Reacting to figures published today, Independent Age Chief Executive, Joanna Elson, CBE said: “Statistics released today are damning. Over 150,000 pensioners in Scotland are living in poverty with an extremely alarming increase in the number of pensioners living in severe poverty, up more than 30% compared to previous statistics.
“In a compassionate society, no one should have to experience the injustice of poverty and the impact this has on their daily life, health and wellbeing, including people in later life.
“With too many older people continuing to live in poverty and the number in severe poverty growing, it’s evident we need a step change in action from both the UK and Scottish Governments to reverse this alarming trend.
“The UK Government has key levers it can pull to change this. It’s vital there is action to make sure the amount people receive through the State Pension and Pension Credit is enough to live on.
“For this to happen, the UK Government must instigate a cross-party review to establish the adequate minimum level of income needed to avoid poverty in later life, alongside robust plans to get the existing financial support available to every older person.
“The Scottish Government also has a responsibility to recognise the scale of this issue and should respond to these alarming figures by urgently introducing a pensioner poverty strategy. While we have a child poverty strategy, we are unaware of any plans to produce a strategy to reduce poverty in later life.
“As today’s figures show, without a concerted effort from Government, too many older people are being left to suffer in poverty.The time for action is now.“
Charity warns rising rents and pensioner poverty could be ‘catastrophic’ for older Scottish renters
1 in 7 pensioners in Scotland (150,000) are in poverty, and over half (75,448) of those are renters
New research finds that just 30% of older renters feel fully informed of their housing rights
Older private renters in Scotland are plagued with damp, unsafe and unaffordable homes
Charity calls for the Scottish Government to ensure affordable rents, that tenants’ rights are upheld and rented homes are maintained to a decent living standard
Older Scottish renters living on a low income urgently need greater protections in the upcoming Housing Bill, says Independent Age, the charity supporting older people in poverty.
It says that renters in later life face a “catastrophe” if action is not taken, with record rent increases in recent years and a growing number of older renters across the nation being pushed into poverty.
The organisation today launches its report Homing in: How to improve the lives of older Scottish renters, which uses polling, Government data and a survey of over 500 older renters to understand the reality of renting in later life in Scotland.
Almost two in five (39%) older Scottish private renters now live in poverty, up from 24% a decade before1. Independent Age says that older renters on a low income are “terrified” their rent could rise after the end of the current rent rise cap on March 31st.
The new report has unearthed older tenants’ daily challenges with affordability, the threat of eviction and poor standards. The charity found that less than a third of older renters (30%) feel fully informed of their housing rights while a shocking one in five (21%) saying they know nothing2.Independent Age believes that this worryingly low level of awareness among tenants of their rights in the private rental sector is leaving poor and sometimes unlawful practice unchallenged.
The charity calls on the Scottish Government to ensure:
Private rents are controlled at an affordable level for older people on a low income.
Landlords are required to inform tenants of independent housing advice services when they serve them notice.
A housing ombudsman is established, giving private tenants the ability to challenge issues like poor maintenance.
Tenants are informed of their rights as renters.
Affordability
In Scotland, almost two in five (39%) older private renters live in poverty3, while more than a quarter (28%) of those surveyed say they have less than £200 disposable income a month after paying rent. In the last year, over 4 in 5 (81%) say they have faced a rise in rent of up to £50 a month.
With the temporary limit to rent increases set to end next month, the charity has heard from older people who, faced with increasing costs from all angles, including rent, Council Tax and energy, are struggling to pay their rent.
An older person who is looking for a new property to rent told the charity: “it is really scary how much starting rents have increased in the last six months”.
Independent Age warned that without action to ensure housing affordability in the private rented sector, more older tenants across Scotland will be forced to make difficult decisions such as making further cutbacks to food, energy and water to cover rent.
Housing quality and standards
65% of older Scottish peoples’ homes are in a state of disrepair4. Independent Age’s survey found that 40% of older private renters were not satisfied with the standard or quality of their home5, however polling found that more than 1 in 10 (12%) older private renters questioned feel uncomfortable raising concerns with their landlord, for fear of negative treatment.
Independent Age says that problems with damp, heating and energy efficiency come up frequently for older renters. One older person said that their house was “never warm… there is a smell of damp in the winter months. There is a huge opening in the back wall where the boiler is located. The wind whistles into the flat.” Another said that their home was cold “even in the summer.”
The charity said that not only are some of the conditions described by interviewees likely in violation of the Repair Standard that sets out a minimum standard that rental properties must meet, but tenants are scared to ask for necessary and reasonable repairs in case they are served with a ‘revenge eviction’. One man said: “I know if I complain to my landlord, it will get me nowhere but homeless.”
Evictions and homelessness
The report reveals that almost one in six (17%) older private renters are worried that their landlord will evict them in the next 12 months.
Almost three in five (59%) say that searching for a new home would be difficult6, likely due to older people sometimes needing special adaptations, such as a ground floor flat, and the growing unaffordability of rents.
Terrifyingly, there has been a 23% rise in the number of older people experiencing homelessness in the last year, up from 891 people in 2021/22 to 1100 in 2022/23.
Joanna Elson CBE, Chief Executive of Independent Agesaid: “For all of us, an affordable, safe and secure home is essential for our wellbeing and should be the norm. That’s why it is a catastrophe that, for many Scottish older renters on a low income, this is far from the reality.
“The Scottish Government made positive moves in recent years to protect tenants. But with many of these protections from eviction and rent increases coming to an end soon, we’ve spoken to many people renting in later life who are absolutely terrified about what will happen over the coming months.
“The Housing Bill is a once in a generation opportunity for the Scottish Government to make sure everyone has a home that is affordable, kept to a decent standard and free from the threat of eviction and homelessness.
“We hope they take action to ensure that all Scottish renters can live with dignity, no matter their age.”
Recommendations
Independent Age is calling for the Scottish Government to:
Establish a housing ombudsman to give tenants the power to challenge their landlords on poor maintenance and ensure that housing advice and advocacy services are accessible and properly funded so renters are aware of their rights.
Introduce a permanent system of rent controls so homes are affordable for older people on a low income, commit to building more social housing and increase access to, and funding of, Discretionary Housing Payments that support those on Housing Benefit who have a rent shortfall.
Ensure tenants, including those in later life on a low income, are informed of their rights.
Enshrine the right to adequate housing in Scots Law
Place a duty on local authorities to help someone threatened with homelessness in the next six months and require landlords to inform tenants of independent advice services before or when they serve them an eviction notice.
Independent Age is also calling on the UK Government to commit to uprating Local Housing Allowance every year so that Housing Benefit matches rises in local rents.
A £6.3 billion investment in social security and more than £19.5 billion for health and social care form the heart of the Scottish Budget for next year, alongside record funding for local authorities and frontline police and fire services.
