Poorest in Scotland face “double whammy”, argues think tank

The poorest families in Scotland face the prospect of being more than £800 a year worse off as a result of the Chancellor’s plans for spending and benefits.

The poorest families in Scotland face the prospect of being more than £800 a year worse off as a result of the Chancellor’s plans for spending and benefits.

As the Scottish Government’s Finance Secretary, John Swinney, prepares to deliver his budget plans tomorrow, the analysis by IPPR Scotland has assessed the cumulative impact on Scotland of announcements made in the Summer Budget and the autumn statement last month.

It finds that:

  • £500 million would be cut from those on benefits by 2020 which would require the equivalent of a 1p rise in income tax by Holyrood to be able to reverse this;
  • The poorest households could lose £580 a year, while those who have their benefits cut will be on average more than £800 a year worse off by 2020;
  • The bottom 60% of households are likely to lose out, while the richest third are set to gain from the Government’s plans;
  • Unprotected Government departments in Scotland, including local government and justice, face the prospect of seeing their budgets fall by 2.9% in 2016-17. By 2020, it warns, spending on these departments could be cut by 10.7%.

Commenting on the findings, 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.”

He continued:

“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.”

The findings come as the Scottish Commission on Local Tax Reform, established jointly by the Scottish Government and the Convention of Scottish Local Authorities (COSLA) has called for an end to the unfair council tax system.

Whilst the report does not recommend any one particular replacement, it does outline three potential solutions aimed at informing next year’s elections to Holyrood which would bring in a similar amount of money to the £2 billion currently collecting in council tax. These are:

  • a replacement property tax, based on the value of land and buildings;
  • a land value tax, based on the value of land only; and
  • a local income tax which would raise revenue based on a householder’s taxable income

The report concludes:

“The predominant view of the Commission is that Local Government’s tax base should, if it could be proved feasible, be broadened to include income. Income is widely perceived to be a fairer basis on which to levy a tax, although a locally variable income tax presents substantial administrative challenges.”

The Commission’s findings come as the Finance Secretary looks set to freeze council tax for the ninth year in a row.

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12 Responses to “Poorest in Scotland face “double whammy”, argues think tank”

  1. Rick

    These are decisions for the Scottish assembly

  2. Alasdair Macdonald

    What is Rick actually saying? The Scottish Parliament does have some powers in these areas, but, until the financial settlement of the Scotland Act are worked out, any discussion is hypothetical. Of course, discussion should explore these matters both in the public domain and within government, so that the ramifications of proposals can be explored.a major part of the problem is the vacuity of Scottish Labour and the cavilling and trivial opposition in Paliament. There are some figures such as Hugh Henry MSP, who have gravitas and are prepared to discuss and transcend party politics to address the very specific issues relating to the poorest members of our society.

  3. Intolerant_Liberal

    It’s obvious that very few people in politics care about the poverty and pauperisation of the poorest people in the British isles as a whole. They have been abandoned. Politics is only really concerned with the affluent and the wealthy, which is not surprising as the majority of politicians in all parties tend to come from affluent and even wealthy backgrounds. Why should they care? Most of them have never lived for a moment in the real world of low paid jobs, financial struggles and the disappointments that many of us are party to. We need more politicians from ordinary backgrounds who have lived in the real world, outside Planet Politics and the concerns of the metropolitan political elites in London. Until that changes, and there is a massive resistance to that, our democracy is in name only.
    And, of course, it’s only the underclass of Scotland, hey, and who cares about them, being so far from London????

  4. Alasdair Macdonald

    There is a huge ‘underclass’ in London, too, and who, in the Government, Whitehall or, indeed, a significant chunk of the PLP, cares about them ….. or about the growing number of people from Muckle Flugga to the Scilly Isles, from Lowestoft Ness to Derry, who are getting poorer.
    Remember Keats’ poem: ‘Rise like lions after slumber, in unvanquishable number …. We are many, they are few”? I heard that first in a speech by Michael Foot, at a time when Labour actually believed in the redistribution of wealth and power, at the time when “Lord”! Darling was pretending to be a leftie.


    Only 1p in the pound tax rise in Scotland to overcome the cuts. Go on Tartan Tories do it. You talk about austerity anf food banks now do somethingvyou have the powers.

