GEORGE Osborne was described as the “high priest of an austerity cult” yesterday, as his budget received a scathing reception in Scotland.

The Chancellor of the Exchequer yesterday delivered the first fully-Conservative budget since 1996. At its heart was a commitment to cut the deficit and bring the country in surplus by 2020.

Osborne will achieve that partly through cuts to government spending, partly through new tax avoidance measures and substantially with hefty cuts to welfare.

The budget introduced a freeze on working-age benefits for the next four years. There was confirmation of a cap on benefits at £20,000 outside London. Public sector workers will see a pay increase of just 1 per cent over the next four years – effectively.

Cuts to Employment Support Allowance will see new claimants lose out on £30, roughly a third of the benefit. Osborne also announced an end to 18 to 21-year-olds being able to access housing benefit. The end to automatic housing benefit for the young meant they have to “learn or earn” said Osborne.

“Those who can work will be expected to look for work and take it when it’s offered” said Osborne. He continued: “it’s not acceptable that in an economy moving towards full employment some people leave school and go on to life on benefits”.

The Chancellor also announced a limit of two children for tax credits. After April, 2017, people who have additional children will not get extra help.

There was genuine surprise from MPs when the Chancellor announced a new mandatory living wage for the over-25to be introduced next year. It will replace the minimum wage of £6.70 with a living wage of £7.20 next April, rising to £9 by 2020. The figure, the Chancellor said, was recommended by Resolution Foundation, but the foundation later pointed that cuts to “in-work support” meant the figure would need to be £3 higher.

First Minister Nicola Sturgeon took to Twitter to show the move does not amount to the introduction of a living wage, pointing out this is already set at £7.85 everywhere but London.

The SNP leader tweeted: “£7.20ph next year and £9 by 2020 is increase in minimum wage (though offset by cuts in tax credits) but it’s not living wage – LW is already £7.85.”

During the budget Osborne also announced an increase in the inheritance tax threshold to £1m for married couples by 2017. There was also a commitment to meeting the Nato target of spending 2 per cent of national income on defence for the next five years, as well an increase in the personal income tax allowance to £11,000 from April, 2016, rising to £12,500 by 2020.

Responding for the SNP, Stewart Hosie, the party’s finance spokesperson said: “George Osborne’s Tory budget will hit hard working families, the poorest and young people the hardest. He has continued with his harsh austerity agenda – particularly the savage cuts in tax credits.”

He added: “Any increase in the living wage is of course welcome, but the reality is that the good will be undone by the Tory cuts to the incomes of people who can least afford it. And the living wage in Scotland is currently £7.85 – George Osborne is proposing to see it effectively lowered to £7.20.

“This Budget was a sermon from the high priest of an austerity cult – taking from the poor and hard working people and giving to the richest. The Tories’ cuts in the living standards of young people are particularly severe, including scrapping student grants. The SNP Government will continue to deliver grants for the poorest students in Scotland, demonstrating the benefits of having these powers in the Scottish Parliament, rather than in Tory hands at Westminster”.

Labour’s shadow Scottish secretary Ian Murray claimed the budget failed, saying: “No amount of Tory spin can hide the fact that this is a bad budget for working families, our most vulnerable and our young people” he said. “The Chancellor has decided to cut vital support for working families, while slashing reducing inheritance tax for the most well off”.

Scottish LibDem Alistair Carmichael said the budget showed the “the nasty party is well and truly back”. He said “Liberal Democrats in government forced the Conservatives to ensure we balanced the books fairly, protecting spending in key areas while getting the economy back on track. Now we are seeing the true face of the Tory party and it is not a pretty sight.

Responding for the Scottish Greens, Patrick Harvie said: “I’m deeply concerned that we will now inevitably see a steep rise in the numbers facing needless hardship, while the services they rely upon also struggle from financial pressures and lack of support.”

Scottish Conservatives finance spokesman Murdo Fraser defended the Chancellor: “Here we have a Conservative government going much further to help working people in Scotland than the SNP ever would have,” he said, “It’s humiliating for the Scottish Government to demand devolution of the minimum wage, only to set it at a lower rate than the rest of the UK”.

'Land of Hope and Glory' by Peter Howson will be available from


George Kerevan: A merciless attacks on the poor ... to the sound of cheers

John Swinney: The National Living Wage hides an attack on people in low-wage jobs

Equality: This Budget continues the project which impoverishes women

Foodbanks: ‘Economic security’ is an alien concept to many of those who use our services

Inheritance tax: Making a system more complicated when it needs simplicity

Disability: Why we are sceptical about Osborne's promise

Unemployment: The National Living Wage is a slightly less low minimum wage

Child poverty: Child poverty ... Measures will do precious little for the poorest families in Scotland

Housing: Pushing those already suffering further into poverty


  • Tax credits and Universal Credit to be restricted to two children
  • Income threshold for tax credits to be reduced from £6,420 to £3,850
  • Working-age benefits – including tax credits and local housing allowance – to be frozen for four years
  • 1% public sector pay rise to continue for next four years
  • New National Living Wage for all workers aged over 25, starting at £7.20ph from April 2016
  • Inheritance tax threshold to rise to £1 million, phased in from 2017
  • Personal allowance to increase to £11,000
  • Point at which people start paying income tax at the 40p rate to rise to £43,000
  • 18-21-year-olds will not be entitled to claim housing benefit automatically, with a new “earn or learn” obligation
  • Employment and Support Allowance payment to be “aligned” with Jobseeker’s Allowance
  • The cost of funding free TV licences for the over-75s will be 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
  • Deficit to be cut at the same pace as during last Parliament
  • Major reform to vehicle excise duties to pay for a new road-building and maintenance fund in England
  • Corporation tax to be cut to 19% in 2017 and 18% in 2020
  • Permanent non-dom status to be abolished
  • New 8% surcharge on bank profits introduced from January 2016
  • New apprenticeship levy for large employers
  • Climate Change Levy exemption for renewable electricity to be removed
  • Government to spend 2% of GDP on defence every year, meeting Nato target