Poverty groups in Scotland slam chancellor’s budget

Web chancellor george osborne in 2010

Chancellor George Osborne pictured on the day of a previous budget announcement

Disabled people could lose out on up to £3,000 per year due to changes to the personal independence payments

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16th March 2016 by Paul Cardwell 0 Comments

Scottish third sector organisations have slammed the Chancellor George Osborne's budget saying it is “deeply unfair” to disabled people.

Changes to the way personal independence payment (PIP) points are calculated will mean 200,000 disabled across the UK will lose their payment completely and another 400,000 will see their benefit reduced from £82 to £55.

Those who lose their payments completely will be left up to £3,000 worse off and those facing a cut will be left around £1,400 poorer each year.

Peter Kelly, director of the Poverty Alliance, which has over 160 members, described those amounts as being substantial to anyone, but especially to those on a low income. 

“The cuts in disability benefits announced as part of today’s budget are deeply unfair,” he said.

Poverty groups in Scotland slam chancellor’s budgetPeter Kelly

The cuts in disability benefits announced as part of today’s budget are deeply unfair

“We have had six years of welfare cuts, and there is now nothing left to cut. We have to think about the impact that moves such as this will have on people.

“There is a need to look beyond the numbers. For every one of those 600,000 people affected by these cuts, this is a devastating blow which will have a negative impact on their lives and their ability to participate in society.

“What type of message does it send to disabled people that we can afford a tax break for those earning over £40,000 a year but we cannot afford to support them to live dignified lives?

“The UK government must reconsider its priorities.”

Cutting PIP, which is designed to help people with some of the extra costs – such as employing someone to help with the likes of washing and going to the toilet – caused by long-term ill-health or a disability are expected to save the Treasury £1.2 billion.

Citizens Advice Scotland policy manager, Keith Dryburgh, criticised the changes, saying disabled people are one of the biggest groups who use Citizens Advice Bureaux.

He said: “PIP is one of the most common, and fastest-growing issues that people come to a CAB for advice about, and we’re concerned about the impact on vulnerable Scots, some of whom may also be losing almost £30 per week as a result of forthcoming changes to employment and support allowance.”

Dryburgh did however concede the Help to Save initiative for people on working tax credit was “interesting” but said he wanted to see a lot more of the detail on how this is to be set up.

The government will offer a 50% bonus on savings to those on a low income who save up to £50 per month after two years and another 50% bonus on any further savings after four years.

Dryburgh added: “Access to credit for people on low incomes has been getting more difficult for the last few years, so moves to help people build up a small savings cushion is welcome.

“However, to take full advantage of the scheme people would need to be in low-paid work for four years, so they may be limited in how much they can make use of it in practice.”

Elsewhere, the Child Poverty Action Group (CPAG) in Scotland slammed the budget as putting the next generation last, adding it sets it up to be the poorest generation for decades. 

Director John Dickie said much bigger reductions to child poverty could be achieved by channelling support through Universal Credit instead of raising the income tax threshold.

He said: “Increasing the personal tax allowance is an expensive way to badly target help for the low paid.

 “For every £1000 the personal tax allowance goes up, basic rate taxpayers gain £200, but Universal Credit rules will claw back 65% of that gain from the low paid, leaving them only gaining a maximum of £70 a year.”

The Scottish Federation of Housing Associations (SFHA) welcomed an announcement that the controversial local housing allowance (LHA) cap for tenants in supported accommodation will be delayed by one year.

Chief executive, Mary Taylor approved of the decision to create time for a strategic review but added the failure to remove the cap threat completely means housing associations will still be faced with difficult strategic decisions.

“While social rents are typically lower than LHA rates across Scotland, single people under-35 as well as people in supported accommodation will likely be adversely affected by the cap.

“Earlier this year, the SFHA carried out a preliminary study which found that the loss to the housing associations sampled could range from £5.2 million to £14.3 million a year and this could potentially increase to hundreds of millions of pounds a year across the entire Scottish sector.”

Action on Smoking and Health (ASH) Scotland welcomed a 2% above inflation rise on cigarettes, and an additional further 3% rise on the price of hand-rolled tobacco.

Sheila Duffy, chief executive, said: "We know that tax price increases do motivate many smokers to quit, and tax is a measure that works to reduce health inequalities. I hope that these taxes will lead to many more smokers becoming free from tobacco."  

The chancellor also announced £12m will be given to charities as a result of the tax on sanitary products.

Around £520m per year is expected to be raised through a sugar tax on soft-drink manufacturers. In England and Wales the cash raised will be used to improve school sports, but Scotland will be able to decide how it spends its share.

Museums and galleries will also be afforded a new tax break if they take their exhibitions on tour.