Ministers act to protect Scots facing cost of living crisis
A combined rent freeze and moratorium on evictions to help people through the cost crisis has been announced as the centrepiece of the 2022-23 Programme for Government (PfG).
The programme outlines emergency legislation which will be introduced to put in place a rent freeze until at least 31 March 2023 and a moratorium on evictions, as well as a new tenants’ rights campaign. In addition a ‘one-stop-shop’ website will be introduced to provide people with information on the range of benefits and support available to help them through the current cost of living crisis.
With £3 billion allocated to the end of March for a range of support that will help mitigate the impact of the cost crisis on households, the PfG also confirms the Scottish Child Payment will increase to £25 per week per eligible child from 14 November when it also opens to all under 16s.
In addition, the programme includes the roll out of free school meals across all primary school age groups, doubles the Fuel Insecurity Fund to £20 million to help households at risk of self-disconnection or self-rationing of energy, confirms rail fares will be frozen until March 2023 and widens the Warmer Homes Fuel Poverty Programme.
For businesses – in addition to an existing package of financial aid worth over £800 million – six ground-breaking ‘tech scalers’ will be opened, two job-boosting Greenports progressed and the National Strategy for Economic Transformation focussing on economy supporting measures continued.
In total, the PfG sets out 18 new Bills including legislation on an independence referendum and major reforms in the justice system, including a Criminal Justice Reform Bill that will propose the end of the Not Proven verdict in Scots Law and provide anonymity for complainers in sexual offence cases. A Bill for the creation of the new National Care Service will also go through parliament this year.
The programme also builds on long-term commitments made in the Bute House Agreement and restates Ministers’ commitment to the importance of delivering on Scotland’s climate ambitions. These range from a consultation on legislation to transform how buildings are heated to continuing record investment in active travel.
First Minister Nicola Sturgeon said: “This Programme for Government is published in the context of the most severe cost crisis in many of our lifetimes. It is a crisis pushing millions into poverty and poses a genuine danger, not just to livelihoods, but to lives.
“The Scottish Government is already committed to a range of measures, worth almost £3 billion this year, that will help with rising costs. But the magnitude of what is being experienced by people and businesses means that mitigation is nowhere near sufficient. What is needed now is action on a scale similar to the initial Covid response.
“Regrettably, the powers to act in the manner and on the scale needed do not lie with this Parliament. In my view, they should lie here. If they did, we could have acted already. But they don’t. These powers are reserved to Westminster.
“The cost crisis means this Programme for Government is more focussed than ever before – deliberately so – with priority actions to provide help now.
“To that end we will provide more help for people who may be at risk of self-rationing or even self-disconnection from their energy supply and we will double the Fuel Insecurity Fund to £20 million this year.
“We will also propose emergency legislation to put in place a rent freeze until at least March and a moratorium on evictions.
“Given the powers to act in the manner and on the scale needed do not lie with this Parliament, this Programme for Government also provides for a Scottish Independence Referendum Bill.
“Independence would give us – like it does other independent countries – the levers we desperately need to respond to a crisis such as this. That’s the prize we surely must grasp.”
Commenting on the Scottish Programme for Government, Peter Kelly, director of the Poverty Alliance said: “The First Minister outlined many important measures today. The increase in the value and availability of the Scottish Child Payment will help thousands of households with rising living costs. Rent freezes will help tenants across the country.
“But we could do more. The First Minister said that it is not a lack of political will that prevents us from further action to help people with this cost crisis – it is a lack of money. So, the upcoming emergency budget review must focus on getting additional cash into the pockets of people on low incomes.
“One way we can raise money in Scotland, is through devolved taxes. Previous changes to the Scottish Income Tax have raised hundreds of millions of pounds for public services. We can go further. There are also opportunities to reform local council taxes, to make them fairer and raise much-needed revenue for overstretched services in our communities. There was no mention of any new wealth taxes in this programme for government.
“The First Minister talked about creating a culture of solidarity in Scotland. People in Scotland already believe in holding out a hand to others when we need help. We can use our tax system to support each other in this time of crisis, and reflect the values of compassion and justice that we all share.”
Commenting on the Scottish Programme for Government, Friends of the Earth Scotland head of campaigns Mary Church said: “There is a welcome recognition in the Programme for Government that the cost of living crisis and the climate emergency are interconnected but the action to mitigate their impacts and tackle their root causes falls far short of what is needed.
“One year on from COP26 in Glasgow, the Scottish Government’s fine rhetoric has not turned into the transformative action needed to drive change across transport, housing and energy.
“The Scottish Government must use its forthcoming energy strategy to spell out how it will secure a rapid and fair transition away from the fossil fuels which are driving both crises within the next decade. By transforming our energy system to run on reliable, affordable renewable energy we can future proof our lives against further damage from volatile fossil fuels.
“The energy strategy must focus on demand reduction, energy efficiency and renewables, which can deliver decent green jobs in Scotland instead of fantasy techno-fixes like hydrogen and carbon capture. The Scottish Government has admitted that these speculative negative emission technologies won’t be able to deliver this decade so it’s hard to see why it continues to throw time and resources at the fossil fuel industry’s pipe dreams.
TRAIN FARE FREEZE
“The freeze on ScotRail fares demonstrates how public ownership can keep fares from getting even higher, benefiting passengers and helping support the necessary shift away from cars. While the fare freeze is welcome, the Scottish Government should be going further and actually reducing fares to help more people leave the car behind.
CIRCULAR ECONOMY
“We saw the same promise to introduce a Circular Economy Bill 12 months ago, it must be delivered this time. Consumption targets to reduce both Scotland’s carbon footprint and material footprints need to be at the heart of the Circular Economy Bill to create real change.
HUMAN RIGHTS BILL
“It’s disappointing that the Human Rights Bill that would enshrine the right to a healthy and safe environment in Scots Law has been kicked into the long grass. This is a vital piece of legal protection for people and nature that should not be delayed any further nor cannot it be allowed to become a political football in the constitutional debate.”
City council Leader Cammy Day has welcomed yesterday’s announcement by the Scottish Government that it intends to introduce a bill to give councils the powers to introduce a visitor levy.
The bill, which is expected to be laid before parliament early next year, forms of the Scottish Government’s Programme for Government for 2022/23, as set out by the First Minister in Holyrood this afternoon.
The council has long campaigned for the powers to introduce a levy – which would see overnight visitors pay a small additional charge on their accommodation – and has produced a substantial body of work to back its case.
It was estimated then that a levy in Edinburgh could raise in the region of £15m per year to invest in sustainable tourism and managing the impact of tourism on the city.
Council Leader Cammy Day said: “This is fantastic news for the city, and a landmark step following years of work here in the Capital to make the case for a visitor levy – something that’s common practice in other major cities and destinations across the world.
“We’re very proud to be one of the world’s most popular visitor destinations, but we’re equally aware that this success comes at a cost. That’s why we believe it’s right to ask visitors to make a small contribution to help us sustain and improve our tourism offer while managing its impact.
“We’ve been building the case for Edinburgh to become the first city in the UK to introduce such a levy, consistently and repeatedly making the case to Scottish Ministers without success – until now. From our citywide consultation held in 2018, our proposals gained overwhelming backing from Edinburgh’s residents, businesses and attractions – and, importantly, also from the majority of accommodation providers.
