- The Deputy Presiding Officer (John Scott):
The next item of business is a debate on motion S4M-02407, in the name of Keith Brown, on housing benefit reform.
- The Minister for Housing and Transport (Keith Brown):
As we know, the United Kingdom Government is making radical changes to the benefits system. We agree that reform is needed. We also agree that the system should incentivise work, that it should be simpler and, of course, that it must be affordable, but we believe that many of the changes will have a devastating impact on some of Scotland’s most vulnerable communities and households. As long as responsibility for the welfare system rests with the UK Government rather than the Scottish Government, there is very little that we can do about that.
The figures relating to the housing benefit reforms are eye watering. The shared accommodation rate changes will affect more than 4,000 Scots, who will lose more than £85 per month on average. Some 95,000 households in the social rented sector will be affected by the Department for Work and Pensions underoccupancy restrictions and will lose between £27 and £65 per month. The benefits cap will affect around 4,000 adults in Scotland and between 7,000 and 8,000 children. The average loss will be around £250 per month.
It is not only claimants who will bear the costs; there is also an impact on landlords. Currently, most social tenants who depend on housing benefit choose to have their rent paid directly to the landlord. That helps to keep a roof over their head, regardless of the many other financial pressures that they are likely to face. That will change through welfare reform. Most working age tenants will receive support to cover their rent directly to them, whether they want to or not. We support financial inclusion, but our stakeholders tell us that the UK Government’s approach is likely to increase rent arrears. That is a sledgehammer approach. The reforms cut right across our devolved housing policies and right through the workings of our social landlords.
Local authorities, too, will feel the impact. Cutting support for some of our most vulnerable households will inevitably result in hardship—in some cases, severe hardship. When people are struggling to find their rent or are forced to move home, they turn to local authorities and registered social landlords.
The underoccupancy penalties alone aim to save around £100 million a year for the UK Treasury. We have estimated that that will have a one-off cost of £87 million to the Scottish economy and will remove £54.4 million a year directly from the Scottish economy thereafter. Overall, the housing benefit reforms will remove more than £150 million a year from the Scottish economy.
Those are the impacts of just the housing reforms. The Scottish Government and stakeholders are clear that the Welfare Reform Act 2012 will have a significant negative impact in Scotland. The current benefit spend in Scotland is around £12 billion. In evidence that was presented to the Health and Sport Committee by the DWP, it was estimated that the reduction in welfare benefit receipts in Scotland would be “about £2.5 billion” by 2015. We share our stakeholders’ concerns. We do not want those who cannot work as a result of ill health or disability to be relegated to a life of disadvantage, financial uncertainty and poverty.
On the issue of protecting vulnerable people, it is worth noting the views of Mary Taylor of the Scottish Federation of Housing Associations. She said:
“What we are worried about is the Government penalising some of Scotland’s poorest families”.
Today, the richest in our society—those who earn over £150,000—have received a 10 per cent tax cut. That gives the lie to the UK Government’s idea that we are all in this together.
We have worked tirelessly with our stakeholders to make the UK Government understand the problems that it is creating by making the cuts that it is making in the way that it is making them. We have argued consistently that it is moving too fast, that it is not providing enough detail, and that the most vulnerable should be protected.
- Liam McArthur (Orkney Islands) (LD):
We are four minutes into the minister’s speech and his complaint about the UK Government’s provision of detail has not been backed up by anything that he has said about the alternative reform agenda that he wishes to see, or by what he set out at the beginning of his speech.
- Keith Brown:
If, as usual, Liam McArthur does not want to believe me, he can ask all the stakeholders, who say that there is a complete lack of detail about many of the reforms that the UK Government has proposed. He should listen to them if he will not listen to me.
We know that the DWP is thinking about changes to supported accommodation and temporary accommodation for homeless people, but we do not know the details or how vulnerable people will be affected. As I said, we have argued consistently that the Government is working too fast.
- Drew Smith (Glasgow) (Lab):
The minister might know that the Welsh Assembly Government has taken the approach of having a two-stage process, which it has published, to examine the impact in Wales. Will the minister commit the Scottish Government to doing the same? As he said, the information is not available.
- Keith Brown:
We have published substantial information about the action that we have taken, including, for example, on the provision of additional resources to the hubs that have been set up throughout Scotland to help to mitigate the effects. We will put more information in the public domain about how we can best mitigate the effects of the changes.
