John Redwood
Main Page: John Redwood (Conservative - Wokingham)Department Debates - View all John Redwood's debates with the Department for Work and Pensions
(9 years, 4 months ago)
Commons ChamberAs I have said, the clause will allow the Scottish Parliament to decide on the details of who carers’ benefits are paid to. I want to make progress now, because I need to come to many other points that have been made.
I am grateful to the Minister; I think there is some problem with Ministers getting to the House.
How will the block grant be adjusted to take into account both the extra welfare responsibilities and the extra revenues? That is a rather important point if we are to understand the significance of the clauses on benefits.
That is subject to the discussions taking place on the fiscal framework.
Returning to carers, we recognise and appreciate, as everybody in the House will, the contribution of informal carers, who provide tremendous support to parents and other family members.
Amendment 115 relates to the powers being devolved on the provision of the regulated social fund. Clause 20 will give the Scottish Parliament legislative competence over support currently provided through a number of reserved benefits such as funeral payments and maternity grants, which some Members have briefly touched on today. As with our approach to disability benefits and carers’ benefits, the clause devolves not simply the existing benefits but the subject matter of them. That will give the Scottish Parliament wide-ranging powers to make its own provision for the areas in question.
I wish to respond briefly to Members’ points about amendments 132 and 117—the hon. Member for Nottingham North (Mr Allen), who is no longer in his place, spoke to the former. The Government have made significant changes to the clauses on discretionary payments since they were first published in draft in January, having listened to the views of the Scottish Government, the Scottish Parliament and key stakeholders. The Bill now includes new top-up provisions in clause 21, and we have removed some provisions on discretionary housing payments that people felt would unnecessarily constrain the powers being devolved. Together, clauses 21 to 23 will give the Scottish Parliament significant powers to legislate for discretionary payments to people in Scotland, whether by topping up a reserved benefit or by providing assistance to meet short-term needs. The Scottish Government will be able to provide people with money additional to that provided by the UK Government.
Some Members mentioned welfare reforms and tax credits. I should point out that my right hon. Friend the Chancellor will bring his Budget to the House next week, when further measures will be highlighted. The hon. Member for Banff and Buchan mentioned the letter in today’s Herald and spoke about children, and I want to put it on the record that the proportion of children in poverty is at its lowest level since the mid-1980s.
There has been some discussion of welfare reform. The Government are absolutely committed not just to reforming welfare but to supporting families into work. The best route out of poverty is work, and I make no apology for all our efforts to raise incomes by expanding employment opportunities. We will of course have a debate about employment opportunities in a later group of amendments this afternoon, and because we are short of time I will not touch on that subject now.
Members mentioned sanctions and conditionality. Conditionality is an important feature of our welfare system, and I note that both the Labour party and the Scottish National party have always stated that they agree that there should be conditionality in the system. I put it on the record again that there has been an independent review of sanctions, the Oakley review. The Government have accepted all the recommendations highlighted in it and have already implemented a number of provisions, including improvements to the hardship payments process.
The hon. Lady is mistaken. The procurement legislation was hampered by EU legislation. In recent public sector contracts, however, the Scottish Government have started to integrate living wage requirements from the outset. In fact, all the people for whom the Scottish Government are now responsible are on a living wage. There remain many challenges with contracted-out services, particularly at local authority level, but we are trying hard to move towards a living wage in all parts of the public sector. In recent months, we have also made real progress in making sure that private sector employers move towards a living wage. After all, most low-paid jobs are found in the private sector. We need the power to raise the minimum wage to a living wage. When people on low incomes have money in their pockets, they spend it, thereby boosting and strengthening the economy and creating jobs. We saw that when the minimum wage was introduced.
It is incumbent on everyone in the House to listen to the voices of people in Scotland who have put their heads above the parapet on this issue, because they are some of Scotland’s largest and most influential civil society organisations: Citizens Advice Scotland, Barnardo’s Scotland, the Child Poverty Action Group Scotland, the Church of Scotland, Inclusion Scotland, One Parent Families Scotland, Oxfam Scotland, the Poverty Alliance, the Scottish Council for Voluntary Organisations, Shelter Scotland, the Scottish Federation of Housing Associations, the Trussell Trust and last, but by no means least, the Scottish Trades Union Congress. The veto in the Scotland Bill is a barrier to responsive and responsible governance in Scotland.