With targeted funding to invest in public services and protect the most vulnerable, the Budget underpins the social contract with the people of Scotland, Deputy First Minister and Finance Secretary Shona Robison told Parliament. She also outlined policies to grow the economy and progress the commitment to deliver a just transition to net zero.
Difficult decisions have been required to prioritise funding for the services people rely on in the face of a deeply challenging financial situation, Ms Robison added.
The 2024-25 Scottish Budget includes:
£6.3 billion for social security benefits, which will all be increased in line with inflation. This is £1.1 billion more than the funding received from the UK Government for devolved benefits in 2024-25
£13.2 billion for frontline NHS boards, with additional investment of more than half a billion – an uplift of over 4%
record funding of more than £14 billion for local government, including £144 million to enable local authorities to freeze Council Tax rates at their current levels
more than £1.5 billion for policing to support frontline services and key priorities such as body-worn cameras
almost £400 million to support the fire service
£200 million to help tackle the poverty-related attainment gap, almost £390 million to protect teacher numbers and fund the teacher pay deal, and up to £1.5 million to cancel school meal debt
almost £2.5 billion for public transport to provide viable alternatives to car use, and increased investment of £220 million in active travel to promote walking, wheeling and cycling
The Finance Secretary said: “It is an enormous privilege to present my first Budget. A Budget setting out, in tough times, to protect people, sustain public services, support a growing, sustainable economy, and address the climate and nature emergencies.
“At its heart is our social contract with the people of Scotland, where those with the broadest shoulders are asked to contribute a little more. Where everyone can have access to universal services and entitlements, and those in need of an extra helping hand will receive targeted additional support.
“This Budget is set in turbulent circumstances. At the global level the impacts of inflation, the war in Ukraine, and the after-effects of the pandemic continue to create instability. In the UK the combined effects of Brexit and disastrous Westminster policies mean that we are uniquely vulnerable to these international shocks.
“We cannot mitigate every cut made by the UK Government. But through the choices we have made, we have been true to our values and rigorous in prioritising our investment where it will have the most impact.
“We choose investment in our people and public services. This is a Budget that reflects our shared values as a nation and speaks to the kind of Scotland that we want to be.”
RESPONSES:
Responding to the Scottish Budget, STUC General Secretary Roz Foyer said: “With Westminster induced pressure on public spending in Scotland, we’re pleased that the Scottish Government has listened to the STUC and introduced a higher rate of tax for those on higher incomes.
“This represents a markedly positive approach which should be recognised. Equally, taking a more proportionate approach to rebates for business speaks to a Government which recognises the importance of the public sector to growing the economy.
“However, the Scottish Government’s Council Tax freeze and its unwillingness to countenance more ambitious tax reform has left a hole it was never going to be able to fill. High-quality, fully funded public services must be at the heart of a well-being economy and we cannot countenance any cuts – spun and packaged up as ‘reforms’ – which act as a barrier to that goal. Government should be under no illusions on this. The continuation of the regressive council tax simply damages our ability to support local government and those most in need.
“It is disappointing to see opposition parties failing to make any demands of government save for calling, impossibly, for more services but lower taxes. To this extent the whole of the Parliament is letting people down. We have to start of using the full powers of our Parliament to deliver tax reforms aimed at wealth and property, reforms which if implemented could raise £3.7 billion tax.”
Responding to the 2024/25 draft Budget, SCVO Chief Executive Anna Fowlie. said: “The draft Budget represents a missed opportunity to set out vital support for Scotland’s voluntary sector – at a time when it is being squeezed by the cost-of-living and running costs crises.
“While we welcome the Scottish Government’s commitments to move towards Fair Funding for Scotland’s voluntary sector by 2026, there was little evidence of that today.
“The UK Government delivered a modest but welcome package of running costs support for voluntary organisations in England – as part of the Spring Statement. Today, at the very least, the Scottish Government could have committed to doing the same here in Scotland. The sector is still waiting on any such commitment.
“While we recognise the challenging financial environment, the sector needs more than warm words and missed opportunities. Just last month the First Minister told assembled voluntary organisations at the Gathering that he’ll move beyond warm words and put money where his mouth is. Today we didn’t see that.
“We need to see meaningful support for the sector, with urgent progress on Fair Funding to safeguard essential services. We stand ready to support the Scottish Government to deliver that progress.”
Joanna Elson CBE, Chief Executive at Independent Age: “We welcome the Scottish Government’s greater focus on older people in poverty in today’s Budget. The news that all devolved social security payments, including the Winter Heating Payment, have been uprated by inflation and that the fund for Discretionary Housing Payment has been increased will be a welcome relief to those struggling financially in later life.
“However, these measures do not go far enough for the 150,000 older people now living in poverty in Scotland, a figure that has risen by a quarter in the last decade alone, now affecting 1 in 7. Today they really needed the Scottish Government to announce a clear, long-term strategy with legally binding targets and ambitions action to tackle pensioner poverty and reverse this frightening trend.
“Older people in Scotland, including those in financial hardship, urgently need greater representation. We were disappointed that the Scottish Government didn’t use today’s announcement as an opportunity to announce funding for an Older People’s Commissioner.
“A Commissioner would give better representation across policy making and provide a crucial independent voice for people in later life. With 1 in 4 of us projected to be over 65 by 2040, there’s no time to waste.
“While we welcome the measures announced today that will improve life for older people on low incomes, the Scottish Government need to go further and faster to address rising pensioner poverty in Scotland. Both a long-term solution to financial hardship in later life and an end to older people feeling ignored by those in power is needed. The time is now for Scotland to have a pensioner poverty strategy and an Older People’s Commissioner.”
Jonathan Carr-West, Chief Executive, LGIU Scotland,said: “With one in four Scottish councils warning that they may be unable to balance their books next year, today’s budget will not offer much reassurance.
“The Verity House Agreement promised early budget engagement, and it promised ‘no surprises.’ This financial settlement does not meet either of those promises or provide councils with the funding they have told us they need.
“A council tax freeze funded as though council tax were increased by 5% is equivalent to the rises that councils were planning for this year, but it denies them the increase in their tax base and thus undermines their finances next year and for years to come.
“The “additional support” promised all appears to be ring fenced to Scottish Government priorities rather than enabling democratically elected councils to make decisions about priorities in their areas. Again, this goes against the Verity House agreement.
“Before the budget, every council told us they were planning cuts to services, 97% that they were planning to increase charges, and 89% that they would have to spend their reserves. The funding announced in the settlement will not alleviate the need for these biting budget measures.
“The council tax freeze this year will not help residents affected by councils’ inevitable spending cuts and it will not help residents next year, when councils’ spending power is reduced further because their council tax base can’t increase in line with the amount they need.
“Our recent survey shows just how strong the concerns are across local government. Only one respondent to our survey said they were confident in the sustainability of council finances. Not a single person said they were happy with the progress that had been made on delivering a sustainable finance system.
