BUDGET 2021
Sunak attacked for building recovery on backs of the poor
RISHI Sunak has been attacked for building the coronavirus recovery on the backs of the poor by cutting Universal Credit by £20 a week from September.
The Tory Chancellor yesterday trumpeted a “whatever it takes” Budget to help people and businesses through the coronavirus crisis.
But he confirmed that at the £20-per-week uplift to Universal Credit will only be extended for six months.
Controversially, the payment will be made as a one-off £500 grant to claimants.
It means extra cash could disappear quickly into debts built up by claimants, many of whom are working, and plunge 60,000 people in Scotland, including 20,000 children, below the poverty line.
Nina Ballantyne of Citizen Advice Scotland said if the uplift is removed, people on UC face a cash drop of as much as a quarter of their income.
She added: “Universal Credit wasn’t enough to live on before the pandemic, and if the uplift ends, whether now or in six months, it will be worth less in real terms than it was when it was first introduced in 2013.”
The number of people claiming Universal Credit in Scotland has almost doubled since the start of the pandemic, from 255,880 people in February to 476,219 in December.
Peter Kelly of campaign group the Poverty Alliance said Sunak had failed in his duty to stem the rising tide of poverty.
“By choosing to pull away support from people in six months’ time, when unemployment is expected to peak, the Chancellor has chosen to ignore the voices of people across our communities who have told him loudly and clearly that they need this lifeline.”
Sunak announced a number of his plans, including an extension of the furlough scheme until the end of September and plans to increase the contactless payment limit to £100, ahead of the Commons statement.
The minimum wage will increase to £8.91 an hour from April and the Chancellor said it would support “the lowest paid and most vulnerable”.
But opposition parties were scathing about the Chancellor’s Budget despite the £407billion spent on the Covid crisis in the last year.
“This is not levelling up, it is giving up,” said Keir Starmer.
The Labour leader said the budget “simply papers over the cracks”.
Starmer added: “It is clear the Chancellor is now betting on a recovery fuelled by a consumer spending blitz.
“But the central problem in our economy is a deep-rooted insecurity and inequality and this Budget isn’t the answer to that.
“So rather than the big, transformative Budget that we needed, this Budget simply papers over the cracks.”
Starmer went for the gap in the Chancellor’s statement, the devastation caused by Brexit to everything from fishing boats to touring musicians.
He added: “This Budget won’t feel so good for millions of key workers who are having their pay frozen, for businesses in debt or millions out of work or fearing losing their jobs.”
SNP Westminster leader Ian Blackford said the Budget “completely fails to recognise the sheer scale of the other pandemic our communities are suffering, the poverty pandemic”.
He said: “After a decade of underinvestment and Tory cuts, the last year has deepened the UK’s poverty crisis and widened the gaps in inequality.
“Six million people are now claiming Universal Credit, a 98 per cent increase since the pandemic began.” Blackford asked the Chancellor: “Where is the compassion?”
He said that in his own constituency a food bank in Skye and Lochalsh had handed out 25 food parcels a month in January 2020 and was now delivering 200 food parcels every week.
Blackford said: “The Chancellor doesn’t understand what it is like to be poor in Boris Johnson’s Brexit Britain.”
Sunak reported that the economy will grow, with the Office for Budget Responsibility now forecasting a “swifter and more sustained recovery” than they were expecting in November.
The independent watchdog expects the economy to recover to its pre-Covid level by the middle of next year, six months earlier than previously expected.
But in five years’ time the OBR still expects the economy to be
three per cent smaller than it would have been.
The Chancellor said 700,000 people have lost their jobs since March 2020 and the economy has shrunk by 10 per cent, the largest fall in more than 300 years.
As a result, furlough will be extended to September, raising fears that the Covid-19 lockdown restrictions could go beyond June.
Sunak announced an extra £19million to support victims of domestic abuse, £10million for veterans with mental health needs, lifetime commitment of funding for thalidomide victims and massive restart grants for the arts sector, all of which should see extra funding for the Scottish Government budget.
In total, there will be £1.2billion extra of Barnett formula funding for Scotland from the Chancellor’s announcements.
Sunak also confirmed £27million investment in the oil industry around Aberdeen and the acceleration of growth deals in Argyll and Bute, Falkirk and Ayrshire.
On duties, Sunak told MPs: “Planned increases in duties for spirits – like Scotch whisky – wine, cider and beer will all be cancelled.
“All alcohol duties (will be) frozen for the second year in a row – only the third time in two decades.
“And right now, to keep the cost of living low, I’m not prepared to increase the cost of a tank of fuel. So the planned increase in fuel duty is also cancelled.”
Sunak said the tax-free personal allowance, which applies across the UK, will be frozen at £12,570 to 2026.
Corporation tax paid by big companies will rise from 19 per cent to 25 cent from April 2023.
But companies with profits of less than £50,000 will still pay the 19 per cent rate, leaving only 10 per cent of firms to pay the higher rate.