Devolution of Welfare

Paul Sweeney Excerpts

Tuesday 9th April 2019 Westminster Hall

[Mr Paul Sweeney (Glasgow North East) (Lab/Co-op)]

It is a pleasure to serve under your chairmanship, Mr Betts.

I thank the hon. Member for Berwickshire, Roxburgh and Selkirk (John Lamont) for calling this debate, which is timely and important, particularly for me. When full transition happens, I will have the largest number of constituents claiming universal credit of any constituency in Scotland, so it is something that particularly affects my constituents.

I suppose this debate leads us to reflect on why we are in politics and what our purpose is as Members of Parliament. For me, it is about building a country that has the capacity to ensure that the maximum number of its people are able to work, sustain themselves in a dignified way and achieve their opportunity. Enabling everyone to have that opportunity will improve our collective function as a society and our capability as a country. That is, in essence, what I want to achieve in Parliament and in politics and why I am a member of the Labour party.

Let us look at the record of the last Labour Government on child poverty. In 1998, there were 3 million children in poverty. By the end of the last Labour Government, that had been reduced to 1.6 million. Sadly, under the coalition and pure Conservative Governments since, that figure has risen to 3.7 million. That is shameful; and before there is any hubris from the Conservatives on welfare or social security, I just want to make clear that that is a shameful stain on their record.

That is a function of a society that has seen the narrative of removing the shame from need and the creation of a floor below which none can fall and everyone can rise completely destroyed. The ideal of the Attlee Government in creating the social security foundation that built the welfare state has been thoroughly damaged by this Government. That is the main take-away from this debate and one that cannot be dismissed.

However, I also reflect on 20 years of devolution and the great opportunities that we saw from it. I still remember, as a nine-year-old, watching the opening of the Scottish Parliament and that parade down the Royal Mile, and the great optimism in the immediate aftermath of a Labour Government coming to power, as well as the great opportunities sensed by people. The Parliament was built not just for the inherent right to have a Scottish Parliament, but as a functional thing that would achieve objectives. In my opinion, one of the key objectives was to have an effective bulwark against a future Tory Government that might attack the fundamentals of our social security system and welfare state.

The Scotland Act 2016 was passed in that spirit. That was due in no small part to the efforts of my hon. Friend the Member for Edinburgh South (Ian Murray), who fought valiantly to ensure key amendments to the Bill, in particular the power to top up reserved benefits, which gives the Scottish Government a significant measure of autonomy. That autonomy is combined with the great opportunity of the United Kingdom’s fiscal union, which each year delivers £10.2 billion extra for Scotland—£1,900 per person—to invest in the economy and public services. That would not be achievable under independence. Therefore, the Scottish Parliament has been pump-primed with a great measure of financial capability to achieve change in the face of an onslaught by the Conservatives, who wish to cut the fabric of our society and our public services.

With this delay we have seen a huge failure to live up to the expectations of devolution. Around 60% of all social security has now been devolved, with the exclusion of the state pension, which is an automatic stabiliser. That is a huge opportunity for Scotland. There have been some improvements, such as the ban on private sector involvement in assessments, but that was thanks to Labour’s campaigning efforts in the Scottish Parliament. There was a commitment to reduce face-to-face assessments—that was a Green proposal—and short-term assistance is now paid if an award is reduced and the applicant subsequently asks for a review or appeal.

However, we have also seen the Tories and SNP unite in Holyrood to vote down a £5 per week top-up to child benefit, by using the Social Security (Scotland) Bill and the budget processes. There has been an endorsement for the uprating cuts, which has blocked Labour’s move to revert to the retail prices index when uprating carer’s allowance. The 2011 cut based on the consumer prices index has cost carers £1,000 since 2011, while Tory uprating cuts have cost Scots £1.9 million in the past decade. Those are just some examples of a complete failure to live up to expectations. We need radical and effective measures, which is what we seek to propose, and we encourage all parties to live up to the expectations that people had when devolution was first delivered 20 years ago.

