‘CATASTROPHIC’: Spring Statement welfare cuts will drive 250,000 more people into poverty

Chancellor ‘delivers security and national renewal in a new era of global change’

Chancellor vows to bring about “new era of security and national renewal” as she delivered a Spring Statement to kickstart economic growth, protect working people and keep Britain safe.
People to be on average £500 a year better off by the end of this parliament compared to under the previous government, putting more money in people’s pockets.
OBR forecast concludes government’s landmark planning reforms will result in a £6.8 billion boost to the economy and housebuilding at its highest level in over 40 years by 2029-30
Growth at the heart of Plan for Change as £13 billion of additional capital spend allocated alongside £2.2 billion defence funding boost next year.

THE Labour government said people will be on average £500 better off from 2029, relative to OBR’s autumn forecast, helping to deliver the Plan for Change as the Chancellor yesterday (Wednesday 26 March) announced a Spring Statement to grasp the opportunities in a changing world.

THEY WON’T. From November 2026, 370,000 people who already get PIP will lose it and another 430, 000 who would qualify now no longer will. These people will lose £4500 a year each. And 150,000 carers who look after them will no longer receive their £83.30 a week Carer’s Allowance.

The OBR has also concluded that the government’s landmark planning reforms will result in UK housebuilding reaching its highest level in over 40 years, bringing the UK one step closer to its Plan for Change mission to build 1.5 million homes.

The government says economy will be 0.2% larger in 2029-30 because of the reforms – worth around £6.8 billion in today’s money – growing to 0.4% over the next ten years. This represents the biggest positive growth effect it has ever forecasted for a policy that comes at zero-cost to taxpayers. The reforms will secure over 170,000 new homes for hard working families and leave borrowing £3.4 billion lower in 2029-30.

The Chancellor also set out how the government is protecting national security and maximising the growth potential of the UK defence sector by confirming a £2.2 billion increase in the defence budget in 2025-26 while ensuring UK defence is on the cutting-edge of technology and innovation.

But growth is still not where it should be, so at this Spring Statement, this government has gone ‘further and faster’ to kickstart growth by training up to 60,000 young people to get Britain building again; increasing capital investment by £13 billion over this parliament; and fixing public services by tearing out waste from its roots.

Growth

Kickstarting economic growth is the number one mission of this government, putting more money in people’s pockets. The government has already made considerable progress; supporting a third runway at Heathrow; revitalising the Oxford Cambridge Growth Corridor, launching the National Wealth Fund and making the right choices on public investment to drive growth across the UK.

The actions of this government across the Autumn Budget and Spring Statement, if sustained, lead to a 0.6% rise in the level of real GDP by 2034-35, signalling the government’s growth plan is working.

The OBR concluded that the stability rule is met by £9.9 billion and the investment rule is met by £15.1 billion. Both rules are met two years early, meaning from 2027-28 the government is only borrowing for investment and net financial debt is falling.

The government is not satisfied with short-term growth figures, and is going further and faster today to improve this:

To go further and faster to get Britain building, the Chancellor has today announced a further £13 billion of capital investment over the Parliament to go further on growth, on top of the £100 billion uplift announced at Autumn Budget. This will deliver the projects needed to catalyse private investment, boost growth and drive forward the UK’s modern industrial strategy – unlocking the potential of the Oxford Cambridge Growth Corridor which could add up to £78 billion to the UK economy by 2035.
Taken together, this greater capital investment more than offsets the modest savings on day to day spending and means the total departmental spending will increase over the next five years, when compared with plans in the Autumn.
Over this Parliament, the government is funding a £625 million package to boost skills in the construction sector, which is expected to provide up to 60,000 more skilled construction workers to support the government’s plans to deliver 1.5 million homes in England over the parliament and progress vital infrastructure projects.
As part of this, the government is providing further support to scale up existing construction skills pathway over this Parliament through £100 million for 35,000 additional training places in construction-focused Skills Bootcamps, supporting trainees, ‘returners’, and existing employees to succeed in the sector. Building on the £40 million investment in the new Growth and Skills Levy at Autumn Budget 2024, the government is also providing a further £40 million to support up to 10,000 more young people to access new construction Foundation Apprenticeships, which will provide a key entry route into a thriving industry.
The government is ensuring there are enough skilled construction workers in the system, with £100 million to deliver 10 Technical Excellence Colleges specialised in construction across every region in England, and £165 million to increase funding for training providers delivering construction courses for 16-19-year-olds and adults.
The government is committed to supporting employers to unlock further investment in training to deliver more skilled construction workers, and is providing £100 million, alongside a £32 million contribution from the Construction Industry Training Board to deliver up to 40,000 industry placements in construction each year.
Supported by the construction skills package, the government confirmed this week that there will be a £2 billion injection of new grant funding to deliver up to 18,000 new social and affordable homes. The new funding will only support developments on sites that will deliver in this Parliament, getting spades in the ground quickly to build homes in places such as Manchester and Liverpool.

Defence

The world is changing before our eyes, reshaped by global instability, including Russian aggression in Ukraine. Europe is facing a once-in-a-generation moment for its collective security, with conflicts overseas undermining security and prosperity at home.

A month ago, the PM announced the biggest sustained increase in defence spending since the Cold War as a result of the changing global picture, now reaching 2.5% of GDP by April 2027, and with an ambition to reach 3% in the next Parliament subject to economic and fiscal conditions.

We are going further and faster to protect our national security and maximise the economic growth potential of the UK defence sector:

Increasing the defence budget by £2.2 billion in 2025-26, taking additional spending on defence to over £5 billion since the Autumn Budget.
This raises spending on defence to 2.36% next year and will be invested in fitting Royal Navy ships with Directed Energy Weapons five years earlier than planned, providing better homes for military families and modernising His Majesty’s Naval Base Portsmouth.
Setting a minimum 10 percent ringfence for equipment spending on emerging technologies like drones and autonomous systems, dual-use technology, and AI-powered capabilities, so that British troops have the tools they need to fight and win in modern warfare.
Getting this new tech into the hands of our armed forces quicker by cutting away bureaucracy, with a new UK Defence Innovation unit within the Ministry of Defence spearheading efforts to identify promising technology and ensure these get to the frontline at speed, while also bolstering the UK tech sector and crowding in private investment.
Creating bespoke procurement processes for different types of military equipment, learning lessons from our rapid support for Ukraine to drive faster timescale targets for operationalising new tanks, aircraft and other essential tools for modern warfare.
This government is determined to transform the defence sector into an engine for growth by focusing this investment on where it boosts the productive capacity of the economy such as investment in innovation and novel technologies. As a result of the increase in defence spending to 2.5%, the government estimates this could lead to around 0.3% higher GDP in the long run, equivalent to around £11 billion of GDP in today’s money.
The government’s investment in defence will also support its number one mission to deliver economic growth. UK citizens will be protected from threats at home whilst creating a stable environment in which businesses can thrive, and supporting highly skilled jobs and apprenticeships across the whole of the UK.

Reform

The government is determined to make the public sector more productive and to improve services for working people. But the changing world means we need to go further and faster to ensure we can deliver the public services that working people care most about.

The government has shown its commitment to taking the difficult decisions required to drive efficiencies and reform the state – including announcing that the world’s largest quango, NHS England, will be brought back into the Department for Health and Social Care, reducing bureaucratic inefficiencies and duplication; and driving out wasteful government spend through cancelling thousands of government credit cards.

Getting more people into jobs is also central to the government’s growth mission. This broken welfare system that is letting people down by asking them to prove what they can’t do, rather than focusing on what they could do with the right support – trapping people due to fear of trying work, lack of support and poor financial incentives.

The social security system will always protect those who can never work, that is why this government is proposing an additional premium that will safeguard their incomes. And will end reassessments for people with the most severe, life-long conditions to give them dignity and security.

Helping more people into work is a central aim of these reforms and which is why the government is tackling incentives to be inactive by abolishing the WCA, rebalancing Universal Credit, and investing more into employment support.

We will always support those with long term health conditions through the Personal Independence Payment, which will remain an important non-means tested benefit for disabled people and people with long term health conditions. But these reforms will make the system more targeted and sustainable to ensure the safety net is there for those who need it most.

The OBR have now set out their final assessment of costings and confirmed this welfare package will reduce welfare spending by £4.8 billion in 2029-/30.

The government will modernise the Civil Service into a more productive and agile organisation that can effectively deliver the Plan for Change, underpinned by a digital revolution, while cancelling thousands of government procurement cards.

