Marginalised Scots hit hardest by tax and spending changes, report finds

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Poorer families, severely disabled people and female lone parents are among those in Scotland whose household income is taking the biggest hit from tax and spending plans, new research indicates.

The Equality and Human Rights Commission (EHRC) examined the impact of combined changes to tax, social security and local authority services between 2010 and 2022.

Families with at least one disabled adult and one disabled child are predicted to be hardest hit, standing to lose £5,000 a year on average – equivalent to a tenth of their income.

Taking the changes into account, the EHRC report estimates household income in Scotland will fall by 8.5% for Scotland’s poorest families, 8% for larger families and 7.8% for female lone parent households.

Household income for black families is predicted to drop by 6.5%, while severely disabled people face a 5% cut and younger people a 4% reduction.

The report estimates an increase in child poverty across Scotland by 2021-22, with 80,000 more children in poverty than in 2010 – an 8% rise.

The forecast impact of changes to tax, welfare and local authority services is uneven across race and gender with white households predicted to lose £550 on average between 2012 – 2022, while black households lose more £2,900 and Asian households lose an average of £1,200.

Women are estimated to lose an average £250 a year, compared to £40 for men.

For women in the 35-44 age group this rises to a loss of more than £1,200 compared with less than £350 for men.

Overall, total household income in England is projected to fall by £1,450 between 2011 and 2022, compared to £200 in Scotland and £470 in Wales, with decisions by the Scottish Government mitigating the impact of some UK Government cuts.

The report makes a series of recommendations including calling on the UK Government to consider mitigating some cuts to reduce the disproportionate impact on some groups.

Further recommendations are for the Scottish Government to continue its mitigation policies and for both governments to ensure future spending plans are accompanied by equality impact assessments.

EHRC Scotland head John Wilkes said: “The findings show just how stark and how unequal the combined impact of the recession, austerity and public spending cuts have been.

“Using this new approach to assess the combined impact of tax and spend policy reveals that it is the most marginalised who have suffered the most.

“We already know that ethnic minorities, disabled people, and lone parents are much more likely to live in poverty than other Scots, and face far higher than average unemployment.

“What this research clearly shows is that we can and must consider the different impacts on different groups before we make major policy changes.

“Otherwise we risk increasing the inequalities in our society.

“Positive policies in Scotland such as mitigating effects of some social security changes has saved many from even greater income losses.”

Scottish Labour MSP Elaine Smith said the report should be a “stark warning” to the Scottish and UK governments on the impact of austerity.

She added: “A single child living in poverty should be a source of shame for our governments – the forecast that there will be a further 80,000 by 2021 is simply sickening.”

A Scottish Government spokeswoman said the UK Government welfare cuts are expected to lead to a £3.7 billion reduction in social security spending in Scotland in 2020/21.

She said: “We are committed to ensuring that, despite the UK Government’s welfare cuts, Scottish Government spending choices and services continue to protect the rights and incomes of our most marginalised and vulnerable citizens – including those from disadvantaged groups.”

She added that Scotland is the only part of the UK to have set a target to eradicate child poverty.

A UK Government spokesman said: “The Scottish Government’s significant powers now include tax-raising and deciding how to allocate funding between public services.

“At Budget, we reiterated our commitment to the people of Scotland by increasing the Scottish Government’s budget by £950 million. And last year, the Department for Work and Pensions delivered £15.7 billion of welfare spending in Scotland to support those most in need.”

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