If the Scottish Government did have wider-ranging powers on welfare, as the hon. Lady would like, by how much would they need to put up benefits compared with UK levels to tackle the problems she has identified?
The right hon. Gentleman raises an interesting point. It is worth pointing out that, over the past five years, Scotland has spent a lower proportion of its GDP on pensions and benefits than the UK as a whole. The question of what a social security system can afford is dependent on the success of the economy. That is why our amendments are all designed to bring into the ambit of the Scottish Government and the Scottish Parliament those powers that would enable us to grow our economy, run it more effectively and join up the existing devolved powers with the new powers that we propose. Frankly, getting powers over work and powers over benefits covered by universal credit is extremely important. The other really important point is that we protect the most disadvantaged people in our society from the onslaught of Tory cuts. Again and again, the people of Scotland have made it clear that they want an alternative to this austerity regime—and that is what we want to be in a position to deliver.
The Deputy First Minister, John Swinney has pointed out that it is not difficult to foresee that what might appear to be pretty innocuous requirements to consult the Secretary of State and secure his or her agreement could be translated into what is essentially a blocking power. All sorts of excuses could be used to prevent something from happening. As the Deputy First Minister put it, if the Secretary of State has a “reasonable explanation” for why he is acting in such a way, that passes the test as it currently exists in clause 24. In practice, the Bill gives the UK Government the ability to veto decisions made by the Scottish Government and Scottish Parliament. This is not a hypothetical scenario. The Deputy First Minister has pointed out how he spent two years trying to make progress on the block grant adjustment, and was stalled and delayed with more analysis at every turn by the UK Government.
For me, no issue illustrates the shortcomings of the Scotland Bill better than the restrictions it would place on the power of the Scottish Parliament to abolish the bedroom tax. As the Secretary of State knows only too well, this has been an issue close to my heart over the last few years, because of its punitive impact on disabled people in Scotland, its gross unfairness and the enormous pressure it puts on councils and other social housing providers. In Scotland, 80% of people affected by the bedroom tax are in homes with a disabled adult, and there is a chronic mismatch between the house size requirements of tenants and the available housing stock. Back in April 2013, I led one of the SNP’s very few Opposition day debates here in this Chamber during the previous Parliament on that very topic, and the Secretary of State knows that I questioned him on several occasions about the failure of the policy and its deep unpopularity right across the country.
The Scottish Government have mitigated the impact of the bedroom tax by providing discretionary housing payments to everyone affected, but it is important to recognise that we still cannot abolish that legislation, which remains on the statute book. Moreover, the money to mitigate its worst side-effects has had to be found from other devolved policy budgets—and, crucially, the legal liability remains with tenants. It is far from an ideal solution. In order to mitigate the bedroom tax by lifting the cap on discretionary housing payments, the Scottish Government first had to secure the permission of the UK Government, and the protracted and frustrating process they encountered in attempting to secure that permission illustrates, I think perfectly, why we need to lift this veto. It shows how a need for permission can be drawn out for months at a time.
I am not giving way, as I am about to wind up my remarks.
This group of amendments comes down to respect—respect for the promises made to the people of Scotland; respect for our Parliament; respect for the democratic process; and, above all, respect for our citizens and our ability to make decisions in our own interests. That is, after all, what meaningful devolution is really all about.
I think that the Committee wants to implement the spirit and the letter of Smith, and I look forward to hearing the Secretary of State’s response to the detailed arguments advanced by the hon. Member for Banff and Buchan (Dr Whiteford). I think, however, that when we are dealing with a matter as potentially wide-ranging as universal credit, we also need to think about the money, and about how far it is possible to operate a very different welfare system in different parts of a country such as the United Kingdom. What we have seen in the unfolding and dreadful Greek crisis is that, if a country belongs to a currency union but has not brought its benefits system into line, and if there is no proper system of sharing revenues and expenditures throughout the eurozone, that becomes extremely damaging, as it has for the poor Greeks.
I am sure the right hon. Gentleman is not suggesting that there is an in-line benefits system across Europe. The real problem is austerity. The Greeks were told five years ago that, if they followed austerity measures, their problems would end, but their problems have not ended. They have become worse, because austerity makes things worse. It is nothing to do with welfare; it is to do with austerity.
