SFHA Member Briefing – UK Spring Budget March 2023
The Chancellor made several announcements with relevance to Scottish social housing providers and tenants.
Yesterday, UK Chancellor, Jeremy Hunt delivered the 2023-24 Budget at Westminster. He defended the Government’s record and pointed to improving economic outlooks in the coming years, while acknowledging the ongoing cost of living crisis. The Office for Budget Responsibility (OBR) yesterday upgraded its short-term economic outlook, with the economy expected to be 1.5% larger by the end of the year than previously expected. The UK is forecast to see the sharpest one-year fall in inflation since the 1970s but avoid a technical recession.
The Chancellor made several announcements with relevance to Scottish social housing providers and tenants. The Energy Price Guarantee will be maintained at £2,500 until the end of June, while the tariffs paid by customers on pre-payment meters will be brought into line with “comparable” direct debit customers. SFHA welcomes these announcements, having called for more and continued support around energy bulls in our pre-budget briefing to MPs.
There were several announcements around social security and Universal Credit. Universal Credit sanctions will now be applied more “rigorously” and “more intensive conditionality” will be applied to workers on low hours. From summer, childcare costs for people on Universal Credit will be able to be claimed in advance rather than in arrears, with monthly caps on this support increased. The DWP will also expand its “Midlife MOT” programme and a new form of apprenticeship, termed a “returnship”, will be introduced for retired over-50s who wish to return to the workforce.
The Chancellor also announced 12 new £80m “investment zones”, one of which will be in Scotland, £8.6m in targeted funding for the Edinburgh Festivals. Other announcements which will directly apply in Scotland include a freeze on fuel duty and draught beer. Jeremy Hunt indicated the Budget would result in up to £320m in additional Barnett Consequentials for the Scottish Government.
The Chancellor also announced additional funding for the Office for Veteran’s Affairs: this will not come directly to Scotland, but it is notable that he referred to veterans’ housing as a key area. In other areas, announcements included an expansion in England’s free childcare offer; scrapping the maximum amount of pension savings an individual can build up over their career without having to pay an additional charge; and significant new investments in nuclear power.
Keir Starmer accused the Government of “dressing up stagnation as stability” and failing to address the severe and long-term problems the country faces. SNP Economy Spokesperson, Stewart Hosie, agreed the Government was falling victim to short-termism and while welcoming the actions around pre-payment meters, he called some of the social security reforms “unconscionable”. He said the Government should have reduced the Energy Price Cap to £2,000 instead of maintaining it at £2,500, noting that average prices in Scotland were up to £1,000 higher than the current average under the cap. He criticised the Government for failing to act against “price gouging” by providers and argued greater intervention would have reduced inflation. Caroline Lucas, Green Party MP for Brighton Pavilion, said the budget “fails to protect our environment [and] gravely risks damaging our economy too.”
Prior to the Budget, we briefed MPs on the reforms required from Westminster to support social housing providers and their tenants. While we welcome the continuation of energy bill support, it remains vital that the UK’s social security system provides individuals with, at the very least, enough to meet the basic essentials required to live. An even more punitive Universal Credit system will only exacerbate the often acute poverty faced by the most vulnerable, many of whom are social tenants. At the very least, UK Government should have removed the two-child limit and benefit cap. We will continue to campaign on this basis.