Reforms announced in George Osborne’s summer budget could cost Edinburgh’s benefit recipients £270 million over the next five years, according to a study that went before Edinburgh City Council last week.
Estimates in Spring 2013 had measured the cost of austerity policies to benefit claimants at £223 million. However, last week’s report represents an estimated increase of £47 million, or 21 per cent of the original projection.
Over 60 per cent of government savings from the austerity initiative will be derived from cuts to working-age benefits and various tax credits.
Critics say that the policy changes, which include a two-child limit on child tax credits and a reduction in overall household benefit caps, have pushed Edinburgh towards a Dickensian “tale of two cities” and will exacerbate inequality between Edinburgh’s rich and poor.
According to the report, the impact of the cuts will increase significantly over time. While Edinburgh’s benefit recipients are expected to absorb £28 million worth of cuts in 2016-17, that number is projected to reach £77 million in 2020-21.
Speaking to The National, a newspaper whose stated goal is an independent Scotland, Labour’s Ricky Henderson, Corporate Policy and Strategy Committee Convener at Edinburgh City Council, implored voters to look at the “human cost” of austerity measures.
Henderson said: “This is the first report we have had since the Budget, and for the first time people can see the total amount of money that is coming out of people’s pockets.
“These are the people in the city who are the least well off, and they are being asked to pay some £270 million worth of pain over five years. It is a huge sum but the human cost is the real issue.
“If you are finding it tough to pay for things, then the last thing you need is £50 or £60 coming out of your income. That is my main concern – the hurt that is being done to people by these cuts.
“But it is worth pointing out that this is £270 million that is not going to go into the Edinburgh economy, as the evidence shows that people who are less well off tend to spend their money locally.”
The report arrives in the context of political chaos over Conservative Party efforts to cut tax credits. The plans, announced by Chancellor of the Exchequer George Osborne, were at least temporarily scuppered when the House of Lords rejected them.
The Lords’ intervention attracted the ire of the Conservative Party, all but 10 MPs of whom had voted in favour of the plans to cut tax credits. Prime Minister David Cameron said that the Lords’ action broke with accepted practices and raised constitutional questions about the powers of the unelected body.
Image: Kim Traynor