The reforms will mean significant changes for the way in which some of our most vulnerable people are housed, including women in refuges, older people in sheltered accommodation and people with severe physical and learning impairments. The organisations that provide that support need to know the detail of the changes and they need to know it in good time, but they say that they have not seen the detail yet.
It is worth restating that we believe that the overall model of universal credit has some merits, but squeezing housing benefit for people in supported and temporary accommodation into that system without due consideration will inevitably cause problems. For example, a default position of direct payments of support for housing costs for users of supported and temporary accommodation is frankly wrong, and all the stakeholders agree.
Of course, the question that arises is what an independent Scotland would do if it was to face the same pressures. I have conceded that the system needs reform. Our Tory and Lib Dem colleagues might suggest that an independent Scotland would be forced to do the same to make ends meet. It is not for me to say what the first Government of the shortly-to-be-inaugurated independent Scotland would do—it would be up to the Government of the day, elected by the Scottish people, to decide.
However, I can say that many of the UK Government’s reforms will simply move burdens from the DWP to others. Remedying the impacts of housing benefit reform could cost more than preventing them in the first place. A Scottish Government, working with stakeholders, could decide where best to invest to get the most from our resources. There is a mismatch between housing policy, which is devolved, and housing benefit, which is reserved. A Scottish Government could make housing benefit policy support our wider housing responsibilities.
A number of opportunities for Scotland’s housing system through devolved housing benefit are set out in the report that was launched last week by the Scottish Federation of Housing Associations and the Chartered Institute of Housing. For example, at a fundamental level, what should be the balance between subsidising people through the benefits system and subsidising new homes through housing investment?
We have an extremely strong housing sector in Scotland. The devolution of housing policy has allowed Scotland to make great strides, such as internationally acclaimed homelessness legislation. Once again, though, all the stakeholders would tell us that that has been made much more difficult by the welfare reforms. Despite those reforms, we are on track to meet our 2012 target, which is a testament to the determination of hard-working local authorities to end the misery of homelessness.
Of course, we have the restarting of the council house building programme and the delivery of 30,000 affordable homes during this parliamentary session alone. We have innovative, groundbreaking approaches, such as our pioneering national housing trust initiative and our commitment to provide a guarantee to support a three-year mortgage indemnity scheme, which will help about 6,000 households.
Yesterday I was at the opening of a housing development in the east of Edinburgh. One of our key partners, who also deals with the UK Government, mentioned how much more progress and innovation there is in Scotland compared with the rest of the UK. The things that we have done have helped to tackle homelessness. This year alone, 28 of the 32 local authorities say that they have had a reduction in homelessness. The reduction in Aberdeen has been huge. All that good work is being done in a process that started in 2003. Now, as we get to the end of the process, as if it was not enough to be hit by an international recession, the welfare reforms are making it much more difficult to get up the final part of the hill to reach the 2012 target.
All the stakeholders whom we deal with have told us—and the UK Government—that the changes to benefits will have a huge impact on some of the most vulnerable individuals in our communities. That is why we oppose the changes and why we have lodged the motion.
I am proud to work in a Government that is part of a dynamic shift to revitalise our homes and communities. However, it is clear that our ambitions for housing—for our people and for our communities—are being thwarted by the current constitutional arrangements. Again, it is not just me saying that—some of the responses from stakeholders point to the frictions that the constitutional arrangements have created.
There is an easy way for the UK Government to deal with this. It can look again at the reforms. It was encouraged to do that by Liam McArthur’s colleagues in the House of Lords, but it did not want to listen. I hope that Liam McArthur’s contribution to the debate reflects more the concerns that were raised by the Liberal Democrats in the House of Lords than the opinions of Danny Alexander and others in the UK Government.
The benefit cuts will have a huge impact. We should oppose them and we have opposed them. The Cabinet Secretary for Infrastructure and Capital Investment, the Deputy First Minister and I have made representations to the UK Government, most of which have been ignored. Some changes have been made but not nearly enough. It is vital that the Parliament makes clear its opposition to the changes for the benefit of the people of Scotland.