“Ultimately the income this generates will help us continue to invest in and manage the success of tourism on our city, making sure we continue to offer one of the most enviable and enjoyable visitor experiences in the world – while bringing new and additional benefits to our residents who live and work here all year round.
“We acknowledge, of course, that this has been an extremely challenging period for our culture and hospitality industries and are fully committed to working together with them, the wider tourism industry and other partners to co-produce a scheme that works best for the whole of our Capital city.
“I’ll be pushing the Scottish Government hard to ensure that any income generated is in addition to our block grant funding – not instead of it – and that we’re in a position to benefit from this as soon as possible.”
Energy price hikes will cause ‘stress, anxiety, illness, debt and death’
Today (26 August) Ofgem has announced the energy price cap will increase to £3,549 per year for dual fuel for an average household from 1 October 2022.
This comes as Ofgem’s CEO warns of the hardship energy prices will cause this winter and urges the incoming Prime Minister and new cabinet to provide an additional and urgent response to continued surging energy prices.
The increase reflects the continued rise in global wholesale gas prices, which began to surge as the world unlocked from the Covid pandemic and have been driven still higher to record levels by Russia slowly switching off gas supplies to Europe.
The price cap, as set out in law, puts a maximum per unit price on energy that reflects what it costs to buy energy on the wholesale market and supply it to our homes. It also sets a strict and modest profit rate that suppliers can make from domestic energy sales. However, unlike energy producers and extractors, most domestic suppliers are currently not making a profit.
The price cap protects against the so called ‘loyalty premium’ where customers who do not move suppliers or switch to better deals can end up paying far more than others. Ultimately, the price cap cannot be set below the true cost of buying and supplying energy to our homes and so the rising costs of energy are reflected in it.
Although Ofgem is not giving price cap projections for January because the market remains too volatile, the market for gas in Winter means that prices could get significantly worse through 2023.
Jonathan Brearley, CEO of Ofgem, said:“We know the massive impact this price cap increase will have on households across Britain and the difficult decisions consumers will now have to make. I talk to customers regularly and I know that today’s news will be very worrying for many.
“The price of energy has reached record levels driven by an aggressive economic act by the Russian state. They have slowly and deliberately turned off the gas supplies to Europe causing harm to our households, businesses and wider economy. Ofgem has no choice but to reflect these cost increases in the price cap.
“The Government support package is delivering help right now, but it’s clear the new Prime Minister will need to act further to tackle the impact of the price rises that are coming in October and next year.
“We are working with ministers, consumer groups and industry on a set of options for the incoming Prime Minister that will require urgent action. The response will need to match the scale of the crisis we have before us. With the right support in place and with regulator, government, industry and consumers working together, we can find a way through this.”
Ofgem will continue to work with government, consumers groups, charities and suppliers, in supporting any new package of help or measures to ease the crisis.
Ofgem has also today strengthened the rules around direct debits to ensure suppliers set them at the right level, meaning that customers only pay exactly what they need to. The changes will stop suppliers from building up excessive customer credit balances and using them in a risky way as working capital.
Ofgem’s clear role is to protect consumers, and it has also today:
Strengthened requirements for suppliers to have sufficient control over the key assets they use to run their businesses. Together, this and the direct debit rule changes build on existing requirements to boost supplier resilience to better protect customers from costs associated with supplier failures.
Extended the Market Stabilisation Charge (MSC), which is paid by suppliers and helps protect customers from the cost of supplier failure.
Extended the ban on acquisition only tariffs which ensures all energy tariffs are available to existing as well as new customers, ensuring all consumers can get a fair deal on their energy.
Launched a review into the mechanism and level of profit margin available under the price cap to ensure that suppliers do not earn excessive profits and receive only a fair return for the services they provide to customers.
The new price cap level will take effect from 1 October 2022, but it is possible some suppliers may begin increasing direct debits before this date to spread costs. Customers worried about when their direct debit will increase should contact their supplier. Any money taken from customers to build up a credit will only ever be spent on their energy supply and customers can ask for their credit balance to be returned at any time.
Anyone worried about paying their bill should contact their supplier in the first instance. They are obliged to discuss payment plans and direct customers to government and third sector support where available. Ofgem is tightly monitoring suppliers’ performance in this area and has told all suppliers now is the time to step up their support for customers, especially those on low incomes or in a vulnerable situation.
Ofgem continues to monitor the impact of the price cap and to work with stakeholders and government on what more can be done for those least able to pay but most in need of energy.
When the new Prime Minister announces what additional support packages will be available, Ofgem will continue to examine how best it can help those groups of people that need it the most.
Reacting to today’s announcement by Ofgem, Poverty Alliance director Peter Kelly said: “The first moral duty of government is to protect people and provide them with security. The UK Government and Ofgem are failing badly in that duty and acting without any sense of compassion and justice.
“This massive price hike is in line with predictions. Ministers knew this was coming for months but have put nothing in place to prevent a humanitarian disaster.
“We must be clear. Bills of this size will be completely and utterly unaffordable for people on low incomes, many of whom have already been struggling with cuts to social security and huge wage squeeze for years and years. They will cause stress, anxiety, illness, debt and death.
“The UK Government must act now. It is simply not right that they continue to dither – prices must be frozen and targeted support must be put in place to help those most in need.”
Chancellor of the Exchequer, Nadhim Zahawi said:“I know the energy price cap announcement this morning will cause stress and anxiety for many people, but help is coming with £400 off energy bills for all, the second instalment of a £650 payment for vulnerable households, and £300 for all pensioners.
“While Putin is driving up energy prices in revenge for our support of Ukraine’s brave struggle for freedom, I am working flat out to develop options for further support. This will mean the incoming Prime Minister can hit the ground running and deliver support to those who need it most, as soon as possible.”
He later told the public to cut back their energy consumption – this from the man who once claimed parliamentary expenses for heating his stables!
This morning, Ofgem announced that the energy price cap will rise by 80%, taking typical household bills from £1,971 a year to £3,549 a year on 1 October.
People will rightly be worried by these huge price hikes. These eye-watering increases will simply be unaffordable for households up and down the country.
We’re demanding the government increase its support package for every household to at least £1,000, with extra support for the most financially vulnerable, or risk pushing millions of households into financial distress this winter. We also expect energy suppliers to ensure their customer service centres are adequately resourced to resolve queries quickly and help those struggling to pay their bills.
THE Government needs to spend £100 billion to freeze household energy prices for a year, according to an industry expert.Derek Lickorish, chairman of retailer Utilita Energy, told GB News: “Back in the banking crisis, Gordon Brown found £500 billion pounds to stop the banks falling apart and I’m advocating that we’re looking at about £100 billion to freeze prices for one year.
“At the moment, we don’t know what Liz Truss is bringing to the party and we don’t know whether it’s going to meet the size of the gap.
“While we have a price cap , when we get to the first of January, that figure is going to have a five in front of it, and it’s going to be another couple of thousand pounds and people cannot possibly afford to pay that amount of money for their energy bill.”
Speaking to Alastair Stewart on GB News, he added: “I think the area that needs to be looked at quite closely is the market structure, in terms of the way electricity is bought and sold, and I know there are plans to look at this now with some urgency.
“But you have a situation where you’re bringing on to the network power that has been effectively subsidised by the renewables obligation, yet they are getting these huge prices in terms of generation because the market price is set by gas.