“Senior council figures widely condemned how limited their involvement in the pre-budget process was, and this funding settlement confirms the suspicions that led to only 8% of respondents believing the Scottish Government considers local government in wider policy decisions.
Most worryingly, 8 separate councils (25% of all local authorities) warned us that they could be unable to fund their statutory services – the services they have to provide by law. The funding announced today will be no comfort to these struggling councils, who will now have to make even more difficult choices to make up for their funding shortfall.
For the average resident, this means their life will get more expensive and their services will get worse. For some of the most vulnerable members of society, as councils warned us, it may mean that if nothing changes then there is not enough money to fund the services they rely on.
“The funding settlement is not enough for councils to provide the services that millions of people across Scotland rely on. More than that though, it demonstrates that annual funding settlements of this type are not the right way to fund councils or to empower councils to tackle their long-term challenges.
“Councils should be given more powers over how they raise and spend their own money. This means ring-fencing and directed spending need to be reduced, as agreed at Verity House, and councils need to be free to set their own council tax.”
Commenting on the budget, UNISON’s Scottish Secretary Lilian Macer, said: “Today’s budget is a bad day for local services and deals a further financial blow to local councils who are already struggling to balance the books and to deliver the vital services our communities rely on.
“Our public services are on their knees due to years of underinvestment and the Scottish government’s council tax freeze will be a disaster for local services. We need to see investment in public services and a council tax freeze stops investment in public services, in schools and in the NHS.
“The Scottish government had the chance to make big choices to raise more money for Scotland’s public services but while the measures on income tax are welcome, much more could and should have been done. We still have a government boasting of low business taxes at the same time that they are delaying urgent improvements to public services.
“The Deputy First Minister spoke of cutting the public service workforce – people need to be aware that job cuts mean service cuts. What communities across Scotland need is investment, not abandonment.
“While we welcome investment in the NHS, the Scottish government failed to say how this would be targeted to tackling the staffing crisis and ensuring proper funding so the safe staffing act can make the improvements the NHS so desperately needs.
“Given the Scottish government’s commitment to become a fair work nation by 2025, it’s concerning that there was no mention of fair work anywhere in the budget statement, particularly in social care, a sector in crisis.”
Responding to the Scottish Government’s Budget Stuart McMahon, Scotland Director of consumer group CAMRA whose members had been lobbying MSPs asking for a 75% business rates discount to help save pubs and breweries, said:
“Pubgoers will be deeply disappointed by the lack of help for most of our locals today. Whilst 100% rates relief for hospitality businesses in island communities will be welcomed, failing to pass on extra money from the UK Government to help with business rates for the rest of our hospitality businesses is undoubtedly a blow and puts many of our pubs at risk of permanent closure.
“Yet again it seems that the Scottish Government just doesn’t understand the importance of our pubs, social clubs and breweries as a vital part of our social fabric – bringing communities together and providing a safe, regulated environment to enjoy a drink with friends and family. Our locals are community hubs that need and deserve help to make sure that they survive and thrive.
“With reports that pubs are closing at a faster rate here than elsewhere in the UK, Scottish Government ministers urgently need to re-think the decision not to give our locals the 75% discount with business rates bills that pubs south of the border are receiving. The Scottish Government also needs to support consumers, pubs and breweries in the new year by ditching any plans to bring back restrictive bans on alcohol advertising.”
In response to the Scottish Budget, Stephen Montgomery, Director of the Scottish Hospitality Group said: “We are sorely disappointed that the Scottish Government has not delivered new emergency support for Scottish hospitality.
“Unless a hospitality business is located on the islands, this Budget offers no new support to Scottish hospitality to survive the unprecedented challenge of rising costs, inflation, and the legacy of the pandemic.
“The very real implication is that many Scottish hospitality businesses will struggle to survive, and customers will see prices increase. This will be a bitter pill to swallow for thousands of Scottish hospitality businesses, given English hospitality businesses will be benefitting from a 75% business rates discount for the next year. Our attention will now be focused on helping those hospitality businesses survive what will be a very challenging year to come.
“However, we welcome the Scottish Government’s commitment to exploring a long-term, fairer deal for hospitality on business rates. It is a ray of hope in an otherwise disappointing day for Scottish hospitality.
“This is a golden opportunity to deliver a fairer deal for Scottish hospitality once and for all. We have been engaged with the New Deal for Business Group for a number of months and it is time that the Scottish Government’s actions matched their words.
“The Finance Secretary has committed to introducing a long-term, fairer deal for Scottish hospitality at next year’s Budget. We will hold her feet to the fire to make sure she delivers on this promise.”
Energy regulator Ofgem has today (Thursday 23 November, 2023) announced the energy price cap for the first quarter of 2024.
The price cap will increase by 5% on the previous quarter from 1 January to 31 March 2024. For an average household paying by direct debit for dual fuel this equates to £1,928, a rise of £94 over the course of a year – around £7.83 a month. The price cap, updated every quarter, sets a maximum that can be charged to customers for energy bills.
Ofgem’s priority is to protect consumers and ensure that they pay a fair price for their energy. Today’s price increase is driven almost entirely by rising costs in the international wholesale energy market due to market instability and global events, particularly the conflict in Ukraine.
The regulator will continue to use all levers available to ensure costs are spread fairly and customers struggling with bills are supported. It has today further developed plans to permanently remove the so-called ‘prepayment meter premium’ to ensure that prepayment customers are charged the same standing charge as direct debit customers. Ofgem has already launched a ‘Call for Input’ on standing charges running until 19 January, 2024.
Jonathan Brearley, CEO of Ofgem, said: “This is a difficult time for many people, and any increase in bills will be worrying. But this rise – around the levels we saw in August – is a result of the wholesale cost of gas and electricity rising, which needs to be reflected in the price that we all pay.
“It is important that customers are supported and we have made clear to suppliers that we expect them to identify and offer help to those who are struggling with bills.
“We are also seeing the return of choice to the market, which is a positive sign and customers could benefit from shopping around with a range of tariffs now available offering the security of a fixed rate or a more flexible deal that tracks below the price cap.
“People should weigh up all the information, seek independent advice from trusted sources and consider what is most important for them whether that’s the lowest price or the security of a fixed deal.”
Ofgem recently set out new rules for suppliers making clear that they should be prioritising enquiries from vulnerable customers who need help and proactively reaching out to households if they miss two monthly or one quarterly payment, check to see if they are struggling with bills and, if so, offer support such as affordable payment plans or, if appropriate, repayment holidays.
The regulator has also taken robust action to raise standards of customer service and worked in conjunction with suppliers and consumer groups to encourage industry to support those struggling with their bills, including the Winter 2023 Voluntary Debt Commitment recently announced by Energy UK and Citizens Advice.