I think that welfare has quite a lot to do with austerity, and I think that we agree. I think that the policies that have been forced on Greece have been too austere. It is quite wrong to make the Greeks cut public spending when they cannot expand their money supply, expand credit or expand the private sector to create the jobs that they clearly need to create in order to make some success out of the cuts imposed on the public sector.
When, after 2010, we conducted policy as a coalition to bring about recovery in Britain—including Scotland—it worked very well, and it was private sector led. We were able to do that because we had a full range of powers over interest rates, money creation, credit and banking, which a nation that has joined a currency union does not have. That is the Greek tragedy. The Greeks are able to carry out only the public sector part of the EU fix, which is the bit that is austere. They are not able to carry out the private sector-led recovery.
Of course, we are not here to talk about Greece; we are here to talk about our currency union. However, I wanted to make that point because, whereas Greece is having to move away from a position in which it shared only currency and is now discovering that it needs to share a great many other policies with the European Union in order to achieve success, in Scotland things are going in the opposite direction.
We have a currency union—a perfectly good currency union, which is supported on all sides. I believe that Members of the SNP are great fans of the currency union and do not wish Scotland to have an independent currency, but they need to consider this: if they do not want proper independence in the sense of having their own currency, and if the currency is to work in the way in which it has worked in the past, there will have to be some basic standards of welfare that are common across the country, and there will have to be agreed systems of transferring money from rich areas to poor ones. There are rich towns and cities in both Scotland and in England. The rule of our system is that those in areas of high income or relative success pay more tax, and those in, say, towns or counties with a lot of poverty benefit from big transfers.
I almost feel sorry for interrupting the right hon. Gentleman when he is advancing a good argument for the redistribution of wealth through taxation, and has also admitted that austerity is not a good idea. However, I think that the mention of Greece is erroneous. If we are talking about an optimal currency zone, a better parallel would be Germany and the Netherlands. The independence that those countries have from each other is welcomed by SNP Members. I hope that the right hon. Gentleman will go a little further than the enlightened remarks that he has made so far, and will agree with us that Scotland and England should be as independent from each other as Germany and the Netherlands.
I am not prepared to go that far. I think that there can be problems in the euro currency zone between Germany and the Netherlands, because they do not have the full range of common policies that they may need. At present, it appears that the Dutch and German economies are sufficiently synchronised for the arrangement not to cause problems in the Netherlands, but that is clearly not true of Portugal, Spain, Ireland or Greece. The fact that there are more countries that it does not fit than countries that it does fit implies that there is something wrong with the fundamental architecture of the euro. That is why I am anxious for us to bear it in mind, when we are debating the issue of how much welfare discretion there should be, that a common welfare system is normally one of the characteristics of successful currency unions.
Yes, I do believe in redistribution. We all believe in redistribution. We believe that, in a civilised country such as ours, we should tax the rich more and give money to those who need support. We have arguments about how much the amounts should be and about the conditions, but we all believe in transfers, and we all believe that the balance must be right.
When I asked the hon. Member for Banff and Buchan to say how much more an enlightened Scottish Government would like to give, by means of welfare payments, to tackle immediate problems of low income or poverty, she was not able to tell me. That was a pity, because I took it that her intention, and the purpose of the amendments, was to give the Scottish Executive power to increase benefit levels in comparison with the levels, or the range, of benefits currently on offer in the Union. I did not think that SNP Members were seeking these powers in order to be meaner than the Union Government are proposing to be, and I see them consenting to that. I feel that this debate would be richer and fuller if they shared with us the amount of extra money that they would like to spend.
Surely the point is that it is for the Scottish Government, whatever their colour, to decide how they want to use the powers. Perhaps one day a Government of the right hon. Gentleman’s colour will be using them. However, no Government would be able to use any powers that had been vetoed by the Secretary of State.
That brings us back to an important and interesting question. At what point does the transfer of power become destabilising for the currency union and the common transfers that make up our common country? That, surely, is one of the issues that were examined in the referendum, when a majority of Scottish people felt that they wanted to remain in the United Kingdom and in the currency union. Having read and listened to what was said by those who were actively involved in the debate, I suspect that the currency union was rather central to the securing of that vote, and that it was when the parties of the Union said that Scotland should leave the currency as well as the UK, if that was the wish of the Scottish people, that the majority voted to stay in the Union.
