Latest News

UK Budget 2015: Summary and Scottish Reaction

CSPP (09/07/2015) - In the House of Commons on 8 July George Osborne announced the UK Government’s post-election budget, which was hailed as promoting a “higher-wage, lower-tax, lower-welfare Britain”. The BBC’s budget summary is posted below, and you can see the Office for Budget Responsibility’s accompanying documents for further explanation and analysis.

Scottish reaction to the budget has been varied. In the Herald, business groups expressed a “mixed reaction” to the budget, praising some aspects while questioning others. Meanwhile Third Force News, a leading publication of Scotland’s third sector, said that in charities’ view the budget “hammers families and the poor”.

Among Scottish political parties, the Scotsman reported that the SNP and Conservatives differed over the benefits of the new ‘living wage’, while Scottish Labour and the SNP both criticised tax credit cuts. The BBC reported on Scottish reaction in Westminster to the budget, with Liberal Democrat MP Alistair Carmichael accusing the budget proposals of singling out “the young and the poor”. According to the National the Scottish Greens were also critical, with Patrick Harvie MSP arguing that the budget would “see even more wealth concentrated in even fewer hands”.

Below is the BBC’s point by point summary of the budget proposals announced yesterday.

 

Budget 2015 key points: At-a-glance summary

George Osborne has delivered his seventh Budget as chancellor, the first for a majority Conservative government since November 1996. Here is a summary of his main announcements.

Personal taxation and pay

  • New national living wage will be introduced for all workers aged over 25, starting at £7.20 an hour from April 2016 and set to reach £9 by 2020 - giving an estimated 2.5 million people an average £5,000 rise over five years
  • Low Pay Commission to advise on future changes to rates
  • Personal allowance, at which people start paying tax, to rise to £11,000 next year. The government says the personal allowance will rise to £12,500 by 2020, so that people working 30 hours a week on the minimum wage do not pay income tax
  • The point at which people start paying income tax at the 40p rate to rise from £42,385 to £43,000 next year

Welfare and pensions

  • Tax credits and Universal Credit to be restricted to two children, affecting those born after April 2017
  • Income threshold for tax credits to be reduced from £6,420 to £3,850
  • Working-age benefits to be frozen for four years - including tax credits and local housing allowance, but maternity pay and disability benefits exempted
  • Rents in social housing sector will be reduced by 1% a year for the next four years.
  • Subsidies for social housing will be phased out with local authority and housing association tenants in England who earn more than £30,000 - or £40,000 in London - having to pay up to the market rent
  • Disability benefits will not be taxed or means-tested while state pension triple lock to be protected
  • 18-21-year-olds will not be entitled to claim housing benefit automatically, with a new "earn to learn" obligation
  • Employment and Support Allowance payments for new claimants who are deemed able to prepare for work to be "aligned" with Jobseeker's Allowance
  • Green paper published on proposals for "a radical change" to pension saving system
  • The amount people can contribute to their pension tax-free to be reduced for individuals with incomes over £150,000
  • The cost of funding free TV licences for the over-75s transferred from the government to the BBC between 2018 and 2021
  • The annual household benefit cap will be reduced to £23,000 in London and to £20,000 in the rest of Britain.

The state of the economy

  • Economy grew by 3% in 2014
  • 2.4% growth forecast in 2015, 0.1% lower than predicted in March, followed by 2.3%, 2.4% and 2.4% in the following years
  • One million extra jobs predicted to be created by 2020

Public borrowing/deficit/spending

  • Spending to be £83.3bn higher up to 2020 than projected before the election
  • Borrowing set to fall from £69.5bn this year to £43.1bn, £24.3bn and £6.4bn before reaching a £10bn surplus in 2019-20
  • Debt as a share of GDP to fall from 80.3% this year to 79.1%, 77.2%, 74.7%, 71.5% and 68.5% in successive years
  • 1% public sector pay rise to continue for next four years
  • £37bn of further spending cuts by 2020, including £12bn of welfare cuts, £5bn from tax avoidance and a £20bn reduction in departmental budgets

Alcohol, tobacco, gambling and fuel

  • No rise in fuel duty this year with rates continuing to be frozen
  • New VED bands for brand new cars to be introduced from 2017, pegged to emissions for the first year. Subsequently, 95% of car owners will pay a flat fee of £140 a year
  • Alcohol and tobacco duties not mentioned in statement