Today, the Chancellor has gone further:

The Chancellor has confirmed the creation of a £3.25 billion Transformation Fund to support the fundamental reform of public services, seize the opportunities of digital technology and Artificial Intelligence (AI), and transform frontline delivery to release savings for taxpayers over the long-term.
The Fund will invest in vital public services and accelerate the modernisation of the state by taking the next step to reform the children’s social care system through an additional £25 million for the fostering system. This will include funding the recruitment of a further 400 new fostering households, providing children with stability and addressing cost pressures on local government.
The fund will also support the managing offenders in the community, by providing £8 million for new technology so probation officers can focus on reducing reoffending, rather than filling out forms.
In addition, it will provide £42 million for three pioneering DSIT-led Frontier AI Exemplars. These Exemplars will test and deploy AI applications to make government operations more efficient and effective and improve outcomes for citizens by reducing unnecessary bureaucracy.
To create an agile and productive state we are also providing £150 million for government employee exit schemes. This will support a leaner and more efficient Civil Service, helping to reduce administration costs by 15% by the end of the decade.
The Chancellor also announced a package of measures to close the tax gap, raising £1 billion per year by 2029-30. The UK tax gap was estimated to be around £40 billion in 2022-23.
The Spring Statement earmarks around £80 million in new money for third party debt collectors to bring in £1.3 billion over the next five years – a return of around £16 for every pound spent for UK public services and investment projects. HMRC will also receive £4 million in new funding to pilot a new test and learn programme with the private sector to improve the tax collection agency’s approach to recouping older unpaid tax debt. Ministers will decide whether to proceed with a larger exercise later this year based on the results of this test.
An additional 600 staff will also be recruited into HMRC’s debt management teams. This means that for every £1 spent on these staff, over £13 of debt is expected to be recovered. The staff will work with the private sector to make collecting tax debt more efficient including through automating admin processes.
The Spring Statement also announces £100 million in new funding for HMRC to recruit a further 500 compliance officers from April 2025. This will raise £241 million in unpaid tax over the next five years.
Late payment penalties for VAT and Making Tax Digital for income tax Self Assessment will increase to incentivise taxpayers to pay on time. This will be from 2% to 3% at 15 days, 2% to 3% at 30 days, and 4% to 10% from day 31. This will take effect from April 2025.
As announced in the autumn, Making Tax Digital for income tax Self Assessment will be extended to sole traders and landlords with income over £20,000. The Spring Statement confirms that this additional group will join Making Tax Digital from April 2028. This will build on the existing plan which will see sole traders and landlords with income above £50,000 joining from April 2026, and those with income above £30,000 joining from April 2027. Around 4 million businesses have an income below the £20,000 threshold.

Looking Forward

This Spring Statement builds on the Autumn Budget and the decisions taken since required to deliver stability to the British economy and kickstart economic growth.

The government will set out its plans for spending and key public sector reforms at the Spending Review which will conclude on 11 June 2025.

This will not be a business-as-usual Spending Review. The government has fundamentally reformed the process to make it zero-based, collaborative, and data-led, in order to ensure a laser-like focus on the biggest opportunities to rewire the state and deliver the Plan for Change.

At the Spending Review, the Budget in the autumn and across the Parliament, the government will continue to prioritise growing the economy to deliver change.

RESPONSES:

UK spending cuts ‘risk harm to most vulnerable’

Finance Secretary responds to Spring Statement

Spending cuts announced by the Chancellor risk harming some of the most vulnerable people in society, Finance Secretary Shona Robison has said.

Responding to the Spring Statement, Ms Robison said: “Today’s statement from the Chancellor will see austerity cuts being imposed on some of the most vulnerable people in our society. The UK Government appears to be trying to balance its books on the backs of disabled people.

“Not content with these cuts, the UK Government is still expected to short-change Scotland’s public services on additional employer National Insurance costs to the tune of hundreds of millions of pounds. This will be felt in public services that people rely on up and down the country – services such as our NHS, GPs, dentists, social care providers, and universities.

“The UK Government’s choice to increase defence investment is welcome, but its choices to shortchange public services and deliver austerity cuts to some of the most vulnerable are deplorable.”

TRUSSELL:

Trussell responds to ‘catastrophic’ Spring Statement

Cara Hilton, Senior Policy Manager at Trussell in Scotland, said: “Today’s announcement has incredibly worrying implications for disabled people in Scotland.

“The insistence by the Treasury on driving through record cuts to disabled people’s social security to balance the books is both shocking and appalling. People at food banks are telling us they are terrified how they’ll survive.

“These brutal cuts to already precarious incomes won’t help more disabled people find work, but they will risk forcing more people to skip meals and turn to food banks to get by.

“Cuts come at a cost. Driving up hunger and hardship means more spending on already struggling public services, with increased hospital and GP visits a very likely outcome of these actions.

“Disabled people are already three times more likely to face hunger, and over three quarters of people in receipt of Universal Credit and disability benefits are already struggling to afford the essentials like food. This will only get worse.

“These cruel cuts are out of touch with what voters want from this government. The government says people voted for change in Westminster, but we know that seven in ten voters across political parties agree the social security for disabled people should at least be enough to cover essential living costs. This is a change for the worse, and it is disabled people who will pay the price.”

David, 46, has a bone disease and is terrified by the prospect of cuts to his disability benefits. He has recently been forced to turn to a Trussell food bank for support.

He said: “I am terrified now that the Chancellor has confirmed that my disability benefits will be cut. The bone tumours in my hips cause me pain everyday and force me to use crutches, and in the cold weather my symptoms worsen but I already can’t afford to put the heating on.

” I don’t know how I’ll survive. It’s not my fault I’m disabled, and I shouldn’t be punished for it.

“Life costs more if you’re disabled. Things like specialist equipment and travel to healthcare appointments all add up. PIP – which the government is brutally cutting – is there to account for these extra costs. It is not a luxury, and I shouldn’t need to use a food bank or turn to charities like Trussell for support.

“Cutting my benefits won’t get me back to work – it will just push me deeper into poverty.”

JOSEPH ROWNTREE FOUNDATION

“The Chancellor said today that she would not do anything to put household finances in danger Yet the government’s own assessment shows their cuts to health related benefits risk pushing 250,000 people into poverty, including 50,000 children.

“Their assessment also found:

800,000 will lose PIP according to the OBR
3m will lose money from changes to the main health element of UC, £500 a year for existing claimants, and £3000 for new claimants
£500m will come out of the carers benefits bill as 150,000 lose carers allowance or UC care element.

“The Chancellor said the world has changed, and today’s announcements places the burden of that changing world on the shoulders of those least able to bear the load. These cuts will harm people, deepening the hardship they already face.”

CHILD POVERTY ACTION GROUP:

Responding to today’s Spring Statement, chief executive of Child Poverty Action Group Alison Garnham said: “Stealth social security cuts bring neither stability nor security to struggling families and will push child poverty even higher.

“Growth and better living standards are not achieved by taking money from families with the least.

“Government must invest in social security support – not cut it – for the most vulnerable, or risk being remembered as the Labour administration under whose watch child poverty continued to rise.”

CARERS UK:

STUC:

INDEPENDENT ALLIANCE MPs:

KIM JOHNSON MP:

OCTOPUS ENERGY:

Greg Jackson, CEO of Octopus Energy, said: “It’s good to see the focus on planning and other reforms that can unlock investment to help make Britain more productive and drive growth.

“We were also pleased to see the receipts from the Government’s sale of Bulb to Octopus funding 36,000 homes for armed forces families. It’s a sign of how business and Government can work together for the good of the country.”

FRONT PAGES:

MOMENTUM:

NEW ECONOMICS FOUNDATION:

JEREMY CORBYN:

PRIME MINISTER KEIR STARMER:

THE NATIONAL:

TRADES UNION CONGRESS (TUC):

Responding to today’s (Wednesday) Spring Statement, TUC General Secretary Paul Nowak said: “Labour inherited a toxic economic legacy from the Conservatives. But at the Budget the Chancellor took the right call to invest in repairing our public services and infrastructure.

“To rebuild Britain this approach must continue long-term. In the face of strong global headwinds, we need to keep building stronger foundations at home. That must include protecting the most vulnerable.

“As the last 14 years have shown us – you cannot cut your way to growth. UK taxes are low as a share of GDP. Those with the broadest shoulders must continue to contribute more through a fairer tax system.

“And the Tories’ botched Brexit deal must be improved to boost growth and trade.”

On the government’s social security reforms, Paul said: “Ministers need to rethink their plans. Decisions that affect millions of people’s lives must be made with care – not as a last-minute response to changed fiscal forecasts.

“These changes mean many disabled people – whether they are in work or not – will be pushed into hardship.

“And removing support could even make it harder for some people to stay in their jobs.

“Disabled people need timely access to high quality healthcare, and accessible jobs – particularly in the towns and communities where there are fewest opportunities.”

On the public sector workforce, Paul added: “Public sector workers are key deliverers of national renewal.

“But after 14 years of Tory chaos and ruin, many feel burnt out and demoralised.

“It’s vital the government invests in these workers and recognises the key role they play in improving the services we all rely on.

“Any approach to transforming our public services must include clear workforce plans for every part of our public sector, developed in partnership with staff and unions.”

On the OBR’s growth forecasts, Paul said: “It is time to review both the role of the OBR and how it models the long-term impacts of public investment. Short-term changes in forecasts should not be driving long-term government decision-making.”

UNITE THE UNION:

UK FINANCE:

David Postings, Chief Executive Officer, UK Finance said: “The chancellor’s Spring Statement focused on stability and growth in the UK. We welcome the government’s continued commitment to growing the economy and the financial services sector is committed to playing its part in support.

“Building on recent positive regulatory reform plans, we now look forward to the upcoming Industrial Strategy, which will be key to unlocking further investment and delivering growth through various sectors, including financial services.”

MENTAL HEALTH FOUNDATION:

LLOYDS BANKING GROUP:

Charlie Nunn, Chief Executive Officer, Lloyds Banking Group said: “A safe and lasting home is the foundation for good lives and livelihoods, and we welcome this boost to building much-needed social and affordable homes.

“As the UK’s biggest commercial supporter of social housing, we’re working across the private, public and community sectors to help increase provision of good quality, genuinely affordable housing for those in need.”

UNITE HOSPITALITY:

DAILY MIRROR:

POVERTY ALLIANCE:

Responding to the Spring Statement, Poverty Alliance chief executive Peter Kelly said: “People in the UK voted for change at the last election because they were desperate for a government that delivers a just and compassionate country. Today’s announcements undermine that ambition.

“It is completely unjust to, once again, balance the books on the backs of the those on the lowest incomes. Today’s statement layered additional cuts to our social security system on top of those announced last week. That will have a devastating impact for households across the country.