“The wind doesn’t cost any more. The sun doesn’t cost any more. But these schemes are making an awful lot of money.
“To be fair, that’s about solutions that were brought in prior to 2017, so there was a change so that renewable projects from 2017 would get the price that they agreed.”
Asked to make a final point, Mr Lickorish said: “I want the Government to tell us what’s happening and it needs to be a very, very big number that we need to know now.
John Redwood MP, who has been tipped for a post in a new administration, suggested that VAT on energy will be scrapped for businesses when a new Prime Minister is in place.
“Cancelling VAT on fuel, at least temporarily while fuel costs are elevated, is a serious runner and any new government team will want to look at that,” he told Liam Halligan on GB News.
“I certainly agree with you that there are a lot of businesses under a lot of pressure and I think that must be part of a comprehensive package to explain to industry what help might become available.
“And what can be done about the excessive fuel bills that will directly now lead to some closures, as we’ve heard recently.”
Commenting on the energy price cap rise announced today, Crispin Truman, chief executive of CPRE, the countryside charity, said: ‘This winter’s energy bills are a ticking time bomb threatening to blow apart household finances.
“Rural areas, where wages are lower and homes often cost more to heat, will be devastated if the full force of the price rises are felt by consumers. The government must step in to prevent those living in the countryside from having to choose between eating and heating this winter.
‘We’ve been here before in the pandemic – the country is entering a national crisis that requires an emergency response. Ministers must urgently put in place direct financial support to get people through the winter, while working to deliver the only viable long term solution – improving the energy efficiency of our homes.
‘In addition to stratospheric energy bills, the cost of living crisis is being driven by a lack of housing and soaring rents for millions in the private rented sector. Homelessness is rising as half a million people languish on social housing waiting lists. In the Eden district of Cumbria, homelessness rates are more than four times what they were in early 2020.
‘Twiddling with taxes won’t cut it. To ease the cost of living crisis the government needs to provide immediate monetary support. To prevent a generation of rolling winter crises, we need to get off gas and rapidly invest in home insulation and cheap renewable energy. A longer term fix must also include providing many more social and affordable homes.’
Scottish Community Development Centre and the Poverty Alliance would like to invite you to attend an online shared learning and celebratory event with community groups supported by the Knowledge is Power programme to design and carry out their own community-led action research – where the community decides on the issue to be researched, designs and carries out the research, and makes use of the results.
The session should be relevant to anyone interested in this approach, including community and voluntary organisations, funders, academics and public sector organisations.
The event will be held using Zoom on Thursday 16th June from 1.30-3.30pm.
Knowledge is Power is a programme from Scottish Community Development Centre and The Poverty Alliance to support community-led action research.
It has been jointly funded by The National Lottery Community Fund and the Scottish Government with additional contributions from the Corra Foundation and Inspiring Scotland.
The two-year programme has supported community organisations across Scotland to develop their own evidence to influence change in their communities – and to take forward actions for improvement.
As Knowledge is Power website has also been developed, featuring a toolkit for groups wanting to carry out their own research as well as examples of where groups have been supported to do this.
Participants at this informal event will hear from community groups who have carried out their own research over the past 2 years. There are some important messages to share, including the benefits community-led action research brings to individuals, groups and services as well as the challenges faced, particularly during the Covid-19 pandemic.
Scotland is a country where compassion is strong, but where child poverty is an ongoing injustice that we have to end together.
Best Start, Bright Future, the Scottish Government’s Tackling Child Poverty Delivery Plan, was published at the end of March. It’s designed to help create the change we need to drive down child poverty and reach Scotland’s interim child poverty targets in 2024.
There are a lot of commitments in the plan, and we are hosting a special morning webinar to explore how we can make sure they are implemented, and how they can best deliver practical change in our communities.
The plan includes pledges to: increase the level of the Scottish Child Payment; create a new employability offer to help parents get into work, and; mitigation of the benefit cap.
There is lot more besides, and Best Start, Bright Futures will touch on all areas of anti-poverty activity in Scotland. It is crucial for groups and organisations across the country to understand what it all means for their work.
Between 2016 and 2020, one tenth of people in Scotland were in persistent poverty after housing costs. Persistent poverty identifies individuals who live in relative poverty (have a household income of less than 60% of the UK median) for at least three years out of the last four.
Persistent poverty rates were similar for children and working-age adults (10%) and pensioners (11%). Over time, persistent poverty rates have been fairly stable for all age groups, except for children in the most recent period.
Persistent child poverty saw a relatively large drop compared to previous estimates, from 15% to 10%. This observed fall should be interpreted with caution as persistent poverty estimates do tend to fluctuate. So not all of this decrease is likely to reflect real change and will be due to a range of factors.
Some low income households will have benefitted from increased financial support during the pandemic. At the same time, reduced earnings and job losses may have resulted in a lower median income, leading to a fall in the poverty line, and a drop in the relative poverty rate.
Not everyone in poverty is in persistent poverty: More than a third of people in poverty move out of poverty each year. At the same time, a similar number of people who were not in poverty before enter poverty each year.
The persistent poverty report usually goes alongside the main poverty statistics publication Poverty and Income Inequality in Scotland. This will not be published this year due to the disrupted data collection during COVID-19 restrictions.
An analytical report will be published instead to explain the limitations of the most recent data. Users should note that the latest reliable figures are those previously published.
These figures are produced in accordance with professional standards set out in the Code of Practice for Official Statistics.
Reacting to the publication of new statistics on poverty in Scotland and across the UK, Poverty Alliance director Peter Kelly said: “In a compassionate society like ours, we believe in looking after one another and protecting each other from harm. But these new figures show that we are failing to put that compassion into practice.
“When the Chancellor raised Universal Credit by £20 a week, he lifted 400,000 children across the UK out of poverty. But when he cut that £20 lifeline, many of those children and their families will have been pulled back into poverty’s grip. It was an unjust and scandalous decision then, and its impact on people’s lives is becoming even clearer now.
“The Scottish Government’s actions to increase the Scottish Child Payment show what can be done when we make our compassion concrete and is a good example to build on. We need to make sure that the money gets to the people who need it, as soon as possible, and that wider action on transport, childcare and housing all ramp up in ambition to help us meet our child poverty targets.”
The full publications are available here:
Persistent Poverty in Scotland presents estimates of the proportion of people in Scotland who live in persistent poverty. The data come from the Understanding Society Survey, and the latest statistics cover the period from 2016 to 2020.
These poverty statistics are used by the Scottish Government and other organisations to monitor progress in tackling poverty and child poverty, and to analyse what drives poverty and what works for tackling poverty and income inequality.
Poverty and Income Inequality in Scotland – analytical report provides information on the limitations of the most recent data for 2020/21 from the Department for Work and Pensions Family Resources Survey Households Below Average Income dataset.
This report and dataset are not official statistics. Users should note that the latest reliable figures are those previously published for 2019/20.
The latest estimates are unreliable as they are based on data collected during the first year of the coronavirus pandemic and associated restrictions. These affected the data collection and as a result, it was not possible to obtain a representative sample for Scotland. UK income and poverty figures are published on the same day by DWP.
