement has failed families who need help NOW, says the TUC.
He didn’t stand up for families. He didn’t take the opportunity to stand up to the bosses who’ve sacked hundreds of workers at P&O. And he didn’t set out a plan to get wages rising – leaving the average workers facing a wage cut of over £500 this year.
Fund efforts towards a peaceful solution to the conflict in Ukraine
Take additional measures to support families in the UK with rising energy prices
Deliver the long-term changes needed for a high-wage, high skill, high productivity economy
Below we set out how the spring statement matched up to our tests and assess what it means for working people.
The Chancellor didn’t deliver an immediate boost to pay
Workers’ pay prospects from the statement don’t look good. The OBR forecasts real weekly wages to fall by £11p/w (2.0 per cent) in 2022, and fall again in 2023. This will put wages back below their 2008 levels (after a brief recovery in 2021), where they’ll stay until 2025. And even this contains some optimistic wage forecasts, with the OBR forecasting pay before inflation to rise by as much as 5.9 per in Q3 2022.
The OBR forecasts that the 2022-23 financial year will see the biggest fall in living standards since records began in 1956-57, explaining that the “failure of nominal earnings growth to keep pace with rising inflation” is a “key factor” in this.
It adds that the policy measures announced since October only “offset a third of the overall fall in living standards that would otherwise have occurred in the coming 12 months”.
But there was no action to tackle falling pay in the Chancellor’s statement: nothing on raising the minimum wage, or funding public sector pay rises, and no recognition that collective bargaining (and union presence) is the most sustainable way to get wages rising.
Measures to support families in the UK with rising energy prices and the cost of living were totally inadequate
The spring statement offers little good news for struggling families, especially those in receipt of benefits.
Benefits uprating
Worst of all there was no increase in the basic rate of benefits. As it stands, the standard allowance for Universal Credit and legacy benefits is set to rise by 3.1 per cent in April 2022. But this is far below the latest inflation figure (CPI is 6.2% in Feb 2022 and RPI is 8.2%), with inflation forecast to rise higher in the coming months.
This will leave those on benefits facing a real terms cut at a time when energy bills are rising by 54 per cent. The families who need the most help have been left totally out in the cold by the Chancellor today.
The decision not to cut benefits in real terms will particularly impact those who are unable to work. This reflects a wider ignorance of the equalities impact of the cost of living crisis.
We also didn’t see a reversal of the decision to suspend the state pension triple lock. The decision to abandon the pensions triple lock will cost pensioners almost £500 a year. Pensioners are particularly vulnerable to price hikes as they spend a higher percentage of their income on food and fuel.
Targeted support
The big new announcement for targeted support for low-income households was £500 million in additional funding for the Household Support Fund – a temporary discretionary fund run by local authorities. This scheme was set to end this month, and the initial funding was £500 million.
This extra money is worth less than £10 each to the six million families claiming Universal Credit – in the unlikely event they hear about it and are able to jump through the hoops needed to claim it. And contrast this £500 million to the £10 billion cut to benefit spending in 2022-23 as a result of not uprating benefits in line with inflation.
Income tax and national insurance threshold
Changes to tax cuts won’t help the families who need it most now. Raising the National Insurance threshold mostly benefits middle earners and, compared to increasing benefits payments, does little to help those with low income. This can be seen in the chart below, from the Resolution Foundation.
And promises of income tax cuts tomorrow do nothing for families facing cuts to their living standards now.
And the Chancellor has missed another opportunity to raise sick pay and make it available to all. Living with Covid requires decent sick pay for all, yet we’re still waiting for government to take action on this.
VAT-free insulation and solar panels
Alongside this was the removal of the 5% Value Added Tax currently applied to building materials, like home insulation and solar panels. But this only benefits families who own a home and can afford to renovate it anyway.
The Chancellor should’ve taken the opportunity to invest in home retrofits at scale. Improving the average UK home’s energy efficiency to band C would reduce the country’s gas demand by 15% and cut hundreds of pounds off fuel poor homes’ energy bills. A massive social homes retrofits programme, delivered by local authorities, could also create over a quarter million good jobs over two years. But here again the Chancellor failed to act.
Transport
The 5p cut on fuel duty does next to nothing to support those at the sharp end of the wages and bills crisis. Analysis by NEF estimates that a third of this tax cut will go directly to the richest 20% of households, while the poorest 20% will on average only receive £5 per month. To make transport truly affordable for everyone, Government should be expanding bus and rail services in the public sector.
The Chancellor didn’t talk about the long-term changes needed for a high-wage, high skill, high productivity economy
We heard nothing on reforms to corporate governance, industrial strategy or expanding the public sector workforce to deliver the decent public services we need to level up.
