Budget will minimise bedroom tax hit - Swinney

The Finance Secretary has said his spending plans will support those facing hard times under UK welfare reforms, as political opponents labelled his Budget a missed opportunity to grow the economy.

Bedroom Tax protesters in  Glasgow.   Picture: Robert Perry
Bedroom Tax protesters in Glasgow. Picture: Robert Perry

John Swinney highlighted more money for affordable housing, colleges and nursery provision in a statement to Holyrood yesterday on his spending plans for 2014-15 and 2015-16.

He also identified up to £20 million in this financial year to support people facing the UK-wide housing benefit change known as the “bedroom tax”.

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But Labour said the money is less than half of what is needed to address the impact of the bedroom tax this year, while the Conservatives said the Budget is focused on independence and fails to prioritise the economy.

Defending the plans, Mr Swinney told BBC Radio Scotland: “This is a Budget that was designed to address the real issues that face the people of Scotland.

“It’s a combination of tackling the economic situation that we face, in which I think we’re making good and reasonable progress, and about ensuring that we support those in our society who are facing very hard times as a consequence of the economic difficulties and as a product of welfare reform.”

He could do more if he had greater powers under Scottish independence, he told the Good Morning Scotland programme.

“Clearly there is more that I could do if I had a wider range of financial and economic powers as the finance minister of an independent Scotland. Some of the aspirations that we would have to stimulate the economy to a much greater extent by greater capital expenditure are thwarted by the fact that I don’t have the power to determine the size of the capital budget in Scotland.”

On the bedroom tax, also known as the spare room subsidy, Mr Swinney suggested he is limited in what he can do legally but is happy to look at other ways to support those affected.

“I have to be able to spend money with appropriate legal authority,” he said.

“This is a reserved issue. We have to have a legitimate way of spending money in this respect, so we can only spend about £20 million in supporting local authorities to deliver discretionary housing payments to those affected by the bedroom tax.

“I have delivered right away in this Budget, in this financial year, the £20 million that will enable local authorities to provide that support to individuals in a perfectly legal fashion. I am absolutely happy to consider other legal mechanisms for supporting people in this way but I haven’t heard any.”

Asked whether £20 million is enough money, he said: “I would accept that there is no way the Scottish Government can mitigate or ameliorate all the impact of welfare reform on the people of Scotland. We cannot mitigate all of the effects of welfare reform, either because we don’t have enough money or because we don’t have legal authority to undertake these steps.”

‘Not enough’

Labour finance spokesman Iain Gray said £20 million is not enough to help people in Scotland hit by the welfare reforms.

“There are two problems with it,” he told Good Morning Scotland.

“The first is it’s less than half the money which is required and the second is that this is money he’s found this year. It’s not actually in the Budget for next year or the year after at all.

“In terms of the bedroom tax, there are 80,000 households affected in Scotland. The cost of that ... is £50 million and so that was really what was needed. The trouble with finding only part of that is that is that in a sense it sets one victim of the bedroom tax against the other.”

Tory finance spokesman Gavin Brown said the SNP Government failed to put the economy at the forefront of its Budget.

“It was a missed opportunity. It was a Budget where we could have put the economy front and centre. It was an opportunity to do something about business rates, to help colleges, to get our economy moving and growing and it was completely missed,” he told the programme.

“There wasn’t anywhere near the focus that I think there ought to have been. It was focused entirely I think on independence. I think the Government has taken its eye off the ball.

“The priority is to focus on the economy and I think the Government failed entirely in doing that and I think that is really regrettable.”

Patrick Harvie of the Scottish Greens said he welcomes the Government pledge to help mitigate the effect of UK welfare reforms.

“I very much welcome the fact that John Swinney has found £20 million to put into the pot for the discretionary housing payment to tackle the effects of the bedroom tax,” he said.

“There is still more that we can do and I do still want to see legislation to prevent eviction, but that money is very welcome.”