[Hugh Gaffney (Coatbridge, Chryston and Bellshill) (Lab)]

I congratulate the hon. Member for Berwickshire, Roxburgh and Selkirk (John Lamont) on securing this debate.

Government figures illustrate that 1 million people in Scotland now live in relative poverty, which equates to one in every five Scots. They also highlight that 240,000 children in Scotland are living in poverty, two thirds of whom come from working households. The Independent Food Aid Network found that more than 480,000 crisis food parcels were distributed by Scottish food banks between April and September 2018, which included 27,000 parcels in North Lanarkshire and in my constituency. The Government are presiding over a crisis of in-work poverty, child poverty and food poverty, and their policies are directly contributing to that with the failing roll-out of universal credit and the unjust benefits freeze.

The central purpose of devolution is to give the Scottish Government a chance to take different decisions, yet the SNP Scottish Government are far too timid in their ambitions for a devolved social security system. Eleven benefits have been devolved, including PIP and DLA, which are worth more than £3 billion to Scots every year. The Scottish Government have shown no sign that they are prepared to take responsibility for those benefits, having twice asked the DWP to delay devolving them. Scottish Government Ministers now admit that the full devolution of benefits will not be completed until 2024, leaving hundreds of thousands of Scottish claimants to languish under the welfare reforms of this Tory Government.

I should stress that I welcome some of the positive changes that the Scottish Government are seeking to make to the devolved social security system. I am pleased that the responsibility for evidence gathering for assessments will be shifted away from claimants. I am glad that short-term assistance will be paid to those who find their awards reduced or who are challenging decisions through the appeals process, and I welcome the commitment to reduce the number of face-to-face assessments. However, I continue to have concerns that much of what is wrong with the current UK welfare reforms will remain in place in the new devolved social security system. There will be no changes to the rate of benefits. The current points-based system and assessment indicators for PIP will be retained, and the mandatory reconsideration process will not be reformed in any meaningful way.

[Mr Sweeney]

My hon. Friend makes an important point about the PIP points-based system staying the same. In many constituencies the change from DLA to the PIP-based system has meant huge losses for people. In my constituency, it amounts to £2 million a year. Does he not agree that that is shameful? Surely the Scottish Government could take action immediately to resolve it.

[Hugh Gaffney]

That is indeed something that the Scottish Government could do. They want to be the Scottish power. They talk down here about “owning Scotland”. Well, start owning Scotland and start making changes to help people—our constituents.

The SNP has voted against topping up child benefit by £5 a week and against reverting to uprating carer’s allowance by RPI, and failed to mitigate the two-child limit. In the Scottish Parliament, Labour has already secured legal guarantees that the devolved social security system will have automatic split payments for universal credit and a ban on private sector involvement in assessments. We have committed to using the full powers available to take action, such as topping up child benefit, mitigating the two-child limit and bringing forward the income supplement that families across Scotland so desperately need. While I welcome the devolution of welfare, there is little point if the Scottish Government are not prepared to use their powers. That is why a Scottish Labour Government, committed to using those powers, are so desperately needed. If we are to tackle the crisis of poverty, make Scotland Labour.

--- Later in debate ---

[Mike Amesbury]

The hon. Gentleman has made his point.

Mitigation is essential, and a lack of it is a cause for unnecessary hardship and continuing poverty. It certainly shames both the Westminster and Holyrood Governments that that continues. Although legal powers to run benefits in Scotland will pass to the Scottish Government in April 2020 as a result of the Scotland Act 2016, the SNP-led Administration have wilfully delayed using those powers in full until 2024.

The spend accounts for some 16% of welfare, or £3 billion. As has been pointed out by Government Members, the SNP is a party that claims it can create an independent state in 18 months. Twice, SNP Ministers have asked the Department for Work and Pensions to delay devolving social security, in 2016 and 2018, which means that, over the next five years, we will have a ludicrous situation in which SNP Ministers will, effectively, send millions of pounds down south to pay the DWP to run social security provision in Scotland.