The Chancellor did announce a review of the apprenticeship levy. We believe that any changes to the levy should focus on significantly increasing the number of high-quality apprenticeships and widening access to groups facing long-standing barriers. A review must not be an exercise in allowing employers to duck their responsibilities on apprenticeships.
And much more than this is urgently needed to tackle the shortfall in training, including increased government skills funding and new workplace training rights to expand opportunities for everyone to upskill and retrain.
The Chancellor didn’t stand up to the scandalous behaviour by bosses P&O
The Chancellor talked about security but did nothing to take on the bosses who take every measure to undermine their workers’ job security. He could’ve made it clear that no employer who treats workers with the contempt shown by P&O Ferries would receive a penny of public money until they reinstate their workforce, including by taking freeports contracts off DP World, the parent company of P&O.
Yet once again the Chancellor failed to mention the issues that matter to working people.
The government’s response to those fleeing conflict and war is inadequate
The Spring statement document outlines the £400m in humanitarian support the government has given to Ukraine, and says it has committed “to provide local authorities with £10,500 per person for support services, and between £3,000 and £8,755 per pupil for education services depending on phase of education, as well as £350 per month for sponsors for up to 12 months”.
But it’s clear that the government’s support for the people fleeing war and conflict is worse than inadequate. The Ukraine for Homes scheme is no substitute for a properly funded system that provides universal refugee protection. And yesterday, the Government’s nationality and borders bill, passed a vital stage in the House of Commons, meaning that those fleeing conflict may find themselves treated as criminals and deported, instead of finding sanctuary.
The Chancellor let families down today.
Families are facing soaring bills at a time when their incomes have been squeezed by years of wage cuts and attacks on the social security system. The wages and bills crisis is a consequence of decisions taken by successive governments. Today the Chancellor chose to make the pain last for longer.
THERE WAS SOME PRAISE FOR SUNAK’S MINI-BUDGET, HOWEVER:
Simon Roberts, Chief Executive Officer, Sainsbury’s said:“We know our customers and colleagues are concerned about increases to the cost of living and at Sainsbury’s we are doing everything we can to support them.
“We really welcome today’s changes to fuel duty and national insurance. We are passing a 6 pence per litre cut in fuel across our forecourts from 6pm tonight as we know fuel costs are one of the biggest pressures everyone is facing right now.
“We were pleased to welcome the Chancellor to one of our stores today to discuss what we are doing to offer customers great value and to invest over £100 million in increasing pay for our colleagues with a new hourly rate of £10 per hour nationally and £11.05 in inner London.”
Michelle Ovens CBE, Founder, Small Business Saturday said:“Moves in today’s Spring Statement to increase the employment allowance, reduce fuel duty and raise the National Insurance threshold are welcome, and will go some way to help businesses deal with rising costs.
“In particular, It is good to see the immediacy of this rise in employment allowance.”
Martin McTague, Chair, Federation of Small Businesses, said:“We are very pleased to see the Chancellor adopting our top ask for this Spring Statement: uprating the Employment Allowance to help small employers with national insurance costs.
“We originally put forward the Employment Allowance as a targeted measure to help small firms, and it has now been expanded three times since its creation.
“Together with a cut to fuel duty, these measures will provide crucial breathing space for our embattled small employers.
“This Spring Statement marks a good starting point, with welcome measures on business rates, net zero and energy investment taking effect next month.
“With steep inflation, energy bills increasing fast, without the same support in place as enjoyed by consumers, and hiring pressures landing hard on small firms, more of the right stuff will be needed in the autumn given this challenging backdrop.
“We’ve seen a VAT cut on net zero investments for households today, which is good for small firms involved in their installation.
“However, a high street shop or local bar cannot access the same support that consumers do when dealing with the same energy supplier, and they should have access to the same assistance to reduce energy use and support the move to net zero.
“We look forward to working with the Chancellor on his new tax plan. Achieving the new culture of enterprise vision he rightly aspires to, alongside levelling up aspirations, will mean putting community small firms and sole traders front and centre of reforms.
“That means taking more of them out of the business rates system, protecting SME R&D investment incentives and delivering on commitments to end an endemic late payment culture that destroys thousands of firms a year.”
Alex Towers, Director of Policy and Public Affairs, BT Group said:“We welcome the Chancellor’s focus on tax reforms for business investment, given how central this is to UK infrastructure and growth.
“This is particularly important for BT Group as we make once in a generation investments to build the UK’s full fibre broadband and 5G networks. The existing super-deduction has already helped us to significantly increase and accelerate that investment.
“We agree that longer-term incentives are now needed, to support this country’s growth and competitiveness, and we will be keen to contribute evidence to aid the Government’s decision-making.”