“The Government’s own analysis shows that these changes will push at least 250,000 people, including 50,000 children into poverty, undermining the forthcoming child poverty strategy before it’s even published.

“These cuts will push people into debt and destitution. They will continue the need for food banks. They will stop people heating their homes, or charging essential medical and support equipment.

“People know that there is no justification for these cuts. It does not have to be like this. The Chancellor could scrap her self-imposed fiscal rules or use our taxation system to raise the revenue needed for the better future we all want to see.

“The UK Government is re-running a failed experiment – austerity will not deliver economic growth. And it certainly won’t deliver a just and compassionate society.”

SCOTTISH HUMAN RIGHTS COMMISSION:

Deep concern about impact of UK Government’s Spring Statement

The Scottish Human Rights Commission (SHRC) is deeply concerned about the impact of announcements on the future of the UK welfare system in the UK Government’s Spring Statement, especially for disabled people and their families and communities.

Plans to cut the health element of Universal Credit will have a direct effect on the human rights of those disabled people in Scotland who are unable to work. Although payments to support people with the additional costs of disability are devolved in Scotland, the UK Government’s proposals will have negative consequences for the Scottish Budget.

Severe economic hardship

Earlier this month, the UN Committee on Economic, Social and Cultural Rights, which holds governments around the world to account for their record on human rights, warned that changes to the UK welfare system introduced since 2012 have “eroded the rights to social security and to an adequate standard of living, disproportionally affecting persons with disabilities, low-income families and workers in precarious employment” and warned that these changes have resulted in “severe economic hardship”.

Last year, the UN Committee on the Rights of Persons with Disabilities reiterated its position that the UK welfare system is leading to ‘grave and systematic’ violations of disabled people’s rights. Over the past week many disabled people, Disabled People’s Organisations and civil society organisations have expressed shock and fear about what further changes to the system could mean for people.

Professor Angela O’Hagan, Chair of the SHRC, says: “With these announcements, the UK Government is not only disregarding the expert findings and recommendations of human rights bodies, but actively pursuing regressive changes that further deteriorate the rights of disabled people in Scotland.

“Indeed, these steps may potentially represent a breach of the UK’s obligations under international human rights law, particularly its duty to progressively realise the rights to social security, an adequate standard of living, and non-discrimination.

“Social security, an adequate standard of living, and non-discrimination are not optional benefits — they are binding human rights that the UK is required to respect, protect, and fulfil for everyone.

“These proposals fly in the face of both the letter and the spirit of the UK’s human rights obligations.”

VOLUNTEER SCOTLAND:

We share the concerns voiced by many third sector organisations regarding the Chancellor’s Spring Statement on Wednesday (writes Volunteer Sotland’s SARAH LATTO).

The significant cuts to health-related benefits have the potential to push more people into financial difficulty. This would create significant additional demand for third sector services and the volunteers that support them.

This comes at a time when the third sector is facing unprecedented pressures, and volunteer participation is in significant decline. Given the reported challenges many organisations are experiencing in recruiting new volunteers, this could add considerable pressure to existing volunteers who give their time to support people in crisis. This is not sustainable and could contribute to a further decline in volunteer participation.

Last week we published research showing that weekly participation in formal volunteering can lead to wellbeing benefits worth an estimated £1000 per person per year.

This same research also found that the effect of volunteering on mental wellbeing for people with a disability or long-term health condition was seven times larger than for people without.

Despite these clear benefits, we are concerned that the announced reduction in welfare spend will prevent many people in receipt of benefits from pursuing volunteering.

Our ongoing research regarding the impact of the cost of living crisis on volunteering suggests that the capacity of many people to volunteer is increasingly diminished.

This is because of competing demands on their time and rising stress or anxiety regarding their finances. The planned changes to welfare spend will likely exacerbate this situation further, meaning many people in receipt of health-related benefits may feel unable to participate in an activity that is likely to improve their health and wellbeing.

As a result, we join many voices from the third sector in urging the Chancellor to rethink her plans around welfare spend.

FRASER OF ALLANDER INSTITUTE:

Spring Statement reaction: a second fiscal event of the year after all

The Chancellor may have tried to portray it otherwise, but her words in the Commons and the length of the scorecard of measures published by the OBR betray a different story: this really was a fiscal event, and a significant one at that.

It was also one where the forecasting process was nowhere as smooth as we hoped it might be given how much hay the Chancellor made out of strengthening the role of the OBR in the Autumn. Instead, we have seen a number of measures either uncertified or included only on a provisional basis, and with no time to evaluate their supply-side effects.

Given how long these measures have been speculated about, the last-minute tweaks and the scramble to announce further welfare reforms to make the sums add up to the £5bn in savings are pretty disheartening. It also makes us wonder about the reasons for announcing the headline amounts last week, before ultimate certification by the OBR.

It is not credible that the Chancellor or the Work and Pensions Secretary were not aware of the OBR’s concerns at the time of the announcement, and so we are left to wonder why figures that weren’t final were bandied about beforehand instead of being left for the appropriate fiscal event.

The underlying picture deteriorated significantly, and so spending cuts have filled the gap

As widely predicted, the Chancellor would have seen her fiscal rules broken had she not made significantly policy decisions, which collectively cut current spending by nearly £9 billion a year by 2029-30.

Chart: How the Chancellor restored her headroom

Source: OBR

Debt servicing costs are the main reason for the deterioration. Higher market interest rates raised the cost of servicing government by just over £10 billion by the end of the decade, more than wiping the starting headroom. Faced with this, and after staking her credibility on complying with the fiscal rules, the Chancellor decided to mostly lean on the spending side of the ledger to essentially get back to where she started.

This means a heavily backloaded set of policy decisions, with spending cuts coming from 2027-28 onwards. Changes to incapacity and disability benefits mostly affect spending from then on, by £1.8 billion in that year and rising to £4.6 billion by 2029-30.

Changes to the path of day-to-day departmental spending also rise to over £5 billion by 2029-30, although some of that is offset by specific investment programmes such as employment support, DWP delivery and HMRC compliance. On net, current departmental spending has been cut by £3.6 billion by 2029-30 relative to plans.

There have also been some increasing in the tax take. Much of it is from compliance activity and tax debt collection, although there are also additional council tax increases allowed in England and increases to passport and visa fees. Receipts are higher by £2.3 billion by 2029-30 because of measures.

But the Chancellor has had to run just to stand still. She is just as close to missing her fiscal rule as she was in October, and that leaves her exposed to any weaknesses or market movements between now and the Autumn. Things may well turn out for the better – but that is far from guaranteed, and it’s as close to a 50-50 bet as it gets.

Chart: Headroom against the main fiscal target since 2010

Source: OBR

What do the announcements mean for the Scottish Budget?

In the very short-term, there is a small amount of additional funding (£28 million) for the Scottish Government in 2025-26 due to a small increase in departmental spending at UK Government level.

Towards the end of the forecast, however, the picture is significantly more challenging in terms of what it means for Holyrood’s finances. The cuts in departmental budgets announced by the UK Government – even after accounting for some consequentials from employment support programmes and DWP delivery of welfare reforms – mean significant reductions in funding for the Scottish Government relative to what was previously included in the forecasts. Of particular significance are the £200 million and £435 million cuts in implied funding for the Scottish Budget in 2028-29 and 2029-30.

The current forecast points to the PIP reforms reducing the block grant adjustment for social security devolution by increasing amounts, from £177 million in 2027-28 to £455 million in 2029-30. This is in line with what we discussed in recent blogs.

Put together, and in the absence of any other changes, the Scottish Budget would be around £900 million worse off on the current side in 2029-30 than previously projected. On the other hand, some additional capital spending on areas which are devolved in Scotland – so aside from the defence spending increases – are expected to raise the Scottish Government’s capital budget by nearly £250 million by 2029-30 relative to current plans.

Chart: Effects of the Spring Statement measures on the Scottish Budget

Source: OBR

There’s still much we don’t know about the welfare reforms

One key policy change from last week’s Green Paper that the OBR have not been able to cost is the removal of the Work Capability Assessment (WCA) that currently determines whether a person is eligible for the Universal Credit (UC) health element. The UK Government have proposed that the PIP assessment will be used instead.

The OBR note the absence of key policy detail, including how entitlement will operate in Scotland where PIP is being phased out. They do state that they expect the policy to have a “material” fiscal impact, both on spending on UC but this could be offset by an increase in people claiming PIP. The labour market response of this (as with most of the other Green Paper policies) is also yet to be analysed by the OBR.

These changes will directly impact on people in Scotland as UC is a reserved policy, but as already noted, how this will happen given that PIP will soon not exist in Scotland, is unknown. The number of people impacted could be significant. The Scottish Government could mitigate this impact through its own social security top up powers but, as with the recently announced mitigation of the two-child limit in UC, would need to be able to find the money to do so from within its own budget.

But distributional analysis shows significant numbers of people will be worse off

Alongside the Spring Statement documents, the UK Government also update their distributional analysis (the differential impact of policies on poorer, middle, and higher income households). The impact of the Spring Statement, the policies from the Spring Statement are added to the policies from the Autumn Statement, making it difficult to isolate the impact of the Spring Statement, although the regressive nature of the welfare measures is clear to see: those in the lower half of the income distribution are facing most of the cuts.

Separately, the UK Government has produced a statement on the impact of the health and disability reforms.

This makes for sobering reading. The impact of changes to the eligibility for PIP will affect 800,000 people who will no longer be eligible for the Daily Living component. They note a further 150,000 people will not receive Carer’s Allowance of the UC Carer element as a result. These numbers are for England and Wales only given that disability benefits are devolved.

