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

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

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

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

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

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

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

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

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

Growth

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

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

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

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

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

Defence

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

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

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

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

Reform

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

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

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

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

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

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

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

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

Today, the Chancellor has gone further:

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

Looking Forward

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

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

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

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

RESPONSES:

UK spending cuts ‘risk harm to most vulnerable’

Finance Secretary responds to Spring Statement

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

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

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

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

TRUSSELL:

Trussell responds to ‘catastrophic’ Spring Statement

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

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

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

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

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

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

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

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

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

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

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

JOSEPH ROWNTREE FOUNDATION

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

“Their assessment also found:

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

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

CHILD POVERTY ACTION GROUP:

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

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

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

CARERS UK:

STUC:

INDEPENDENT ALLIANCE MPs:

KIM JOHNSON MP:

OCTOPUS ENERGY:

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

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

FRONT PAGES:

MOMENTUM:

NEW ECONOMICS FOUNDATION:

JEREMY CORBYN:

PRIME MINISTER KEIR STARMER:

THE NATIONAL:

TRADES UNION CONGRESS (TUC):

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

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

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

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

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

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

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

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

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

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

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

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

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

UNITE THE UNION:

UK FINANCE:

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

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

MENTAL HEALTH FOUNDATION:

LLOYDS BANKING GROUP:

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

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

UNITE HOSPITALITY:

DAILY MIRROR:

POVERTY ALLIANCE:

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

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

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

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

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

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

SCOTTISH HUMAN RIGHTS COMMISSION:

Deep concern about impact of UK Government’s Spring Statement

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

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

Severe economic hardship

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

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

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

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

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

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

VOLUNTEER SCOTLAND:

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

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

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

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

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

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

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

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

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

FRASER OF ALLANDER INSTITUTE:

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

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

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

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

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

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

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

Chart: How the Chancellor restored her headroom

Source: OBR

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

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

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

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

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

Chart: Headroom against the main fiscal target since 2010

Source: OBR

What do the announcements mean for the Scottish Budget?

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

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

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

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

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

Source: OBR

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

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

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

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

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

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

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

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

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

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

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

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

How does departmental spending look in historical context?

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

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

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

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

Source: OBR, FAI analysis

Five years on from the pandemic – the workers who kept us going and the fight they still face

There are moments that will stay with you for the rest of your life. For millions of people across our country, that was five years ago today, Sunday 23 March (writes TUC’s Natahn Oswin).

‘From this evening, I must give the British people a very simple instruction – you must stay at home’ – Prime Minister Boris Johnson

The essential workers who kept the country running

‘From this evening, I must give the British people a very simple instruction – you must stay at home’ – Prime Minister Boris Johnson.

But for many this simply wasn’t possible – due to their jobs being so essential to the country they were declared key workers and kept going into work, risking their lives and livelihoods to keep our society running.

They were the people we stood outside our doorsteps for every Thursday, clapping, banging pots and generally attempting to show our appreciation for what they kept on facing.

Honoring the NHS and social care heroes

It wasn’t just nurses and doctors, it was physios and cleaners in our hospitals, porters and midwives. So many NHS staff faced unimaginable scenarios and kept going, as best they could, to save as many lives as possible.

Meanwhile, social care – a workforce often underappreciated, grappling with zero hour contracts and minimum wages – battled to stem the tide and protect vulnerable residents from the virus, now labelled Covid-19.

The hidden struggles of key workers during Covid-19

Transport workers continued to make our national infrastructure run and many lost their lives ensuring NHS workers and social care staff could make it into their workplace.

Education staff tried their utmost to look after children and protect them whilst facing off against a government who simply did not care about their welfare, with Gavin Williamson and Boris Johnson rejecting calls for masks in schools because they were in “no surrender mode” towards trade unions.

Food manufacturing workers, textiles workers, retail staff, refuse collectors, fire staff, police staff, civil servants and many, many more played a vital role.

Many watched as colleagues lost their lives to the pandemic.

The emotional and mental health impact of the Pandemic

The consequences for many have been severe.

I vividly remember a friend who served in our NHS during the pandemic breaking down in tears during a remembrance service, “I hadn’t realised how little I had processed it all” she said.

For many the emotional scars of the trauma they experienced as key workers will last a lifetime, the mental health impact is hard to calculate and the continuing effects of Long Covid are devastating for millions of people.

They knowingly marched into danger, often terrified, but with heads held high to tackle the biggest crisis our country, and the world, has faced since World War II.

It is a debt we can never truly repay, but that does not mean we should not try.

Why we must improve workers’ rights and protections

A decent level of statutory sick pay from day one, banning exploitative zero hour contracts and tackling the scourge of poverty pay would ensure that a future pandemic could not thrive when people are faced with the impossible choice of going into work ill or being able to feed their families, boosting our national resilience.

The dangers of underfunding public services

The pandemic was a stark reminder of how crucial public services are, revealing the dangers of underinvestment – the UK went into the pandemic unprepared and our public services were under-resourced.

Lessons from the pandemic: the need for insourcing

Recognising the risks of outsourcing is another key lesson which this government is already getting to grips with. A fragmented social care system failed thousands of care recipients and care workers.

Insourcing public services like social care will rebuild the state and allow resources to be redirected to frontline delivery, rather than corporate profits.

Join the fight for justice: share your Covid-19 experience

Long Covid should be recognised as an industrial disease.

It’s for all these reasons above the TUC are involved in the Covid-19 Public Inquiry, to stand up for working people and ensure their voices are heard.

But we need your help to make this happen.

We want to hear about your experiences of the pandemic to make sure the Inquiry knows the challenges working people faced and hope you will fill in our survey to make sure the Inquiry hears your voice.

Biggest shake up to welfare system in a generation ‘to get Britain working’

UNIVERSAL CONDEMNATION OF LABOUR PLANS

Largest welfare reforms for a generation to help sick and disabled people who can and have the potential to work into jobs – backed by a £1 billion investment, unveiled by the Work & Pensions Secretary today

Work Capability Assessment to be scrapped and “right to try” work guarantee to be introduced in drive to tear down barriers to work
Changes will unlock work, boost employment, and tackle the broken benefits system to unlock growth as part of the government’s Plan for Change

Record £1 billion employment support measures have been announced ‘to help disabled and long-term sick people back into work’.

The new measures are designed to ensure a welfare system that is fit for purpose and available for future generations – opening up employment opportunities, boosting economic growth and tackling the spiralling benefits bill, while also ensuring those who cannot work get the support they need as part of the government’s Plan for Change.

This will end years of inaction, which has led to one in eight young people not currently in work, education or training and 2.8 million people economically inactive due to long term sickness – one of the highest rates in the G7.

The number of people receiving one of the main types of health and disability benefit, Personal Independence Payments (PIP), has also risen rapidly and is becoming unsustainable.

Since the pandemic, the number of working-age people receiving PIP has more than doubled from 15,300 to 35,100 a month. The number of young people (16-24) receiving PIP per month has also skyrocketed from 2,967 to 7,857 a month. Over the next five years, if no action is taken, the number of working age people claiming PIP is expected to increase from 2 million in 2021 to 4.3 million, costing £34.1 billion annually.

All this has driven the spiralling health and disability benefits bill, forecast to reach £70 billion a year by the end of the decade, or more than £1 billion a week. This is equivalent to more than a third of the NHS budget, and more than three times as much as is spent on policing and keeping communities safe.

Speaking in Parliament today, Liz Kendall announced a sweeping package of reforms to overhaul the system, so it better supports those who need it while tearing down barriers to work including:

Ending reassessments for disabled people who will never be able to work and people with lifelong conditions to ensure they can live with dignity and security

Scrapping the controversial Work Capability Assessment to end the dysfunctional process that drives people into dependency – delivering on the government’s manifesto commitment to reform or replace it

Providing improved employment support backed by £1 billion – one of the biggest packages of employment support for sick and disabled people ever – including new tailored support conversations for people on health and disability benefits to break down barriers and unlock work

Legislating to protect those on health and disability benefits from reassessment or losing their payments if they take a chance on work.

To ensure the welfare system is available for those with the greatest needs now and long into the future, the government has made bold decisions to improve its sustainability and protect those who need it most, including:

Reintroducing reassessments for people on incapacity benefits who have the capability to work to ensure they have the right support and aren’t indefinitely written off.
Targeting Personal Independence Payments for those with higher needs by changing the eligibility requirement to a minimum score of four on at least one of the daily living activities to receive the daily living element of the benefit, in addition to the existing eligibility criteria.
Rebalancing payment levels in Universal Credit to improve the Standard Allowance. Raising it above inflation by 2029/30, adding £775 annually in cash terms.
Consulting on delaying access to the health element of Universal Credit until someone is aged 22 and reinvesting savings into work support and training opportunities through the Youth Guarantee.

Prime Minister Keir Starmer said: “We inherited a fundamentally broken welfare system from the previous government. It does not work for the people it is supposed to support, businesses who need workers or taxpayers who foot the bill.

“This government will always protect the most severely disabled people to live with dignity. But we’re not prepared to stand back and do nothing while millions of people – especially young people – who have potential to work and live independent lives, instead become trapped out of work and abandoned by the system. It would be morally bankrupt to let their life chances waste away.