Dr Clive Hickman OBE, Chief Executive, the Manufacturing Technology Centre said: “We welcome the Spring Statement, which outlines concrete steps to ensure that the manufacturing sector remains competitive, sustainable, and resilient.
“The Government’s commitment to cut tax rates on business investment is important if the UK is to boost manufacturing productivity and create high-quality jobs. In addition, the reform to R&D tax credits is a very positive step that will enable the scheme to be more effective, better value for money, and more generous.
“These measures will be crucial to spur innovation and encourage investment across the country.”
Julian David, Chief Executive, TechUK said: “Rightly the majority of the Spring Statement focused on addressing the cost of living concerns resulting from the war in Ukraine and rising inflation. Along with this vital action, the Chancellor also outlined a welcome package of consultations and policy programmes aimed at boosting businesses investment.
“In our recent Digital Economy Monitor Survey UK tech companies said increasing support to invest in R&D would be their top ask of Government, with 76% saying R&D is important to their business operations in the UK.
“The proposals unveiled today to further expand R&D tax credits and consult on ways to maintain the tax deduction for capital expenditure have the potential to unlock more investment into UK innovation.
“However, to get this right the Government must ensure that the software and intangible assets that power modern business investment are kept in scope. Otherwise, the Government risks missing an opportunity to unleash the potential of tech led growth.”
Dom Hallas, Executive Director, COADEC said:“Better R&D tax credits would mean more innovation from startups and innovative companies.
“We’re delighted the Chancellor recommitted to expanding it to cover cloud and data costs – and look forward to discussing the many ways to improve the credit further.”
Irene Graham OBE, Chief Executive, ScaleUp Institute said: “In the face of increasing pressures of inflation and wider international uncertainties, it is very good to see the Spring Statement continues to recognise the importance of business growth and innovation.
“It reaffirms policies targeted towards R&D, people and skills, investment, and innovation including the new Innovation Challenge across central government departments. We will continue to work closely with the Government on the evolution and development of these policies which are so vital to our scaleup economy.”
Michael Moore, BVCA Director General, said:“Increased business investment is key to the future of the UK economy and we welcome the measures announced by the Chancellor today which support this objective.
“Private capital’s focus on sectors like AI, robotics and fintech has helped the UK to become a world leader in these areas – further reform of R&D tax credits will help businesses to drive further innovation and strengthen the UK’s position in this new economy.”
Fuel Duty
Edmund King, President, the AA said: “The AA welcomes the cut in fuel duty. However, we are concerned that the benefit will be lost unless retailers pass it on and reflect a fair price at the pumps. Average pump prices yesterday hit new records- despite the fall in wholesale costs.
“The Chancellor has ridden to the rescue of UK families and businesses who use their vehicles, not for pleasure, but to function in their daily lives. Since the start of the year, the 20p-a-litre surge in pump prices has been the shock that rocked the finances of families, and particularly young drivers, pensioners and lower-income workers who need to commute each day.
“AA research showed that even in November, when petrol pump prices set new records at around 148p a litre, 43% of drivers were cutting back on car use, other spending to compensate or both. That rose to 59% among young drivers and 53% among the lower-paid. Petrol started this week averaging 167p a litre.
“On top of the duty cut, there has been a substantial reduction in wholesale road fuel costs feeding through to the forecourts since 9 March. That needs to drive lower pump prices also. The road fuel trade shouldn’t leave the Treasury to do the heavy lifting when cutting motoring costs.”
Elizabeth de Jong, Director of Policy, Logistics UK said:“With average fuel prices reaching the highest level on record and rising inflation, there has been an unstainable burden on logistics businesses which operate on very narrow margins of around 1%; the Chancellor’s decision today will help to ensure operators can continue to afford supplying the nation with all the goods it needs, including food, medicine and other essential items.
“Fuel is the single biggest expense incurred by logistics operators, accounting for a third of the annual operating cost of an HGV. The cut in fuel duty of 5ppl will result in an average saving of £2,356 per year per 44-tonne truck; this move will help to strengthen the UK’s supply chain during a time of ongoing financial and operational challenges.”
Zero rating VAT in energy efficiency measures
David Cowdrey, Director of External Affairs, MCS said:“The Chancellor has used the Spring Statement as an opportunity to kick-start the home heating revolution by zero rating VAT on home energy efficiency and renewable technologies for five years.
“This announcement allows people to insulate their homes and save on our fuel bills, making houses cheaper to run, especially when gas prices are at a record high.
“The government’s bold move to zero rate VAT can help the UK meet its net zero targets by using proven, off the shelf, zero carbon domestic energy solutions, such as solar and heat pumps, which are ready to be upscaled now.“
Professor Robert Gross, Director, U.K. Energy Research Centre, Professor of Energy Policy, Imperial College said:“The VAT cut on energy efficiency products is a great first step in helping households adopt simple measures to help cut fuel bills for the coming winter.