I should be fascinated to know the size of the changes in welfare spending that the right hon. Gentleman would find destabilising. The hon. Member for Gainsborough (Sir Edward Leigh) said yesterday:
“the Scottish Parliament spends £37 billion and raises £30 billion”.—[Official Report, 29 June 2015; Vol. 597, c. 1234.]
He described that as “quite responsible”. He also said that the UK raised staggeringly more—£648 billion, an amount that is about 20 times greater—but, of course, the UK also spent a great deal more, with a black hole of £732 billion. Given those figures, and given the difference between the sizes of the states of Scotland and the UK, in terms of both spending and raising powers, just what type of changes does the right hon. Gentleman think would have to hit welfare before it began to destabilise the Union? I suggest that it would be necessary to make a millionaire of each and every unemployed person before that point was reached.
I do not think that it would be necessary to go that far. At present, there is clearly a disproportion between the size of Scotland and that of the rest of the United Kingdom, and, as the hon. Gentleman’s budget figures show, a lot more money is collected elsewhere than in Scotland. That, however, is not the point at issue. [Interruption.] I am not asserting anything; I am just asking a question. We are engaging in a crucial debate on how much welfare power should go to Scotland. I am one of those who agree that some welfare power should go to Scotland in accordance with Smith, but we have to ask how far it goes, and what the consequences might be.
If countries have a common work area and a free movement area, and if they share a language, a labour market and a currency, that arrangement can bring benefits when it has settled down, because it is backed by political union. When we start to unpick the political union, we must ask ourselves at what point that unpicking of that union, or the welfare transfer union, will become damaging. A point will be reached when it does become damaging, because one part of the country will be too attractive, or too unattractive, compared with another part. A single currency area as big as the United Kingdom can work only if there are fair systems for raising money from the rich, wherever they may be in that big area, and giving enough to the poor, wherever they may be.
Is the right hon. Gentleman aware that parts of the United Kingdom are already more unattractive because of decisions on welfare spending? The bedroom tax is one example. In the highlands, there are some 70 communities with no one or two-bedroom properties on the social register for people to move to. How can it possibly be fair for that principle to apply across the UK, when the people who live there are unable to cope with that heinous tax?
I fully understand the arguments against the spare room subsidy, or the bedroom tax. I understand the politics of it only too well. I do not want to go into my private views now, but it is a matter to be settled within the Union Parliament, and by the Government of the Union, under current powers. It does not make good law to say that if there is a particular benefit that people in Scotland do not like very much, that is the one that we should be able to fix. We need to come up with a settlement for a longer-term period which takes account of the principles.
It is for that reason that I am presuming to spend just a few minutes reminding colleagues that very big principles are involved in this instance. We need to secure the right balance, one that enables Scotland to feel that it can make enough of its own decisions to meet the mood of the majority, but falls short of giving it so much power that the Union’s mechanisms for switching money around do not work. I find it very difficult to make decisions on this Bill without knowing what the financial settlement will be, because it will not work unless there is enough money to make it work, or if England does not think that it is fair to them. Scotland may well find that the financial settlement is not fair to them—I am sure our SNP colleagues will not be shy if that is the case—but England has delivered big majorities for me and many of my colleagues, so we have a mandate and a voice and we need to make sure that the financial settlement that emerges is fair to us. The range of powers that Scotland has will have a bearing on that settlement.
I thank the right hon. Gentleman for giving way; he is being very kind. On welfare, we already share a common language with a country in the common travel area, namely the Republic of Ireland, where people can get up to €188 per week, with extra payable for those who have children. I am not saying that people are going from Liverpool or the north-east of England to a far more advantageous situation in the Republic of Ireland in the common travel area—which they could do—so I think that the right hon. Gentleman’s fears are misplaced. I would almost suggest that his fears are politically motivated and based on wanting to keep powers in Westminster and a deep psychological need for Westminster to over-control aspects of people’s lives around the current UK.
I am afraid that that is a bad example, because it proves my case. Ireland broke from the pound, set up its own currency and then, unfortunately for Ireland, chose the euro, but that was Ireland’s decision and it has had a bumpy ride ever since.