A Statutory Consultation on levelling standing charges for prepayment meter and direct debit customers so customers pay the same daily charge has been published today.
Previously, customers on prepayment have been charged more than those who pay by direct debit to cover the additional costs and resources required by suppliers to provide their services.
In October 2022, the government introduced measures to temporarily remove this ‘PPM premium’ via the Energy Price Guarantee, which remains in place until April 2024.
Following a consultation this summer, Ofgem is now proposing an enduring solution that would ‘levelise’ these standing charges to coincide with the end of that government support. This consultation also sets out proposals to share the costs of bad debt more equally across customers to reduce the premium paid by standard credit customers (those who pay on receipt of a monthly or quarterly bill for the exact amount of energy used).
Under the terms of the regulator’s proposal, this would save PPM customers around £50 a year, reduce Standard Credit bills by around £45 a year but add around £20 a year for direct debit customers. Ofgem is keen to hear views on this proposal from all interested parties.
This follows the launch of a wider conversation on the issue of standing charges last week and how they should be set, which has already attracted a high number of responses in the first week of the consultation.
In response to today’s Ofgem energy price cap announcement, Joanna Elson CBE, Chief Executive of Independent Age said: ““Today’s energy price cap announcement offers little reassurance for older people in financial hardship, with bills still 85% higher than before the energy crisis.
“We speak to people in later life who are living in one room because they can’t afford to properly heat their home, those who risk falls because they aren’t turning on the lights, and older people who are in thousands of pounds of debt to energy suppliers. They urgently need help.
“With average energy prices having close to doubled in recent years, coupled with rocketing household costs such as water, food and broadband, those on a low income have endured several years of sky-high costs from all angles. Older people in financial hardship are especially vulnerable to sharp price increases, as many are on a fixed income. The extra money simply isn’t there.
“The UK Government needs to announce financial support now to help the most financially vulnerable, including those in later life, get through this winter. After that, we need a long-term solution to protect against the impact of continuing high prices, including energy.
“Our evidence shows an energy social tariff would offer more stability to older people on a low income and make sure no one is forced to make dangerous choices. This must be something the UK Government consults on.”
The next quarterly price cap announcement will be announced in February 2024, covering April – June 2024.
Reducing poverty, delivering growth, tackling climate change and providing high-quality public services will be the Scottish Government’s top priorities for the year ahead, First Minister Humza Yousaf has pledged.
Outlining his first Programme for Government, the First Minister described it as “unashamedly anti-poverty and pro-growth”. The package of measures aims to help build a more equal society through concerted efforts to eradicate poverty, tackle the cost of living crisis, and create opportunities for businesses and individuals.
The Programme supports the Scottish Government’s wider work in building a fair, green and growing economy, and strengthening public services.
Key commitments include:
expanding access to funded childcare
paying social care workers in a direct care role and frontline staff providing funded early learning and childcare in the private, voluntary and independent (PVI) sector, at least £12 an hour from April
speeding up renewable energy projects with a new deal for the onshore wind industry
delivering a new £15 million support package to unleash entrepreneurial talent
expanding free school meals in primary schools
The First Minister said: ““The Scottish Government will always be on the side of the people we serve. Scotland is – certainly should be – a land of opportunity, but I know it doesn’t always feel like that to people bearing the brunt of the UK Government cost-of-living crisis, to families living in the poverty, to struggling businesses, to those who still face consequences of discrimination and inequality. I get that.
“This Programme is an opportunity to be explicit about the driving mission of this government. So let me make it abundantly clear, we are a government who will maximise every lever at our disposal to tackle the scourge of poverty in our country.
“But let me be equally clear, we also need to support economic growth. Not for its own sake but so we can tackle poverty and improve our public services. And we will be unapologetic in taking the action necessary to ensure a sustainable future for our children and planet.
“The unfortunate reality is that the Scottish Government is currently operating with one hand tied behind our back. In the last five years we have spent more than £700 million in countering the impact of UK Government welfare cuts alone.
“That’s why this government will never stop believing that decisions about Scotland should not be made by a government based in Westminster, but by the people of Scotland. In proposing the case for independence we will set out a positive vision for Scotland’s future.
“Scotland’s economy already performs better than most parts of the UK, we have world-class universities and colleges, and significant strengths and potential in many of the key economic sectors of the future. Today’s Programme for Government sets out how we will build on these strengths, to make people’s lives better.
“In the year ahead, we will support more than 300,000 children with more than £1,000 a year through the Scottish Child payment.
We will expand the availability of high quality childcare – providing funding in six early adopter local authority areas to offer increased access to childcare from nine months through to the end of primary school. And we will invest in raising the pay of childcare and social care staff.
“We will also safeguard the rights of tenants, promote payment of the living wage, and provide help for disabled people with complex needs, so that they can live independent lives.
“We will do all of this – first and foremost because it is the right thing to do. And also, as I know well from my own family history, because providing people with support and security helps them to contribute to society and to create opportunities for others. This Programme for Government shows how we will make progress towards a fairer, wealthier and greener Scotland.”
Responding to Tuesday’s Programme for Government, Anna Fowlie, Scottish Council for Voluntary Organisations’ (SCVO) Chief Executive, said: ““The First Minister has today set out a Programme for Government (PfG) which outlines priorities for Scotland which voluntary organisations working in and for communities have welcomed.
“While the PfG recognises the contribution voluntary organisations make across different portfolios, it doesn’t move far or fast enough to address fundamental changes to the operating environment that would recognise the vital role of Scotland’s voluntary sector in delivering on government priorities.
“Today’s PfG restates the Scottish Government’s commitment to Fairer Funding for the voluntary sector, which we welcome. The Scottish Government’s current poor grant-making practice makes the focus on improving the clarity and consistency of existing approaches very important, but we must continue to work together to support the sector to be financially sustainable.
‘To secure the future of the invaluable work our sector delivers, we must not only address disappointing practice, but also implement the longer-term improvements that are so desperately needed.
“We can’t forget that an on-paper commitment to Fairer Funding was made by ministers earlier this year. It is disappointing that progress on this commitment has been so slow. Today’s announcement commits to developing a plan, when urgent action is needed. Our long-term work on Fair Funding provides clear recommendations, based on the sector’s experiences, and a clear blueprint for next steps.
“The PfG’s firm commitment to taking forward a wider review of charity law is also welcome, particularly the commitment to work alongside the sector. It is important that the review is comprehensive and independent and doesn’t shy away from fundamental issues. We need a holistic approach to regulating the voluntary sector that supports the role of modern charities.
“With charities experiencing growing frustration at the funding relationship with Scottish Government and the impact this is having on organisations, staff, volunteers, and the services and support they offer, we had hoped for more action and urgency.
The steps outlined will move us in the right direction, albeit slowly, and we will of course work with the Scottish Government to ensure that they do so in the ways that make the biggest difference to voluntary organisations across Scotland, supporting the invaluable contribution they make to Scotland’s economy and society.”
