Scotland Bill

Patricia Gibson Excerpts

Tuesday 30th June 2015 Commons Chamber

[Ian Blackford]

No, not the current Member for Kirkcaldy and Cowdenbeath; my hon. Friend would not do anything so rash.

There is a crisis in the funding of such schemes and the tax treatment of dividends requires a fresh examination. Pension freedoms were initiated in the last Parliament. While we broadly welcome the enhancement of consumer choice, SNP Members have gone on record as questioning the appropriateness of the advice that consumers receive and the risks of mis-selling. Those concerns have not been adequately addressed, and if pensions are devolved to Scotland, the Parliament in Edinburgh may want to look at it.

We welcome the amendment, especially in the light of the threatened attack on the most vulnerable in our society if the Government go ahead with their £12 billion-worth of cuts. We recognise that we can deliver only if we have fiscal responsibility as part of the equation. We recognise our responsibilities to look after the vulnerable in our society. We firmly believe that we need power over our economy to deliver sustainable economic growth and grow the tax base to generate the resources to create not only a wealthier but a fairer Scotland. Passing the amendment today would at least give us the power to intervene to ameliorate some of the pain that will be inflicted on so many of our people by the policies of the UK Government.

[Patricia Gibson (North Ayrshire and Arran) (SNP)]

I am delighted to speak in favour of amendment 118 and new clause 45, which call for the removal of the requirement for the Scottish Government to obtain consent from the UK Secretary of State in relation to universal credit and the cost of claimants who rent accommodation.

In the light of our mandate from the Scottish people, and the lack of democratic mandate that the Conservatives —indeed, any of the other parties—have in Scotland, we urge all in the Committee to support the amendment. We set it out unequivocally in our manifesto that, as part of our welfare priorities, there should be an immediate scrapping of the bedroom tax and a halt to the roll-out of universal credit and PIP payments. We said that we would support an increase in the work allowance. Those policies were supported by both the people of Scotland and civic Scotland and we have a clear democratic mandate for that demand, given the result of the general election.

We are particularly concerned about the work allowance element of universal credit—the amount of income that a household can earn before their universal credit entitlement is reduced. We demand that the work allowance be devolved to the Scottish Government as part of new clause 45, and democratic integrity requires that that demand be met. We support increases in the personal tax allowance, but we also back an increase in the work allowance. In this, we are in keeping with a Resolution Foundation policy proposal paper, which pointed out:

“if we really want to help working families on low and middle incomes, boosting the Work Allowance would be more effective and better value for money than any tax cuts”.

For a lone parent with housing costs, for example, the work allowance is currently set at just over £3,000 per year. After that point benefits start to be withdrawn. For example, those on universal credit lose £65 of benefit for every £100 of post-allowance salary. Of course we need to put in place some sort of tapering system to make work pay, but the complexity of the system allows—indeed, encourages—the Government to focus on simpler measures, even if those simpler measures are far less effective. Take the personal allowance. People begin paying tax at 20% after earning £10,000 a year, but we pay less attention to the fact that a sole working parent faces a 65% deduction rate when they earn over £3,000 a year.

For people who receive universal credit and pay income tax, the Chancellor’s £600 a year increase to their personal allowance is welcome. That would boost their income by £42, but the same increase in work allowance would increase their income by £390.

Even the Institute for Fiscal Studies has weighed into this debate, arguing:

“In-work benefits provide a more precise and cost-effective way of supporting low-earning working families than changes to direct taxes.”

The freezing of work allowance is profoundly misguided and effectively cuts the benefits of workers on low incomes. What happened to making work pay? What we need is a work allowance to help to ensure that those in work have a better chance of lifting themselves and their families out of poverty. We need the power in Scotland to change work allowances in Scotland, so that we can help families to help themselves out of poverty as they go out every day to earn a living through increasingly difficult times.

Universal credit does not help some of our poorest households, but much could be done by increasing work allowance and making work pay. This could be one—only one—of the tools that could help to combat the scandal of those in work having to rely on food banks to put food on their tables and feed themselves and their families. Scotland needs powers over the work allowance element of universal credit—no ifs, no buts.

I draw the Committee’s attention to the letter in The Herald today, which has already been mentioned by my hon. Friend the Member for Banff and Buchan (Dr Whiteford). It is a letter from the third sector in Scotland protesting against the socially divisive and damaging impact of the UK Government’s cuts of a further £12 billion in social security spending—cuts which, despite attempts to rewrite history, the Labour party signed up to prior to the general election. [Interruption.] These cuts—[Interruption.] Let me put the cuts in context. In the pre-election debate the hon. Member for Leeds West (Rachel Reeves) said that the Labour party was not the party of people on benefits. I notice that there is no retort to that. These cuts first and foremost—

[Kate Green]

Will the hon. Lady give way?

