Autumn Statement, free school meals and Barnett consequentials: CPAG in Scotland comment and media briefing

December 2013

Speaking ahead of the UK Autumn Statement on 5 December, John Dickie, head of the Child Poverty Action Group in Scotland, said

"The Autumn Statement is a vital opportunity for the Chancellor to reverse a forecast explosion in child poverty by investing in childcare support within the new Universal Credit, raising the national minimum wage and uprating benefits and tax credits in line with inflation.

The Chancellor also needs to set out clearly the Barnett consequentials from the UK government promise to provide free school meals to all pupils in the early years of primary school in England. But, whatever the outcome of the Chancellors statement, the Scottish Government must also prioritise children and families in its budget and deliver on its own long standing promise to give every child in P1 to P3 a free healthy school lunch."

Background

Current UK government policies are forecast to drive 70,000 more children into poverty by 2020[i]. But this is not inevitable. The Chancellor has legislative, spending and tax raising powers which could immediately lift thousands of families out of poverty, whilst the Scottish government can act now to support families in the face of damaging UK policies.

CPAG in Scotland believes that the Autumn Statement 2013 should;

  • Clearly identify Barnett consequentials resulting from the UK Government decision to provide Free School Meals to P1-P3 children in England. In September 2013, the UK Government announced that all pupils in the first three years of primary school in England will receive a free school lunch[ii] from September 2014 with reported Barnett consequentials of around £60 million to be made available to the Scottish Government[iii]. These funds should be clearly identified in the Autumn Statement 2013. Whatever the Barnett consequentials, the Scottish Government must prioritise resources in its budget to deliver on its own longstanding commitment to provide free school meals to all pupils in P1 to P3. [iv]

In a letter to the Chancellor CPAG has called for the UK government to;

  • Extend the 85% proportion of childcare costs that can be recovered through Universal Credit to all families, rather than a lower rate for lower earner families as currently proposed. In April 2011 the support that parents could get to pay for childcare through working tax credit was cut from 80% of childcare costs to just 70% of childcare costs. This increases the pressure on hard pressed families struggling to cope with the high cost of childcare. A nursery place for a two year old child in Scotland currently costs an average of £200 a week[vi].
  • Commit to increasing the National Minimum Wage back to its real value prior to 2010. Currently, two-thirds of children below the official relative low income poverty line come from working families. A family with two children in which both parents work full time at national minimum wage will have an income sufficient to cover only 83% of their minimum needs[vii].
  • Raise social security entitlements, welfare benefit and tax credits at least in line with the Consumer Prices Index (CPI). Analysis by the IFS has already shown that by uprating social security benefits, child benefit and tax credits less than the cost of living, the Government will drive up child poverty in future years and worsen material deprivation for low income families[viii].
  • Pilot second earner and single parent disregards in Universal Credit. Under UC the second earners in a couple will be big losers. The earnings disregard will be shared by couples, so it will be ‘used up’ by the main earner, resulting in very poor work incentives for second earners.

From more information or interviews please contact John Dickie, Head of CPAG in Scotland:

Tel: 0141 552 3656 or 07795 340618

Email: jdickie@cpagscotland.org.uk

[i] http://www.ifs.org.uk/comms/r78.pdf. Figures for Scotland can be found on p41 table B.2 Column 1.

[ii] https://www.gov.uk/government/news/free-school-lunch-for-every-child-in-...

[iii] http://www.heraldscotland.com/politics/political-news/salmond-urged-to-b...

[iv] See http://news.bbc.co.uk/1/hi/england/7646898.stm , reiterated http://www.scotland.gov.uk/News/Releases/2010/03/26140633

[vi] http://www.daycaretrust.org.uk/data/files/Research/costs_surveys/Childca...

[vii] http://www.cpag.org.uk/content/cost-child-2013 CPAG Cost of a Child Report, August 2013

[viii] http://www.ifs.org.uk/comms/r78.pdf