Business

  • Corporation tax to be cut to 19% in 2017 and 18% in 2020
  • £7.2bn to be raised from clampdown on tax avoidance and tax evasion with HMRC budget increased by £750m
  • Cap on charges imposed by claims management companies and an increase in insurance premium tax to 9.5% from November
  • New apprenticeship levy for large employers
  • Climate Change Levy exemption for renewable electricity to be removed
  • National Insurance employment allowance for small firms to be increased by 50% to £3,000 from 2016
  • Dividend tax credit to be replaced with a new tax-free allowance of £5,000 on dividend income. Rates of dividend tax to be set at 7.5%, 32.5% and 38.1%.
  • Annual investment allowance will be fixed permanently at £200,000 from January 2016

Health and education

  • NHS will receive a further £8bn by 2020, in addition to the £2bn already announced)
  • The maintenance loan will increase to £8,200
  • New university professorships to be created to mark the Queen's 90th birthday
  • £50 million to expand the number of cadet units in state schools

Housing/infrastructure/transport/regions

  • Control over fire services, planning and children's services to be handed to consortium of 10 councils in Greater Manchester
  • Discussions on devolution of services to Sheffield, Liverpool and West Yorkshire
  • £30m for new body, Transport for North, to promote integrated transport - including use of Oyster cards - in the north of England
  • Rent-a-room relief scheme to rise to £7,500

Defence

  • Government to spend 2% of GDP on defence every year, meeting Nato target
  • Spending on defence to rise in real terms - 0.5% above inflation - every year during the Parliament
  • New £1.5bn Joint Security Fund for investment in military and intelligence agencies
  • Recipients of the Victoria Cross and George Cross will see annual pension annuities rise from £2,129 to £10,000, paid for by bank fines. Government to fund memorial to victims of terrorism overseas
   

Women Hit Hardest by Welfare Reform

Women are being hit hard on multiple fronts by controversial changes to the benefits system, according to a report published by Holyrood’s Welfare Reform Committee.

Scottish Parliament (06.07.2015) - The Committee found women are disproportionately impacted by welfare reform across a range of issues and benefits. Its report includes recommendations to the Scottish Government and Department of Work and Pensions, aimed at mitigating the impact of welfare reform on women, including:

  • An integrated approach to job seeking support across health, housing and social care, to better meet the needs of women.
  • To tackle the greater dependence of women on the benefits system due to low pay and insecure employment, the Committee calls for better measures to close the gender pay gap and end occupational segregation. 

Committee Convener Michael McMahon MSP, said:

“The evidence we have set out confirms the devastating impact on women of the UK Government’s reforms to the social security system. Of particular concern is the cumulative impact on women hit by multiple benefits cuts, from child support to carer’s allowance. The UK Government urgently needs to look at how women are being affected by these changes and we are also calling on the Scottish Government to look at the gender impact of their own policy decisions.” 

Deputy Convener Clare Adamson MSP, said: 

“Our report shows inequalities faced by women in Scotland have been exacerbated by the welfare reform agenda. With the Scotland Bill still making its way through Westminster and the Chancellor set to announce even deeper cuts to welfare spending, the Committee is urging the Scottish Government to make use of expected new powers over welfare to help mitigate more of the negative impact of welfare reform on women.

“The Committee would, for instance, support a move away from monthly and single household payments under Universal Credit, as a way of protecting women’s financial autonomy.”

Background

The Committee has previously published evidence showing the impact of welfare reform nationally and on communities and particular groups, such as children and families, and households.

Scottish Conservative MSP, Annabel Goldie dissented on a number of the report’s recommendations. 

 

 

 

   

Commission for Childcare Reform Final Report Published

On 25 June the final report of the Commission for Childcare Reform was published. It offers a series of new recommendations and reiterates and expands on initial proposals made in March.

The report follows 15 months of investigation into how best childcare provision in Scotland might be organised, delivered and paid for, and extensive consultation with parents, services, employers and businesses throughout the country.

Download the report

Download the covering letter from Colin MacLean, Chair of the Commission

Download an overview of the final report, presented at its launch on 25 June 2015

For more information, contact Lesley Warren.

Source: Commission for Childcare Reform.

 

   

Page 6 of 66

Reshaping Scotland Picture

Screen Shot 2013-05-24 at 13.50.53

Reshaping Public Services