These results, on their own, will increase the number of working age people in poverty by 250,000 and 50,000 children. The UK Government are careful to say that these estimates do not account for any employment impact of those who lose benefits subsequently moving into work, and we will need to wait for the OBR to judge on the strength of these employment effects to understand the potential for offsetting of these numbers.

The reduction and or freezing of the UC health element will affect Scottish claimants as well as those in England and Wales. 2.25 million people who are current claimants will be affected by the freeze and 730,000 new claimants will receive the new lower rate and freeze. A further 50,000 working age people will be in poverty as a result of these changes.

There is as yet no analysis of the impact of the abolition of the Work Capability Assessment in UC, and the only impact that is shown is the reversal of a 2023 change to the descriptors in the Work Capability Assessment, which will not apply given the decision to abolish it.

We’ll have to wait until the OBR has been able to look at the whole policy package in aggregate before we understand the full scale of the impact both on the UK and Scotland. But it is clear from what we know so far that this is a package of measures that will raise poverty across the UK.

How does departmental spending look in historical context?

In October, the Chancellor announced significant increases in departmental spending. But we and others also noticed how frontloaded some of those announcements were.

This has been made even more so by the changes at this forecast to the latter years of the projections. Day-to-day departmental spending per person is now forecast to grow by a strong 3.4% in real terms in 2025-26, slowing to 1.5% in 2026-27 and remaining at 0.6% a year for the rest of the decade.

We’ll leave others to decide on words to characterise this path of spending. We’ll instead note that this leaves spending per person only 8% higher than it was in 2007-08. And as a share of national income – a better measure of affordability and of the Government’s prioritisation of the country’s resources – there is a slight increase in spending in the short-term. But day-to-day departmental spending then falls back by 0.4 percentage points by the end of the decade relative to its peak of 16.1 per cent of GDP in 2025-26 and 2026-27.

Chart: Resource departmental spending per person in real terms and as a share of GDP since 2007-08

Source: OBR, FAI analysis

Tax Justice: A Matter of Life and Death

CATASTROPHIC: Tax justice or austerity-induced declines in life expectancy?

Tax Justice Scotland is seeking to promote a better conversation on tax policy. As such, the views expressed in this blog are those of the author and do not necessarily reflect the views of Tax Justice Scotland and its diverse supporters.

UK-wide austerity has caused average life expectancy to stagnate since 2012, and to decrease in the most disadvantaged areas (write GERRY McCARTNEY and DAVID WALSH) . With more UK-wide public spending cuts looming, the Scottish Government should use fairer taxation to combat the impacts of austerity – and avoid additional cuts.

Austerity Kills

Since 2010, a range of austerity measures have been implemented across the UK. Although most areas of public spending have suffered to some degree, the largest cuts have been directed at social security and local government, with brief interruptions in this broad approach only seen during the pandemic.

Our analyses show that the effects of austerity policies have been catastrophic.

Life expectancy, which had on average increased uninterrupted across the UK since 1945 suddenly stopped improving after 2012. Even worse, for people living in the 20-30% most disadvantaged areas, life expectancy started to decline.

Let that sink in: despite medical advances, people in our least well-off households have seen their lives get shorter.

‘Healthy life expectancy’ is also in decline, meaning that people are living for a shorter time in good health. The evidence that these dreadful health and life expectancy trends are due to austerity is now overwhelming, as summarised in our book Social Murder: austerity and life expectancy in the UK.

Austerity continuing under Keir Starmer’s Labour

Make no mistake: austerity is not going away.

The UK Labour Government’s self-imposed ‘fiscal rules’, which limit public spending, are triggering a new round of spending reviews across departments, with cuts again on the cards. Ahead of the Chancellor’s Spring Statement on 26 March, we’re now seeing reports of looming cuts to social security, with those on benefits further stigmatised.

Elsewhere, local government spending has been squeezed in real-terms per person by 18% in England (2010 to 2023/24), and 7% in Scotland (2009/10 to 2022/23). We have also just seen the international aid budget slashed to fund defence spending.

These cuts are a choice: after all, there is no shortage of fair tax options to raise more resources at UK level. Tax Justice UK and the Patriotic Millionaires suggest over £60 billion more could be raised per year through tax reforms and the closure of tax loopholes.

What can be done in Scotland?

In the absence of tax justice at UK level, the Scottish Government isn’t powerless.

It’s true that the devolution settlement dictates that it has to run a balanced budget, with the bulk of its revenues coming from the block grant, and a smaller proportion from devolved taxes.

This has meant that as budgets were squeezed in real-terms between 2010 and 2019 the Scottish Government has either had to pass on those cuts to Scottish public services, or raise taxes to protect budgets. Subsequent increases to deal with the pandemic have been eroded away .

Positively, the Scottish Government has chosen to raise some additional tax revenues; for example, the relatively small, but progressive adjustments in the Income Tax bands and rates. However, the scale of these changes has been wholly insufficient to compensate for the cuts in the block grant up to 2020.

Implementing a more comprehensive tax justice programme in Scotland is therefore the obvious option to protect the health of the Scottish population from further austerity.

Many tax options are available

Generating more revenue from Income Tax by increasing taxes for people on higher incomes would be a fair first step, particularly given that it is likely that most Scottish high earners work in the public sector and therefore cannot move that income elsewhere (the postholder could leave, but the job – and the tax paid on the income from it – would remain in Scotland).

But taxing earned income from employment isn’t the only way to raise more revenues to combat austerity; we must find ways to better tax wealth too.

Changes to how property wealth is taxed are long-overdue. Right now, the Council Tax is patently unfair because it taxes poorer households more than richer households as a percentage of their income and property value.

The Scottish Government has powers to make it fairer, or to replace it entirely, something that has been (unimplemented) SNP policy for many years. While the Cabinet Secretary for Finance says she’s “seeking a consensus on a local taxation system that is fairer, financially sustainable and fits a modern Scotland”, we’ve heard similar promises too many times to count.

Wealth takes many forms – including ownership of land, shares and savings, as well as pensions, and other assets. Devolved powers to better tax all of these forms of wealth are limited, but options like a land tax, perhaps administered locally, could be considered. Doing so would not only raise more revenues to fund services but also combat the damaging impact of wealth inequality on the economy.

Wealth inequality fuels other inequalities, like those related to gender and ethnicity. But most importantly, a growing wealth gap between those who have wealth and those who don’t – locks some of us into a life of precarity and poverty, and others into one of privilege and opportunity.

This not only concentrates advantage, opportunity and power in fewer hands, but also limits social mobility for the majority, undermines the social contract, and can ultimately threaten social cohesion and democratic politics.

With a recent report for the STUC indicating that a combination of tax justice reforms in Scotland could raise an additional £3.7bn per year, we must see faster progress.

Reject austerity and deliver tax justice

So, in the absence of action at UK level, if the Scottish Government really wants to protect the health of the Scottish population, fighting back against austerity will be necessary. The only real option in the current context is to increase taxes in a fair way so that the rich pay more.

Tax justice for Scotland, and the rest of the UK, really is a matter of life and death.

This blog was written by Gerry McCartney, Professor of Wellbeing Economy, University of Glasgow and David Walsh, Senior Lecturer in Health Inequalities, University of Glasgow.

David and Gerry’s book, Social Murder: austerity and life expectancy in the UK, is available now from https://policy.bristoluniversitypress.co.uk/social-murder

TaxJusticeScotland-Report-Digital-Nov24 Download

Scots say: Increase taxes on the richest, rather than make cuts to public spending

CHANCELLOR EXPECTED TO SLASH WELFARE IN SPRING STATEMENT

New polling reveals people in Scotland would overwhelmingly prefer the very richest to pay more in tax rather than see cuts to public spending, as parallel Oxfam analysis shows the UK’s wealthiest people continue to amass even greater fortunes.

It comes as new number crunching by Oxfam, Patriotic Millionaires UK and Tax Justice UK finds that UK billionaires have seen their fortunes swell by £11 billion in the past 12 months alone – the combined amount the UK Government plans to cut from international aid and social security entitlements for people in the UK with disabilities or illnesses.

Campaigners say the data shows the UK Government’s recent cuts are not about financial scarcity, but rather about political priorities, and they sharply contrast with public opinion.

The polling, carried out ahead of the Spring Statement by YouGov on behalf of Oxfam, shows that people aged over 16 in Scotland strongly back action to fairly tax the wealthiest:

68% think the very richest should pay more in tax.
More than three-quarters (79%) would rather tax the very richest than see cuts to public spending.
79% support a new 2% wealth tax on assets worth more than £10 million.

The findings pile further pressure on the UK Government to introduce wealth taxes on the richest millionaires and billionaires.

Tax justice campaigners have identified a series of fair tax reforms and loopholes that could be closed to raise additional revenue. They say that a 2% wealth tax alone, applied to assets worth more than £10m, could raise up to £24 billion annually or around £460 million a week while only impacting 0.04% of the population – around 20,000 people.

For illustrative purposes, if the 2% wealth tax on assets over £10 million was introduced now, UK billionaires would still have seen their personal wealth soar by an average of £141 million each – a total of nearly £7.5 billion combined – since this time last year.

The money raised could be used to reduce poverty and inequalities, strengthen public services, including the critical care sector, and boost climate action, instead of padding the pockets of the super-rich while deepening economic, gender and racial inequalities.

Jamie Livingstone, Head of Oxfam Scotland, said: “We all feel it in our bones: it’s indefensible that public spending to support those in poverty and crisis is being slashed, while private wealth is quietly stashed away.