That the Parliament notes the UK Government’s plan for housing benefit reforms that will have a devastating impact on tenants, especially in some of Scotland’s poorest communities, and, as a result, on social and private landlords, local authorities and support agencies; regrets that, despite significant, well-evidenced and considered lobbying by Scottish stakeholders against the reforms, the UK Government pushed through the Welfare Reform Bill largely unchanged; notes that the UK Government’s housing benefit reforms cut across devolved responsibilities, compromising the Scottish Government’s capacity to deliver on its housing ambitions for Scotland, and acknowledges that, now that the Welfare Reform Bill has gained Royal Assent, the Scottish Government, local authorities, landlords and others must work together to minimise as far as possible adverse impacts on some of Scotland’s most vulnerable people and to develop thinking on the Scottish delivery of housing support costs under any changed future constitutional arrangements.
- Elaine Murray (Dumfriesshire) (Lab):
The Welfare Reform Act 2012 received royal assent on 8 March. I, too, believe that aspects of benefit reform are necessary, but not these ones. Not only does the act contain proposals for changes to housing benefit that seriously affect the recipients, but the provisions will seriously affect the providers of rented accommodation: registered social landlords, local authorities, and private sector landlords.
In April 2013, restrictions on size criteria—otherwise known as the bedroom tax—will be introduced. As a result, many council tenants and housing association tenants will find themselves underoccupying their homes.
The UK Government has decreed that, for the purposes of claiming housing benefit, young people of the same sex are expected to share a bedroom until one of them reaches the age of 16 and, if they are of different sexes, they should share until the age of 10. That does not correlate with social landlords’ allocation policies. For example, Dumfries and Galloway Housing Partnership allocates an additional bedroom at the age of eight for children who are of different sexes and at 12 for children of the same sex. For the City of Edinburgh Council, the ages are seven and 14. Tenants who have been allocated houses fairly, in accordance with the allocation policies of their social landlords, will find themselves underoccupying their homes.
The National Housing Federation estimates that, across the UK, 670,000 tenants in the rented sector will be affected immediately and that the figure will rise to 750,000 when the pension credit age rises in 2020. Seventy-eight per cent of those tenants will be considered to have one bedroom too many and will lose an average of £12 a week. The remainder will lose an average of £22 a week.
About a third of tenants in the social rented sector will be affected and some may well have to find more than £1,000 a year additional rent from a restricted budget. Councils and RSLs do not have the housing stock to reallocate smaller properties to those tenants, so what happens if the tenant cannot pay? Is the landlord supposed to evict the tenant, in which case they will go back into the system as homeless and come round again, at which point they will be entitled to a smaller property that is not available?
- Kevin Stewart (Aberdeen Central) (SNP):
Dr Murray has missed out a few folk who might be affected by the proposal. They include parents who have restricted or limited access to their children and who might not get access if they do not have the extra bedroom, and folk who have medical conditions and require the extra bedroom to deal with those conditions.
- Elaine Murray:
I agree. Given the restricted time available, I cannot go through all the horrors of this particular reform.
As the minister said, if landlords evict tenants, that will seriously undermine the Scottish Parliament’s targets on homelessness, which we all agreed should be implemented this year. Alternatively, will the landlord just have to bear the loss of income? They need that income in order to borrow and build new homes. The UK Government’s solution, of course, is that the families should move the kids back into a shared bedroom and let out the other bedroom to a lodger.
Single people between the ages of 25 and 35 are already being hit by the reduction in the shared accommodation rate.
Another proposal that will cause landlords’ difficulty is the introduction in 2013 of the universal credit and the phasing in by 2017 of payment of the housing benefit element directly to the tenant, monthly and in arrears, other than for pensioners and vulnerable tenants whose housing costs will continue to be paid directly to landlords. That is not what landlords or tenants want. In a poll last year, 93 per cent of social housing tenants said that they believed that it was better for housing benefit to be paid to landlords.
A tenant does not need to be vulnerable to have problems managing money if they are on a low income and unexpected financial burdens come along, especially if they receive their income monthly in arrears. Again, what does the landlord do when the tenant cannot or will not pass on the housing element of the universal credit?
The minister mentioned the benefits cap. Although it might not affect many families in Scotland, in places such as inner London where rents are very high, families with as few as two children will be affected and will face large increases in rent or having to relocate.
Scottish Labour shares the Scottish Government’s serious concerns about the reforms to housing benefit, but we have concerns about the wording of the Government’s motion. My amendment does not seek to delete and insert, because we wanted to express consensus on the principle of opposition to the reforms.
