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The voice of Scotland’s vibrant voluntary sector

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"His priorities are the wrong ones": charities hit out at chancellor over 'mini-budget'

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Kwasi Kwarteng announced a number of new policies, including scrapping the cap on banker's bonuses

Charities in Scotland and across the UK have said the UK government has “failed to deliver” in its mini-budget on Friday, accusing the chancellor of prioritising bankers’ bonuses.

Kwasi Kwarteng outlined what he and other ministers describe as a “new growth plan”, cancelling corporation tax rises, cutting income tax rates and abolishing the top rate as part of a swathe of moves to “grow the economy”. 

He said: “Economic growth isn’t some academic term with no connection to the real world. It means more jobs, higher pay and more money to fund public services, like schools and the NHS.

“This will not happen overnight but the tax cuts and reforms I’ve announced today – the biggest package in generations – send a clear signal that growth is our priority.

“We want businesses to invest in the UK, we want the brightest and the best to work here and we want better living standards for everyone.”

Charities have been quick to condemn the announcements, as the country continues to be gripped by a cost of living crisis. 

Concerns have been raised about the awarding of tax cuts to the wealthy, with a lack of investment in social security and limiting of Universal Credit levels. 

Peter Kelly, director of the Poverty Alliance, said: "The new prime minister and chancellor have taken office at a time when the country is being swept up in a rising tide of poverty. In communities across the UK, more and more people are being pushed into impossible decisions like whether to heat their home or pay their rent.

“Today's mini budget provided the opportunity to take the action needed to protect people from being pulled deeper into poverty. It offered a chance to create lifelines for people who are struggling to stay afloat, for example by boosting Universal Credit to strengthen our social security system. Instead, Kwasi Kwarteng's statement embodied the economic policies that helped create the social and economic injustice that exists today.

“Governing is about priorities. The chancellor’s statement, with its tax cut for the wealthiest, makes clear where his priorities lie. Instead of ending the benefit cap, he scrapped the cap on bankers bonuses. Those on the highest incomes will get even more; those in low paid part-time jobs will be expected to work harder just to stay afloat. His priorities are the wrong ones, and fail to reflect the values of justice and compassion that are at the heart of our society. This mini budget will do nothing for the people who need help the most."

Across the UK, the increasing levels of child poverty will not be addressed, other charities warned. 

Becca Lyon, head of child poverty at Save the Children, said: “The prime minister said she would deliver on the cost of living crisis. Instead, the UK government has delivered tax-cuts to help the richest and a hammer-blow to low-income families.

“The chancellor has prioritised bankers' bonuses over helping vulnerable children through the cost of living, whose hard-working parents face impossible choices. Today’s announcements overwhelmingly benefit the country’s wealthiest households, meanwhile almost four million children risk going cold and hungry this winter. Growth is a welcome goal, but that growth must include investment that helps all children have a fair start in life.

“The last few years have been brutal on families on low-incomes: the pandemic, the removal of the £20 Universal Credit uplift, and now the cost-of-living crisis have left many at breaking point. Families we work with are deeply worried about how they will survive the winter, and what lasting impacts these crises will have on their kids. 

“In the Autumn Budget, the UK government must address the glaring omissions from this announcement and introduce a children’s cost of living package, with a £10 per week increase to the child element of Universal Credit and scrap the unfair benefit cap.”

Other groups have urged the Scottish Government to step up and act where ministers in Westminster have not. 

John Dickie, director of Child Poverty Action Group (CPAG) in Scotland, said: “It is children in poverty who will pay the price for the chancellor’s choice to prioritise tax cuts that mainly benefit the better off over additional support for low income families. It is our poorest families who are struggling most in the face of the costs of living crisis. 

“To protect them it is absolutely vital that the UK government now increases benefits in line with inflation as soon as possible, scraps the benefit cap, and pauses deductions from benefits to help families get through winter. Our social security system is there for a reason - investing in it is vital to keeping families out of poverty.”

Mr Dickie added: “In the long shadow cast by the chancellor’s statement it is critical that the Scottish Government continues to do the right thing and prioritises tackling child poverty. That means using the imminent emergency Scottish budget review to provide more immediate support for hard up families  through, for example, doubling the remaining Scottish child payment bridging payments.

"At the same time the Scottish finance secretary must protect and enhance investment in the wider childcare, social security and services that its child poverty delivery plan rests on.”

Mr Dickie said: “The UK government could and should be making a big difference for low-earners who want to work more. But sanctions make people poor, not help them get jobs. Investing in skills training and more affordable childcare would make the difference they need.”