“People in Scotland are crystal clear: they’d rather tax the richest than see cuts to public spending. Yet the UK Government has chosen to snatch £11 billion from the pockets of those who need it most while the same amount has been added to the bloated bank balances of those who need it least in just 12 months.

“It’s time for the UK Government to put fairness first; tax the super-rich and protect people in poverty. The choice is that simple.”

Mark Campbell, entrepreneur and member of Patriotic Millionaires UK, said: “As a millionaire I know the economy is working for a few people like me and working against the vast majority.

“Spending cuts are short-sighted and will only increase the worries of millions of people in the UK who are struggling to put food on the table and heat their homes.

“Meanwhile, the very richest people in our society are watching their wealth grow exponentially. It seems outrageous that the wealth of the richest is taxed at a much lower rate than the income of working people who will bear the brunt of these budget cuts.

“A wealth tax is a very clear alternative. Given that most people want higher taxes on the very richest, and plenty of millionaires – people like me – also want it, what’s stopping the UK Government?”

As part of Tax Justice Scotland, a campaign backed by more than 50 diverse civil society organisations, think tanks, trade unions and academics, Oxfam Scotland is urging the UK and Scottish Governments to use their respective tax powers to fairly raise more money to enable greater investment in key poverty-reducing public services, like care, while combatting inequalities, and rewarding businesses that provide fair and flexible work – including for parents, and particularly women – while paying the real Living Wage.

Oxfam Scotland says the Scottish Government must also use devolved powers to help combat the growing gap between the wealthiest and those struggling to make ends meet, with the richest 10% having 217 times more wealth than the least wealthy 10%, and with record high income inequality.

Wealth inequality is not only deeply unfair, but a barrier to reducing poverty. It exacerbates social and environmental harms, fuels wider inequalities – such as those related to gender and race, and drives a wedge between those with wealth and those without it.

Campaigners are calling on Scottish Ministers to use the devolved tax tools at their disposal, such as landing a fair tax on pollution-spewing private jets using Scotland’s airports and finally replacing the discredited Council Tax with a system to tax property wealth fairly.

Jamie Livingstone added: “Scotland’s political leaders can’t afford to wait for Westminster to make the fair and obvious choice to make the wealthiest pay their share.

“As we approach the 2026 Holyrood election, they would be fool hardy to ignore the public mood. People want to see real progress on fairness. Scotland has powers to tax wealth more fairly to combat runaway inequality and to build a better and greener country, it’s time to use them.”

Starmer: Labour Government’s first Budget will invest in Britain’s future

Prime Minister will say government’s first Budget will fix the foundations to deliver on the promise of change.
Keir Starmer will reject austerity, chaos and decline in favour of economic stability, investment and reform.
He will pledge ‘better days are ahead’ with an economic plan that will rebuild Britain and deliver sustainable, long-term investment to put more money in people’s pockets and deliver stronger public services.

Prime Minister Keir Starmer will today (Monday 28 October) pledge that his government’s first Budget will put Britain on a new path, one that chooses long-term growth to put more money in working people’s pockets and rebuild public services instead of a return to austerity.

Setting out the defining and central purpose of the government’s agenda to protect working people from the dire inheritance, he will say: “It is working people who pay the price when their government fails to deliver economic stability.

“They’ve had enough of slow growth, stagnant living standards and crumbling public services. They know that austerity is no solution. And they’ve seen the chaos when politicians let borrowing get out of control.

“We choose a different path: honest, responsible, long-term decisions in the interests of working people. It’s stability that means we can invest, and reform that will maximise that investment.

“Stability, investment, reform. That’s how we fix the NHS, rebuild Britain and protect working people’s payslips. Delivering on the mandate of change.”

The Prime Minister will say that the country faces unprecedented challenges after the last government covered up the state of the public finances and crumbling public services:

“We have to be realistic about where we are as a country. This is not 1997, when the economy was decent but public services were on their knees. And it’s not 2010, where public services were strong, but the public finances were weak. These are unprecedented circumstances.

“And that’s before we even get to the long-term challenges ignored for fourteen years. An economy riddled with weakness on productivity and investment. A state that needs urgent modernisation to face down the challenge of a volatile world.

“But I won’t offer it as an excuse. I expect to be judged on my ability to deal with this. Politics is always a choice. It’s time to choose a clear path, and embrace the harsh light of fiscal reality so we can come together behind a credible, long-term plan.

“It’s time we ran towards the tough decisions, because ignoring them set us on the path of decline. It’s time we ignored the populist chorus of easy answers… we’re never going back to that.”

Setting out his economic plan to drive growth across the country, the Prime Minister will say fixing the foundations through stability and investment brings benefits to everyone:

“If people want to criticise the path we choose, that’s their prerogative. But let them then spell out a different direction. If they think the state has grown too big, let them tell working people which public services they would cut.

“If they don’t see our long-term investment in infrastructure as necessary, let them explain to working people how they would grow the economy for them.

“This is an economic plan that will change the long-term trajectory on British growth for the better.

“We are tackling the biggest challenges in our economy. Higher investment – we’re dealing with it. Planning – we’re reforming it. The labour market – we’re getting people back to work, but also making work pay. On competition, we’re stripping out the needless regulation that holds back growth and private investment. And all of this built on that foundation, economic stability.

“This is what fixing the foundations and delivering change means. Everyone in this country will benefit from this. Everyone can wake up on Thursday and understand that a new future is being built, a better future.”

Give Us A Chance!

TORY MSP MILES BRIGGS SUPPORTS SCOTTISH DISABILITY CHARITY’S CAMPAIGN TO PROTECT DISABLED PEOPLE FROM FUNDING CUTS

Miles Briggs is offering his full support to Spina Bifida Hydrocephalus (SBH) Scotland’s ‘Give us a chance’ campaign. The charity’s campaign comes as the Scottish Government announced £500m of cuts to public services and warned of further “difficult decisions” ahead in next year’s Scottish Budget.

Miles met with SBH Scotland CEO Lawrence Cowan, Chair Dr Margo Whiteford CBE and Amjid Majeed, who has spina bifida and receives support from SBH Scotland, to learn more about the charity’s campaign.

The ‘Give us a chance’ campaign calls on people to sign a letter to the First Minister, demanding that he protect disabled people from future cuts. The campaign also calls on the Scottish Government to release funding to protect the work of disability charities and to make the needs of disabled people across Scotland a priority.

SBH Scotland, which supports people with spina bifida and hydrocephalus across Scotland, is facing a 22% cut to support from Scottish Government this year – a total cut of 42% since 2018.

Half of all people in poverty live in a household where at least one member is disabled. Scottish Government figures show that disabled people are over twice as likely to experience loneliness compared to non-disabled people. They are also less likely to meet socially than non-disabled people.

Miles Briggs, MSP for Lothian, said: “I give my full support to SBH Scotland’s ‘Give us a chance’ campaign.

“The needs of disabled people in Scotland should be a priority for the Scottish Government and it is crucial that they protect disabled people from future cuts.

“It is important that the vital services that the most vulnerable in our society rely on are protected at all costs.

“I call on the First Minister John Swinney and Cabinet Secretary Shona Robison to properly invest in services to enable disabled people to thrive and lead full lives.”

Spina Bifida Hydrocephalus (SBH) Scotland CEO, Lawrence Cowan said: “The Scottish Government’s talk of further ‘difficult decisions’ ahead is incredibly concerning.

“We did not receive a commitment this week to protect people with disabilities from budget cuts. We will be seeking that commitment as we head into the Budget. 

“People we work with say that they already have to constantly fight for basic support. 

“If those services are worn away even further, we will see greater inequality and more injustices experienced by disabled people. We cannot let that happen. 

“We also urgently need clarity on the future of funding for charities like ours. We’re facing a 22% cut in Scottish Government funding this year – a total cut of 42% since 2018. If that money doesn’t come through, we won’t be able to reach people who desperately need help right now. 

“We are delighted to have the support of Miles Briggs as we ask the Scottish Government, on behalf of families across the country, to ‘give us a chance’.

“Give disabled kids a chance to fulfil their potential and follow their dreams and give our disabled adults a chance to live life to the full.”

Amjid Majeed said: “It is a sad day when we have to campaign to make sure those who need the most help are given the care and support they desperately need!

“SBH Scotland is a lifeline for so many people living with spina bifida and hydrocephalus.

“I personally can feel very lonely and isolated and rely on the groups provided by the charity as a chance to socialise, going out and meeting with the good friends I’ve made there.

“Charities can’t survive without funding, and I’d be devastated to think that the services SBH Scotland provides could be reduced or taken away because of these cuts.”

Sign SBH Scotland’s open letter: www.sbhscotland.org.uk/give-us-a-chance

THE LETTER READS:

Dear First Minister,

We are urging you to make sure that disabled people are protected from future cuts.

We and our loved ones are more reliant on good quality public services to live. Many of these services are already feeling the strain and further cuts could be devastating.

Half of all households living in poverty have at least one member with a disability. Disabled people are over twice as likely to experience loneliness compared to non-disabled people.

Charities like SBH Scotland give us a place to belong, to meet people who are going through the same things and for kids with spina bifida and hydrocephalus to have fun and just be kids. They are facing a 22% cut in funding from your government this year unless further funds are confirmed. We need the work of this charity more than ever.

We cannot let these inequalities become further entrenched. Please, protect disabled people from cuts and release funding for vital charities like SBH Scotland.

We all have so much to give our society and our economy. Give us a chance. With your support we can be unstoppable.

Yours Sincerely,

Lawrence Cowan, CEO SBH Scotland

Elenor Leckie, Parent

Starmer: Fixing the Foundations? Or AUSTERITY 2 – the sequel?