Key poverty measures:
Relative poverty: A household is in relative poverty if its income is below 60 percent of the middle household income in the UK (the poverty threshold). Relative poverty is a measure of whether the income of the poorest households are keeping pace with middle income households across the UK.
Persistent poverty identifies the number of people in relative poverty for three or more out of four years. People who live in poverty for several years are affected by it through their lifetime.
Household income is adjusted for household size.
The poverty publications present poverty figures before and after housing costs. Before housing costs figures are a basic measure of household income from earnings and benefits.
After housing costs figures subtract spending on rents, mortgage interest payments and other unavoidable housing costs from this basic income. In Scotland, poverty statistics focus mainly on poverty after housing costs.
The poverty estimates in this summary refer to relative poverty after housing costs.
Child poverty in Scotland is projected to fall to its lowest level in nearly 30 years as a result of the actions taken to date and commitments in the second Tackling Child Poverty Delivery Plan.
More than 60,000 fewer children could be living in relative poverty in 2023 compared to 2017, according to updated modelling.
Social Justice Secretary Shona Robison said a focus on long-term parental employment opportunities, strengthened social security and support to reduce household costs are at the heart of the new four year delivery plan, Best Start, Bright Futures.
In 2022-23 this work will be supported by investment of almost £113 million on top of funding already allocated to ongoing programmes.
Actions include:
Significantly increasing employment services with the aim of supporting up to 12,000 parents to enter and progress in sustainable and fair work through actions taken over the life of the Plan, with initial investment of up to £81 million in 2022-23 in employability support for parents
Increasing Scottish Child Payment from £20 to £25 when the benefit is extended to under 16s by the end of 2022. This means £1,300 of support per eligible child per year. It is five times more than originally asked for by campaigners and an investment of £671 million over the next two years
Delivering a new Parental Transition Fund to tackle the financial barriers parents face in entering the labour market, particularly over the initial period of employment, with an investment of up to £15 million each year
Taking immediate steps to mitigate the UK Government’s Benefit Cap as fully as possible within devolved powers, through Discretionary Housing Payments. This will support our priority families, in particular, who are disproportionately impacted by this policy
Ms Robison said: “I am proud that our actions of the past four years, together with those set out in this plan, are projected to deliver the lowest level of child poverty in Scotland in 30 years.
“We are taking immediate steps to put cash in the pockets of families – tackling the cost of living crisis and helping to lift thousands of children out of poverty in Scotland.
“Our package of five family benefits for low income families, including the increased Scottish Child Payment, will be worth over £10,000 by the time a family’s first child turns 6, and £9,700 for second and subsequent children.
“That is a difference of more than £8,200 for every eligible child born in Scotland in comparison to England and Wales – highlighting the unparalleled support offered by this government to children across the early years.
“We will also build on our investment in employment support for parents, through new skills and training opportunities and key worker support to help reduce household costs and drive longer term change.
“Our national mission to tackle child poverty is already giving more children the best start and a bright future. We are determined to meet our ambitious targets set for 2023-24 and 2030 and beyond, so that no children in Scotland are living in poverty. We know there is not a silver bullet and this cannot be done overnight.”
Scottish Government Minister and Scottish Green Party Co-Leader Patrick Harvie said: “This plan delivers on key commitments to tackle child poverty and inequality in the cooperation agreement between the Scottish Government and the Scottish Green Party.
“We welcome the actions being taken, particularly in mitigating the UK Government benefit cap and increasing the Scottish Child Payment which will provide major support to thousands of low income households.”
Reacting to the Scottish Government’s publication of its Child Poverty Delivery Plan, Peter Kelly, director of the Poverty Alliance said: “Child poverty is unjust and unnecessary. It’s a sign of Scotland’s commitment to compassion and justice that there are stretching targets to end it.
“A clear message from Poverty Alliance members ahead of the new plan was to ‘put money in people’s pockets’. Commitments to increase the Scottish Child Payment to £25 by the end of this year and to mitigate the unjust benefit cap are therefore welcome. With one in four children in Scotland still growing up in the grip of poverty, and the rising cost of living meaning that many more families are being swept into hardship every day, this new plan needed to set out how we can do more to protect people from harm.
“On the back of the Chancellor’s failure of a Spring Statement yesterday, we needed to see real commitments that will make a positive impact on the lives of people on low incomes. Alongside the mitigation of the benefit cap, the expansion of employability support that provides tailored support to families can help to make that impact.
“However, there is significant scope to go much further to ensure that cash makes it to those who most need it. There is clear evidence that increasing the Scottish Child Payment to £40 would have an even greater impact in unlocking families from poverty and take us closer to the target of eradicating child poverty by 2030.
“The rising tide of poverty sweeping across the country demands that the actions contained in this Plan are not the peak of our ambitions, but merely a start. Our efforts cannot and must not cease.”
‘A failure of courage, a failure of compassion and a failure of justice‘ – Peter Kelly, The Poverty Alliance
Chancellor announces Spring Statement tax cut for 2.4 million Scottish workers through rise in National Insurance thresholds – saving the typical employee over £330 a year.
Unveiling plans to give families further help with the cost of living, Rishi Sunak also slashes fuel duty on petrol and diesel by 5p per litre for the next 12 months.
Spring Statement also sets out measures to help businesses boost investment, innovation, and growth – including a £1,000 increase to Employment Allowance to benefit around half a million SMEs across the UK
The UK Government is providing an additional £45 million to the Scottish Government next year as a result of measures announced by the Chancellor today.
The Chancellor delivered a Spring Statement today that ‘puts billions of pounds back into the pockets of hard-working people in Scotland’– unveiling a series of tax cuts to ease the cost of living.
Rishi Sunak announced that National Insurance starting thresholds will rise to £12,570 from July, meaning hard-working people across the UK will keep more of what they earn before they start paying personal taxes.
The cut, worth over £6 billion, will benefit 2.4 million working people in Scotland with a typical employee saving over £330 a year, whilst the typical self-employed person will save over £250. This means the UK now has some of the most generous tax thresholds in the world.
Mr Sunak also announced that fuel duty for petrol and diesel will be cut by 5p per litre from 6pm tonight (23 March) to help drivers across the UK with rising costs. Worth £2.4 billion, this is the biggest cut ever on all fuel duty rates and means a one-car family will now save on average £100.
As a result of a cut to the basic rate of income tax for savings income, taxpayers in Scotland will see benefits worth £3 million. As other income tax rates are devolved in Scotland, the Scottish Government’s funding is automatically increased as a result of this tax cut as set out in the agreed Fiscal Framework. This is initially worth £350 million in 2024-25.
The Chancellor also set out a series of measures to help businesses boost investment, innovation, and growth – including a £1,000 increase to Employment Allowance to benefit around half a million businesses.
As a result of measures in this Spring Statement the UK Government is providing the Scottish Government with an additional £45 million through the Barnett formula next year.
Chancellor Rishi Sunak said:“We’re slashing taxes for millions of hard-working people in Scotland, getting pounds in people’s pockets and helping pay cheques to stretch further – from July more than 2.4 million in Scotland will get a tax cut with the typical employee keeping £330 more each year.
“By cutting fuel duty, we’re making it cheaper for people in Scotland every time they go to the pump, which together with the freeze means people save £100 per car on average a year.
“We’re boosting small business growth by increasing the Employment Allowance – a tax cut worth up to £1,000 for thousands of businesses.”