“When I talk about opportunity for all, I mean it. That’s why we are bringing forward the biggest changes to the welfare system in a generation and improving support for those who need it. Ensuring those who can work do work is not only right, but it will also improve living standards and drive growth, the number one priority in our Plan for Change.”

Work and Pensions Secretary Liz Kendall said: “Our social security system must be there for all of us when we need it, now and into the future. That means helping people who can work to do so, protecting those most in need, and delivering respect and dignity for all.

“Millions of people have been locked out of work, and we can do better for them. Disabled people and those with health conditions who can work deserve the same choices and chances as everyone else.

“That’s why we’re introducing the most far-reaching reforms in a generation, with £1 billion a year being invested in tailored support that can be adapted to meet their changing circumstances – including their changing health – while also scrapping the failed Work Capability Assessment.

“This will mean fairness for disabled people and those with long term health conditions, but also for the taxpayers who fund it as these measures bring down the benefits bill.

“At the same time, we will ensure that our welfare system protects people. There will always be some people who cannot work because of their disability or health condition. Protecting people in need is a principle we will never compromise on.”

In her statement to Parliament, the Work and Pensions Secretary outlined the clear case for change to the welfare system and set out her commitment to ensuring that disabled people and those with a health condition have the same opportunities to work as anyone else.

In particular, she highlighted that the UK has one of the highest reported rates of working-age people out of work due to ill health in Western Europe and the UK is the only major economy whose employment rate hasn’t recovered since the pandemic – exacerbated by a broken NHS with millions of people on waiting lists.

The government has already made huge progress to fix the NHS, including by hitting the manifesto commitment to deliver over two million extra elective care appointments seven months early, and bringing forward a wider programme for NHS reform through the rollout of community diagnostic centres and 10-year plan. The Health Secretary has also sent crack teams spearheaded by top clinicians into areas of high economic inactivity, and the latest data shows waiting lists in these areas have reduced at almost double the rate of the rest of the country.

The reformed system will be built on a straightforward guarantee: any disabled person or person with a long-term health condition who is claiming out of work benefits will be able to access high quality, tailored help into a job. It will also mean that those who cannot work will always get the support they need. In Scotland and Wales, we will work closely with the devolved governments as we develop this package of support.

The reforms are based on five key principles:

Protecting disabled people who can’t and won’t ever be able to work and supporting them to live with dignity by:

Income Protection: Those currently in receipt of UC health will benefit from the increased standard allowance and will not be affected by plans to reduce UC health in future.
Extra Financial Support: For people who receive the new rate of UC health in the future system, we are proposing a new premium for individuals with severe, life-long health conditions who will never be able to work. The details, eligibility criteria and rate of this premium will be set out in due course.
Ending Reassessments: Reassessments for disabled people and people with life-long conditions who will never be able to work will be scrapped.
Improving Safeguarding Practices: The government will look at how safeguarding practices for the most vulnerable can be improved and improve experiences with the system, working with stakeholders to identify areas for improvement.

Delivering better and more tailored employment support to get more people off welfare and into work. This includes:

£1 Billion employment package to deliver tailored support for disabled people and those with long-term conditions.
New Support Conversations to provide earlier opportunities for people with health conditions to discuss work goals and available help.
Investing in the Youth Guarantee by delaying access to UC health element until age 22 and reinvesting savings into work support and training for young people.

Stopping people from falling into long-term economic inactivity through early intervention and support by:

Access to Work Scheme: We will consult on improvements to help people start and stay in work with reasonable adjustments including aids, appliances and assistive technology. These would be the first substantive changes to Access to Work since its introduction in 1994
Unemployment Insurance: We will reform contributory benefits (ESA and JSA) into a single, non-means tested, time-limited benefit for those who have paid into the system to ensure people get the support they need to find a new job that makes the most of their skills, contributing to a dynamic and productive economy.

Restoring trust and fairness in the system by fixing the broken assessment process that drives people into dependency on welfare by:

Scrapping the WCA to end the labelling of people as either ‘can or can’t work’ and consulting on a new single assessment. Under the new system, any extra financial support for health conditions (including PIP, ESA or UC health) will be assessed via a new single assessment which will be based on the PIP assessment – considering on the impact of disability on daily living, not on capacity to work.
Increasing Face-to-Face Assessments for PIP and the WCA to improve the quality of assessment decision while ensuring we continue to meet the needs of those with who may require a different method of assessment.
Longer term reform of the PIP Assessment – In the long term we will set out broader reforms to the PIP assessment, and intend first to carry out a review involving experts and stakeholders to adapt and improve it.
Right to Try Guarantee: which will ensure someone trying work or on a pathway towards employment will never lead to an immediate reassessment or award review.
Restarting Mandatory Reassessments: We will reintroduce reassessments for incapacity benefits, with exceptions for those who will never work and those under special rules for end-of-life care. Reassessments have largely been switched off since 2021, leaving people stuck on benefits when they could be helped into work and to improve their quality of life.

Ensuring the system is financially sustainable to keep providing for those who need it most by:

Changing PIP Eligibility: PIP will be targeted more on those with higher needs by requiring a minimum of four points on one daily living activity, in addition to the existing eligibility criteria.. DWP will work with DHSC to ensure that existing people who claim PIP who may no longer be entitled to the benefit following an award review under new eligibility rules have their health and eligible care needs met. The government is consulting on how best to achieve this.
Rebalancing Universal Credit: by improving the Standard Allowance to provide more adequate support. The government plans to raise the Standard Allowance above inflation by 2029/30, adding £775 in cash terms annually. This aims to avoid people having to choose between employment or adequate financial support. This change addresses the current issue where the health element rate is double that of the standard allowance, creating an incentive for people to prove they are unfit to work to claim the health element and access greater financial support.

Helen Barnard, director of policy at Trussell, said: “We’re deeply concerned by the cuts announced to disability payments today.

People at food banks have told us they are terrified of how they might survive. We welcome the positive proposals from the Department for Work and Pensions to boost the basic rate to Universal Credit and invest in employment support. However, we fear these steps will be undermined by a Treasury drive to make short-term savings.

“Huge cuts risk pushing more disabled people to the doors of food banks, and will have devastating consequences for us all. The UK government was elected on manifesto pledges to end the need for emergency food parcels. This isn’t what people voted for.

“Disabled people are already three times more likely to face hunger, and three quarters of people at food banks are disabled or live with someone who is. Our social security system should be rooted in justice and compassion, able to be there for us all, especially when we need it most.

“This isn’t a done deal. With at least a year before any cuts come into force, there’s still time for the Prime Minister and Chancellor to rethink and make good on today’s promise to restore trust and fairness in the social security system.”

The TUC said: ’11 General Secretaries of our trade union affiliates have written to the government to raise “profound concerns” about today’s welfare cuts targeted at disabled people. The labour movement must stand together with campaigners, charities & carers to resist”

#disabilitybenefit

Responding to today’s statement by Liz Kendall MP, Poverty Alliance policy & campaigns manager Ruth Boyle said: “People in the UK are desperate for a government that delivers a just and compassionate country.

“They want to see an end to deepening poverty, debt, destitution, and hunger in their communities. Many will be distressed, disappointed, scared, and angry at today’s announcements.

“The plans to cut the health element of Universal Credit are wrong and unjust. Cutting vital financial support to disabled people won’t help them into paid work – but it is likely to move them towards poverty.

“Equally unjust is the idea of making it virtually impossible for under-23s to get Universal Credit health support. The Government is punishing young people who aren’t fit for work simply because of their age.

“These changes are driven by a desire for financial cost savings, rather than helping people access the support they need. Positive proposals like personalised support to help people into work and a Right-to-Try will be undermined by cuts which force people into further and deeper poverty.

"The plans to cut the health element of Universal Credit are wrong and unjust. Cutting vital financial support to disabled people won't help them into paid work – but it is likely to move them towards poverty." https://t.co/gLnkE8FNAk pic.twitter.com/CZAIn0O6kL
— The Poverty Alliance (@PovertyAlliance) March 18, 2025

“Personal Independence Payments are a vital part of the social security system, and even though we have a replacement Adult Disability Payment in Scotland, there are still many people here who are on PIP.

“These social security benefits support people’s basic freedom – whether they are in work or not. They help cover some of the extra living costs that are forced on disabled people. The Government now plans to make it harder for them to get that vital support, denying them a full place in society, and undoubtedly pushing many towards debt and destitution.

“We urge the Scottish Government to maintain its commitment to justice and compassion, and to make sure the Adult Disability Payment still supports the freedom and rights of disabled people.

“It is shameful to try to balance the books on the backs of disabled people and households that are already struggling to keep their heads above water. Instead, the Government should do the responsible thing and use their tax powers to unlock our country’s wealth for investment in a strong social foundation.

“And they can scrap their self-imposed fiscal rules with a plan to help everyone build a better life for their households, and a better future for our country.”

Commenting on the Green Paper’s plans for social security reform announced by the government today (Tuesday), TUC General Secretary Paul Nowak said: “During 14 years of Tory failure, too many people were written off. Millions of workers have been left without proper support to move into work or progress in good jobs, and too many people with disabilities or ill health have not had access to the support they need.

“But change must be done in the right way. While we welcome the decision not to freeze PIP, this package will still lead to significant cuts in entitlements for some disabled people.

“As well as ensuring that those with the most severe disabilities are protected, we urge ministers to reconsider the scale of proposed cuts in disabled people’s incomes.

“Disabled people who are unable to work must not be pushed further into hardship.”