  6. Intolerant_Liberal

    Couldn’t agree more with you, Alasdair. The wealthy are pulling up the ladders that helped them up, closing the drawbridge and letting the marginalised fend for themselves. Whilst at the same making it harder and harder for the aspirant, hardworking and those who want to get on, to get on. A very bad mistake, all told. The Tories seem to be alienating everyone they can in double quick time. And the wealthy in London more and more resemble those in Rome just before the barbarians came to the gates, looking for a bigger slice of the pie. Whichever way you cut it, no pun intended, we all want a bigger slice of the pie, and the majority of us are being denied that at the moment. What do you expect when a government is made up of posh, privately educated, wealthy white men mostly from the affluent parts.of London and the South East of England?? It sure ain’t democracy…

  7. Alasdair Macdonald

    One of the arguments for capitalism is that it creates a continually increasing series of pies because by allowing more people reasonable-sized shares of the pie they use these to make the next and larger pie. This was characterised as a ‘virtuous circle’. So, by ‘pulling up ladders and closing the drawbridge’ the wealthy and powerful, by their logic, will put themselves under siege and eventually starve. Of course, the original thesis was flawed as people like Marx and the Club of Rome demonstrated.
    Cooperation, equity, justice, reducing (not necessarily eliminating) inequality all contribute to fairer and voluntarily self-regulating societies. This was what some of us used to vote Labour for. However, after Messrs Blair, Brown, Mandelson, et al mendaciously continued the Thatcherite revolution many of us decided that the UK was no longer operating for the benefit of the large majority of its population. And, since we could, many of us who live in Scotland decided we should try something different. We came close, but not close enough. Even if we had won, we might have faced a number of rocky years, but if things continue as they are most of the U.K. faces such a future. Despite what the quasi lefties of the Guardian, Observer, New Statesman, Scottish Labour Party and ‘the imperial masters’ who paid a flying visit to Glasgow for a photo shoot, those of us who voted YES did so, not because ‘we hated the English’. Many of us were English ….. and Irish, Bangladeshi, Indian, Pakistani, etc, as well as people born in Scotland of Scottish parents.
    We might have lost, but we have exposed the excluding, baleful, vicious class politics of Westminster/Whitehall/City nexus. Perhaps, with the election of Jeremy Corbyn, there are signs that a large number of the excluded in England are awakening. It is still possible that the Blairite thugs will depose Mr Corbyn, but I hope the genie is out of the bottle.


    The SNP Gov have a £200 million underspend and refuse to use tax raising powers to help the poor. Osborne is not to blame. I am happy to pay additional tax.

  9. Intolerant_Liberal

    If I was in a good job, I would be happy to pay extra too, if it went to the people who needed it most. When the world is turned upside down as it is now, and you have a government pro actively trying to marginalise the marginalised and impoverish the impoverished with as much alacrity and class hatred they can muster, and then gifting the affluent and wealthy with tax breaks and more and more resources, most of us just despair. It is the way of the right wing to create division, and the harshest divider of all in wealthy societies is the economic division and access to healthcare, decent higher education and access to resources and help. Denying help to those who in some cases desperately need it, and giving help to those who are already prosperous is unfair, unjust, divisive, creates waves of resentment back and forth, and is unchristian to boot. But that’s the present political system we have at the moment. Most politicians have no soul, they have sold out.

  10. Intolerant_Liberal

    When they abandoned the ordinary person, and played for the vote of those who were traditionally voted Conservative, that’s when the Labour party lost votes. Why vote for a wet Labour party when you could vote for the Tories? They marginalised their core voters and were marginalised themselves. If they can’t see that, then they need to re-evaluate just what the Labour party stands for.
    The Tories are past masters at dividing people up and getting everyone at everyone else’s throats. A kind of dysfunctional society where the posh, rich and connected can do what they like whilst the rest of us squabble over the crumbs coming off the table. I don’t particularly want a hard left Labour party, and I certainly don’t want Fabian socialists and Guardinista trendy lefties going about PC irrelevances, I want a Labour party that wishes to redistribute wealth, and particularly access to that wealth through opportunity, education and other things the affluent and privileged take for granted. I also want a political that reflects this country, and not a small section of this country, which is primarily white, middle and upper middle class, privileged and privately educated men mostly from London and the South East. That reality is the core of why most things are unfair and imbalanced in the first place. Let’s focus on that reality.

  11. Derick Tulloch

    Dear God. How many times?
    There is no ‘underspend’. As I am sure you know the Scottish Government is legally prevented from overspending. Therefore it must budget to just underspend – until the end of the financial year when that ‘underspend’ is carried forward to the next year. This arrangement was put in place after John Swinney’s negotiations with the Treasury, which also recovered the cumulative £1.5bn which the SLAB had returned to Whitehall because they couldn’t think what to spend it on.

  12. Derick Tulloch

    Message to Rick. It’s not 1979

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