To grow the world’s very best talent in AI, the UK Government will partner with industry and academia to create 1,000 new AI PhDs. The Government will invest £117m to create PHDs across the UK at Centres for Doctoral Training, building on the existing three sites in Scotland. This will train a new generation of AI researchers who will develop and use AI in areas such as healthcare, climate change and creating new commercial opportunities.
Delivering the statement, the Chancellor made clear that our sanctions against Russia will not be cost-free for people at home, and that Putin’s invasion presents a risk to our economic recovery – as it does to countries all around the world.
However, announcing the further measures to help people deal with rising costs, he said the extra support could only be provided because of the UK’s strong economy and the tough but responsible decisions taken to rebuild our fiscal resilience.
The immediate financial support for people and businesses comes as part of a wider tax plan announced by the Chancellor that will create better conditions for growth and will share proceeds from growth more fairly – ensuring people can keep more of what they earn.
Mr Sunak also announced that the Scottish Government will receive £41 million more funding as there will be an extra £500 million for the Household Support Fund, which doubles it’s total amount to £1 billion to support the most vulnerable families with their essentials over the coming months.
The Chancellor also reduced the VAT on energy saving materials such as solar panels, heating pumps and roof insulation from 5% to zero, helping families become more energy-efficient.
This cost of living support comes on top of the measures that the Chancellor has already announced over the recent months to support families. This includes an over £9 billion energy bill rebate package, worth up to £350 each for around 28 million households, an increase to the National Living Wage, worth £1,000 for full time workers, and a cut to the Universal Credit taper, worth £1,000 for 2 million families.
The Spring Statement also confirms that:
A new Efficiency and Value for Money Committee will be set up to cut £5.5 billion worth of cross-Whitehall waste – with savings to be used to fund public services.
£50 million new funding to create a Public Sector Fraud Authority to hold departments to account for their counter-fraud performance and to help them identify, seize and recover fraudsters money.
Local residents across the UK will benefit from a fresh set of infrastructure projects as we open the second round of the £4.8 billion Levelling Up Fund. It will continue to focus on regeneration, transport and cultural investments.
Chancellor’s statement ‘a failure of courage and compassion’, says Poverty Alliance
Reacting to today’s Spring Statement, Peter Kelly, director of the Poverty Alliance, said: “Government should be about compassion and justice, and making sure people are able to live as full a life as they can.
“The Chancellor said his Spring Statement today was all about security. Yet his plans show a failure to comprehend the situations being faced by households across the country, leaving them with insecure and falling incomes in the face of rising costs.
“Amid a rising tide of poverty, the Chancellor could have thrown a lifeline by increasing benefits in line with inflation and by scrapping the unjust benefit cap. Instead he has provided additional funding of only £500m to the Household Support Fund which, although welcome, will quickly be consumed by the rising cost of living for families on the lowest incomes.
“The increase in the National Insurance threshold has also been presented as a support to people living on low incomes. In reality two thirds of this effective tax cut will go to middle and higher income households.
“By ignoring the tidal wave of rising living costs that is pulling so many people into poverty, the Chancellor has made clear his priorities. His tax cutting agenda will generate positive headlines, but could see another 400,000 people across the UK swept into poverty.
“Ultimately, the Chancellor’s statement is a failure of courage, a failure of compassion, and a failure of justice.”
The UK Government has not delivered the support and help that families and businesses need today, according to Finance Secretary Kate Forbes.
Responding to the Spring Statement, Ms Forbes said the Chancellor failed to help thousands of worried households facing poverty as a result of soaring energy bills and a cost of living crisis.
In 2018/19, the Scottish Government introduced a more progressive approach to tax, including a 19% starter rate band below the basic rate, ensuring those who can afford to pay a little more do so.
Ms Forbes said: “The Spring Statement has failed to address the biggest challenges facing households today. With soaring energy bills and a cost of living crisis, the Chancellor has not used his Spring Statement sufficiently to provide lifeline support that could prevent households facing fuel poverty.
“The Scottish Government is providing a further £10 million to continue our Fuel Insecurity Fund into 2022-23, which supports people struggling with their energy bills. Most powers relating to the energy markets remain reserved and Scottish Ministers have repeatedly called for the UK Government to urgently take further action to support households – including a reduction in VAT on household energy bills and support for those on low incomes.
“We are doing all we can to tackle the cost of living crisis – including doubling the Scottish Child Payment from £10 per week per eligible child to £20 next month. The UK Government should have followed our lead and matched the 6% uprate on social security benefits which the Scottish Government is adding to eight of the benefits we deliver. The Chancellor failed to match that commitment which could have provided lifeline support to thousands of households.
“On taxation, we have already acted to introduce a 19% starter rate of income tax below the basic rate, in line with our commitment to progressive taxation, which makes Scotland the fairest taxed part of the UK. We will continue to take that approach when we set taxation policy in future budgets.”
In the midst of the biggest wages and bills crisis in living memory, Rishi Sunak’s Spring Statement has failed families who need help NOW, says the TUC.
He didn’t stand up for families. He didn’t take the opportunity to stand up to the bosses who’ve sacked hundreds of workers at P&O. And he didn’t set out a plan to get wages rising – leaving the average workers facing a wage cut of over £500 this year.
Fund efforts towards a peaceful solution to the conflict in Ukraine
Take additional measures to support families in the UK with rising energy prices
Deliver the long-term changes needed for a high-wage, high skill, high productivity economy
Below we set out how the spring statement matched up to our tests and assess what it means for working people.
The Chancellor didn’t deliver an immediate boost to pay
Workers’ pay prospects from the statement don’t look good. The OBR forecasts real weekly wages to fall by £11p/w (2.0 per cent) in 2022, and fall again in 2023. This will put wages back below their 2008 levels (after a brief recovery in 2021), where they’ll stay until 2025. And even this contains some optimistic wage forecasts, with the OBR forecasting pay before inflation to rise by as much as 5.9 per in Q3 2022.
The OBR forecasts that the 2022-23 financial year will see the biggest fall in living standards since records began in 1956-57, explaining that the “failure of nominal earnings growth to keep pace with rising inflation” is a “key factor” in this.
It adds that the policy measures announced since October only “offset a third of the overall fall in living standards that would otherwise have occurred in the coming 12 months”.
But there was no action to tackle falling pay in the Chancellor’s statement: nothing on raising the minimum wage, or funding public sector pay rises, and no recognition that collective bargaining (and union presence) is the most sustainable way to get wages rising.
Measures to support families in the UK with rising energy prices and the cost of living were totally inadequate
The spring statement offers little good news for struggling families, especially those in receipt of benefits.
Benefits uprating
Worst of all there was no increase in the basic rate of benefits. As it stands, the standard allowance for Universal Credit and legacy benefits is set to rise by 3.1 per cent in April 2022. But this is far below the latest inflation figure (CPI is 6.2% in Feb 2022 and RPI is 8.2%), with inflation forecast to rise higher in the coming months.
This will leave those on benefits facing a real terms cut at a time when energy bills are rising by 54 per cent. The families who need the most help have been left totally out in the cold by the Chancellor today.
The decision not to cut benefits in real terms will particularly impact those who are unable to work. This reflects a wider ignorance of the equalities impact of the cost of living crisis.