Prime Minister Keir Starmer delivered a speech in the Downing Street garden today on fixing the foundations of our country

When I stood on the steps of Downing Street – just over there – two months ago. I promised this government would serve people like you.

Apprentices. Teachers. Nurses. Small business owners. Firefighters. Those serving our community and our country every day.

I promised that we would get a grip on the problems we face. And that we would be judged by our actions, not by our words.

I said before the election – and I say it again really clearly today: Growth.

And, frankly, by that I do mean wealth creation…

[Please note political content redacted here.]

is the number one priority of this government.

That’s why, in our first few weeks, we set up the National Wealth Fund –

because we want every person and every community to benefit.

It’s why we’ve unlocked planning decisions –

Because we are going to build 1.5 million new homes.

It’s why we’ve set up Great British Energy –

To create good jobs and cut people’s bills.

And it’s why we ended the national strikes that have crippled our country for years.

Because I defy anyone to tell me that you can grow the economy…

when people can’t get to work – because the transport system is broken.

Or can’t return to work – because they’re stuck on an NHS waiting list.

[Please note political content redacted here.]

And these are just the first steps towards the change that people voted for.

The change I’m determined to deliver.

But before the election I also gave a warning.

I said change would not happen overnight.

When there is deep rot in the heart of a structure, you can’t just cover it up.

You can’t tinker with it or rely on quick fixes.

You have to overhaul the entire thing.

Tackle it at root.

Even if it’s harder work and takes more time.

Because otherwise what happens?

The rot returns.

In all the same places.

And it spreads.

Worse than before.

You know that – I know that.

That’s why this project has always been about fixing the foundations of this country.

But I have to be honest with you. Things are worse than we ever imagined.

In the first few weeks, we discovered a £22 billion black hole in the public finances.

And before anyone says ‘oh this is just performative’.

Or ‘playing politics’.

Let’s remember.

The OBR did not know about this.

They didn’t know.

They wrote a letter saying they didn’t know.

[Please note political content redacted here.]

Even just last Wednesday, we found out that

[Please note political content redacted here.]

We borrowed almost £5 billion more than the OBR expected in the last three months alone.

That’s not performative – that’s fact.

But as well as the things we’ve discovered, we’ve also seen shocking scenes across the nation.

A mindless minority of thugs – who thought they could get away with causing chaos.

Smashing up communities and terrifying minorities.

Vandalising and destroying people’s property.

Even trying to set fire to a building – with human beings inside it.

And as if that wasn’t despicable enough.

People displaying swastika tattoos.

Shouting racist slurs on our streets.

Nazi salutes at the cenotaph –

The cenotaph – the very place we honour those who gave their lives for this country.

Desecrating their memory….

Under the pretence – and it is a pretence – of ‘legitimate protest’.

Now they’re learning that crime has consequences.

That I won’t tolerate a break down in law and order under any circumstances.

And I will not listen to those who exploit grieving families, and disrespect local communities.

But these riots didn’t happen in a vacuum. They exposed the state of our country. Revealed a deeply unhealthy society. The cracks in our foundation laid bare –

Weakened by a decade of division and decline.

Infected by a spiral of populism…

Which fed off cycles of failures

[Please note political content redacted here.]

Stuck in the rut of the politics of performance.

And I saw the beginning of that downward spiral firsthand.

Back in 2011.

When riots ripped through London and across the country.

I was then Director of Public Prosecutions.

And when I think back to that time.

I see just how far we have fallen.

Because responding to those riots was hard – of course it was.

But dealing with the riots this summer was much harder.

In 2011, I didn’t doubt the courts could do what they needed to do.

This time – to be honest with you – I genuinely didn’t know.

Let me tell you this. Every day of that disorder – literally every day – we had to check the precise number of prison places we had and where those places were.

To make sure we could arrest, charge and prosecute people quickly.

Not having enough prison places is about as fundamental a failure as you can get.

And those people throwing rocks, torching cars, making threats.

They didn’t just know the system was broken.

They were betting on it.

Gaming it.

They thought – ‘ah, they’ll never arrest me.

And if they do, I won’t be prosecuted.

And if I am, I won’t get much of a sentence.’

They saw the cracks in our society after 14 years of populism and failure – and they exploited them.

That’s what we have inherited.

Not just an economic black hole.

A societal black hole.

And that’s we have to take action and do things differently.

And part of that is being honest with people – about the choices we face. And How tough this will be. And frankly – things will get worse before they get better.

I didn’t want to release prisoners early.

I was Chief Prosecutor for five years.

It goes against the grain of everything I’ve ever done.

But to be blunt – if we hadn’t taken that difficult decision immediately.

We wouldn’t have been able to respond to the riots as we did.

And if we don’t take tough action across the board. We won’t be able to fix the foundations of the country as we need.

I didn’t want to means test the Winter Fuel Payment. But it was a choice we had to make.

A choice to protect the most vulnerable pensioners. while doing what is necessary to repair the public finances.

Because pensioners also rely on a functioning NHS.

Good public transport.

Strong national infrastructure.

They want their children to be able to buy homes.

They want their grandchildren to get a good education.

So we have made that difficult decision –

To mend the public finances.

So everyone benefits in the long term –

Including pensioners.

Now that is a difficult trade off.

And there will be more to come.

I won’t shy away from making unpopular decisions now…

If it’s the right thing for the country in the long term.

That’s what a government of service means.

This shouldn’t be a country where people fear walking down their street.

Their TVs showing cars and buildings being set on fire.

This shouldn’t be a country where the Prime Minister can’t guarantee prison places.

This shouldn’t be a country where people are paying thousands more on their mortgage.

Or waiting months for hospital appointments they desperately need.

Where our waters are filled with sewage.

Where parents worry that their kids won’t get the opportunities they did.

Where nothing seems to work anymore.

So, when I talk about the inheritance the last government left us…

The £22 billion black hole in our finances…

This isn’t about a line on a graph.

That’s about people’s lives.

Your lives.

[Please note political content redacted here.]

This government won’t always be perfect, but I promise you this:

You will be at the heart of it…

In the forefront of our minds…

At the centre of everything we do.

That’s why I wanted to invite you here today.

To show that decent, hard-working people who make up the backbone of this country belong here.

This government is for you.

A garden and a building that were once used for lockdown parties…

Remember the pictures just over there? With the wine and the food.

Well this garden…

And this building…

are now back in your service.

[Please note political content redacted here.]

Those things happened precisely because the government itself lost its focus.

on the hopes and ambitions of working people.

During those recent riots, I made huge asks…

of the police and of the criminal justice system –

People already stretched to the limit.

They knew I was making big asks of them.

And I’m not going to apologise for it.

But let me tell you this – they delivered.

They deserve our gratitude.

And that’s why I went to Southport…

To Lambeth…

To Belfast…

To thank them personally. To shake the hands of the first responders who rose up to the ask I made of them.

They deserve a government that trusts them.

Supports them.

And works with them.

That is the sort of government we will be.

One that works with people, not does things to them.

One that believes in hard graft, not gimmicks.

Honest about the challenges we face…

And working tirelessly to fix them.

That is how we will always work.

Now, next week, parliament returns. The business of politics will resume. But it won’t be business as usual.

Because we can’t go on like this anymore. Things will have to be done differently.

We will do the hard work to root out 14 years of rot. Reverse a decade of decline. And fix the foundations.

Between now and Christmas, we will carry on as we have started. Action not words.

We will introduce legislation and take decisions to protect taxpayers’ money.

To take on the blockers by accelerating planning. to build homes and boost growth.

We’ll move forward this autumn with harnessing the full potential of AI for growth and the public good.

We’ll bring rail service into public ownership, putting passengers first.

The biggest levelling up of workers’ rights in a generation to give people security, dignity and respect at work.

And Great British Energy will be owned by the taxpayer, making money for the taxpayer. Producing clean energy and creating good jobs.

That is our focus for the rest of the year.

But I will be honest with you. There’s a budget coming in October. and it’s going to be painful.

We have no other choice given the situation that we’re in. So those with the broadest shoulders should bear the heavier burden. And that’s why we’re cracking down on non-doms.

Those who made the mess should have to do their bit to clean it up. That’s why we’re strengthening the powers of the water regulator and backing tough fines on water companies that have let sewage flood our rivers, lakes and seas.

But just as when I responded to the riots – I’ll have to turn to the country and make big asks of you as well.

To accept short term pain for long term good.

The difficult trade-off for the genuine solution.

And I know that after all that you’ve been through – that is a really big ask and really difficult to hear.

That is not the position we should be in. It’s not the position I want to be in. But we have to end the politics of the easy answer that solves nothing.

But I also know that we can get through this together.

Because the riots didn’t just betray the sickness. They also revealed the cure.

Found not in the cynical conflict of populism. But in the coming together of a country.

The people who got together the morning after. All around the country. With their brooms, their shovels, their trowels. And cleared up their community.

They reminded us who we really are.

I felt real pride in those people who cleaned up the streets.

Rebuilt the walls. Repaired the damage.

And I couldn’t help thinking about the obvious parallels.

Because imagine the pride we will feel as a nation.

When, after the hard work of clearing up the mess is done.

We have a country that we have built together.

Built to last.

That belongs to every single one of us.

And all of us have a stake in it.

Our hard work rewarded – a dozen times over.

Because we’ll have an economy that works for everyone.

An NHS not just back on its feet, but fit for the future.

Streets that everyone feels safe in.

No longer dependent on foreign dictators…because we’re producing our own clean energy right here.

And giving every child – wherever they come from. Whatever their background.The chance – to go as far as their talent will take them.