Commenting on the Green Paper’s wider proposals, Paul added: “Action to boost access to quality employment programmes and ensure that Jobcentre work coaches can provide quality and meaningful support is welcome. As too are proposals to strengthen contributory benefits.

“This needs to be accompanied by ongoing investment in the NHS, including mental health services. Better healthcare can transform lives.

“The government’s plan to Make Work Pay is also crucial to driving up the quality of jobs in Britain and ensuring more people have access to decent work.”

Transport union, RMT has criticised Labour’s decision to cut welfare spending by up to £5bn by 2030.

Eddie Dempsey RMT general secretary said: “Welfare cuts target people who rely on support to survive, including disabled people, carers, the unemployed, and those in insecure work.

“For the past 40 years our economy has been marked by low investment, wage suppression and super-high profits.

“Our economy needs to be fundamentally restructured so we can invest in housing, infrastructure and services to create well paid jobs and provide an adequate safety net for those who fall on hard times.

“There is an enormous amount of wealth in this country and the Labour government should be using the economic levers at their disposal to capture it from the rich.

“Billions could be recouped by the treasury through levies on wealth, the closure of tax loopholes, and extracting excess corporate profits.

“RMT stands with all in our working-class communities, including the disabled and unemployed.”

OXFAM Scotland tweeted: ‘Just a reminder there’s no shortage of money in the UK, just a shortage of political will to go out & tax it.

‘While more people risk being locked into hardship/deeper poverty, the ballooning bank balances of the UK’s richest millionaires/billionaires get off virtually scot-free’

The Disability Policy Centre’s Interim Director of Research, Arun Veerappan, response to the Government’s release of the Green Paper this afternoon.

Green MSP slams Labour betrayal of disabled people and calls on MPs to fight back

Scottish Green’s co-leader and MSP for Lothian region Lorna Slater is calling on Labour MPs to fight back on the inhumane cuts that the UK government are proposing to hit their fiscal targets.

In the Westminster government’s latest controversial move, it has announced a package of changes expected to affect some of the UK’s most severely disabled people. The measures will deny benefits for thousands of people across the country.

Lorna Slater MSP for Lothian region said: “These cuts will make a cruel and dehumanising system even more brutal than it already is. They will spread pain and misery across every community.

“ This decision is immoral. You can’t cut £5 billion of support without causing real harm to disabled people.

“ None of this is inevitable. Labour could choose to bring in a wealth tax that collects a fair and justified share from the richest people to invest in the services we all rely on.

“Labour are doubling down on the Tory idea that you can work your way out of disability. They are sending a cruel and dangerous message that only people who can boost our economy are worth supporting. They promised an end to austerity, but this goes even further than anything that the Tories ever dared.”

“The fact that they are choosing to punish the people with the least tells us everything we need to know about Labour’s values. The millions of people who waited 14 long years to get rid of the Tories deserve so much better than this.”

‘Cuts to benefits announced today have clearly been motivated by a desire to make short-term savings to meet arbitrary fiscal rules, says New Economics Foundation’s Head of Social Polict Tom Pollard.

‘They’re not going to help ill and disabled people, they’re only going to create more problems.’

Former Labour Party leader and now Independent MP Jeremy Corbyn said: “This is a seminal moment: a Labour government cutting disability benefits. Not just continuing Tory levels. Cutting.

“This comes after a week of speculation, itself an act of cruelty by a government toying with people’s dignity. These cuts are disgraceful – and will cost lives.”

Scope charity commented: “These plans will be catastrophic for disabled people’s living standards. Nearly half of families living in poverty already include someone who is disabled. Now the government is choosing to penalise some of the poorest people in our society.

“We welcome the investment in tailored, non-compulsory employment support. But ripping £5 billion out of the benefits system by 2030 will completely undermine this positive step.

“Countless disabled people, charities, MPs, and experts are urging the government to think again. And we’re not backing down. The consultation is likely to receive an overwhelming response. We urge the government to listen to disabled people and think again.

“Over the coming days, we’ll analyse all the details in the government’s plans. We’ll then share more information about what these changes mean and who could be affected as soon as we can. We’ll also share ways you can have your say in the consultation.

‘This is an especially worrying time for many disabled people. If you’re concerned about these changes, you can contact our helpline for advice and support.

Call us free on 0808 800 3333, or visit our website for more ways to get in touch:

https://scope.org.uk/helpline

‘If you need to talk to someone about how you’re feeling, day or night, Samaritans are here to help. Call 116 123 for free, or visit their website https://samaritans.org “

Money and Mental Health response to government welfare green paper

Today the government has published its welfare green paper, which outlines its proposals to reform the welfare system.

In particular, the green paper sets out plans to make it harder for people to qualify for Personal Independence Payments (PIP) — a benefit which people with disabilities and long-term ill-health can claim to help cover the extra costs associated with their disability, and which is not connected to work. In addition, people aged under 22 will not be able to qualify for the health top-up element of Universal Credit.

The government has also announced £1bn additional funding for personalised employment support to help people with disabilities move into work, and that people receiving benefits will be given a “right to try” work without losing their benefits entitlement.

Commenting on the proposals, Helen Undy, Chief Executive of the Money and Mental Health Policy Institute, said: “PIP is an absolute lifeline for thousands of people with mental health problems.

“It can be the difference between being able to afford basic things like a phone to call your crisis team or help to clean your home, or living in disarray and increasing isolation. Making it harder to access will jeopardise people’s financial security and cause serious distress, which won’t set up people to go back into work and to thrive.

“These changes will mean that needing help to wash or get dressed because of your mental health wouldn’t be enough to qualify for PIP. The government says it will ensure people with ‘genuine need’ aren’t affected, but we’re really concerned that these new reforms will take us further back to the days when people with mental health problems were treated as less worthy of help than those with physical health issues.

“The new ‘right to try’ a job without losing the benefits is welcome, as is the funding for personalised employment support for people with disabilities or health conditions. But introducing these measures alongside cuts to PIP and stopping young people from getting incapacity benefits will do more harm than good.

“It is a short sighted approach that will have a devastating impact on many people’s finances and mental health, and we urge the government to rethink these plans.”

Mikey Erhardt, Policy Officer at Disability Rights UK, said: “The minister stood up today and made clear that, after months of rumours, media speculation and spin, these reforms are not about supporting Disabled people into work, but making brutal and reckless cuts of £5 billion. That is up from £3 billion just a few weeks ago.

“The rise in claims is driven by the increase in the retirement age, record NHS waiting lists, inadequate education and mental health support for young Disabled people and a complete failure to tackle the disability employment and pay gaps. Yet the government has decided to create a rhetorical smokescreen around the depth of cuts it’s going to make.

“The government intends to bar young Disabled people from receiving the Universal Credit health component until they are 22. That is alongside their promise to significantly increase assessments at scale without making the assessment process safer for those going through the system right now.

“These measures mark dangerous cuts for all Disabled people. Furthermore, altering the PIP award criteria will make it harder for those who need support to qualify.

“The minister’s assertion that 1000s more face-to-face assessments will be more accurate is laughable; we know that in-person assessment causes more stress and worry and often leads to inaccurate findings from assessors.

“Let’s be clear: there is nothing ambitious about cutting support from those who need it and that’s what today’s announcements were really about. Rising claims for personal independence payment reflect not a problem with Disabled people but rather reflect successive government’s failure to do even the bare minimum to create a more equitable society.”

Mental Health Foundation responded:

Responding to the Government’s proposed changes to welfare and work announced today, Carers Trust’s CEO, Kirsty McHugh, said: “In the midst of today’s announcements on welfare reform, we cannot lose sight of the nation’s carers. Two-thirds of carers have been forced to give up work or cut back on hours because of their caring role.

“Many would like to work if they were able to access flexible jobs and the right employment support – sadly this is rarely on offer. But for many carers, work isn’t an option – either because of the toll of their caring role or their own ill health.

“Proposals to tighten eligibility criteria for benefits will strike fear into the heart of many carers. Around half a million carers look after someone receiving Personal Independence Payments (PIP), and nearly 150,000 people rely on both PIP and Carer’s Allowance.

“Disabled people and their carers are already among the most vulnerable in our society and more likely to live in poverty. Reducing their access to a financial safety net could push them over the edge.

“Carers already prop up our ailing health and social care system and we cannot introduce welfare changes that leave carers again picking up the pieces. We therefore welcome the commitment in the Green Paper to consider the impact of these changes on carers.”

New protections for workers closer as MPs back Employment Rights Bill

A major step was taken towards resolving key issues in the labour market last night after MPs voted to approve the government’s Employment Rights Bill

Significant measures in the Bill include:

The right to guaranteed hours for zero hours workers.
Protection from unfair dismissal from day one in the job.
Sick pay for all workers, from the first day of absence
The right for unions to access workplaces to speak to workers.
The establishment of a state Fair Work Agency to bring together existing bodies to better enforce the law.

The common sense reforms take a step towards resolving key issues for many workers, such as being parked on zero hours contracts for months or years on end. Or workers being afraid to take a better job because currently they can be dismissed for no reason within the first two years.

Such steps take the UK closer to equivalent countries in the strength of its employment law.

They could also provide a £13 billion annual boost to the UK’s lacklustre economy.

After consultations with businesses, trade unions and the wider public at the end of last year, the government tabled a number of other notable changes when the Bill returned to parliament this week.