We also didn’t see a reversal of the decision to suspend the state pension triple lock. The decision to abandon the pensions triple lock will cost pensioners almost £500 a year. Pensioners are particularly vulnerable to price hikes as they spend a higher percentage of their income on food and fuel.
Targeted support
The big new announcement for targeted support for low-income households was £500 million in additional funding for the Household Support Fund – a temporary discretionary fund run by local authorities. This scheme was set to end this month, and the initial funding was £500 million.
This extra money is worth less than £10 each to the six million families claiming Universal Credit – in the unlikely event they hear about it and are able to jump through the hoops needed to claim it. And contrast this £500 million to the £10 billion cut to benefit spending in 2022-23 as a result of not uprating benefits in line with inflation.
Income tax and national insurance threshold
Changes to tax cuts won’t help the families who need it most now. Raising the National Insurance threshold mostly benefits middle earners and, compared to increasing benefits payments, does little to help those with low income. This can be seen in the chart below, from the Resolution Foundation.
And promises of income tax cuts tomorrow do nothing for families facing cuts to their living standards now.
And the Chancellor has missed another opportunity to raise sick pay and make it available to all. Living with Covid requires decent sick pay for all, yet we’re still waiting for government to take action on this.
VAT-free insulation and solar panels
Alongside this was the removal of the 5% Value Added Tax currently applied to building materials, like home insulation and solar panels. But this only benefits families who own a home and can afford to renovate it anyway.
The Chancellor should’ve taken the opportunity to invest in home retrofits at scale. Improving the average UK home’s energy efficiency to band C would reduce the country’s gas demand by 15% and cut hundreds of pounds off fuel poor homes’ energy bills. A massive social homes retrofits programme, delivered by local authorities, could also create over a quarter million good jobs over two years. But here again the Chancellor failed to act.
Transport
The 5p cut on fuel duty does next to nothing to support those at the sharp end of the wages and bills crisis. Analysis by NEF estimates that a third of this tax cut will go directly to the richest 20% of households, while the poorest 20% will on average only receive £5 per month. To make transport truly affordable for everyone, Government should be expanding bus and rail services in the public sector.
The Chancellor didn’t talk about the long-term changes needed for a high-wage, high skill, high productivity economy
We heard nothing on reforms to corporate governance, industrial strategy or expanding the public sector workforce to deliver the decent public services we need to level up.
The Chancellor did announce a review of the apprenticeship levy. We believe that any changes to the levy should focus on significantly increasing the number of high-quality apprenticeships and widening access to groups facing long-standing barriers. A review must not be an exercise in allowing employers to duck their responsibilities on apprenticeships.
And much more than this is urgently needed to tackle the shortfall in training, including increased government skills funding and new workplace training rights to expand opportunities for everyone to upskill and retrain.
The Chancellor didn’t stand up to the scandalous behaviour by bosses P&O
The Chancellor talked about security but did nothing to take on the bosses who take every measure to undermine their workers’ job security. He could’ve made it clear that no employer who treats workers with the contempt shown by P&O Ferries would receive a penny of public money until they reinstate their workforce, including by taking freeports contracts off DP World, the parent company of P&O.
Yet once again the Chancellor failed to mention the issues that matter to working people.
The government’s response to those fleeing conflict and war is inadequate
The Spring statement document outlines the £400m in humanitarian support the government has given to Ukraine, and says it has committed “to provide local authorities with £10,500 per person for support services, and between £3,000 and £8,755 per pupil for education services depending on phase of education, as well as £350 per month for sponsors for up to 12 months”.
But it’s clear that the government’s support for the people fleeing war and conflict is worse than inadequate. The Ukraine for Homes scheme is no substitute for a properly funded system that provides universal refugee protection. And yesterday, the Government’s nationality and borders bill, passed a vital stage in the House of Commons, meaning that those fleeing conflict may find themselves treated as criminals and deported, instead of finding sanctuary.
The Chancellor let families down today.
Families are facing soaring bills at a time when their incomes have been squeezed by years of wage cuts and attacks on the social security system. The wages and bills crisis is a consequence of decisions taken by successive governments. Today the Chancellor chose to make the pain last for longer.
THERE WAS SOME PRAISE FOR SUNAK’S MINI-BUDGET, HOWEVER:
Simon Roberts, Chief Executive Officer, Sainsbury’s said:“We know our customers and colleagues are concerned about increases to the cost of living and at Sainsbury’s we are doing everything we can to support them.
“We really welcome today’s changes to fuel duty and national insurance. We are passing a 6 pence per litre cut in fuel across our forecourts from 6pm tonight as we know fuel costs are one of the biggest pressures everyone is facing right now.
“We were pleased to welcome the Chancellor to one of our stores today to discuss what we are doing to offer customers great value and to invest over £100 million in increasing pay for our colleagues with a new hourly rate of £10 per hour nationally and £11.05 in inner London.”
Michelle Ovens CBE, Founder, Small Business Saturday said:“Moves in today’s Spring Statement to increase the employment allowance, reduce fuel duty and raise the National Insurance threshold are welcome, and will go some way to help businesses deal with rising costs.
“In particular, It is good to see the immediacy of this rise in employment allowance.”
Martin McTague, Chair, Federation of Small Businesses, said:“We are very pleased to see the Chancellor adopting our top ask for this Spring Statement: uprating the Employment Allowance to help small employers with national insurance costs.
“We originally put forward the Employment Allowance as a targeted measure to help small firms, and it has now been expanded three times since its creation.
“Together with a cut to fuel duty, these measures will provide crucial breathing space for our embattled small employers.
“This Spring Statement marks a good starting point, with welcome measures on business rates, net zero and energy investment taking effect next month.
“With steep inflation, energy bills increasing fast, without the same support in place as enjoyed by consumers, and hiring pressures landing hard on small firms, more of the right stuff will be needed in the autumn given this challenging backdrop.
“We’ve seen a VAT cut on net zero investments for households today, which is good for small firms involved in their installation.
“However, a high street shop or local bar cannot access the same support that consumers do when dealing with the same energy supplier, and they should have access to the same assistance to reduce energy use and support the move to net zero.
“We look forward to working with the Chancellor on his new tax plan. Achieving the new culture of enterprise vision he rightly aspires to, alongside levelling up aspirations, will mean putting community small firms and sole traders front and centre of reforms.
“That means taking more of them out of the business rates system, protecting SME R&D investment incentives and delivering on commitments to end an endemic late payment culture that destroys thousands of firms a year.”
Alex Towers, Director of Policy and Public Affairs, BT Group said:“We welcome the Chancellor’s focus on tax reforms for business investment, given how central this is to UK infrastructure and growth.
“This is particularly important for BT Group as we make once in a generation investments to build the UK’s full fibre broadband and 5G networks. The existing super-deduction has already helped us to significantly increase and accelerate that investment.
“We agree that longer-term incentives are now needed, to support this country’s growth and competitiveness, and we will be keen to contribute evidence to aid the Government’s decision-making.”
Dr Clive Hickman OBE, Chief Executive, the Manufacturing Technology Centre said: “We welcome the Spring Statement, which outlines concrete steps to ensure that the manufacturing sector remains competitive, sustainable, and resilient.