The big difference we need to remind ourselves about for the purposes of this welfare debate is that there is a common currency, so there have to be some limits to the amount of freedom appropriate for welfare benefits. If the SNP wishes to be truly independent and wants an independent currency, I fully understand its position and none of these arguments makes any sense.
I think I have made my point and I hope that Ministers will bear it in mind that it is very difficult to come to a conclusion before we know what the financial settlement will be. It is also very important to remember that there is a common work, language and currency area, which means that there has to be some family resemblance in the benefits that are paid.
I want to follow on from some of the issues touched on by the right hon. Member for Wokingham (John Redwood), particularly his last point about a financial settlement. When debating the earlier group of amendments, he intervened on the Secretary of State to ask whether he would address how the Barnett formula might be adjusted.
In essence, I think that the right hon. Gentleman is corroborating some of the basic questions asked by the hon. Member for Banff and Buchan (Dr Whiteford) about clauses 24 and 25, which presume an awful lot and raise a lot of questions about what else should be in them and what is happening outside them. The clauses presume a standard of behaviour and courses of action and events in relation to how decisions will be made. For instance, the word “concurrently” is used, but if we look at the sequence of decisions and processes involved, we will see that they do not look very concurrent. There could be distended periods and a lot of dispute and difference. The most important gap in clauses 24 and 25 —both Labour and the SNP have tabled amendments to address this—is that they do not say what will happen if Scottish Ministers and the Secretary of State do not concur on some of the issues.
If we as legislators are going to pass clauses that presume certain standards, the course of events and political behaviour, the question we need to ask is, “And what if not?” The Bill does not answer that question. If there is no agreement between Scottish Ministers and the Secretary of the State on the decisions, timelines, details and other implications, what will happen? We will be in difficulty and we will be told, “Well, the legislation faithfully followed Smith and we couldn’t do any more than that,” but it is clear that Smith is not of itself sufficient to address those questions, so we as legislators must address them. The Smith commission exercise was different from that for which we have responsibility as legislators. It is not good enough for us to say, “We’re not going to answer those obvious questions, because Smith didn’t address them.”
I was just going to quote the right hon. Gentleman, but I will take his intervention.
I entirely agree with the hon. Gentleman’s description of what we want from our welfare system, but by how much does he want pensions and universal credit to go up to meet his aspirations compared with what is on offer?
The right hon. Gentleman has on several occasions in this and previous debates talked about cost and about how much will be paid for certain welfare benefits. I have to say to him that he must not assume that the cuts his Government are making in the welfare budget are cost free. There will be consequences as a result of what they are doing.
If the Government reduce the amount of money that poor people have and impoverish them even further, there will be consequences for the rest of society. It will increase the burden on our national health service as people become physically and mentally ill. It will drive people to drug dependency and petty crime, and put extra demands on our police service. Most of all, it will cost our economy in the lost opportunity of those wasted lives. Do not think for one minute that there are no consequences to what the Government are doing with the welfare budget.
I am anxious not to get into a debate with the right hon. Gentleman, but I will take one more intervention.
This is a debate, and I am delighted that the hon. Gentleman is prepared to get into such a debate. I have no wish to take money away from people who need it; fortunately, we do not have to debate that today. What is the answer: how much more is needed to meet his aspirations for greater generosity than the Government have volunteered?
I am happy to have a debate; I just do not want to have it with the right hon. Gentleman by himself. It is a matter for assessment: we will have to sit down and work out exactly how much more will be required. The question here is: who should make the assessment—should it be the representatives of the people in the Scottish Government, or should it be someone else?
I want to talk about the bedroom tax, which has been mentioned several times. I will give one example of a human story, rather than the statistics that people have thrown around the Chamber. I have a 62-year-old constituent, who has lived in the area for 30 years in the same two-bedroom house. She has brought up her family, who have now left home. She now suffers from chronic angina and arthritis, and she can barely leave the house, never mind go into employment. She is probably not going to work again. The question is: what type of social protection do we offer someone in that position?