‘Warm words won’t stop a warming planet’
Climate campaigners have reacted to the latest Scottish Programme for Government saying that “warm words won’t stop a warming planet.”
Friends of the Earth Scotland climate and energy campaigner Caroline Rance commented, “This is an underwhelming programme for more of the same when what is needed a radical change that can speed Scotland away from the damage being wrought by fossil fuel companies.
“The First Minister talked a good game about the importance of climate action and a just transition to net zero, but warm words won’t stop a warming planet.
“The climate emergency demands scaled up action that rapidly shifts us away from fossil fuels, prioritises public transport and puts in a credible plan in place to support workers in the transition from the oil industry to good, green jobs.”
+++ SPEEDING UP OF RENEWABLES PLANNING
Rance commented: “It’s a positive step that the process for onshore renewables will be quickened up but sites must still be environmentally appropriate, and far more work is needed to ensure that local communities can benefit from developments in their area.
+++ SINGLE USE VAPES
Friends of the Earth Scotland circular economy campaigner Kim Pratt: “The evidence that single use vapes are harmful to young people and polluting our environment is overwhelming.
“Businesses have been allowed to put profit before their obligations to provide safe disposal service for these products. The quickest and surest way to end the harm caused by single use vapes is to ban them.
“While consultation on a ban is welcome, we don’t have time to change our economy one product at a time. From wasteful plastic packaging to phones that can’t be fixed, and harmful products like single use vapes, everything we own needs to become more sustainable.
“That’s why the Circular Economy Bill is so important because it must transform our economic systems so that all materials are used sustainably.”
+++ CIRCULAR ECONOMY BILL
Friends of the Earth Scotland circular economy campaigner Kim Pratt commented: “Scotland’s material use is more than twice sustainable levels. The Circular Economy Bill is an important opportunity for Scotland to change the way it uses materials by making businesses design products with less materials, encourage repair and reuse and limit harmful single use products.
“The Circular Economy Bill must be as strong as possible to create the system change that we need, including strong targets for reducing our consumption and consideration of the social impacts of material use.”
Independent Age: ‘A Missed Opportunity’
Following the First Minister’s Programme for Government, Debbie Horne, Scotland Policy and Public Affairs Manager at Independent Age said: “Today is a missed opportunity to help the 150,000 older people living in poverty across Scotland.
“Alarmingly, this figure has risen by 25% in the last decade alone, with the ongoing costs crisis squeezing the budgets of those in later life to breaking point. The First Minister should have used today’s Programme for Government to announce a strategy to tackle pensioner poverty and reverse this frightening trend.
“None of us dream of a later life where, because of the cost, we risk falls by not turning on the lights or are forced to skip meals, yet this is now a reality for 1 in 7 older people.
“With over 3 in 5 over 65s on a low income currently cutting their food spending, and almost 3 in 4 reducing their heating, they’re terrified for the winter to come.
“The Scottish Government should reconsider this glaring omission from today’s announcement and urgently announce a plan to reduce financial hardship in later life. They’ve said that tackling poverty is a key priority – older people must not be forgotten in this.”
The upcoming Programme for Government must include plans for a pensioner poverty strategy, says older people’s financial hardship charity Independent Age.
1 in 7 pensioners in Scotland are in poverty, a number that has risen by a quarter in the last decade, and the current cost of living crisis means that many more are at risk of being pulled into financial hardship.
Polling by Independent Age shows that almost half (45%) of over 65s living on a low income (£15,000 per year or less) in Scotland are cutting back on their food spending. Well over a third (42%) of the same group are concerned about covering their food bills for the next 6 months.
With energy prices remaining high, Independent Age polling found that in Scotland, over half (54%) of over 65s on a low income are worried about how they will afford the cost of heating their home.
The charity also found that inadequate incomes coupled with rising costs is causing some older people to disconnect from digital technology. Without this it’s often harder to access information, stay in touch with friends and family and save money by shopping around for the best deals.
Polling showed that 39% of older people on a low income are already cutting back on their phone usage to save money. Over a third (35%) of the same group are fearful of not being able to afford their broadband bill during the next 6 months.
Independent Age is calling on the Scottish Government to urgently produce a pensioner poverty strategy. Whilst the charity continues to call on the UK Government to do more to support older people facing financial hardship across the country, there are actions the Scottish Government can take to support older people living in poverty in Scotland.
Debbie Horne, Scotland Policy and Public Affairs Manager at Independent Age said: “Older people struggling financially can’t wait any longer for the Government to step in. The First Minister must include a pensioner poverty strategy in next month’s Programme for Government.
“Every day, we hear from older people across Scotland who are cutting back to dangerous levels. We’ve heard stories of those in later life risking falls by not turning on the lights at night, terminally ill older people not using the heating during winter and those who only eat one meal a day, all to save money. They are crying out for a plan to help them.
“If the Scottish Government wants to make Scotland the best place in the world to grow old, they can start now by committing to introducing a pensioner poverty strategy. We’ve heard positive words on the Government’s commitment to tackling poverty, but now older people need to see action.
“The Programme for Government must include a strategy to tackle pensioner poverty, or we risk seeing thousands more fall into financial hardship.”
Independent Age launched its powerful report “Not enough to live on”: Pensioner poverty in Scotland in February this year. It set out the devastating experience of poverty for those aged over 65.
The charity interviewed 38 people across the nation and these in-depth conversations uncovered struggles around managing on a low, fixed income, battling high costs and living in unaffordable and inadequate housing.
June, 67, Glasgow, is currently struggling financially. She said:“I’m very cautious with money. I’m careful to make sure I’ve got enough to get my food. You’ve got to be careful because you can still run out at the end of the month, then you end up needing to go to the food bank.
“If something big was to come up that was needed, say my fridge, God forbid, or my cooker or washing machine, it would be a worry. I would have to get help. I can’t go out and buy big things. I cannot go for a cup of tea or buy a wee meal for my friends, it’s irritating because you want to do more. But I’m restricted, I’ve not got the money for that. So you just forget it. I live a quiet life.”
Nearly half (44%) of older people in Scotland on a low income1 have struggled to keep up with their broadband bill in the last 6 months, according to new research from the older people’s charity Independent Age.
Of that number, 18% found it a constant struggle, and 26% struggled from time to time.
Independent Age says the findings from YouGov commissioned polling raise fears that the cost of living has deepened the ‘digital divide’ and warns that older people in financial hardship may become even more isolated and could face additional costs if they are forced to shut off their internet access.
The survey also found:
More than 1 in 3 (35%) older people in financial hardship said they are worried they will not be able to pay their broadband bill over the next 6 months.
36% are currently having to cut back their spending on their internet, phone or TV subscription services a great deal or a fair amount.