“The Government’s commitment to cut tax rates on business investment is important if the UK is to boost manufacturing productivity and create high-quality jobs. In addition, the reform to R&D tax credits is a very positive step that will enable the scheme to be more effective, better value for money, and more generous.
“These measures will be crucial to spur innovation and encourage investment across the country.”
Julian David, Chief Executive, TechUK said: “Rightly the majority of the Spring Statement focused on addressing the cost of living concerns resulting from the war in Ukraine and rising inflation. Along with this vital action, the Chancellor also outlined a welcome package of consultations and policy programmes aimed at boosting businesses investment.
“In our recent Digital Economy Monitor Survey UK tech companies said increasing support to invest in R&D would be their top ask of Government, with 76% saying R&D is important to their business operations in the UK.
“The proposals unveiled today to further expand R&D tax credits and consult on ways to maintain the tax deduction for capital expenditure have the potential to unlock more investment into UK innovation.
“However, to get this right the Government must ensure that the software and intangible assets that power modern business investment are kept in scope. Otherwise, the Government risks missing an opportunity to unleash the potential of tech led growth.”
Dom Hallas, Executive Director, COADEC said:“Better R&D tax credits would mean more innovation from startups and innovative companies.
“We’re delighted the Chancellor recommitted to expanding it to cover cloud and data costs – and look forward to discussing the many ways to improve the credit further.”
Irene Graham OBE, Chief Executive, ScaleUp Institute said: “In the face of increasing pressures of inflation and wider international uncertainties, it is very good to see the Spring Statement continues to recognise the importance of business growth and innovation.
“It reaffirms policies targeted towards R&D, people and skills, investment, and innovation including the new Innovation Challenge across central government departments. We will continue to work closely with the Government on the evolution and development of these policies which are so vital to our scaleup economy.”
Michael Moore, BVCA Director General, said:“Increased business investment is key to the future of the UK economy and we welcome the measures announced by the Chancellor today which support this objective.
“Private capital’s focus on sectors like AI, robotics and fintech has helped the UK to become a world leader in these areas – further reform of R&D tax credits will help businesses to drive further innovation and strengthen the UK’s position in this new economy.”
Fuel Duty
Edmund King, President, the AA said: “The AA welcomes the cut in fuel duty. However, we are concerned that the benefit will be lost unless retailers pass it on and reflect a fair price at the pumps. Average pump prices yesterday hit new records- despite the fall in wholesale costs.
“The Chancellor has ridden to the rescue of UK families and businesses who use their vehicles, not for pleasure, but to function in their daily lives. Since the start of the year, the 20p-a-litre surge in pump prices has been the shock that rocked the finances of families, and particularly young drivers, pensioners and lower-income workers who need to commute each day.
“AA research showed that even in November, when petrol pump prices set new records at around 148p a litre, 43% of drivers were cutting back on car use, other spending to compensate or both. That rose to 59% among young drivers and 53% among the lower-paid. Petrol started this week averaging 167p a litre.
“On top of the duty cut, there has been a substantial reduction in wholesale road fuel costs feeding through to the forecourts since 9 March. That needs to drive lower pump prices also. The road fuel trade shouldn’t leave the Treasury to do the heavy lifting when cutting motoring costs.”
Elizabeth de Jong, Director of Policy, Logistics UK said:“With average fuel prices reaching the highest level on record and rising inflation, there has been an unstainable burden on logistics businesses which operate on very narrow margins of around 1%; the Chancellor’s decision today will help to ensure operators can continue to afford supplying the nation with all the goods it needs, including food, medicine and other essential items.
“Fuel is the single biggest expense incurred by logistics operators, accounting for a third of the annual operating cost of an HGV. The cut in fuel duty of 5ppl will result in an average saving of £2,356 per year per 44-tonne truck; this move will help to strengthen the UK’s supply chain during a time of ongoing financial and operational challenges.”
Zero rating VAT in energy efficiency measures
David Cowdrey, Director of External Affairs, MCS said:“The Chancellor has used the Spring Statement as an opportunity to kick-start the home heating revolution by zero rating VAT on home energy efficiency and renewable technologies for five years.
“This announcement allows people to insulate their homes and save on our fuel bills, making houses cheaper to run, especially when gas prices are at a record high.
“The government’s bold move to zero rate VAT can help the UK meet its net zero targets by using proven, off the shelf, zero carbon domestic energy solutions, such as solar and heat pumps, which are ready to be upscaled now.“
Professor Robert Gross, Director, U.K. Energy Research Centre, Professor of Energy Policy, Imperial College said:“The VAT cut on energy efficiency products is a great first step in helping households adopt simple measures to help cut fuel bills for the coming winter.
“Better insulated houses need less energy to keep warm and this is good for our bills, energy security and the environment.”
Amy MacConnachie, Director of External Affairs, Association for Renewable Energy and Clean Technology (REA), said:“The REA warmly welcomes today’s announcement to remove VAT on domestic renewables for five years. We have long campaigned for this change because we know these installations will help protect people from volatile gas prices and reduce their energy bills, while also supporting the transition to Net Zero and providing a catalyst for new jobs and investment across the country.
“The move to bring forward business rate exemptions for green technologies from April 2022, including solar panels and heat pumps, will help to further drive down costs and support the decarbonisation of buildings.
“We now want to see the Government clarify and go further on the range of technologies included as Energy Saving Materials, particularly energy storage, but this is a positive package of measures for our sector.
“We stand ready to deliver an energy future which is independent, secure, and stable.”
UP TO £660 PER YEAR COULD BE SLASHED FROM HOUSEHOLD INCOME
In a letter to the chancellor last week, the Bank of England stated that it expected inflation to be “around 8 per cent” this spring. With Universal Credit set to rise by just 3.1 per cent in April, families with children on universal credit now face a real-terms cut of around £660 per year, on average.
This is an increase on Child Poverty Action Group’s original analysis which showed a cut of £570, when inflation was expected to be 7.25 per cent.
The £20 cut to universal credit last October plunged out-of-work benefits to their lowest level in 30 years. Latest analysis shows that the picture for families is going from bad to worse.
Without government action, families will be pulled deeper into poverty. Increasing benefits by anything less than 8 per cent risks pushing those with already stretched budgets past breaking point.
Anti-poverty charities wrote to the Chancellor last weekcalling for a minimum 7% benefits rise:
Prices are rising at the fastest rate in 30 years, and energy bills alone are going to rise by 54% in April. We are all feeling the pinch but the soaring costs of essentials will hurt low-income families, whose budgets are already at breaking point, most.
There has long been a profound mismatch between what those with a low income have, and what they need to get by. Policies such as the benefit cap, the benefit freeze and deductions have left many struggling.
And although benefits will increase by 3.1% in April, inflation is projected to be 7.25% by then. This means a real-terms income cut just six months after the £20 per week cut to universal credit.
Child Poverty Action Group’s analysis shows families’ universal credit will fall in value by £570 per year, on average. The Joseph Rowntree Foundation has calculated that 400,000 people could be pulled into poverty by this real-terms cut to benefits.
The government must respond to the scale of the challenge. Prices are rising across the board. Families with children in poverty will face £35 per month in extra energy costs through spring and summer, even after the government’s council tax rebate scheme is factored in. These families also face £26 per month in additional food costs. The pressure isn’t going to ease: energy costs will rise again in October.