[Patricia Gibson]

No, thank you. [Interruption.] I have already responded informally to the hon. Member for Edinburgh South (Ian Murray), who is on the Front Bench.

These cuts first and foremost will bear down on the most vulnerable and poorest in society. The whole of the third sector in Scotland supports the devolution of working-age benefits to Scotland because there is a recognition that the Scottish Government can and will do things better. They will set out a welfare system competently and with compassion. Make no mistake. Such devolution of welfare powers—

[Sir Edward Leigh]

Will the hon. Lady give way?

--- Later in debate ---

[Patricia Gibson]

I give way to the hon. Gentleman.

[Sir Edward Leigh]

I am listening with great care to the hon. Lady, as I hope are my right hon. Friend the Secretary of State and the shadow Secretary of State, because I maintain that she is making the same point that I was making, although from a different direction. If we dribble out powers, the SNP will constantly blame us for everything that goes wrong—“Cuts? They’re responsible for the cuts.” Give them the responsibility and they will have to take responsibility.

[Patricia Gibson]

We will be proud to take responsibility for investing in the growth of Scotland’s economy, in our infrastructure and in the people of Scotland.

Make no mistake: the devolution of the welfare powers in the Bill is supported by Citizens Advice Scotland, Barnardo’s Scotland, the Child Poverty Action Group, the Church of Scotland, Oxfam Scotland, the Poverty Alliance, the Scottish Trades Union Congress—I could go on, but I think I have made my point.

We on the SNP Benches are seeking to protect those we represent in Scotland from the worst excesses of this Government. We speak with the clear democratic mandate of the people of Scotland, and behind that we have the increasingly raised voices of Scotland’s third sector and civic society. We must not balance the books on the backs of the poor. It is time that the Government listened to a valued and equal partner in this Union—Scotland—in the spirit of the respect agenda.

For the record, and for the avoidance of any doubt, the SNP set out unequivocally in our manifesto, as part of our welfare priorities, that there should be an immediate scrapping of the bedroom tax and a halt to the roll-out of universal credit and PIP payments. As far as working-age benefits go, the Bill does not meet what was set out in the Smith agreement.

The Secretary of State has argued that there is no effective UK Government veto over the powers in the Bill relating to welfare arrangements, limited as they are, yet there is a clear requirement for the Scottish Government to

“have consulted the Secretary of State about the practicability of implementing the regulations”.

The Secretary of State would then have to give

“his or her agreement as to when any change made by the regulations is to start to have effect, such agreement not to be unreasonably withheld.”

Is it likely that the current Secretary of State and the Scottish people would ever agree on a definition of what is unreasonable? For example, the people of Scotland believe that it is unreasonable that a party that has a far weaker mandate in Scotland than at any time during any of the years when it last led a majority Government now pontificates over what powers Scotland should have while reneging on the all-party agreements arrived at in Smith. The Secretary of State clearly thinks that this situation is entirely reasonable and presides over the Dispatch Box like a colossal Governor-General, with no shame, taking on the elected and legitimate representatives of the huge majority of the Scottish people.

For the sake of social justice in Scotland, for the sake of our most vulnerable, who are being crushed beneath the weight of the illogical and misguided attempts to punish those who require assistance from the state, for the sake of what was promised in Smith, for the sake of Scotland’s position as a “valued and equal partner” in this Union, for the sake of the wisdom of Scotland’s civic society, and for the sake of the SNP’s democratic mandate, I urge the Committee to support amendment 118 and new clause 45.

[Tommy Sheppard (Edinburgh East) (SNP)]

We are considering a lot of amendments, and some of them cover quite technically detailed matters, but I think that the context of the debate is about big ideas; it is about big differences between this side of the House and the Government side of the House. I think that there can be no bigger difference than how we view our society with regard to welfare provision. On the Opposition Benches we see welfare as a means of social insurance whereby we work together to protect each other through periods of illness and disability and in old age, and also to protect people who are casualties of economic circumstances as they move from one period of employment to another. It is something we should provide with kindness and generosity and in the spirit of co-operation. I fear that the attitude of Government Members is founded on prejudice and parsimony. It is about a welfare state that grudgingly gives to people as a means of last resort. It is because of that difference in opinion that this debate matters so much.