Almost 1 in 10 (9%) have already cancelled broadband and phone services over the winter in an effort to save money and 6% had already taken this action before the winter began, to save money.
The charity warns that not being able to go online could mean that older people on low incomes are unable to access information about financial entitlements or services, miss out on savings by not being able to search for the best deals and lose vital social connections.
It’s calling on broadband providers to further promote their social tariffs so that older people in financial hardship are aware that support for their internet costs is available. The charity also believes the Government has a role to play in promoting social tariffs as part of the support available during the cost of living crisis.
Social tariffs are cheaper broadband contracts for those receiving means tested benefits, such as Pension Credit (the State Pension top-up for those on a low income). However, current take-up is low, with just 5.1% of eligible households using them2,and Independent Age say that eligible older people are going without as a result.
Morgan Vine, Head of Policy and Influencing at Independent Age, said:“The choice to engage online shouldn’t be taken away due to cost. We’re hearing from people in later life who are struggling to pay their broadband bills, cancelling their services, or making considerable sacrifices to afford this expense, such as going without fresh food.
“Cancelling broadband can mean someone misses out on the best deals, social connections with friends and family or on finding information about financial support they could be entitled to, such as Pension Credit or Attendance Allowance.
“Independent Age is calling on broadband providers to do all they can to support vulnerable customers. We also think the Government has a role to play when promoting the options available now and thinking about consistency in the longer term. At the moment it’s a confusing picture for older people on low income, with each provider offering different options.
“While broadband social tariffs are available from most major providers, and can be a great help for those in financial hardship, take up is extremely low. Independent Age wants providers to proactively promote their social tariffs and target their activity at all eligible groups, including ensuring older people on a low income are not missed out.”
“There’s a growing assumption that we can all do everything online now, but because of my financial situation, I’ve had to cancel my phone and Internet contracts. So now if I want to do anything that involves being on the Internet, I need to get hold of a library that’s open at certain times.
“I don’t know what’s happened in other parts of the country, but we used to have access to Wi-Fi on Greater Manchester’s buses and trams. That disappeared during COVID. I’m assuming it was taken off as a cost-saving thing because people weren’t traveling on the buses, but they’ve never put it back.
“And that doesn’t just impact older people who don’t have Wi-Fi — it impacts young families who are trying to do stuff whilst they’re out and about because they can’t afford to pay for the subscription at home.”
High costs across the board, from utilities and food to accessing the internet, are causing misery for thousands of older people across Scotland, warns national charity Independent Age.
Laid bare in their new report – The Hidden Two Million – is the profound impact high costs are having on those in later life living on the lowest income across the UK. In Scotland, over half (56%) of those polled on a low income (less than £15,000 per year) say they are worried about the cost of electricity. When asked about heating, still over half (54%) were concerned about the utility’s affordability.
Food inflation has been at record highs the past year, and this has also had a harmful impact on those on the lower end of the income spectrum. Polling by Independent Age shows that a staggeringly high 45% of older people living on £15,000 per year or less are cutting back on their food spending and well over a third (42%) of the same group are concerned about covering their food bills for the next 6 months.
Across the UK, 20% of single pensioners, and 7% of couple pensioners have no other source of income outside the State Pension and other benefits. Older people in financial hardship have shared with Independent Age that managing on a fixed income means, when faced with increased bills, the only options they feel they have to choose from, are to cut back – which could harm physical and mental health – or go into debt.
It’s not just big bills that are squeezing older people’s finances. Smaller but important bills, such as phone and broadband, are also causing money worries.
New polling commissioned by Independent Age shows that 39% of older people with an income of less than £15,000 per year, are already cutting back on their phone usage to save money while 35% of the same group are fearful of not being able to afford their broadband bill during the next 6 months.
This is concerning as not being digitally connected can lead to social isolation and limits access to better deals only found online.
Recommendations
Independent Age is urging both the government and private sector to do the following in support of older people in financial hardship:
Utility companies must provide and promote financial support to everyone on low incomes, including older people
The UK Government should introduce national social tariffs across utilities such as energy
The UK and Scottish Governments must ensure that everyone in financial hardship in later life receives the financial support they are entitled to
June, 67, Glasgow, is currently struggling financially. She said:“Now I know exactly what’s getting paid with my pension, I know what’s coming in.
“I’m very cautious with money. I’m careful to make sure I’ve got enough to get me my food. You’ve got to be careful because you can still run out at the end of the month, not got any money, know what I mean, then you end up going to the food bank.
“If something big was to come up that was needed, say my fridge, God forbid, or my cooker or washing machine, it would be a worry. I would have to get help. I can’t go out and buy big things.
“I cannot go for a cup of tea or buy a wee meal for my friends, it’s irritating because you want to do more. But I’m restricted, I’ve not got the finance for that. So you just forget it. I live a quiet life.”
Debbie Horne, Scotland Public and Policy Affairs Manager at Independent Age said:“These new figures are a stark reminder of just how frightening turbulent economic times can be for those on the lowest incomes.
“Thousands of people in later life across Scotland are being financially squeezed in every direction, this can be damaging to people’s mental and physical health.
“We hope that all utility companies will review their support for their most vulnerable customers, including older people, and ensure they are protected from future spikes in costs.
The hidden two million. The reality of financial hardship in later life
Independent Age launched its powerful report at an event last week to raise awareness of its renewed focus to support the more than 2 million older people across the UK living in financial hardship (including the 150,000 in poverty in Scotland), and those hovering above the line in a financially precarious situation.
The new research provides the latest insights into poverty in later life.
The event also saw the premier of the charity’s new thought provoking film that amplifies the voices of older people currently living in financial hardship.
Independent Age: Scots sacrifice essentials to ensure they can buy for others this Christmas
Many people in Scotland are facing a bleak run up to Christmas, as they cut back on essentials like food and heating to ensure they can buy presents for loved ones.
In a national survey of people aged 50 and over by older people’s charity Independent Age, a third (33%) of Scottish respondents said that in order to spend money on loved ones this year, they would reduce spending on essentials for themselves as Christmas approaches.
Of those who said that they will reduce their spending:
69% will socialise less
44% will cut back on heating their homes
41% will spend less on food
37% will cut back on the electricity they use
The findings come as inflation continues to rise, with the official rate recently soaring to 11.1%.
Scottish Government statistics show that 1 in 7 (150,000) older people in Scotland are living in poverty, with 120,00 pensioners living in persistent poverty (meaning they’ve spent at least three of the past four years in poverty).
Claire Donaghy, Head of Scotland at Independent Age, said:“It’s extremely alarming that those in later life are being forced to cut back on essentials so they can buy presents for loved ones.
“Older people living in one of the world’s richest nations shouldn’t have to risk damaging their health by reducing the food they eat and using less heating during the coldest months.
“For many in Scotland, the festive season is something to look forward to, but increasing numbers of older people are being hit from every angle financially.”