I won’t lose sight of that prize. I won’t lose sight of what we were elected to do.

And most importantly – I won’t lose sight of the people that we were elected to do it for.

You.

This is our country. Let’s fix it – together.

From austerity to crisis: Covid-19 Inquiry highlights UK’s pre-pandemic weaknesses, says TUC

Just three days short of its second anniversary, the Covid-19 Public Inquiry published the report from the Module One investigation into the resilience and preparedness of the United Kingdom (writes TUC’s NATHAN OSWIN).

The report highlights the devastating consequences of austerity in the decade that preceded the pandemic and the risk of vulnerability in the UK population.

The Impact of austerity on public services

Inquiry Chair, Baroness Hallett, states plainly that, “In short, the UK entered the pandemic with its public services depleted, health improvement stalled, health inequalities increased, and health among the poorest people in a state of decline.” This blunt assessment underscores the critical condition of the nation’s public services as they faced the unprecedented challenges of the Covid-19 pandemic.

The role of the TUC and evidence from frontline workers

As Core Participants in the Inquiry, the TUC played an integral role in the process, working with our unions to provide the evidence that ten years of under-investment and real terms funding cuts to public service in the run up to the Inquiry left key services struggling to cope.

“Public services, particularly health and social care, were running close to, if not beyond, capacity in normal times” the report states, a statement that doctors, nurses, porters and social care workers have been telling us all.

The Inquiry also heard that “there were severe staff shortages and that a significant amount of the hospital infrastructure was not fit for purpose. England’s social care sector faced similar issues. This combination of factors had a directly negative impact on infection control measures and on the ability of the NHS and the care sector to ‘surge up’ during a pandemic.”

A call to avoid past mistakes

The report is both a damning indictment and a call to never repeat the mistakes of that decade – a desperate reminder of the need to invest in our public services.

And while the report is not naive about the costs needed to make the UK more resilient ahead of the next pandemic – a matter of when not if – it reaches the conclusion that “the massive financial, economic and human cost of the Covid-19 pandemic is proof that, in the area of preparedness and resilience, money spent on systems for our protection will be vastly outweighed by the cost of not doing so”.

Addressing health inequalities

What’s more, the Inquiry is crystal clear as to the price we pay for inequality across our communities. It notes that at the outset of the pandemic, the UK had “substantial systematic health inequalities by socio-economic status, ethnicity, area-level deprivation, region, social excluded minority groups and inclusion health groups”.

And Baroness Hallett’s report correctly states that these inequalities weakened the ability of the UK to cope, stating that “resilience depends on having a resilient population. The existence and persistence of vulnerability in the population is a long-term risk to the UK.’

Recommendations for the future

The recommendations themselves speak of the need to engage with wider society for planning on how we handle a crisis and to take into account the “capacity and capabilities of the UK”.

No one knows the capacity and capabilities of our public services better than the staff that deliver them and the TUC and its affiliated unions stand ready to assist the government in this vital work.

Conclusion: Building a resilient future together

It is by working in partnership – with proper resources going into our public services – that we can truly learn the lessons this report sets out and secure the resilience and preparedness that the UK needs for a future full of challenges.

Governments ‘failed citizens’ with flawed pandemic planning

Inquiry publishes first report and 10 recommendations focused on pandemic resilience and preparedness

The Chair of the UK Covid-19 Inquiry, Baroness Heather Hallett, is urging the new UK government and the governments of Wales, Scotland and Northern Ireland to implement promptly her 10 key recommendations following publication of the Inquiry’s report of its first investigation into the nation’s resilience and preparedness for the pandemic.

These recommendations, made public on Thursday 18 July 2024, include a major overhaul of how the UK government prepares for civil emergencies such as the Covid-19 pandemic.

Key recommendations include a radical simplification of civil emergency preparedness and resilience systems, holding a UK-wide pandemic response exercise at least every three years and the creation of a single, independent statutory body responsible for whole system preparedness and response.

It is the first of several reports setting out the Inquiry’s recommendations and findings.

Today the Inquiry has published its first report after examining the resilience and preparedness of the United Kingdom to respond to a pandemic. My report recommends fundamental reform of the way in which the UK government and the devolved administrations prepare for whole-system civil emergencies.

If the reforms I recommend are implemented, the nation will be more resilient and better able to avoid the terrible losses and costs to society that the Covid-19 pandemic brought.

I expect all my recommendations to be acted on, with a timetable to be agreed with the respective administrations. I, and my team, will be monitoring this closely.

Baroness Hallett, Chair of the Inquiry

Module 1 examined the state of the UK’s structures and the procedures in place to prepare for and respond to a pandemic.

Hearings for Module 1 were held in London in June and July 2023 and the Chair heard from current and former politicians as well as key scientists, experts, civil servants and bereaved family members.

Following these hearings, the Inquiry’s findings and recommendations are set out in the report published today. The publication of the first report has been welcomed by some of those who lost loved ones during the pandemic. Dr Alan Wightman from North Yorkshire, lost his mother in early-May 2020 to Covid-19 that she had acquired in her care home in Fife, Scotland.

My Mum was an 88-year-old widow, a dementia sufferer and a cancer survivor. She had been settled and looked after in her well-run home for 11 months before Covid got in, despite the best efforts of the staff. A number of the home’s residents were taken by Covid.

I congratulate Baroness Hallett and her Inquiry team for reaching this substantive milestone of issuing findings and recommendations from Module 1. To be at this point a mere 13 months after witnesses started giving evidence in this Module is very impressive. To have achieved that whilst simultaneously completing Module 2 and its three satellite Modules, plus having Module 3 ready to launch within the next three months, is truly exemplary.

Dr Wightman

In her findings, the Chair concludes that the UK’s system of building preparedness for the pandemic suffered from several significant flaws.

These include a flawed approach to risk assessment, a failure to fully learn from past civil emergency exercises and outbreaks of disease, and Ministers not receiving a broad enough range of scientific advice and failing to challenge the advice they did get.

Baroness Hallett acknowledges the pressure on politicians and others to make tough decisions about how resources should be used. However, she also stresses that if the UK had been better prepared, the nation could have avoided some of the significant and long-lasting financial, economic and human costs of the Covid-19 pandemic.

In summary her recommendations are:

A radical simplification of the civil emergency preparedness and resilience systems. This includes rationalising and streamlining the current bureaucracy and providing better, simpler Ministerial and official structures and leadership;
A new approach to risk assessment that provides for a better and more comprehensive evaluation of a wider range of actual risks;
A new UK-wide approach to the development of strategy, which learns lessons from the past and from regular civil emergency exercises and takes proper account of existing inequalities and vulnerabilities;
Better systems of data collection and sharing in advance of future pandemics, and the commissioning of a wider range of research projects;
Holding a UK-wide pandemic response exercise at least every three years and publishing the outcome;
Bringing in external expertise from outside government and the Civil Service to challenge and guard against the known problem of ‘groupthink’;
Publication of regular reports on the system of civil emergency preparedness and resilience;
Lastly and most importantly, the creation of a single, independent statutory body responsible for whole system preparedness and response. It will consult widely, for example with experts in the field of preparedness and resilience and the voluntary, community and social sector, and provide strategic advice to government and make recommendations.

The Chair believes that all 10 recommendations are reasonable and deliverable and all must be implemented in a timely manner. The Inquiry and the Chair will be monitoring the implementation of the recommendations and will hold those in power to account.

The Chair has today restated her aim to conclude all public hearings by summer 2026, and to publish reports with findings and recommendations as the Inquiry progresses.

The Inquiry’s next report – focusing on Core UK decision-making and political governance – including in Scotland, Wales and Northern Ireland (Modules 2, 2A, 2B and 2C) – is expected to be published in 2025.

Future reports will focus on specific areas, including:

Modules 2, 2A, 2B, 2C: Core UK decision-making and political governance – including Scotland, Wales and Northern Ireland
Module 3: Healthcare systems
Module 4: Vaccines and therapeutics
Module 5: Procurement – procurement and distribution of key equipment and supplies
Module 6: The care sector
Module 7: Test, trace, and isolate programmes
Module 8: Children and young people
Module 9: Economic response to the pandemic

For more details of these modules visit the Inquiry’s website.

The Chair is also examining the best way to fulfil her Terms of Reference and investigate the impact of the pandemic on the population of the UK. This will cover a wide range of those affected and include the impact on mental health.

TUC: Covid Inquiry Report is a “moment of truth for the country” as report confirms impact of austerity on UK preparedness and resilience

Report confirms that public services were under huge strain even before Covid struck

Baroness Hallett says public health, NHS and social care sector’s capacity to respond to pandemic was “constrained” by funding and negatively impacted by “severe staff shortages” and infrastructure “not fit for purpose”
Report warns that not investing “in systems of protection” will impact on the UK’s “preparedness and resilience” in a future pandemic

Responding to the UK Covid-19 Inquiry Module 1 report today (Thursday), TUC General Secretary Paul Nowak said: “This is a moment of truth and reflection for the country.

“Baroness Hallett’s report confirms that austerity left the UK underprepared for the pandemic.

“Faced with the biggest crisis since the Second World War our defences were down as a result of severe spending cuts.

“We owe it to those who lost their lives – and to those workers who put their lives at risk – to make sure this never happens again.

“Strong public services – and a properly supported workforce – are vital for the nation’s health. As Baroness Hallett rightly points out the cost of investing in ‘systems for our protection’ is ‘vastly outweighed’ by the cost of not doing so.”

Commenting on the report’s finding that inequality put certain communities at disproportionate risk during the pandemic, Paul added:

“This report lays bare how inequality fuelled the spread of Covid-19. Low-income, disabled and BME people were far more likely to be infected and die from the virus. As Baroness Hallett warns inequality is a huge risk to the whole of the UK.”