My first gripe is that the motion could be perceived to imply that the arguments and evidence against the reforms came only from Scottish stakeholders and, by implication, the Scottish Government. That is simply not true: the reforms have been opposed by individuals and organisations the length and breadth of the UK, including members of the House of Commons and the House of Lords. Our amendment recognises that there is strong opposition to the changes elsewhere, too.
It would be entirely wrong to depict the argument as progressive Scotland versus reactionary UK. The changes have been introduced by a right-wing Government that panders to a press agenda that peddles the perception that all recipients of benefits are scroungers. The reforms have been thought up by a Cabinet of millionaires—who, today, have again rewarded themselves—who believe that poverty is somehow a lifestyle choice. They should be, and are, opposed by fair-minded people throughout the UK.
Although we share serious concerns about how the changes will affect some of the poorest people in Scotland and the organisations that supply their accommodation, we are not prepared to concede to the issue being used as another Trojan horse in the constitutional debate. Moreover, I object to injustice regardless of which side of the Solway it occurs on.
- The Cabinet Secretary for Infrastructure and Capital Investment (Alex Neil):
Does the member agree that if responsibility for housing benefit were devolved to this Parliament, there is no way that these reforms would ever have seen the light of day?
- Elaine Murray:
It would depend on the Administration that we had here. We do not know.
I have concerns about the use in the motion of the phrase
“compromising the Scottish Government’s capacity to deliver on its housing ambitions for Scotland”,
which sounds a bit like a get-out clause in the event that the Government does not meet its affordable housing targets. Cutting the affordable housing supply budget by 30 per cent and reducing the subsidy to RSLs will not help, either.
I was sympathetic towards some of the statements in the Liberal Democrat amendment, but I think that it is a diversion from the topic of the debate, which is housing benefit reform. We are not debating the Government’s housing policy. If the Liberal Democrats feel so strongly about the Scottish National Party’s housing policy, why did they vote for the SNP’s budget earlier in the year?
The Tory amendment is as I would have expected it to be and, as the Tories would expect, we will not support it.
Our amendment asks the Government to come back to Parliament with its proposals on how to mitigate the effects of the reforms. We want to know what it intends to do, not just who it intends to blame, however justified that blame may be.
I move amendment S4M-02407.3, to insert at end:
“; recognises that opposition to these changes will continue in both the Scottish and the UK Parliament, and believes that the Scottish Government should bring before the Parliament a clear strategy to mitigate the impact on those individuals and families who will be affected.”
- Alex Johnstone (North East Scotland) (Con):
Debates like this remind me of why I got into politics. I did so because of the great challenges between the left and right of the 1970s. Now we are back facing that same dichotomy.
The Government that we had between 1979 and 1997 had an incredible record on taking the low-paid out of the tax regime. Throughout its term, it consistently raised the tax threshold by more than the rate of inflation. Then, as Chancellor of the Exchequer, Gordon Brown, with his great clunking fists, took all those people back in again. What a pleasure it is to see that today’s budget takes a major step towards taking those poor unfortunate victims back out of the tax regime.
Richard Baker (North East Scotland) (Lab) rose—
- Alex Johnstone:
It is the Conservatives who will stand up for working men and women the length and breadth of this country. We will also guarantee to support the best welfare system in the world. Parties of the right and left have consistently adopted a policy of ensuring that ours was the best welfare system in the world, but an unfortunate side-effect has been the growth of welfare dependency that has taken place in parallel with that.
Despite the fact that there is an undisputed need for welfare reform, the Scottish Government opposes what is proposed but will bring forward little or nothing that might be put in its place. Let us start with the benefits cap. Someone who gets £26,000 a year on benefits is doing better than people who work and pay tax on an income of as much as £35,000 a year. Who in Scotland could justify that excessive expenditure?
- John Mason (Glasgow Shettleston) (SNP):
Will the member give way?
- Alex Johnstone:
Unfortunately, I will not give way, because I have only five minutes, whereas the member’s party will, I believe, have 45 minutes in the debate. As long as we have pluralism in this country, I will have my shot and the member will listen.
The situation in which we find ourselves did not occur overnight. Why is it that while the benefits burden on the taxpayer increased to the unimaginable levels that we see today, the housing experts sat on their hands and said nothing? The subsidies kept flowing and tenants’ rents kept getting paid. Frankly, I am disappointed with some of the lazy, simplistic and sadly predictable responses that we have heard in the debate on the issue, both within Parliament and outside it.