Cost-of-living fears this festive season
The immense financial pressure faced by millions of older people this winter is forcing many of them to cut back on essentials – as well as foregoing presents for others.
In the same survey over two fifths (41%) of people in Scotland said they are planning on spending less money at Christmas this year, compared to last.
When asked how they plan to reduce their spending, worryingly, 49% of people planning to spend less said they would reduce spending on food, and 47% said they would spend less on heating and gas.
When asked about general Christmas spending, 56% who plan to spend less at Christmas said they plan to spend less on presents for their children or grandkids, and this number rises to 78% when asked about other friends and family.
There will be even fewer ornaments and lights to enjoy this festive season, with 39% saying they will reduce spending on decorations that require electricity. These figures paint a bleak picture of how the cost-of-living crisis will stop many from enjoying their usual Christmas.
End the Pension Credit Scandal
With many households struggling to cope financially this December, Independent Age is calling on the government to ensure older people are receiving the support they are entitled to, including Pension Credit.
For people over 66, Pension Credit acts as an income top-up, and is a gateway to additional support, including the Warm Home Discount and Council Tax Reduction. It is also being used as a mechanism by the government to decide who gets some of the vital cost-of-living payments announced in November.
In what the charity is calling a ‘national scandal’, Independent Age estimate that almost 80,000 people who are eligible for Pension Credit in Scotland are currently not claiming, resulting in £160 million being missed out on by older people in Scotland.
Claire Donaghy continues: “The government was right to uprate Pension Credit by inflation in the Autumn Budget, but the hard truth is too many older people are still not receiving this vital income top-up that they are eligible for. Without it, many people in later life are facing a stressful and dire Christmas, forced to cut back on food and heating, which can be detrimental to their health.
“It is scandalous that people are struggling when billions of pounds has been set aside for them and the money is sitting there unused. The government must commit to a Pension Credit strategy to prevent hundreds of thousands of people missing out.”
Independent Age has launched a petition calling on the government to end the Pension Credit scandal and announce a strategy to increase uptake.
The Chancellor will make a statement at 11am, bringing forward measures from the Medium-Term Fiscal Plan that will support fiscal sustainability.
He will also make a statement in the House of Commons this afternoon.
This follows the Prime Minister’s statement on Friday, and further conversations between the Prime Minister and the Chancellor over the weekend, to ensure sustainable public finances underpin economic growth.
The Chancellor will then deliver the full Medium-Term Fiscal Plan to be published alongside a forecast from the independent Office for Budget Responsibility on 31 October.
The Chancellor met with the Governor of the Bank of England and the Head of the Debt Management Office last night to brief them on these plans.
That racket you hear is those infamous Mini-Budget economic plans being put through the shredder – Ed. …
UPDATE: The Chancellor of The Exchequer Jeremy Hunt has today, Monday 17 October, brought forward a number of measures from 31 October’s Medium-Term Fiscal Plan:
Changes designed to ensure the UK’s economic stability and provide confidence in the government’s commitment to fiscal discipline
Basic rate of income tax to remain at 20% until economic conditions allow for it to be cut, IR35 and dividend tax rate reforms no longer going ahead
Treasury-led review of energy support after April 2023 launched
Following conversations with the Prime Minister, the Chancellor has taken these decisions to ensure the UK’s economic stability and to provide confidence in the government’s commitment to fiscal discipline.
The Chancellor made clear in his statement that the UK’s public finances must be on a sustainable path into the medium term.
Today’s announcement represents another down payment following the reversal of the corporation tax cut announced on Friday 14 October by the Prime Minister. The Chancellor will publish the government’s fiscal rules alongside an OBR forecast, and further measures, on 31 October.
In his statement the Chancellor announced a reversal of almost all of the tax measures set out in the Growth Plan that have not been legislated for in parliament.
The following tax policies will no longer be taken forward:
Cutting the basic rate of income tax to 19% from April 2023. While the government aims to proceed with the cut in due course, this will only take place when economic conditions allow for it and a change is affordable. The basic rate of income tax will therefore remain at 20% indefinitely. This is worth around £6 billion a year.
Cutting dividends tax by 1.25 percentage points from April 2023. The 1.25 percentage points increase, which took effect in April 2022, will now remain in place. This is valued at around £1 billion a year.
Repealing the 2017 and 2021 reforms to the off-payroll working rules (also known as IR35) from April 2023. The reforms will now remain in place. This will cut the cost of the government’s Growth Plan by around £2 billion a year.
Introducing a new VAT-free shopping scheme for non-UK visitors to Great Britain. Not proceeding with this scheme is worth around £2 billion a year.
Freezing alcohol duty rates from 1 February 2023 for a year. Not proceeding with the freeze is worth approximately £600 million a year. The next steps of the Alcohol Duty Review announced in Growth Plan 2022 will continue as planned. The alcohol duty uprating decision and interactions with the wider reforms to alcohol duties under the Alcohol Duty Review will be considered in due course.
This follows on from the previously announced decisions not to proceed with the Growth Plan proposals to remove the additional rate of income tax and to cancel the planned increase in the corporation tax rate.
Taken together, these changes are estimated to be worth around £32 billion a year.
The government’s reversal of the National Insurance increase and the Health and Social Care Levy, and the cuts to Stamp Duty Land Tax, will remain benefitting millions of people and businesses. The £1 million Annual Investment Allowance, the Seed Enterprise Investment Scheme and the Company Share Options Plan will also continue to further support business investment.
Energy bills support review
The government has announced unprecedented support within its Growth Plan to protect households and businesses from high energy prices. The Energy Price Guarantee and the Energy Bill Relief Scheme are supporting millions of households and businesses with rising energy costs, and the Chancellor made clear they will continue to do so from now until April next year.
However, looking beyond April, the Prime Minister and the Chancellor have agreed that it would be irresponsible for the government to continue exposing the public finances to unlimited volatility in international gas prices.
A Treasury-led review will therefore be launched to consider how to support households and businesses with energy bills after April 2023. The objective of the review is to design a new approach that will cost the taxpayer significantly less than planned whilst ensuring enough support for those in need. The Chancellor also said in his statement that any support for businesses will be targeted to those most affected, and that the new approach will better incentivise energy efficiency.
The government is prepared to act decisively and at scale to regain the country’s confidence and trust. The Chancellor stated in his speech that there will be more difficult decisions to take on both tax and spending. This means doing what is needed to lower debt in the medium term and to ensure that taxpayers’ money is well spent, putting public finances on a sustainable footing.
In light of this, government departments will be asked to find efficiencies within their budgets. The Chancellor is expected to announce further changes to fiscal policy on 31 October to put the public finances on a sustainable footing.