Here are some of the key ones:

Zero hours contracts

Agency workers will have to be offered guaranteed hours contracts reflecting their normal hours, based on a 12-week reference period. This closes a loophole that could have allowed employers to switch from employing zero hours workers directly to hiring them via an agency.

There is a provision that new rights to guaranteed hours, reasonable notice of a shift and payment for cancelled, moved and curtailed shifts can be changed if workers and an employer agree alternative arrangements in a collective agreement. This means arrangements can be tailored to suit particular workplaces.

Sick pay

The government has confirmed that workers will be entitled to receive minimum sick pay of 80 per cent of their normal wages or statutory sick pay, whichever is the lower. This largely affects workers who are not currently entitled to statutory sick pay. The government had modelled a rate as low as 60 per cent.

Union access

The right for a trade union to access a workplace to support workers and talk to them about joining has been extended to a digital right of access as well. This will be especially important where workers work outside an office and are better contacted by digital means such as email or intranet posts.

Unions have been given stronger rights to access workplaces when workers are seeking recognition. Employers will be barred from carrying unfair practices to undermine unions from the start of the process.

Trade union rights

Current law deliberately ties unions up in red tape, which gives employers great opportunities to challenge strike action in the courts on technicalities. This will reduce somewhat as the government reduces the amount of information unions must disclose to employers when they launch a strike ballot.

Meanwhile, notice for strike action will be cut from 14 days currently to ten days. And the mandate for taking strike action after a vote in favour doubled to 12 months.

Industrial action is a last resort for trade union members. After all, workers usually suffer a significant loss of income. But a vote for action can give real weight to union negotiations and kickstart talks when progress has stalled.

These changes mean some of the artificial barriers to action have been removed.

Work still to do

While the Employment Rights Bill will take important steps towards a fairer economy, there are further reforms required. These include:

Some workers could receive less sick pay under these changes than they currently receive. This should be remedied and a review conducted to improve the paltry headline rate of SSP.
A huge amount of detail will be set out in subsequent regulations laid by the government. It is crucial that new “initial periods of employment” during a worker’s first nine months in the job provide sufficient protection from unfair sacking, including a route to take a case to the employment tribunal. And that loopholes are not opened up stopping workers getting guaranteed hours contracts.
The Bill makes it easier for workers to gain recognition for their trade union. But leaves in place a law requiring a three-year gap between recognition attempts, benefiting union-busting employers. This gap should be significantly reduced.
The government will delay the repeal of a Tory measure that requires a 50 per cent turnout for a strike law to be valid until after it has introduced electronic balloting.
The government has pledged to reform current employment status rules that govern whether someone is self-employed, a worker with some rights, or an employee with full rights. An overhaul is needed to stop exploitative employers attempting to deny workers their protections.

The passage of the Employment Rights Bill represents another significant step forward for working people.

The recent amendments further strengthen government efforts to crack down on worker exploitation and strengthen their voice in the workplace.

TUC: Work-related ill-health is costing the UK economy over £400 million a week

New analysis shows that number of days lost due to work-related ill-health has rocketed by a third since 2010 to 34 million days
Work-related ill-health reduced economic output by £22bn in 2023
TUC says findings highlight the importance of driving up job quality in the UK and stronger rights at work ahead of Employment Rights Bill returning

Work-related ill-health is costing the UK economy over £415 million a week, according to new TUC analysis published on Monday.

The analysis of official statistics shows that the number of days lost due to health conditions – including stress, depression and anxiety – has shot up by a third since 2010.

In 2023 to 2024 (the latest year for which figures are available) 34 million working days were lost to work-related ill-health – compared to 22 million in 2010.

The TUC says the findings – which are published as the Employment Rights Bill returns to parliament – show the “urgent importance” of improving the quality of work in the UK.

In 2022 to 2023 (the latest year for which figures are available) work-related ill-health is estimated to have reduced economic output by £21.6bn.

Boom in insecure work

The TUC says the rise in days lost to work-related ill health has coincided with a huge boom in insecure work.

The union body estimates that over a similar period (2011-2023) the number of people in precarious employment also rocketed by a third to over 4 million.

A separate report out this week from the Commission for Healthier Working Lives suggests that poor quality work can harm employee health. It states:

“Most health conditions develop outside work, but for a significant number of people, work itself is the cause. Persistent insecurity, workplace discrimination and extreme demands take a serious toll on health. In some cases, poor-quality work is even worse for health than being unemployed.”

The TUC says driving up employment standards will help improve staff well-being, health and productivity. It will also ensure that more people with disabilities or health conditions can stay in work.

This view was backed up by polling last autumn which revealed that:

Three-quarters (75 per cent) of managers think that strengthened employment rights will improve employee health, compared to just 4 per cent who disagree
Seven in 10 (74 per cent) believe that strengthening employment rights will improve workforce retention, compared to just 6 per cent who do not.

Employment Rights Bill back in parliament

The government’s Employment Rights Bill returned to parliament this week for its report stage. The Bill will deliver “common-sense reforms” which bring the UK closer to the European mainstream on workers’ rights, the union body says.

The TUC says the legislation will help to deliver better quality work in every corner of the country by cracking down on insecure work and banning exploitative zero-hours contracts.

TUC general secretary Paul Nowak said: ”Improving the quality of work in Britain is good for workers and our economy. Work related ill-health is costing us hundreds of millions each week – that’s billions of pounds down the drain every year.

”That’s why the government’s Employment Rights Bill is so important. Cracking down on exploitative practices like zero-hours contracts and giving people more security will boost workers’ health, well-being and productivity. It will also help more people stay in work.

“We need to turn the corner on Britain’s low-rights, low-pay economic model that has been tested to destruction over the last 14 years. Giving working people more control and predictability over their lives will help create a happier, healthier and more robust workforce.”

Action for healthier working lives Download

TUC: ‘Huge support’ for Government’s plan to make work pay

The landmark Employment Rights Bill is ‘vote winner’

Voters in every constituency overwhelmingly support key measures to strengthen workers’ rights, according to new polling published by the TUC and Hope Not Hate today.

In recent months, there has been criticism of the Bill from Conservative and Reform politicians and parts of the business lobby.

But this polling decisively proves that those opponents are a world away from the views of the British public.

The public wants stronger worker protections

The poll of over 21,000 people reveals huge backing across the country and across the political spectrum – including with Reform and Conservative voters – for key policies in the Bill. The poll shows:

Banning zero hours contracts by giving workers a contract that reflects their regular hours: More than 7 in 10 (72%) of UK voters support a ban on zero hours contracts – including 2 in 3 Reform (65%) and Conservative (63%) voters from the 2024 general election support banning zero hours contracts. The figure is even higher with those saying they would vote Conservative (65%) and Reform (67%) if there was a general election held tomorrow. Just 15% oppose the policy.
Giving all workers statutory sick pay from day one: 3 in 4 (74%) voters support giving all workers the right to statutory sick pay, and ensuring it is paid from the first day – including 2 in 3 Reform (64%) and Conservative (62%) voters from the 2024 general election. The figure is even higher with those saying they would vote Conservative (65%) and Reform (66%) if there was a general election held tomorrow. Just 14 % oppose the policy.
Giving all workers protection from unfair dismissal from day one: 3 in 4 (73%) voters support giving all workers protection from unfair dismissal from the first day in the job – including 2 in 3 Reform (62%) and Conservative (62%) voters from the 2024 general election. The figure is even higher with those saying they would vote Conservative (65%) and Reform (64%) if there was a general election held tomorrow. Just 14% oppose the policy.
Making it easier for people to have flexibility in their patterns or hours of work: 3 in 4 (74%) voters support making it easier to work flexibly – including 2 in 3 Reform (63%) and Conservative (64%) voters from the 2024 general election. The figure is even higher with those saying they would vote Conservative (67%) and Reform (65%) if there was a general election held tomorrow. Just 12% oppose the policy.

Break down by constituency level

The poll breaks down to constituency level – and reveals that voters in every single constituency are behind the Bill’s flagship policies.

Click on the interactive map below to see how each constituency voted. Use the search field to find your constituency, and the drop-down menu at the top to view data for each policy.

https://flo.uri.sh/visualisation/21515919/embed?auto=1

A Flourish map

Reform is defying its own voters on workers’ rights

Interestingly, the new poll shows the measures the government is taking through Parliament are hugely popular with Reform voters from 2024 as well as Reform-leaning voters (those who would vote Reform if there was an election tomorrow).

In every Reform-held constituency, including in Reform leader Nigel Farage’s seat, there is significant support for banning zero hours contracts and giving sick pay to everyone from day one.

And yet Reform MPs have voted against the Bill at every stage. The party are defying their own voters and constituents on workers’ rights. This proves beyond doubt that Nigel Farage and Reform aren’t on the side of working people – they’re on the side of bad bosses, zero hours contracts and fire and rehire.

Labour, Conservative, Green and Lib Dem voters also significantly back the policies. It’s clear that the Employment Rights Bill is that rare thing – a policy which is genuinely popular across traditional party lines.

Time for change

After the failed Conservative era of a low-rights, low-pay, and low-growth economy, voters can see the importance of making work pay and ending the scourge of insecure work.

That’s why the government must ignore the noise and deliver the Employment Rights Bill in full.