A second cut to benefits in six months is unthinkable. The government should increase benefits by at least 7% in April to match inflation, and ensure support for housing costs increases in line with rents. All those struggling, including families affected by the benefit cap, must feel the impact.
Much more is needed for levels of support to reflect what people need to get by, but we urge the government to use the spring statement on 23 March to stop this large gap widening even further. The people we support and represent are struggling, and budgets can’t stretch anymore.
Alison Garnham, Chief Executive, Child Poverty Action Group
Emma Revie, Chief Executive, The Trussell Trust
Graeme Cooke, Director of Evidence and Policy, Joseph Rowntree Foundation
Morgan Wild, Head of Policy, Citizens Advice
Dan Paskins, Director of UK Impact, Save the Children UK
Imran Hussain, Director of Policy and Campaigns, Action for Children
Thomas Lawson, Chief Executive, Turn2us
Sophie Corlett, Director of External Relations, Mind
Dr Dhananjayan Sriskandarajah, Chief Executive, Oxfam GB
Caroline Abrahams, Charity Director, Age UK
Eve Byrne, Director of Advocacy, Macmillan Cancer Support
Kamran Mallick, CEO, Disability Rights UK
Katherine Hill, Strategic Project Manager, 4in10 London’s Child Poverty Network
Karen Sweeney, Director of the Women’s Support Network, on behalf of the Women’s Regional Consortium, Northern Ireland
Satwat Rehman, CEO, One Parent Families Scotland
Mark Winstanley, Chief Executive, Rethink Mental Illness
James Taylor, Executive Director of Strategy, Impact and Social Change, Scope
Irene Audain MBE, Chief Executive Scottish, Out of School Care Network
Steve Douglas CBE, CEO, St Mungo’s
Richard Lane, Director of External Affairs, StepChange Debt Charity
Robert Palmer, Executive Director, Tax Justice
Claire Burns, Director, The Centre for Excellence for Children’s Care and Protection (CELCIS)
The Disability Benefits Consortium
Dr. Nick Owen MBE, CEO, The Mighty Creatives
Peter Kelly, Director, The Poverty Alliance
Elaine Downie, Co-ordinator, The Poverty Truth Community
Tim Morfin, Founder and Chief Executive, Transforming Lives for Good (TLG)
UCL Institute of Health Equity
Dr Mary-Ann Stephenson, Director, Women’s Budget Group
Natasha Finlayson OBE, Chief Executive, Working Chance
Claire Reindorp, CEO, Young Women’s Trust
Businesses in Scotland are also calling for the Chancellor to announce new measures to help with rising costs ahead of his Spring Statement tomorrow, according to a recent survey from Bank of Scotland.
As inflation hits the highest levels seen since 1992, over half (55%) of Scottish businesses said that direct help with energy bills and rising costs tops their wish list for the Chancellor. This was followed closely by calls for a reduction in VAT, cited by two-fifths (40%), while almost a quarter of firms (23%) want increased funding to help create new jobs and develop skills.
Rising prices remain a key challenge for business. Almost half (46%) of respondents said they are concerned about having to increase the costs of goods and services and over one in ten (14%) stated that inflation is reducing profitability. Almost one in ten (9%) said rising prices had caused them to worry about having to make staff redundant and a further one in ten (9%) were concerned about not being able to pay their bills.
To help specifically with rising prices Scottish businesses are asking the Chancellor for a VAT reduction (46%), while a third (35%) have called for grants to cover rising energy costs. A further quarter (23%) called for grants to support investment in energy saving measures.
The data comes as businesses face continuing supply chain challenges, which are reducing the availability of stock (40%), causing hikes in freight costs (39%) and disruption through Rules of Origin and VAT requirements from EU suppliers (33%).
Fraser Sime, regional director for Scotland at Bank of Scotland Commercial Banking, said:“Rising prices are causing multiple challenges for businesses across Scotland and the pressure from inflation shows no sign of abating in the near-term.
“As we wait for the Chancellor’s Spring Statement, we’ll continue to remain by the side of business in Scotland and support the country’s ongoing economic recovery from the pandemic.”
Responding to the ONS public sector finances statistics for FebruaryChancellor of the Exchequer, Rishi Sunak said:“The ongoing uncertainty caused by global shocks means it’s more important than ever to take a responsible approach to the public finances.
“With inflation and interest rates still on the rise, it’s crucial that we don’t allow debt to spiral and burden future generations with further debt.”
“Look at our record, we have supported people – and our fiscal rules mean we have helped households while also investing in the economy for the longer term.”
All will be revealed when the Chancellor delivers his Spring Statement (Budget) at Westminster tomorrow.
MSPs have today (Wednesday 26th January) launched a call for evidence on the impact of poverty-related stigma, after being told by experts that negative and discriminatory attitudes towards people living in poverty are continuing to blight the lives of people across Scotland.
The Scottish Parliament’s Cross-Party Group on Poverty, which brings together MSPs from all parties with organisations working to tackle poverty in Scotland, have issued the call as part of their new inquiry into the causes, impacts of and solutions to poverty-related stigma in Scotland.
At an evidence session held yesterday (Tuesday 25th January) as part of the inquiry, MSPs heard evidence from Professor Imogen Tyler (Lancaster University), Professor Tracy Shildrick (Newcastle University) and Dr Greig Inglis (University of the West of Scotland).
The three academics, all of whom specialise in the links between stigma and poverty, told the inquiry that:
Stigma is created by a combination of factors, including media depictions of poverty and the creation of media and political narratives that portrays people on low incomes as ‘undeserving’ of support
Negative experiences of public services, for example experiences of judgemental attitudes from staff, can entrench feelings of stigma and shame
Stigma is directly linked to poorer mental health and lower levels of wellbeing
Key to tackling stigma is to involve people with experience of poverty in the design of services, particularly the social security system.
Now, MSPs have issued a call for written evidence to be submitted to the inquiry. They’re asking for people and organisations from across the country to feed in their experiences and perspectives of poverty-related stigma, to help inform and shape their final report, which is due to be published in May.
As well as the call for written evidence, the group will also be holding further evidence sessions with people working in the media, as well as with people who have experience of poverty.
Peter Kelly, Director of the Poverty Alliance, said: “Too many people living on low incomes across Scotland face challenges and barriers because of the stigma associated with poverty.
“This can impact on the kind of support people are able to access, the treatment by public services, the media and the wider public, and most importantly on individual mental health and wellbeing.
“The Cross-Party Group on Poverty’s new inquiry offers the opportunity to explore some of the drivers of poverty-related stigma as well as, importantly, what the solutions are.
“Critical to the success of the inquiry will be the involvement of people with experience of poverty, who will help shape the inquiry’s findings and key recommendations.”
Pam Duncan Glancy MSP, Deputy Convenor of the CPG on Poverty, said: “Stigma is not only unfair and causes real pain for people, it stops people accessing the essential support they need. That traps people in poverty.
“People in Scotland living in poverty need support and action, not blame and suspicion. They have seen far too little support for far too long.
“If we’re to reduce poverty in Scotland, we have to end the stigma of it, and take down all barriers to getting support.
“I am pleased the Cross Party Group on Poverty have created an opportunity to dig deeper on this. This will give us a clearer idea of how to break down barriers – and empower people to speak up and reach out when they require support.”
For full details on the call for evidence, including how to submit your views, click here.