Further information
Table of total benefit of tax policy reversals:
Policy (£bn)
2022-23
2023-24
2024-25
2025-26
2026-27
Re-instate plans to raise Corporation Tax to 25% from April 2023
+2.3
+12.4
+16.6
+17.6
+18.7
Suspend 1p reduction in the basic rate of income tax
0
+5.3
+5.9
+5.8
+5.9
Maintain additional rate of income tax
+2.4
-0.6
+0.8
+2.2
+2.1
Maintain 1.25 percentage point increase in dividends tax rates
0
+1.4
-1.0
+1.1
+0.9
Maintain 2017 and 2021 reforms to off-payroll working rules (also known as IR35)
0
+1.1
+1.4
+1.7
+2.0
Cancel VAT-free shopping scheme for non-UK visitors to Great Britain
0
0
+1.3
+2.0
+2.1
Cancel one year freeze to alcohol duty rates
+0.1
+0.5
+0.6
+0.6
+0.6
Total
+4.7
+20.1
+25.4
+30.9
+32.3
Costings in the table are as set out in the Growth Plan 2022 – except for the 1p reduction in the basic rate of income tax, which is the costing from Spring Statement 2022 as adjusted in the Growth Plan 2022. Final costings will be set out as part of the Medium-Term Fiscal Plan on 31 October. Totals may not sum due to rounding.
THE CHANCELLOR’s STATEMENT:
A central responsibility for any Government is to do what is necessary for economic stability.
This is vital for businesses making long-term investment decisions and for families concerned about their jobs, their mortgages, and the cost of living.
No government can control markets, but every government can give certainty about the sustainability of public finances and that is one of the many factors influencing how markets behave.
And for that reason, although the Prime Minister and I are both committed to cutting corporation tax on Friday she listened to concerns about the mini budget and confirmed we will not proceed with the cut to Corporation Tax announced.
The government has today decided to make further changes to the mini budget.
And to reduce unhelpful speculation about what they are, we have decided to announce these ahead of the Medium-Term Fiscal Plan, which happens in two weeks.
I will give a detailed statement to Parliament and answer questions from Members of Parliament.
But because these decisions are market sensitive, I have agreed with the Speaker the need to give an early, brief summary of the changes which are all designed to provide confidence and stability.
Firstly, we will reverse almost all the tax measures announced in the Growth Plan three weeks ago that have not started Parliamentary legislation.
So whilst we will continue with the abolition of the Health and Social Care Levy and Stamp Duty changes we will no longer be proceeding with:
The cut to dividend tax rates.
The reversal of off-payroll working reforms introduced in 2017 and 2021.
The new VAT-free shopping scheme for non-UK visitors.
Or the freeze on alcohol duty rates.
Secondly, the government’s current plan is to cut the basic rate of income tax to 19% from April 2023.
But at a time when markets are rightly demanding commitment to sustainable public finances, it is not right to borrow to fund this tax cut.So I have decided that the basic rate of income tax will remain at 20% and it will do so indefinitely, until economic circumstances allow for it to be cut.
Taken together with the decision not to cut Corporation Tax, and restoring the top rate of income tax the measures I’ve announced today will raise, every year, around £32bn.
Finally, the biggest single expense in the Growth Plan was the Energy Price Guarantee.
This is a landmark policy supporting millions of people through a difficult winter and today I want to confirm that the support we are providing between now and April next year will not change.
But beyond that, the Prime Minister and I have agreed it would not be responsible to continue exposing public finances to unlimited volatility in international gas prices.So I am announcing today a Treasury-led review into how we support energy bills beyond April next year.
The objective is to design a new approach that will cost the taxpayer significantly less than planned whilst ensuring enough support for those in need.
Any support for businesses will be targeted to those most affected.
And the new approach will better incentivise energy efficiency.
The most important objective for our country right now is stability.
Governments cannot eliminate volatility in markets, but they can play their part, and we will do so because instability affects the prices of things in shops, the cost of mortgages, and the value of pensions.
There will be more difficult decisions to take on both tax and spending as we deliver our commitment to get debt falling as a share of the economy over the medium term.
All departments will need to redouble their efforts to find savings, and some areas of spending will need to be cut.
But, as I promised at the weekend our priority in making the difficult decisions that lie ahead will always be the most vulnerable.
And I remain extremely confident about the UK’s long term economic prospects as we deliver our mission to go for growth.
But growth requires confidence and stability, and the United Kingdom will always pay its way.
This Government will therefore make whatever tough decisions are necessary to do so.
REACTION:
Commenting on the Chancellor Jeremy Hunt’s fiscal statement today (Monday), TUC General Secretary Frances O’Grady said: “The Conservatives drove the UK economy over a cliff. Hunt slamming the gears into reverse now won’t help families and businesses already hit by soaring borrowing costs.
“People needed reassurances today. Instead, they got more uncertainty – about energy bills, about our public services, and about whether universal credit and benefits will rise with inflation.
“We are now on the brink of a deep and damaging recession that threatens millions of jobs. But the latest Conservative Chancellor still has the same basic approach that got us into this mess.
“The Chancellor should have announced a boost to universal credit and pensions, and a comprehensive plan to get wages rising faster for everyone. And he should have announced a much higher windfall tax on oil and gas giants.”
On the announcement of a review of support for families and businesses with energy costs beyond April 2023, she added: “Families and businesses now face months of worry. There is going to be less help with bills – but no-one knows who will lose out, by how much, or whether there will finally be a programme to fix Britain’s cold and draughty homes. This is not the reassurance working families need.”
Director of Policy & Communications at Independent Age, John Palmer, said: “Older people living on low and modest incomes were hoping to be reassured today, but frustratingly the Chancellor’s statement posed more questions than answers.
“Instead of ensuring stability, today only provided uncertainty. The review of the Energy Price Guarantee is extremely concerning. It’s no longer clear who will receive support beyond April 2023. Now millions of older people are wondering if they will be abandoned by the government and left with unaffordable energy bills and freezing homes next year.
“We know that many people in later life are already making dangerous cutbacks on heating and food. Our own polling revealed that 65% of older people plan to use less heating this winter.
“The government must ensure that its new targeted approach from next year helps older people in financial hardship, including the 850,000 older people who are currently entitled to Pension Credit but do not receive it.
“A fundamental, non-negotiable way to help older people’s incomes keep up with the price of essentials is for the government to uprate benefits and the State Pension with inflation. Today was another missed opportunity to offer this reassurance. Instead, millions of people over 65 will continue to live in fear that they will be made even poorer, when their budgets have been broken by the cost-of-living crisis.”
Will Hodson, consumer champion and founder of How To Save It commented:‘The Chancellor’s announcement that the Government will review the energy price cap in April is welcome. Supporting millionaires in paying their energy bills for two years was both morally and economically wrong.
“However, many households will be concerned about what this change means for them. The Government needs to make sure that their support is both good value to the taxpayer and provides sufficient, targeted support to those who really need it.’
