You are here

Budget will hit Scotland's poor even harder than the rest of the UK

25 Aug 2010

Citizens Advice Scotland have backed the Institute of Fiscal Studies report on how the Budget will hurt the poorest families, and have said that impact could be worse in Scotland than elsewhere.

CAS spokesman Matt Lancashire said,

“The IFS is absolutely right in its conclusions about the budget. There’s no doubt that the VAT increase, the freezing of child benefit, and the changes to tax credits will have a huge impact on the poorest families across the UK. But there are three reasons why we think this impact could be even worse in Scotland: our patterns of unemployment, housing and benefits.

“Firstly, public sector employment in Scotland is proportionally higher than in the rest of the UK. A quarter of employees in Scotland work in the public sector (613,000 employees). The Independent Budget Review predicted a loss of up to 60,000 public sector posts over the next four years. That’s around 1 in 40 jobs in Scotland.

“Secondly, the changes to the welfare system will impact severly on the most vulnerable in our society. Changes to Local Housing Allowance will mean that 97% of claimants in Scotland will be worse off by an average of £10 per week. Nearly 50,000 households in Scotland will be over £500 worse off a year. In total almost £26 million less in LHA will be paid in Scotland each year.

“Thirdly - and perhaps most concerning of all - is the changes for claimants of disability and sickness benefits. For the next four years, every Incapacity Benefit claimant will be re-assessed for Employment and Support Allowance (ESA). This will mean that over 1,100 IB claimants in Scotland will have to attend medical assessments every week for the next four years, and that around 250 of them are likely to be told they are ‘fit for work’. However, we have serious concerns that the assessments used in ESA are deeply flawed and are finding people ‘fit for work’ despite serious health conditions. That’s in addition to the fact that there are very few jobs for these people to go into. Similar changes will be applied to Disability Living Allowance claimants, affecting a further 340,000 in Scotland, with an estimated 68,000 having their DLA payments removed in the next few years.

“Many vulnerable people in Scotland will be affected by all of the changes, as well as the VAT increase - they could be thousands worse off every year.

“The recession had a significant impact on the lives of the people in Scotland. However, it would be wrong to think that the effects of the recession left when GDP began to grow again. These effects will be felt for years to come – and the upcoming jobs cuts and slashes in welfare will be bound to hurt Scotland badly.”

For more information, interviews etc. please contact Tony Hutson on 0131 550 1010.