[Mr Sweeney]

My hon. Friend makes a powerful point about the absurdity, if the DWP is so evil and malevolent, of the Scottish Government’s effectively paying it to continue to administer the system. Even after the full transition has happened under the revised timescale of 2024, severe disablement allowance will still be outsourced to the DWP and still visiting harm on the Scottish people. Surely that is an absurdity?

[Mike Amesbury]

Yes; it is another failing of fine and warm words but nothing happening in reality.

While those agency arrangements are in place, SNP Ministers are blocked from making changes to any of the benefits the DWP delivers. They are not able to intervene in aggressive debt recovery or even to change the inflation measure to uprate benefits. While the SNP dithers and sits on its hands, as my hon. Friend the Member for East Lothian (Martin Whitfield) has pointed out, thousands of families are falling into poverty every year. Both parties are concentrating on avoiding responsibility, rather than using what levers of power are available to change the failing policy.

--- Later in debate ---

[Mr Sweeney]

My hon. Friend is being very generous with his time, and is making an excellent speech. We have talked about mitigating factors in the Scottish Parliament, but some of the key mitigating factors, such as mitigating the bedroom tax, were implemented only after significant and persistent Labour pressure. Indeed, John Swinney, who was finance Minister at the time, said that he did not want to let the Tories off the hook; he would rather the Scottish people suffered to make a political point.

[Mike Amesbury]

I thank my hon. Friend for highlighting the excellent record of Labour in Scotland, campaigning to change things for people on the ground.

Together, SNP and Tory politicians repeatedly voted down a £5 a week top-up to child benefit during the passage of the Social Security (Scotland) Bill and the budget process. In February, they endorsed George Osborne’s uprating cuts, blocking Scottish Labour’s move to revert to RPI uprating of the carer’s allowance. During the recent budget, the SNP refused to mitigate the two-child limit—a policy that would have supported 4,000 families and lifted 5,000 children out of poverty, and would have cost just 0.2% of the Scottish budget. After years of warm words and claims that it will build a system based on human rights, the SNP relied on the Tories to block the international covenant on economic, social and cultural rights from being included in the social security Bill.

Labour Members know the effects of Tory welfare policy all too well, wherever in the United Kingdom we represent. We have heard about those effects today: my hon. Friend the Member for East Lothian argued that we need bold action for women born in the 1950s, and was right to highlight the woeful response of the Tory Government. My hon. Friend the Member for Edinburgh South (Ian Murray) argued that in-work poverty is a major problem in Scotland, as well as out-of-work poverty, with over a million people in Scotland living in poverty. My hon. Friend the Member for Glasgow North East (Mr Sweeney) attacked the political choice of austerity, and called for a social security system that draws on the founding principles of the Attlee Government: security, opportunity and dignity. My hon. Friend the Member for Midlothian (Danielle Rowley) correctly pointed out that she needs to be the champion of women in this place, because women are disproportionately affected by that political choice of austerity—a choice made by this Tory Government.

Labour believes that the Tories’ approach to welfare is flawed and failing. It is a story of failure that begins with the Tory Government in Westminster’s cruel and unnecessary welfare policies, but has been worsened by the decision by the SNP Government in Holyrood not to use their powers to effectively mitigate those policies. As a result, it is a story of hardship and hunger, wherever in the UK a person is affected.

My questions to the Minister are simple. First, will he accept that universal credit is failing? It is cruel in design, it is under-resourced, and its roll-out needs to be halted. How about scrapping the benefit freeze, the two-child limit and the five-week wait? Hardship is hardship, wherever we are in the UK. Finally, will the Minister confirm whether the devolution of welfare to Scotland could have happened earlier, had the Scottish Government not asked the Department for Work and Pensions to delay the process twice, in 2016 and 2018? The only way we will change things is by having a Labour Government.