GEORGE Osborne’s cuts will leave Scotland’s poor poorer and the rich richer, according to a thinktank.
Speaking ahead of John Swinney’s Scottish Budget tomorrow, the Institute for Public Policy Research say the country’s poorest households look set to lose £580 a year, and those facing benefits cuts will be, on average, more than £800 a year worse off, as Osborne makes cuts of £500 million per year by 2020. This, the IPPR say, could lead to a situation where the bottom 60 per cent of households lose out, while the richest third benefit because of income tax cuts.
The thinktank say the budget could also lead to the position where Scottish Government departments with unprotected budgets fall by 2.9 per cent in 2016-2017. By 2020, spending on these departments would be reduced by 10.7 per cent.
Russell Gunson, director of IPPR Scotland, said: “The poorest households in Scotland are facing a double whammy of cuts to benefits and potential cuts to public services in Scotland.
“By 2020, many thousands of the poorest households in Scotland will see their incomes drop by hundreds of pounds each year, while the richest households in Scotland will benefit through tax cuts.
“At the same time, the UK Government’s spending decisions will see significant cuts to spending on public services in Scotland.
“Our calculations show that, for Scotland, departments outside of health, affordable housing and childcare could see cuts of over a tenth, leaving a shortfall of around £1.5 billion per year by 2020. From April next year, these non-protected departments could be facing cuts of over £400 million in real-terms.”
Gunson continued: “It is clear that the UK’s spending cuts will bring serious cuts to Scotland. How these cuts are reduced in Scotland or where they are passed on will require some incredibly difficult choices, not just this year, but over the whole of the next parliament.”
A Scottish Government spokesman said they were “determined to defend and protect key priorities that the people of Scotland expect”.
He added: “The UK Government has imposed real terms cuts on Scotland every year from now until 2020, and more than a billion pounds of those cuts are still to come by the end of the decade.
“Against this backdrop, the Scottish Government is determined to defend and protect key priorities that the people of Scotland expect – our schools, hospitals and police. In recent years there has been more police, lower crime, better schools, tuition-free university education and a health budget that is at a record level.
“The Scottish Government has always said that we would do everything within our power and means to protect the most vulnerable in society against the UK Government’s austerity programme.”
A UK Government spokesman rejected the IPPR’s analysis, claiming increases in spending would be passed on to the Scottish Government via the Barnett Formula: “In cash terms next year, there will be £390 million more spending available to the Scottish Government. This is not including its underspend, which brings the total to about £750 million.”
The spokesperson continued: “The extensive range of welfare powers which are being devolved to the Scottish Government through the Scotland Bill means it can tailor its benefit system as it sees fit. Complete control over income tax rates and thresholds from 2017 will give it the ability to pay for them, but responsibility for those choices will rest with Scottish Government ministers.”
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