Finance secretary in Budget welfare warning to Chancellor

Derek Mackay

Finance and economy secretary Derek Mackay has written to the Chancellor of the Exchequer to outline the Scottish Government’s “deep concerns” about the impact UK welfare reforms are having on the people of Scotland.

Welfare reform was among a number of key issues that the Scottish Government said it needed to raise ahead of the UK Budget on October 29.

In a letter Chancellor Philip Hammond, Mr Mackay urged the UK Government to immediately to lift the benefit freeze, and for benefits to be uprated in line with inflation.

He said: “The Scottish Government remains deeply concerned about the impact UK welfare reforms are having on the people of Scotland, pushing them into poverty and hardship, and causing stress and anxiety. Our new 2018 Welfare Reform report shows that by 2020/21, social security spending in Scotland is expected to have reduced by £3.7 billion as a result of UK Government welfare cuts since 2010. In Scotland, the four-year Benefit Freeze is the reform that is estimated to have led to the biggest reduction in spending – around £190 million in 2018/19, and around £370m per year by 2020/21.

“The report also shows that over the first year of its implementation around 3,800 Scottish families have seen their incomes reduced due to the Two Child Limit. Each year more children will lose out on up to £2,780 per year because they were born after the arbitrary April 2017 cut-off date.

“The Scottish Government also remains concerned about the impact that the roll out of Universal Credit (UC) is having as it causes further widespread hardship, stress and anxiety. Due to work allowance cuts, more and more working people in Scotland are losing out on vital support to help them sustain employment and make work an attractive option. For example, in 2018/19, working UC claimants in Scotland will lose £164m, and approximately £245m by the year 2021. We have repeatedly called on the UK Government to halt the roll out of UC until the fixes the system urgently needs can be implemented.

“In order to stop things getting any worse, I am asking you to use the Autumn Budget to act immediately to lift the benefit freeze, and for benefits to be uprated in line with inflation. The benefit freeze has resulted in the biggest reduction in welfare spending in Scotland and it is time for the UK Government to lift it.”

Mr Mackay also repeated calls on the UK Government not to impose fees on EU citizens applying for settled status.