Improving job quality and putting more money into people’s pockets is an urgent national mission and a key plank of the government’s wider plan to grow the economy. Those who defend the broken status quo are simply putting their own vested interests above working people.

Voters across the political spectrum want work to pay and to feel secure and respected in their jobs. The government has a historic opportunity – and an electoral mandate – to make work pay. The plan to make work pay is hugely popular, and this poll should give ministers the confidence to deliver it in full.

JRF report shows ‘shockingly high’ number of children in poverty living in working families, says TUC

The latest Joseph Rountree Foundation (2025) UK Poverty 2025 Report clearly shows that work doesn’t protect families from poverty.

In particular, the report highlights the “shockingly high” number of children living in poverty in working families:

50% of children in families where at least one adult is (but not all adults are) in work live in poverty.

Working-age adults are also impacted:

Two-thirds (68%) of working-age adults living in poverty are in a household where at least one adult works.

Responding to these figures, TUC General Secretary Paul Nowak said: “Every worker deserves to earn a decent living. But many working households are struggling to keep their heads above water.

“This is unacceptable. Working people should be able to put food on the table for their families and keep their children warm during the winter.

“After 14 years of Tory chaos and stagnation, we urgently need to boost living standards.

“That’s why this government’s Make Work Pay agenda is so crucial for millions of families up and down the country.

“More money in working people’s pockets means more spend on our high streets – that’s good for workers and good for local economies.

“And the Employment Rights Bill will mean more good and secure jobs – boosting productivity for businesses and giving workers more control over their lives and better chances to progress.

“Better work is crucial for ending child poverty, but decent social security matters too. The Government must remove the two-child benefit cap which is keeping too many children in working households in poverty.”

jrf-uk-poverty-report-25 Download

Holocaust Memorial Day: Remembering the Past, Striving for a Better Future

On January 27th the UK will observe Holocaust Memorial Day (writes TUC General Secretary PAUL NOWAK).

It is a day we remember the millions murdered by the Nazis during the Holocaust, and in the genocides which followed in Cambodia, Rwanda, Bosnia and Darfur.

We encourage every trade unionist to take part – at home, in workplaces and union branches, and in their communities.

Sculpture by Sir Jacob Epstein

This year – as we mark the 80th anniversary of the liberation of Auschwitz and the 30th anniversary of the genocide in Bosnia – everyone is invited to light candles at 8pm in their windows.

Across the country, iconic buildings and landmarks will light up purple during this powerful national moment of commemoration and solidarity.

As part of this, the TUC will illuminate Jacob Epstein’s powerful sculpture at the home of the trade union movement, Congress House. And I will represent the trade union movement at the national commemoration on the 27th.

Holocaust Memorial Day is an occasion for reflection – but it is also a call to action.

The Holocaust was not an inevitable event. It was the result of unchecked prejudice, propaganda, and the dehumanisation of entire groups of people.

By remembering the past we are reminded of our collective responsibility to challenge hatred in all its forms. The atrocities of the Holocaust serve as a stark warning of what can happen when societies remain silent in the face of intolerance and extremist ideologies.

The theme for this year’s Holocaust Memorial Day is ‘for a better future’.

As I light my candle I will think not only of those who were senselessly killed but of the world we are striving to build. A world rooted in compassion, understanding and justice. And this year, I will think in particular about the need for a lasting peace in the Middle East after more than 15 devastating months of conflict that have seen so much human suffering. That lasting peace will only be built on a two-state solution – a safe and secure Israel and a safe, secure, free Palestine.

By remembering the horrors of the past we can commit ourselves to ensuring that darkness never takes hold again.

We must never forget. We must always strive for peace.

TUC: Workers’ rights reforms could benefit economy by over £13bn a year

New analysis shows how improving employment standards, employee well-being and modernising industrial relations will benefit the economy
TUC General Secretary Paul Nowak gave evidence to MPs as Employment Rights Bill enters committee stage
Making Work Pay agenda is an “urgent national mission” that is “good for workers and good for business”, says union body

New TUC analysis published yesterday (Tuesday) shows that even modest gains from the government’s workers’ rights reforms would benefit the UK economy by over £13bn a year.

The analysis models some of the key benefits of the Employment Rights Bill – identified by the government’s impact assessment of the Bill.

The research shows that even if the Bill just delivers small improvements in areas such as employee wellbeing, industrial relations and labour market participation the economic gains will outweigh any costs.

The analysis looks at the scale of the benefits implementing the Employment Rights Bill could bring across a range of workplace measures:

Workplace stress: Between £490 million and £974 million would be gained by reducing the number of working days lost to stress, depression or anxiety.
Staff well-being: Between £310 million and £930 million a year would be gained from improving staff well-being.
Minimum wage compliance: Between £42 million and £168 million a year would be gained through improving minimum wage compliance.
Strikes: Between £255 million and £510 million a year would be gained through resolving disputes that lead to workers taking action.
Industrial relations: Between £2.7bn and £8.1bn a year would be gained through reduced workplace conflict
Increased labour market participation: Between £1.3bn and £2.6bn a year would be gained through increasing employment for people currently looking after family or home.

The research shows that the cumulative impact of even modest improvements would be £13.3bn a year – and stronger outcomes could generate even greater gains.

The TUC says the analysis confirms the view of the government’s impact assessment that there is “clear, evidence-based benefits of government action through the Bill.”

The impact assessment also warns that “not acting would enable poor working conditions, insecure work, inequalities and broken industrial relations to persist.”

Evidence to MPs

The findings were published as TUC General Secretary Paul Nowak prepared to give evidence to MPs as the Employment Rights Bill enters its committee stage.

Nowak told parliamentarians that improving the quality of work in Britain is an “urgent national mission” that will benefit workers and businesses alike.

Polling published in July revealed huge backing across the political spectrum for boosting workers’ rights.

And polling published in September revealed that an overwhelming majority (75%) of employers support the government’s measures, including nearly seven in 10 (69 per cent) of small businesses.

TUC General Secretary Paul Nowak said: “Far too many working people are trapped in jobs that offer them little or no security. We can’t carry on with this broken status quo.

“Improving the quality of work in this country is an urgent national mission that will bring real economic gains.

“Driving up employment standards, improving employee well-being and increasing labour market participation is good for staff and good for businesses.

“When workers are treated well they are happier, healthier and more productive.

“The Employment Rights Bill is a historic opportunity to make work pay – and to create a level playing field that stops good employers from being undercut by the bad.

“It must be delivered in full.”

Commenting on the impact of the Bill on employers, Paul added: “The TUC stands ready to work with the government and employers. We recognise that businesses and unions will need advice to understand and implement these changes.

“But there is no case for delaying the reforms. People need jobs they can build a decent life on.

“Many of the arguments being used against this legislation are the same ones that were used against introducing the minimum wage – one of the great policy successes of the last 25 years.

“They were wrong then and they are wrong now. When working people thrive so do businesses and the wider economy.”

EQUAL PAY DAY 2024: Time to close the gender pay gap

TUC: Employment Rights Bill is “vital” for women’s pay and equality

TODAY (20 November) is Equal Pay Day 2024. That is two days earlier than last year when it fell on 22nd November. This means that, despite years of slow progress to close the UK’s mean Gender Pay Gap, it has definitively widened for the first time since 2013.

Equal Pay Day is a national campaign led by the Fawcett Society in the UK. It marks the day in the year when, based on the gender pay gap, women overall in the UK stop being paid compared to men.

The gender pay gap is the difference between the average pay of men and women within a particular group or population. Fawcett uses the mean, full-time, hourly gender pay gap for the UK to calculate the gender pay gap for Equal Pay Day which this year is 11.3%, up from 10.4% last year.

Jemima Olchawski, Chief Executive of the Fawcett Society, said: “It’s incredibly alarming to see the mean gender pay gap widen in 2024 and shows that without concerted effort most women won’t see equal pay in our working lifetime.

“Today’s data confirms that the Gender Pay Gap increases with age as women take on more and more unpaid care work for children and older people.

Tomorrow, at her first Budget, our first female Chancellor in history can right this wrong by investing to finally address the motherhood penalty and set the UK on a path to close the Gender Pay Gap for good.

“The draft Employment Rights Bill and commitments to close the gap are important steps but today’s data clearly shows more must urgently be done. Our government must commit to a cross-government strategy to shrink the gender pay gap by 2030 – women cannot wait any longer.”

Commenting on the Fawcett Society’s Equal Pay Day today (Wednesday), the day of the year women effectively stop getting paid because of the gender pay gap, TUC General Secretary Paul Nowak said: “Our economy isn’t working for women. At current rates of progress, it will still take 16 years to close the gender pay gap.

“This is why Labour’s Employment Rights Bill is so vital for women’s pay and equality.

“The Bill will require large employers to set out clear action plans on how they will close their gender pay gaps, rather than just report what they are.

“And we know women still take on the lion share of caring responsibilities – a key driver of the gender pay gap – so fixing care is critical to raising their pay.

“The Employment Rights Bill will also introduce a fair pay agreement in social care, to stop the race to the bottom on pay and conditions. This will help recruit and retain staff.”

The TUC says many of the other policies in the Employment Rights Bill – which begins its committee stage on Monday (25 November) – will help close the gender pay gap, including:

Strengthening flexible working rights by introducing a day one right to work flexibly unless an employer can properly justify why this is not possible.

Banning exploitative zero-hours contracts to help end the scourge of insecure work, which is particularly widespread in sectors like social care.