“Better insulated houses need less energy to keep warm and this is good for our bills, energy security and the environment.”
Amy MacConnachie, Director of External Affairs, Association for Renewable Energy and Clean Technology (REA), said:“The REA warmly welcomes today’s announcement to remove VAT on domestic renewables for five years. We have long campaigned for this change because we know these installations will help protect people from volatile gas prices and reduce their energy bills, while also supporting the transition to Net Zero and providing a catalyst for new jobs and investment across the country.
“The move to bring forward business rate exemptions for green technologies from April 2022, including solar panels and heat pumps, will help to further drive down costs and support the decarbonisation of buildings.
“We now want to see the Government clarify and go further on the range of technologies included as Energy Saving Materials, particularly energy storage, but this is a positive package of measures for our sector.
“We stand ready to deliver an energy future which is independent, secure, and stable.”
Chancellor expected to unveil Spring Statement that builds a stronger, more secure economy for the United Kingdom.
Rishi Sunak will set out further plans to support people with the rising cost of living and pledge to continue to “stand by” hard-working families during the challenging times ahead.
He will say that freedom and democracy remain the best route to peace, prosperity, and happiness and that a strong economy is fundamental in enabling us to counter the threat Russia poses to our values.
The Chancellor will today deliver a Spring Statement that ‘builds a stronger, more secure economy for the United Kingdom’.
With people across the UK facing growing pressures exacerbated by the war in Ukraine, Rishi Sunak will pledge to continue to “stand by” hard-working families and outline further plans to help with the rising cost of living.
Alongside Britain continuing its “unwavering” support to Ukraine, he will add that a stronger economy is vital in responding to the threat of President Putin and that freedom and democracy remain the best route to peace, prosperity, and happiness.
Delivering the Spring Statement, Chancellor Rishi Sunak is expected to say:“We will confront this challenge to our values not just in the arms and resources we send to Ukraine but in strengthening our economy here at home.
“So when I talk about security, yes – I mean responding to the war in Ukraine. But I also mean the security of a faster growing economy.
“The security of more resilient public finances. And security for working families as we help with the cost of living.”
The Chancellor’s statement is also expected to set out how the government plans to create a new culture of enterprise, with the private sector training more, investing more, and innovating more.
The Spring Statement will build on UK government support worth around £21 billion this year and next to help families with the cost of living.
That includes the £9.1 billion Energy Bills Rebate, putting an average of £1,000 more per year into the pockets of working families via changes to Universal Credit and freezing fuel and alcohol duties to keep costs down.
The Government is also raising the National Living Wage to £9.50 per hour from April, meaning people working full time on the National Living Wage will see a £1,000 increase in their annual earnings.
And the Government’s Plan for Jobs is also helping people into work and giving them the skills they need to progress – the best approach to managing the cost of living in the long term.
Bold action needed to tackle cost of living
The UK Government must take bold and decisive action to help protect people from soaring living costs, according to Holyrood Finance Secretary Kate Forbes.
Speaking ahead of the Spring Statement, Ms Forbes said the Chancellor of the Exchequer must use every tool available to provide support through what is expected to be a turbulent period of economic uncertainty.
Finance Secretary Kate Forbes said: “This is not a time to be ducking the considerable challenges we face, and I expect the Chancellor to use the Spring Statement to outline significant actions to support households and businesses, considering that most of the relevant powers are reserved to the UK Government.
“The Scottish Government is doing all it can to help those most in need. We are uprating eight Scottish benefits by 6% from 1 April as well as doubling our Scottish Child Payment to £20 per week per eligible child. I call again on the UK Government to follow our lead and uprate social security benefits by 6%.”
The Scottish Government has called on the Chancellor to:
increase benefits at a higher rate, closer to inflation
implement business relief on National Insurance contributions
provide immediate funding to sectors directly impacted by the Russia/Ukraine conflict
remove/reduce VAT on household energy bills
take VAT off energy efficient and zero emissions heat equipment and products
provide powers to implement flexible working, to get more people into jobs
deliver two extra Cold Weather Payments – one immediately and another in winter 2022-23 when energy bills will have risen again.
Commenting on today’s (Wednesday) inflation figures, which show CPI inflation rising to a 30-year high of 6.2% in February, TUC General Secretary Frances O’Grady said: “The Chancellor must respond to high inflation today with much greater help for families with soaring bills and a plan to get wages rising.
“Families need grants, not loans to help with soaring energy bills. These should be funded by a windfall tax on excess profits from gas and oil. Universal credit should get a boost to help families keep up with the rising cost of living.
“And we need a comprehensive plan to get wages rising, including new pay bargaining rights for workers and their unions.”