When I came across my constituent last year, she was running up against the spare bedroom subsidy regulations. She was told that she would either lose £14 a week off her benefit, or she would have to move house. Not having £14 to lose, she inquired about where she should move to. The only options given to her were five miles away, in an estate with a number of social problems that hers did not have, with no support from family or friends and no ability to continue the life she had. She was almost terrorised when I came across her: she was at the point of distraction and was making herself ill. I am glad to say that, because of the actions of the Scottish Government, we have now been able to help that woman and others in her situation, but I fear for people throughout the rest of the United Kingdom who are in that terrible situation.
Another example of parsimony is the sanctions regime, which has been mentioned several times. Let us not kid ourselves that officials in the DWP are using sanctions as a last resort. In many cases, they are being used as a first resort. We all know of cases in which people have been sanctioned for the most petty of breaches.
We have had an interesting and wide-ranging debate on the amendments this afternoon, perhaps more wide-ranging than I could ever have envisaged. I am not sure how we managed to get sidetracked into Greece so early in the afternoon’s debate, and the comparison between Greece and Scotland did seem rather ill-conceived. It was, of course, refuted ably and comprehensively by the hon. Friend of the right hon. Member for Wokingham (John Redwood), the hon. Member for Gainsborough (Sir Edward Leigh).
However different Scotland and Greece might be in cultural, economic and climatic terms—
I will not give way just at the moment, because I think we have talked quite enough about Greece. I want to make a couple of substantive points about the issues that were raised, however.
Whatever differences Scotland and Greece have, what we have in common, apart from our patron saint, is the fact that people in Scotland will feel great sympathy for their fellow European citizens in Greece and will have a sense of solidarity about the level of deprivation they are having to undergo. My hon. Friend the Member for Na h-Eileanan an Iar (Mr MacNeil), who is not in the Chamber at the moment, made the important point that the real morality tale from the Greek situation that is relevant to our discussions today is that austerity does not work and that we need the power to create alternatives to it.
The other salutary tale we heard this afternoon came from the hon. Member for Foyle (Mark Durkan) who, with his usual eloquence, drew on his experiences in Northern Ireland to warn of the difficulties ahead if we fail to legislate clearly. He also warned of the dangers of what has been termed “karaoke legislation” in Northern Ireland, in which people have powers but not the power to enforce those powers.
My hon. Friend the Member for Ross, Skye and Lochaber (Ian Blackford) made a powerful speech that highlighted some of the real differences between the challenges we face with welfare and pensions in Scotland and those in other parts of the UK, pointing out the low life expectancy and the poor value that Scottish pensioners get. Indeed, we have some of the lowest pensions in Europe and Scottish pensioners end up about £10,000 each worse off because of our pension arrangements. My hon. Friend the Member for North Ayrshire and Arran (Patricia Gibson) drew attention to the issues with the work allowance, which is a really good example of what we might do with these powers to improve the support we give to lower paid workers.
Above all, we need to talk about the veto. My hon. Friend the Member for Edinburgh East (Tommy Sheppard), who is quickly becoming one of the stars of this Parliament, set out how new clauses 45 and 46 would enable constructive working between the UK and Scottish Governments. That means not just fine words about constructive working but fine working.
To move on to those who spoke from the Front Benches, I welcome the support from the hon. Member for Edinburgh South (Ian Murray) for our lead amendment and for amendment 119. I listened very carefully to the Secretary of State’s conclusion to the debate. I fully accept that there are constructive relationships through the joint ministerial working group and many other parts of the Scottish and UK Governments, but when there are genuine differences of opinion and of ideological direction as well as different policies and different circumstances, we need the mechanisms and the legislation that enable us to deal with them effectively. That is what we still do not see on the face of the Bill.
The problem is that the Bill, in its current form, does not cut the mustard. The Secretary of State’s position on this could probably be summed up by the old saying, “They’re aw oot o’ step but oor Jock.” There is a consensus in Scotland, among all the other Scottish MPs, among MSPs, including MSPs from the Secretary of State’s own party, and among civil society that the veto needs to be taken out of the Bill. I urge the Secretary of State to listen. Part of the problem in Scotland for too long has been that people have not listened, but the voices of the people of Scotland will not be silenced. If the Secretary of State thinks that these issues will go away, I can tell him that they will not. We have heard salutary lessons about why we need to have the legislation pinned down and secure.
Earlier in the debate, I should also have stated my intention to move new clauses 39 and 40 and I am grateful to the hon. Member for Edinburgh South for flagging up that omission. We will press—