Impact of austerity

Baroness Hallett writes on page 2 of her report: ‘Public services, particularly health and social care, were running close to, if not beyond, capacity in normal times.

[…] in the area of preparedness and resilience, money spent on systems for our protection is vital and will be vastly outweighed by the cost of not doing so.’

Baroness Hallett writes on page 122 of her report: ‘The Inquiry also heard that there were severe staff shortages and that a significant amount of the hospital infrastructure was not fit for purpose. England’s social care sector faced similar issues. This combination of factors had a directly negative impact on infection control measures and on the ability of the NHS and the care sector to ‘surge up’ during a pandemic.’

Baroness Hallett writes on page 123 of her report: ‘Issues of funding are political decisions that properly fall to elected politicians. However, it remains the case that the surge capacity of the four nations’ public health and healthcare systems to respond to the pandemic was constrained by their funding.’

Baroness Hallett writes on page 127 of her report: ‘Some witnesses to the Inquiry described the prioritisation and reprioritisation of limited resources as a cause of inaction. This is a widely recurring theme in the evidence.’

Impact of inequality

Baroness Hallett writes on page 70 of her report: ‘Resilience depends on having a resilient population. The existence and persistence of vulnerability in the population is a long-term risk to the UK.’

‘[…] as the UK entered the Covid-19 pandemic, there were “substantial systematic health inequalities by socio-economic status, ethnicity, area-level deprivation, region, social excluded minority groups and inclusion health groups.”’

Baroness Hallett writes on page 71 of her report: ‘Covid-19 was not an ‘equality opportunity virus’. It resulted in a higher a likelihood of sickness and death for people who are most vulnerable in society. It was the views of Professors Bambra and Marmot that:

“In short, the UK entered the pandemic with its public services depleted, health improvement stalled, health inequalities increased and health among the poorest people in a state of decline.”’

TUC: Austerity left UK “hugely unprepared” for the Covid pandemic

NEW REPORT: TUC report shows how austerity led to unsafe staffing in public services, a broken safety net, and decimated workplace safety enforcement when the pandemic began
“Austerity cost the nation dearly. The consequences were painful and tragic. The inquiry is our chance to learn from this” says the TUC

Austerity left the UK “hugely unprepared” for the Covid pandemic, according to a new report published by the TUC yesterday.

The report looks at four pillars of the country’s pandemic preparedness:

Safe staffing levels in public services
Public service capacity and resources
A strong safety net through the social security system
Robust health and safety protections at work

It finds that in each of these key areas, funding cuts reduced the country’s capacity to respond to the pandemic.

The report was published as the TUC held a joint press conference with the Covid-19 Bereaved Families for Justice about the lessons that must be learned through the inquiry, to save lives in the future.

Safe staffing levels in health and social care

The report details how safe staffing levels in health and social care were undermined by multiple years of pay caps and pay freezes, which impeded recruitment and increased staff turnover. This left both health and social care dangerously understaffed when the pandemic began:

Between 2010 and 2020, the number of nurses per capita in the UK grew by less than one per cent – despite demand for care rising by one-third. This is in stark contrast to the OECD average of nurses per capita rising by 10 per cent.
In 2019 the average NHS worker was earning £3,000 less in real terms than in 2010, with significant impacts on both recruitment and retention.
In social care, the turnover rate for staff in England increased from 22 per cent in 2012/13 to 31.8 per cent in 2019/20.
When the pandemic hit, a quarter (24%) of social care workers in England were employed on zero-hours contracts, with the turnover rate higher among these workers.

Public services capacity and resources

Public services capacity was damaged by steep cuts to almost every part of the public sector.

In 2020 when the pandemic hit, spending per capita was still lower than in 2010 in social care, transport, housing, childcare, schools, higher education, police, fire services, and environmental protection.

This limited the ability of public services to contribute effectively to civil contingencies, and to continue essential activities effectively such children’s education.

Between 2010 and 2020, school funding per pupil was cut by 8.3% in England, 6.4% in Wales, 2.4% in Scotland and 10.5% in Northern Ireland.
Local authority core spending power was cut by a third between 2010 and 2020. Over the same period, demographic changes increased pressures – for instance, leading to higher referrals and more complex cases in both adult and children’s social care. And new statutory duties in public health, social care and homelessness have stretched budgets further.
In 2019, capital investment in the UK health sector was 10% below 2010 levels. This forced NHS providers to close hospitals and delay equipment upgrades.

A strong safety net through the social security system

The social security safety net was damaged by direct cuts through benefit freezes, and by reforms that reduced entitlement to help and narrowed eligibility to fewer people.

Most of these benefits cuts were made in the period 2010 to 2016 when David Cameron was Prime Minister and George Osborne was Chancellor – both of whom are set to give evidence at the Covid inquiry.

The benefit cuts increased poverty levels. Living in poverty was associated with greater risks of exposure to Covid-19, and greater levels of vulnerability to more serious health consequences from being ill with Covid.

Since 2010, £14 billion has been cut from support to households through social security.
A family not in work has lost on average £1,160 a year in social security support since 2010, and a family in work has lost on average £460.
Disabled people have lost on average £1,200 of annual support, comparing 2021 with 2010.

Robust health and safety protections at work

The pandemic had a particular impact on workplaces – especially for key workers and those who could not work from home. But the enforcement of rules to keep workers safe at work was compromised by cuts that decimated public health and workplace safety regulators, and by confusion about who had responsibility to enforce the rules.

During the pandemic, when workplace risks multiplied, workplace inspections and enforcement notices fell to an all-time low, despite vast numbers of workplace-linked transmission caused by poor health and safety practice.

Funding for the Health and Safety Executive (HSE – the body responsible for workplace safety) in 2021/22 was 43% lower than in 2009/10 in real terms.
Staff numbers at the HSE have been cut by 35% since 2010.
The number of workplaces investigated by a safety inspector fell by 70% from 2010 to 2020.

TUC General Secretary Paul Nowak said: “To learn lessons and save future lives, we must take an unflinching look at the choices made by our leaders in the years before the pandemic.

“In the NHS and social care, funding cuts put staff levels in the danger zone. Cuts to social security pushed many more people below the poverty line, leaving them more vulnerable to infection. And cuts to health and safety left workers exposed to rogue employers who cut corners and put their lives at risk.

“Austerity cost the nation dearly. It left us hugely unprepared for the pandemic. And it left far too many workers unprotected. The consequences were painful and tragic.

“The inquiry is our chance to learn the lessons – and to understand why we have to rebuild our public services so that they are strong enough to protect us in a future crisis.”

TUC_Austerityandthepandemic_June23 Download

Tough decisions: Scottish Government publishes financial strategy

Plan to grow economy, target spending and deliver progressive tax system

Economic growth, progressive taxation and spending plans that unapologetically target those in greatest need are at the heart of a financial strategy announced by Deputy First Minister Shona Robison.

The Medium-Term Financial Strategy outlines the approach to ensuring Scotland’s finances are on a sustainable footing and delivering high-quality public services in the face of high inflation. This includes:

growing the economy, including by delivering on ambitious commitments on childcare, seizing opportunities in areas where Scotland has a competitive advantage and supporting entrepreneurs, start-ups and scale-ups
taking tough decisions around spending, focusing on what is needed to achieve the missions of equality, opportunity and community
updating the tax strategy, with a new advisory group to be established this summer and chaired by the Deputy First Minister

The strategy details the tough choices required in challenging financial circumstances. Scottish Government estimates indicate that due to inflation, pay increases and the lack of further funding from the UK Government, current resource spending requirements could exceed funding by £1 billion in the next financial year, and by £1.9 billion in 2027-28.

The gap between capital spending commitments and funding could rise to 16% in 2025-26.

Ms Robison said: “We are steadfast in our commitment to tackling poverty, building a fair, green and growing economy, and improving our public services to make them fit for the needs of future generations.

“But we must recognise that our current financial situation is among the most challenging since devolution, driven by the Covid pandemic, the war in Ukraine and the recent period of high inflation.

“Our funding remains largely based on decisions made by the UK Government, but they have failed to take the steps required to inflation-proof our budgets, and their decisions from Brexit to the disastrous mini-budget have made matters worse. This is creating substantial pressure on our public services, which we have no choice but to address.

“Today I have outlined our strategy for managing these challenges, doing all we can within our powers to ensure public finances are on a sustainable path. We will have a laser-like focus on spending, ensuring it targets equality, opportunity and community.

“We will generate economic growth, supporting businesses to invest and create new jobs while increasing tax revenues to invest in better public services. And we will continue to build the most progressive tax system in the UK, ensuring the burden of taxation is placed on those with the broadest shoulders.

“There can be no escaping the difficult choices ahead, but by following the plan outlined today we can provide a more prosperous and fairer future for the people of Scotland.”

Responding to the statement, STUC General Secretary Roz Foyer said: “The Cabinet Secretary for Finance is in a slightly better budgetary position than was predicted this time last year. However, she rightly points out that UK Government austerity and its manufactured cost-of-living crisis continue to hit Scotland hard.

“However, this is not an excuse for inaction. There is a worrying lack of ambition from the government ministers which cannot be condoned.

“Tax reform cannot be kicked down the road for another year. To protect services and pay, the Scottish Government must make good on the First Minister’s pledge to leave no stone unturned in seeking to raise additional income by rebalancing wealth. This means committing now to the policy changes required to introduce wealth and property taxes as the STUC has advocated.”

The Deputy First Minister’s statement to the Scottish Parliament