Giving all employees day one rights on the job by scrapping qualifying time for basic rights, such as unfair dismissal, sick pay, and parental leave.

Extending redundancy and unfair dismissal protections for pregnant women and new parents.

Read Fawcett’s explainer on the Gender Pay Gap here:

thegenderpaygapexplainer_29.10.24.pdf

equalpayday2024_timetoclosethegap Download

A Budget to ‘fix the foundations’ and deliver change for Scotland?

Chancellor ‘takes long-term decisions to restore stability, rebuild Britain and protect working people across Scotland’

No change to working people’s payslips as employee national insurance and VAT stay the same, but businesses and the wealthiest asked to pay their fair share.
Record £47.7 billion for the Scottish Government in 2025/26 includes £3.4 billion through the Barnett formula.
Funding for Green Freeports, City and Growth Deals, GB Energy and hydrogen projects to fire up growth and deliver good jobs across Scotland.

The Chancellor has ‘delivered a Budget to fix the foundations to deliver on the promise of change after a decade and a half of stagnation’. She set out plans to rebuild Britain, while ensuring working people across Scotland don’t face higher taxes in their payslips.

The UK Government was handed a challenging inheritance; £22 billion of unfunded in-year spending pressures, debt at its highest since the 1960s, an unrealistic forecast for departmental spending, and stagnating living standards.

This Budget takes ‘difficult decisions’ to restore economic and fiscal stability, so that the UK Government can invest in Scotland’s future and lay the foundations for economic growth across the UK as its number one mission.

The Chancellor announced that the Scottish Government will be provided with a £47.7 billion settlement in 2025/26 – the largest in real terms in the history of devolution. This includes a £3.4 billion top-up through the Barnett formula, with £2.8 billion for day-to-day spending and £610 million for capital investment.

Secretary of State for Scotland Ian Murray said: “This is a historic budget for Scotland that chooses investment over decline and delivers on the promise that there would be no return to austerity.

“It is the largest budget settlement for the Scottish Government in the history of devolution, including an additional £1.5 billion this financial year and an additional £3.4 billion next year through the Barnett formula. That money must reach frontline services, to bring down NHS waiting lists and lift attainment in our schools.

“It will also bring a new era of growth for Scotland and the whole UK, confirming nearly £890 million of direct investment into Freeports, Investment Zones, the Argyll and Bute Growth Deal, and other important local projects across Scotland’s communities, as well as £125 million next year for GB Energy and support for green hydrogen projects in Cromarty and Whitelee.

“The increase in the minimum wage will also mean a pay rise for hundreds of thousands of workers in Scotland, with the biggest increase for young workers ever. This is on top of our employment rights bill which will deliver the biggest upgrade in workers’ rights in a generation. The triple lock means an increase in the state pension by £470 next year, on top of £900 this year for a million Scottish pensioners.

“The budget protects working people in Scotland, delivers more money than ever before for Scottish public services and means an end to the era of austerity.”

Protecting working people and living standards

While fixing the inheritance requires tough decisions, the Chancellor has committed to protecting the living standards of working people. The decisions taken by the Chancellor to rebuild public finances enable the UK Government to deliver on its pledge to not increase National Insurance or VAT on working people in Scotland, meaning they will not see higher taxes in their payslip.

The National Living Wage will increase from £11.44 to £12.21 an hour from April 2025. The 6.7% increase – worth £1,400 a year for a full-time worker – is a significant move towards delivering a genuine living wage.
The National Minimum Wage for 18 to 20-year-olds will also see a record rise from £8.60 to £10 an hour.
Working people will benefit from these increases, with there estimated to be over 100,000 minimum wage workers in Scotland in 2023.
The Chancellor has made the decision to protect working people in Scotland from being dragged into higher tax brackets by confirming that the freeze on National Insurance Contributions thresholds will be lifted from 2028-29 onwards, rising in line with inflation so they can keep more of their hard-earned wages.
The Chancellor is also protecting motorists by freezing fuel duty for one year – a tax cut worth £3 billion, with the temporary 5p cut extended to 22 March 2026. This will benefit an estimated 3.2 million people in Scotland, saving the average car driver £59, vans £126 and Heavy Goods Vehicles £1,079 next year.
To support Scottish pubs and smaller brewers in Scotland, the UK Government is cutting duty on qualifying draught products by 1p, which represent approximately 3 in 5 alcoholic drinks sold in pubs. This measure reduces duty bills by over £70 million a year, cutting duty on an average strength pint in a pub by a penny. The relief available to small producers will be updated to help smaller brewers and cidermakers.
Over 1 million Scottish pensioners will benefit from a 4.1% increase to their new or basic State Pension in April 2025. This is an additional £470 a year for those on the new State Pension and an additional £360 a year for those on the basic State Pension.
Households eligible for Pension Credit will get £465 a year more for single pensioners and up to £710 a year more for couples due to a 4.1% increase in the Pension Credit Standard Minimum Guarantee, benefitting 125,000 pensioners in Scotland.
Around 1.7 million families in Scotland will see their working-age benefits uprated in line with inflation – a £150 gain on average in 2025-26.
Reducing the maximum level of debt repayments that can be deducted from a household’s Universal Credit payment each month from 25% to 15% will benefit a Scottish family by over £420 a year on average.

Rebuilding Britain

This UK Government will not make a return to austerity and will instead boost investment to rebuild Britain and lay the foundations for growth in Scotland. This includes £130 million of targeted funding for the Scottish Government, of which £120 million is in capital investment.

The Budget delivers on the first step to establish Great British Energy by providing £125 million next year to set up the institution at its new home in Aberdeen – helping to develop new clean energy projects in Scotland and across the UK.
The UK Government will deliver £122 million for City and Growth Deals, including the continuation of its contribution to the Argyll and Bute Growth Deal which delivers £25 million of investment in the region over 10 years. This Deal will be supported by a rigorous value for money assessment as part of the review of the business cases for projects within it, to ensure best value is being delivered.
The Budget gives certainty to local leaders and investors, confirming funding for the Investment Zones and Freeports programmes across the UK – including Scotland’s Green Freeports.
The Chancellor committed the UK Government to working closely with the Scottish Government on the Industrial Strategy, 10-year infrastructure strategy and the National Wealth Fund – to ensure the benefits of these are felt UK-wide and as part of the relationship reset between governments. These will mobilise billions of pounds of investment in the UK’s world-leading clean energy and growth industries.
To support economic growth and promote Scottish culture, products and services through diplomatic and trade networks, the UK Government is allocating £750,000 for the Scotland Office in 2025/26 to champion Brand Scotland as was committed in the manifesto.
We are supporting Scotland’s world-renowned Scotch Whisky industry by providing up to £5 million for HMRC to reduce the fees charged by the Spirit Drinks Verification Scheme and by ending mandatory duty stamps for spirits on 1 May 2025.
Two electrolytic hydrogen projects in Scotland have been selected for UK Government revenue support through the first Hydrogen Allocation Round: Cromarty Green Hydrogen Project and Whitelee Green Hydrogen. Both projects will bring in significant international investment and create good quality, local jobs.
An extension of the Innovation Accelerators programme will support the high-potential innovation cluster in the Glasgow City Region.
A corporate tax roadmap will provide businesses with the stability and certainty they need to make long-term investment decisions and support our growth mission. It confirms our competitive offer, with the lowest Corporate Tax rate in the G7 and generous support for investment and innovation.
The UK Government will also proceed with implementing the 45%/40% rates of the theatre, orchestra, museum and galleries tax relief from 1 April 2025 to provide certainty to businesses in Scotland’s thriving cultural sector.

Repairing public finances

The Chancellor has made clear that, whilst protecting working people with measures to reduce the cost of living, there would be difficult decisions required. The Budget will ask businesses and the wealthiest to pay their fair share while making taxes fairer. This will go directly towards fixing the foundations of the UK economy.

The rate of Employers’ National Insurance will increase by 1.2 percentage points, to 15%. The Secondary Threshold – the level at which employers start paying national insurance on each employee’s salary – will reduce from £9,100 per year to £5,000 per year.
The smallest businesses will be protected as the Employment Allowance will increase to £10,500 from £5,000, allowing Scottish firms to employ four National Living Wage workers full time without paying employer national insurance on their wages.
Capital Gains Tax will increase from 10% to 18% for those paying the lower rate, and 20% to 24% for those paying the higher rate.
To encourage entrepreneurs to invest in their businesses Business Asset Disposal Relief (BADR) will remain at 10% this year, before rising to 14% on 6 April 2025 and 18% from 6 April 2026-27.
The lifetime limit of BADR will be maintained at £1 million. The lifetime limit of Investors’ Relief will be reduced from £10 million to £1 million.
The OBR say changes to CGT raise over £2.5 billion a year and the UK will continue to have the lowest CGT rate of any European G7 country.
Inheritance Tax thresholds will be fixed at their current levels for a further two years until April 2030. More than 90% of estates each year will be outside of its scope. From April 2027 inherited pensions will be subject to Inheritance Tax. This removes a distortion which has led to pensions being used as a tax planning vehicle to transfer wealth rather than their original purpose to fund retirement.
From April 2026, agricultural property relief and business property relief will be reformed. The highest rate of relief will continue at 100% for the first £1 million of combined business and agricultural assets, fully protecting the majority of businesses and farms. It will reduce to 50% after the first £1 million. Reforms will affect the wealthiest 2,000 estates each year. Inheritance Tax reforms in total are predicted by the OBR to raise £2 billion to support stability.
From 2026-27 Air Passenger Duty (APD) for short and long-haul flights will increase by 13% to the nearest pound, a partial adjustment to account for previous high inflation. For economy passengers, this means a maximum £2 extra per short haul flight and tickets for children under the age of 16 remain exempt from APD. APD for larger private jets will be increased by a further 50%. Passengers carried on flights leaving from airports in the Scottish Highlands and Islands region are exempt from APD.
The rate of the Energy Profits Levy will increase to 38% from 1 November 2024 and the levy will now expire one year later than planned, on 31 March 2030. The 29% investment allowance will be removed.
To provide long-term certainty and to support a stable energy transition, the UK Government will make no additional changes to tax relief available within the EPL and a consultation will be published in early 2025 on a successor regime that can respond to price shocks. Money raised from changes to the EPL will support the transition to clean energy, enhance energy security and provide sustainable jobs for the future.

