Scottish Welfare Powers

Margaret Greenwood Excerpts

Tuesday 20th March 2018 Westminster Hall

[Margaret Greenwood (Wirral West) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Rosindell. I welcome this debate, and I thank the hon. Member for Ayr, Carrick and Cumnock (Bill Grant) for securing it.

It is important that we debate the impact of the Westminster Government’s cuts to the social security system in Scotland and the whole of the UK. Although the Scottish Government’s response takes steps in the right direction, is not without problems. I pay tribute to my Labour colleagues in Scotland who have worked hard and continue to do so to ensure opportunities are not missed in the Social Security (Scotland) Bill, as my hon. Friend the Member for Glasgow North East (Mr Sweeney) said powerfully. They have used every opportunity available to them to improve the legislation, but we are concerned because, for all the Scottish Government’s warm words, progress has been slow.

I will not go through every aspect of the Bill, because many have been discussed today, or the powers available to the Scottish Government, but I want to raise some key issues that we need answers to. The previous Labour Government strengthened the social security net to lift 120,000 children and 110,000 pensioners in Scotland out of poverty, but ground has been lost since Labour left office. More than one in four children in Scotland now live in poverty.

The Westminster Government’s decision to limit the cap on uprating to 1% from 2013-14 to 2015-16, and the subsequent freeze on the majority of social security payments, have caused low-income households to suffer a significant deterioration in the adequacy of social security support. The freeze to payments and support is having a detrimental impact on millions of people on low incomes across the UK. Inflation has more than doubled in the past year. It hit 3.1% in November, and it is now at 2.7%. Meanwhile, food inflation is at 3.3%. The Child Poverty Action Group states that

“the failure to uprate benefits in line with inflation is the single biggest driver behind child poverty.”

Will the Minister explain why the Government refuse to listen to CPAG and many other expert charities and organisations, and why they will not end the freeze?

I want to see the uprating of social security support both in Scotland, via the powers given to the Scottish Government in the Social Security (Scotland) Bill, and in the rest of the UK. Unfortunately, the Government here have refused to do that, but the Scottish Government still have the opportunity to take action.

[Danielle Rowley (Midlothian) (Lab)]

Does my hon. Friend agree that the Conservative Government’s handling of welfare changes has been absolutely shambolic, and that the SNP Government in Holyrood have dragged their heels? At the centre of this are people, and the finger pointing on display here does nothing to reassure them.

[Margaret Greenwood]

My hon. Friend makes a really important point, but I am so short of time.

In Scotland, some 50,000 households with three or more children are in receipt of tax credits. From April 2017, families no longer received support through child tax credits or universal credit for any third or subsequent child born on or after that date. That also applies to new UC claims. On top of that, the abolition of the family element of the child tax credit for all families whose third child is born after the April 2017 deadline will affect thousands of families who will lose £545 a year. Yet in Scotland the SNP blocked Labour’s plan to introduce a child benefit top-up of £260 each year, which would have lifted 30,000 children out of poverty. After housing costs, 26% of children in Scotland were living in relative poverty in 2015-16—approximately 260,000 children. Does the Minister think that is acceptable? Why does he refuse to act?

On top of that, the switch to universal credit will cause up to 100,000 families in Scotland who are currently in receipt of housing or council tax benefit to lose an average of £1,196 a year in state support for childcare costs. Universal credit is clearly not fit for purpose, so why does the Minister refuse to pause the roll-out and fix the problems to make the system work?

Members have spoken about the flexible payment system, which is important—we have been calling for one for the rest of the UK—and the system of split payment. I would be grateful if the Minister explained to us whether there are any practical reasons why split payments cannot be the default position. There is a great deal of concern about the impact that the current system has on the safety of people living in situations of domestic violence.

Labour has long campaigned for the abolition of the bedroom tax right across the UK, so we welcome the Scottish Government’s action to mitigate its impact. Like the bedroom tax, the imminent changes to support for mortgage interest is another Conservative policy that will hit those on low incomes. Right now, 11,000 people in Scotland who rely on the current scheme have little more than a month to decide whether to take out a loan or pay for the shortfall. I am eager to hear what the Minister has to say about that devastating yet avoidable change. Will he delay the impending changes and review the impact of the options before him?

We welcome the Scottish Government’s agreement with Labour that the new social security agency in Scotland should have a duty to ensure take-up, but we should go further. Will the Minister commit to considering a duty for the rest of the UK? We need a social security system that is reliable, is there for us in our time of need, and provides support should any of us become sick or disabled, or fall on hard times. I am interested to hear how the Minister intends to address that in the light of the changes his party is pursuing.

[The Minister for Employment (Alok Sharma)]

It is an absolute pleasure to serve under your chairmanship, Mr Rosindell. I congratulate my hon. Friend the Member for Ayr, Carrick and Cumnock (Bill Grant) on securing this debate on a key issue for the citizens of Scotland.

We have had an incredibly spirited debate, in which a range of views have been expressed. Of course there have been disagreements, but that demonstrates, as my hon. Friends the Members for Ochil and South Perthshire (Luke Graham) and for Berwickshire, Roxburgh and Selkirk (John Lamont) noted, that ultimately we all care about our constituents and want to do the best by them. That is why we need to work together, across all parties, to ensure that we deliver for the people of Scotland.

[Margaret Greenwood]

Will the Minister give way?

[Alok Sharma]

No, I will not, if the hon. Lady does not mind. A lot of comments have been made, and I want to deal with them.

The devolution of welfare powers represents a considerable and positive change, but it will require strong collaboration and co-operation from all sides if it is to be a success. The hon. Member for Airdrie and Shotts (Neil Gray) asked about the UK’s commitment. I can tell him that we have set up and resourced dedicated teams to lead on Scottish devolutions; we have shared—and we continue to share—our learnings and experience with the Scottish Government; we have run more than 100 workshops and operational visits; and we have shared many hundreds of pieces of information. We are absolutely committed to working in partnership with the Scottish Government to ensure a safe and secure transfer of the welfare powers for which they now have responsibility.

Scotland is an integral part of the United Kingdom, and our economic and welfare reform policies recognise that. Unemployment in Scotland is at a near historic low, which we should all welcome, and more people see greater security in retirement. Following the decisive result of the 2014 independence referendum and the ensuing Smith commission, we are delivering on the promises we made to people in Scotland by devolving £2.8 billion in welfare powers.