Here are seven ways Westminster is making Scotland poorer

Ministers at Holyrood have introduced some measures to help mitigate the damage being done by a swathe of Tory policies but have all the while insisted there is only so much they can do with the limited resources they have. 

Here’s a reminder of some of the main ways Westminster is making Scots poorer.

1. Cut to Universal Credit

Last year, the Tories opted to remove a £20-a-week uplift benefit claimants had been receiving throughout the pandemic. This is equivalent to £1040 a year.

The 18-month hike was brought in specifically to soften the blow for the most vulnerable in society as the country shut down.

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But the Chancellor ignored cries from opposition parties to make it permanent, despite warnings it would push hundreds of thousands of people into poverty.

A study by Action for Children found that even if the uplift had been kept, because of other social security changes in the past decade, families would still be struggling with an average loss of £750 a year.

The Joseph Rowntree Foundation (JRF) estimated the cut alone could force 500,000 people, almost half of them children, into poverty.

Meanwhile, people on legacy benefits – such as those too ill to work – were never eligible for the uplift despite often having even higher costs during the coronavirus crisis because many were shielding.

2. Real terms cuts to benefits

In April, the state pension and other benefits are due to rise by 3.1%. This is in line with September’s inflation figures.

But that was seven months ago. February’s figure was twice that at 6.2% but there has been no change in the increase to benefits.

Pensioners are going to be about £290 worse off if inflation stays at this level and people on Universal Credit – which will rise from £324.84 a month to £334.91 a month for a single person over 25 – will find themselves down about £10 a month.

The JRF has previously estimated 400,000 could be pulled into poverty by this real-terms cut to incomes of some of the poorest families in the UK when the country’s out-of-work support is already at a 30-year low following a decade of cuts.

3. The benefit cap

If you didn’t already know, the UK Government has imposed a limit on the total amount of benefit you can receive if you are of working age since 2013.

This has left many families struggling to put food on the table or keep their homes warm and opposition parties have repeatedly called for it to be scrapped.

Earlier in March, the Department for Work and Pensions (DWP) figures showed as of August last year, 180,000 households had their social security support capped, including 6400 in Scotland.

Back in 2013, the UK Government found the benefit cap was supported by 73% of people via a poll.

But more recently, a fresh survey carried out by Survation for the Poverty Alliance found that – excluding don’t knows – 57% of people now think the UK Government should remove it.

The Poverty Alliance launched the Scrap the Cap campaign last week, and more than 100 campaign groups, trade unions, faith groups and health organisations signed a letter in time for the Spring Statement calling on the Tories to ditch the policy. There’s no sign of them listening yet.

4. Two-child benefit cap and the “rape clause”

But it’s not just the general cap on benefits that affects our most vulnerable.

Back in April 2017, new rules came into force limiting the child element of child tax credit and Universal Credit to two children, meaning families claiming these benefits would not get support for a third child.

Figures released last year showed more than a million children in the UK had been affected by the policy.

In April 2021, 1.1 million children living in 318,0000 households were hit by the cap.

The number of households affected increased by 67,000 from the figures to April 2020.

There are ways you can get an exemption from this policy. For example, if you have had a third child as a result of being raped, you can claim for this child but you have to prove they were conceived as a result of “non-consensual conception”.

A campaign group called Scrap the Rape Clause was launched by Alison Thewliss MP and a petition calling on the Government to abandon the idea was signed by 10,000 people.

In July 2020, official figures showed 900 women were forced to disclose their child was conceived through rape to claim benefits.

In its first three years, 243,000 households containing 911,000 children were affected by the policy. It remains in place to this day.

5. Suspension of the pension triple-lock

The triple-lock is a safeguard that applies to the state pension in the UK and guarantees it will rise each year. It means it will increase in line with whichever is highest out of inflation, average wage increase, or 2.5 per cent. It was introduced in 2010 by the Conservative/Lib Dem coalition.

In 2019, the Tories vowed to keep it in place for the duration of their term in government, but Work and Pensions Secretary Therese Coffey said last September the triple lock would be suspended in 2022-23 and instead the state pension would be determined by either the inflation rate or would increase by 2.5%.

This occurred because during the pandemic, many people were earning less than usual because they were placed on furlough but when they returned to full pay, this was recorded as a large rise in average earnings – an estimated 8%. Under the rules of the triple lock, this means state pensions would have to rise by a similar amount.

The triple lock is due to be restored next year, but many have slammed the government for the move saying it will leave pensioners worse off.

Research released by the Labour Party suggested the retired will experience the sharpest real-terms drop in their incomes in half a century.

6. National Insurance hike

The UK Government announced last year that employees, employers and the self-employed will all pay 1.25p more in the pound for National Insurance (NI) from April.

The extra tax will be collected as a new Health and Social Care Levy and from April 2023 it will return to its current rate.

After a backlash from the public, Chancellor Rishi Sunak announced in his Spring Statement he would increase the threshold at which people start paying NI from July by £3000, taking it to £12,570.

But he also confirmed the planned increase to generate cash for the NHS and social care would still go ahead.

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This means, for example, that someone who is employed and earns £30,000 a year will pay £53 less over the course of 2022/23 compared to the previous year, but those earning more than £34,261 will pay more NI than they did last year.

7. VAT increase

VAT was reduced to 5% in 2020 to help businesses recover from the pandemic, but it rose to 12.5% in October last year and will return to 20% this month.

Firms have warned they will have no choice but to increase prices as a result, with many still struggling to stay afloat in the aftermath of the Covid crisis.

Some businesses have also been seen cutting opening hours because of soaring energy costs.