The Budget also announced a package of measures that disincentivise activities that cause ill health, by:

Renewing the tobacco duty escalator which increases all tobacco duty rates by RPI+2% plus an above escalator increase to hand rolling tobacco (totalling RPI+12%). 
Introducing a new vaping duty at a flat rate of 22p/ml from October 2026, accompanied by a further one-off increase in tobacco duty to maintain financial incentive to choose vaping over smoking.
To help tackle obesity and other harms caused by high sugar intake, the Soft Drinks Industry Levy will increase to account for inflation since it was last updated in 2018, and the duty will rise in line with inflation every year going forward.
The UK Government will also uprate alcohol duty in line with RPI on 1 February 2025, except for most drinks in pubs.

The UK Government has set out the next steps to deliver its tax manifesto commitments in the July Statement. Having consulted on the final policy details where appropriate, this Budget delivers the UK Government’s manifesto commitments to raise revenue to pay for First Steps, with reforms that are underpinned by fairness, and tackle tax avoidance by:

A new residence-based regime will replace the current non-dom regime from April 2025 and will be designed to attract investment and talent to the UK.
Offshore trusts will no longer be able to be used to shelter assets from Inheritance Tax, and there will be transitional arrangement in place for people who have made plans based on current rules.
The planned 50% reduction for foreign income in the first year of the new regime will be removed.
Reforms to the non-dom regime will raise a total of £12.7 billion according to the OBR.
The tax treatment of carried interest will be reformed by first increasing the Capital Gains Tax rates on carried interest to 32% and then, from April 2026, moving to a revised regime – with bespoke rules to reflect the characteristics of the reward.

The Chancellor also ‘doubled down’ on fiscal responsibility through two new fiscal rules that put the public finances on a sustainable path and prioritise investment to support long-term growth, and new principles of stability. Spending Reviews will be held every two years, setting plans for at least three years to ensure public services are always planned and improve value for money.

One major fiscal event per year will give families and businesses stability and certainty on tax and spending changes, while giving the Scottish Government greater clarity for in its own budget-setting. A Fiscal Lock will also ensure no future government can sideline the OBR again.

Budget marks ‘step in right direction’

Scotland’s Finance Secretary responds to Budget

Finance Secretary Shona Robison has welcomed additional funding in the Autumn Budget, but said the Scottish Government will still face “enormous cost pressures” despite the measures.

The Finance Secretary said: “We called for increased investment in public services, infrastructure and tackling poverty. This budget is a step in the right direction, but still leaves us facing enormous cost pressures going forwards. The additional funding for this financial year has already been factored into our spending plans.

“By changing her fiscal rules and increasing investment in infrastructure, the Chancellor has met a core ask of the Scottish Government. But after 14 years of austerity, it’s going to take more than one year to rebuild and recover – we will need to see continued investment over the coming years to reset and reform public services.

“Indeed, there is a risk that by providing more funding for public services while increasing employer national insurance contributions, the UK Government is giving with one hand while taking away with the other.

“We estimate that the employer national insurance change could add up to £500 million in costs for the public sector unless it is fully reimbursed – and there is a danger that we won’t get that certainty until after the Scottish budget process for 2025/26 has concluded.

“With the lingering effects of the cost of living crisis still hitting family finances, it is disappointing that there was no mention of abolishing the two-child limit, which evidence shows would be one of the most cost-effective ways to reduce child poverty. Neither was there mention of funding for the Winter Fuel Payment.

“As ever, the devil is in the detail, and we will now take the time to assess the full implications of today’s statement. I will be announcing further details as part of the Scottish Budget on 4 December.”

Child Poverty Action Group: Chancellor misses golden chance to scrap two child limit

16 000 more children will now be pulled into poverty by time new UK child poverty taskforce reports in spring
“Good news on universal credit deductions, but no bold action on child poverty”
Barnett consequentials must now be prioritised to fund action on child poverty in Scotland

Responding to the UK Chancellor’s Budget, John Dickie, Director of the Child Poverty Action Group (CPAG) in Scotland, said; “The Chancellor brought good news on universal credit deductions, but this was not a Budget of bold action on child poverty. She missed a golden chance to scrap the two-child limit, a policy that will pull 16,000 extra children into poverty by the time the government’s child poverty taskforce reports in spring.

We welcome the new UK government’s ambition on child poverty but this budget played for time, time that children and families can’t afford. The UK spending review next spring will have to deliver much more to make a significant difference for children in poverty.”

Mr Dickie continued: “Here in Scotland and looking ahead to the Scottish budget it is vital that wider Barnett consequentials are now used to fund the action needed to deliver on the First Minister’s number one priority of ending child poverty.

“That must include funding a real terms increase to the Scottish child payment, expanding childcare provision, delivering on free school meal promises and increasing the supply of affordable family housing.”

POVERTY ALLIANCE:

Responding to today’s UK Budget, Poverty Alliance chief executive Peter Kelly said: “People across the UK believe in a nation based on justice and compassion. Today’s Budget was an opportunity for the Chancellor to turn those values into action, and to rebuild trust in government. Despite some welcome changes, there is still some way to go.

“Boosting the minimum wage is welcome, because for decades workers have been getting less and less from our growing economy. This increase will go some way to making up the gap, particularly for younger workers. But we need to remember that today’s Budget will still leave the legal minimum wages far lower than the real Living Wage rate – the only wage rate that is solely based on the cost of living – of £12.60 per hour, or £13.85 per hour in London.

“We know that too many people on Universal Credit find themselves pushed into destitution when they are chased for debt by public bodies, so it’s good that the maximum amount of benefit that can be taken from them has been reduced. But the Chancellor could have gone further, by strengthening our social security with a boost to Universal Credit that would guarantee that households can afford life’s essentials.

“She could have made it clear that every child matters, by scrapping the unjust and ineffective two-child limit, and ditching the unfair benefit cap which stops households getting all the support they are entitled to.

“There was a welcome focus on the importance of our public services to our shared prosperity and wellbeing. But the Chancellor could have done more to use our country’s wealth to tackle poverty and invest in a better society. Even with today’s changes, people who earn money from selling shares and business assets will pay Capital Gains Tax at a lower rate than workers pay in Income Tax. That’s just wrong.

“Freezing fuel duty and keeping the previous cuts in place will cost the Exchequer billions of pounds a year. It’s bad value for money, benefits the wealthiest in society most, and does little to make the transition to the green economy. The money would have been better invested in affordable, accessible, and sustainable public transport for all.

“It’s right that big companies pay their fair share towards building a strong society, but the Chancellor must urgently consider how increases to employer National Insurance will hit charities and community groups.

“The support and advice provided by these organisations is vital for people who have been pushed into poverty, but too many are already struggling through a lack of fair funding, and this NI increase could push many over the edge.

“That would be a disaster for our communities, and leave more low-income households facing destitution and despair.”

TUC: Labour’s investment budget has begun process of “repairing and rebuilding Britain”

Union body says budget is a vital first step towards the growth, jobs and living standards working people desperately need

Commenting on Wednesday’s budget statement from the Chancellor Rachel Reeves, TUC General Secretary Paul Nowak said: “The Chancellor was dealt a terrible hand by the last Conservative government – a toxic legacy of economic chaos, falling living standards and broken public services.

“But with today’s budget the Chancellor has acted decisively to deliver an economy that works for working people.

“The government’s investment plans are a vital first step towards repairing and rebuilding Britain – securing the stronger growth, higher wages and decent public services that the country desperately needs.

“Tax rises will ensure much-needed funds for our NHS, schools and the rest of our crumbling public services, with those who have the broadest shoulders paying a fairer share. The Chancellor was right to prioritise hospitals and classrooms over private jets.

“There is still a lot more work to do to clean up 14 years of Tory mess and economic decline. – including better supporting and strengthening our social security system. But this budget sets us on an urgently needed path towards national renewal.”

Shelter Scotland has responded to the UK budget set out this afternoon by Chancellor Rachel Reeves.

The housing and homelessness charity urged the Scottish Government to commit to investing any new capital funding into delivering the social homes needed to end the housing emergency.

However, it also expressed disappointment at the continuation of the two-child limit and ongoing freeze to Local Housing Allowance.

Shelter Scotland Director, Alison Watson, said: “Having declared a housing emergency it’s clear that the Scottish Government must back words with actions.

“It is vital that any capital funding which becomes available as a result of the Chancellor’s investment plans is in turn used by Scottish Ministers to deliver social homes here, but we also need to see growth in the capital budget over a sustained period to support continued investment.

“Delivering more social homes remains the single most effective way to tackle the housing emergency in Scotland, and only the Scottish Government can decide how much of its budget it commits to that endeavour.

“However, we can’t ignore the role that austerity has played in exacerbating Scotland’s housing emergency.

“The freeze on local housing allowance and the two-child limit has forced thousands into poverty; they will continue to do so as it seems the Chancellor has chosen to keep them in place.”

COSLA:

ONE PARENT FAMILIES SCOTLAND:

Scotch Whisky industry says UK government has broken commitment to ‘back Scotch producers to the hilt’

Chancellor increases discrimination of Scotch Whisky and other spirits in on-trade

The Scotch Whisky Association (SWA) says the Chancellor’s decision to further increase duty on Scotch Whisky has broken the Prime Minister’s commitment to ‘back Scotch producers to the hilt.’

In her first Budget, Chancellor Rachel Reeves announced an RPI inflation increase to alcohol duty, but cut duty on draught products in the on-trade by 1.7%. Scotch Whisky and other spirits are excluded from this tax relief.

The SWA had called on the new Chancellor to take the opportunity to reverse the damage done by the 10.1% increase in August 2023. Instead, the damage done to the industry and to government revenue has been compounded by further increasing the tax burden on the sector, which is already the highest in the G7.

Spirits revenue fell by hundreds of millions of pounds as a result of the 10.1% duty increase last year, and the industry has warned that this further tax hike will not deliver the revenue ministers have been promised but will hurt businesses, the hospitality sector and hard-pressed consumers.

Commenting on the Budget, Chief Executive of the SWA Mark Kent said: “This duty increase on Scotch Whisky is a hammer blow, runs counter to the Prime Minister’s commitment to ‘back Scotch producers to the hilt’ and increases the tax discrimination of Scotland’s national drink.

“On the back of the 10.1% duty increase last year, which led to a reduction in revenue for HM Treasury, this tax hike serves no economic purpose. It will damage the Scotch Whisky industry, the Scottish economy, and undermines Labour’s commitment to promote ‘Brand Scotland’.

“She has also increased the tax discrimination of spirits in the Treasury’s warped duty system, and with 70% of UK spirits produced in Scotland, that will do further damage to a key Scottish sector.

“The disastrous 10.1% duty hike last year has now been compounded. This further tax rise means the lessons have not been learned, and the Chancellor has chosen continuity with her predecessor, not change.

“We urge all MPs who support Scotch Whisky to vote against this duty hike and tax discrimination of Scotland’s national drink.”

Rain Newton-Smith, CBI Chief Executive, said: “The Chancellor had difficult choices to make to deliver stability for the economy and public finances. A more balanced approach to our fiscal rules which prioritises capital investment should help to unlock private sector investment in our infrastructure and net zero transition over the long-term.

“This is a tough Budget for business. While the Corporation Tax Roadmap will help create much needed stability, the hike in National Insurance Contributions alongside other increases to the employer cost base will increase the burden on business and hit the ability to invest and ultimately make it more expensive to hire people or give pay rises.

“Only the private sector can provide the scale of investment required to deliver the government’s growth agenda.

“To achieve this shared mission of growing our economy sustainably, it’s vital that the government doubles down on its partnership with business to unlock the investment that is needed to drive opportunity around the UK.”

FSB: Employment allowance rise welcome from Chancellor in tax-raising Budget

The Federation of Small Businesses responds to the Chancellor’s Budget statement

Responding to the Chancellor’s Budget statement, Policy Chair of the Federation of Small Businesses (FSB), Tina McKenzie, said: “Increasing the employment allowance for small businesses by a record amount is a very welcome move and we’re pleased the Chancellor has heard us loud and clear.

“More than doubling it, from £5,000 to £10,500, will shield the smallest employers from the jobs tax, therefore is a pro-jobs prioritisation in a tough Budget.

“The decision to protect small businesses from an inflationary hike in business rates – by freezing the small business multiplier – will help small firms with premises across all sectors. Meanwhile, extending business rates relief, albeit at a lower level, for small firms in retail, hospitality and leisure will mitigate a potential cliff-edge tax hike for those in some of the toughest sectors.

“The true test of today’s Budget will be whether small businesses can grow and end the economic stagnation the UK has been stuck in.

“Larger small, and medium-sized, businesses will struggle with the rises on employer national insurance on top of the large costs from the Government’s employment law plans. We’ve been very clear in our warning of the difficulty SMEs will be confronted with in meeting all of these changes at once – and the potential impact on jobs, wages and prices.

“The Budget documents include plans for a small business strategy command paper, which is a welcome signal that ministers appreciate the central role that small businesses play in driving growth and we look forward to working with the Government closely on that.

“Investment in infrastructure is key to future growth, and the Chancellor’s announcement of additional funding for rail projects and fixing potholes is therefore encouraging. Many small firms, meanwhile, will be relieved at the decision not to raise fuel duty. The commitment to prioritise small housebuilders when it comes to housing investment is also welcome.

“Building a business involves a significant element of risk and personal, as well as financial, investment. But for the economy to grow, we need more people to be incentivised to take that leap and, in turn, create jobs, opportunities and prosperity in all communities across the country.

“The right decision has been taken to retain entrepreneurs’ relief (now branded Business Asset Disposal Relief) up to £1million, which is something we have campaigned hard for. Although the level of relief will gradually reduce over time, resulting in more tax being paid in the future on business sales, we’re pleased to see a differential has been kept.

“Against a challenging backdrop, today’s Budget shows a clear direction in business policy now for the whole of this Parliament to target support at small businesses, rather than big corporates – prioritising everyday entrepreneurs working in local communities in all parts of the country.”

UK Budget fails “3 Key Tests for Scotland”, say Alba Party

Scottish Government must now fund universal entitlement to pensioners winter fuel payment

“To gain pass marks the new UK Labour Government had three key tests to meet in Scotland: it had to reverse its plan to cut the universal winter fuel payment; it had to save Grangemouth; and it had to fund a plan to save North Sea Oil and Gas jobs – on all three counts Labour has failed Scotland.”

This was said today by Acting Alba Party leader Kenny MacAskill reacting to Chancellor Rachel Reeves’ budget.

Alba Party say that the UK Government had three key tests to meet to deliver for Scotland. Former First Minister Alex Salmond helped launch a campaign to save the winter fuel payment last month.

Close to one million pensioners in Scotland are set to lose out on between £200-£300 this winter. Acting Alba Party leader Kenny MacAskill has been a leading voice in the campaign to save the Grangemouth Oil Refinery from closure.

Mr MacAskill has today hit out at the UK Government after Labour promised in the General Election to save Scotland’s only refinery that is set for closure next year but has failed to provide funding to save the refinery in today’s budget.

MacAskill has now called on the Scottish Government to use extra Barnett consequential funding to fully mitigate the cut to the winter fuel payment.

Alba Party have also hit out as successive UK Government’s have promised investment in Carbon Capture Technology in the North East of Scotland. Alba say the technology is vital to secure the future of the North Sea Oil and Gas industry and to help Scotland play its part in protecting the environment. Today’s UK Budget confirmed £22billion of investment in carbon capture projects in England – but snubbed the Acorn project on the Buchan coast.

Commenting Acting Alba Party leader Kenny MacAskill said: ““Today’s UK Budget is a continuity budget that proves that regardless of whether we have a UK Tory Government or a UK Labour Government, Scotland will always lose.

“ Close to a million Scottish pensioners are to be kept in the cold this winter, the UK Government has chosen to stand by and allow Scotland’s key industrial asset to close, and Labour have betrayed the North East of Scotland.

“ Nothing for Scotland’s pensioners, nothing for Grangemouth and nothing for Carbon Capture and the North Sea. It is now vital that the Scottish Government steps up to the plate and uses any additional funding consequentials it receives to fully mitigate the cut to the winter fuel payment.”

Budget is a ‘Missed Opportunity’

The budget is a missed opportunity to bring about the transformative change this country needs, said Westminster’s group of independent MPs.

A statement from the Independent Alliance:

LOCAL GOVERNMENT INFORMATION UNIT:

Dr Jonathan Carr-West, Chief Executive, LGIU, said: “The Chancellor billed this as an historically consequential budget of hard choices. That’s certainly true in many areas with £40bn of tax rises announced and significant changes to the government’s debt rules.

“For local government, however, it is a budget of choices deferred. It could have been worse – there’s an additional £1.3bn in funding including money for social care and additional funding for housing and special educational needs: the very areas that are driving many councils to bankruptcy.

“But this extra funding is not even half the gap that councils currently face.

“The longer-tem change that the sector desperately needs is all deferred for now. We are waiting on the Local Government Finance Settlement, on the Devolution White Paper and on a broader redistribution of funding through a multi-year settlement from 2026-27.

“There were some welcome highlights: retaining 100% of right to buy receipts and integrated settlements for Greater Manchester and the West Midlands and possibly for other places in future.

“Is this a start? Yes. Is it enough? Not by a long shot. At least not yet. There’s a positive direction of travel set out, but there’s a long way to go and the pressure on council finances means there’s a real risk that some councils will not be able to hang on long enough to get there.”