The hand wringing that has gone on and the detailed explanations that we have heard from Elaine Murray about the intricate detail of how the legislation will be applied are simply examples of people taking advantage of the situation. In stark contrast, during the Welfare Reform Committee’s evidence session last week and in my subsequent personal meetings, I discovered a constructive and positive reaction from organisations such as Citizens Advice Scotland, Capability Scotland and Barnardo’s Scotland. I found the way in which they are tackling the reforms refreshing and realistic.
The issue is not just money; even more important is the need to maximise the use of our existing housing stock. That is vital, as it seems increasingly likely that the Scottish Government will fail spectacularly to achieve its own modest target of 6,000 social houses per year.
How many bedrooms across Scotland are unused because the property is underoccupied? That leads me to another contributory factor: the lack of tenancy options that are available to local authorities.
Before I close—and I do not have long left—I must tackle the issue of flexibility. It has been made clear that there can be flexibility in the application of the rules. On 14 February Lord Freud made it clear that the designation of property size and the nature of rooms was another area in which the Government may be flexible. The Government is exploring with social landlords as part of its implementation work how that flexibility might come about.
Sadly, however, I am aware from advice that I have taken that there are issues surrounding housing law in Scotland that make some of the flexibilities that are possible in the south impossible in Scotland. I ask the minister if he will study them to see whether changes in the law are necessary.
We in Scotland are just as likely as the rest of the United Kingdom to find benefits in trusting people to manage their own affairs. It is vital that we find ways to give support to individuals who sometimes have chaotic lifestyles and will require help to organise their finances and fulfil the requirements of the legislation.
- The Deputy Presiding Officer (Elaine Smith):
The member must close now.
- Alex Johnstone:
However, unless we are willing to give them that help, the problems that are predicted by members on the Government front bench and by some elements of the Opposition are inevitable. We should not let that happen when we can do something to prevent it.
I move amendment S4M-02407.2, to leave out from “the UK Government’s plan” to end and insert:
“that the coalition government’s Welfare Reform Act received Royal Assent on 8 March 2012 and that it will introduce the biggest reforms for 60 years, including the introduction of the universal credit, which will replace the current, complex myriad of means-tested benefits with a single benefit system, making it simpler for people to navigate, harder for people to defraud and ensure that it is no longer possible to be better-off on benefits than in work, while, at the same time, protecting the most vulnerable in society; understands that the changes to housing benefit are part of this essential reform, which will promote individual responsibility and ensure that better use is made of the social housing stock, and further notes that the coalition government is working with councils on the transition and has announced an additional £10 million in 2011-12 and £40 million in each year from 2012 to 2015 in additional discretionary housing payments to allow local authorities to provide additional support where it is most needed.”
- Liam McArthur (Orkney Islands) (LD):
Back in October I took part in our debate on the wider welfare reform agenda. I noted then that it was an emotive area of policy that attracted strongly held views and, for reasons that I entirely understand and respect, the same is true of the specific aspects that relate to housing benefit.
At that stage, however, the SNP motion and the Labour amendment at least acknowledged the need for reform. Winding forward six months, it is evident from the SNP motion and the Labour amendment before us today that the acceptance that changes to the status quo are necessary is gone.
A budget that now represents a quarter of all benefits spending, which doubled to £20 billion during Labour’s term in office and which if it was unreformed would rise to £25 billion by 2015, is neither credible nor sustainable. The Scottish Federation of Housing Associations said that it
“agrees that the existing welfare system is in need of radical reform”.
The minister reiterated that point this morning.
I grant that what the SFHA envisages by way of reform differs from what is contained in the Welfare Reform Bill. That much is clear from its briefing and—more significantly—from the issues that it has been taking forward at Westminster in recent months. However, there is a recognition that carrying on regardless is not an option.
The SFHA does not detail what its reform package would look like, but in a sense that is not its role. The same is not true of SNP ministers. As I said, the minister repeated earlier his claim to be in favour of reform, which, while he holds the view that any cut to any benefits or any tightening of any of the demands placed on recipients is automatically unfair, is a cop out.
- Kevin Stewart:
This is nonsensical reform rather than radical reform. True radical reform would have considered ways of helping people out of poverty; the reform that Mr McArthur is talking about will put even more people into poverty. Will he comment on the fears of some social landlords about the fact that housing benefit will now be paid to the individuals, which might lead folk into even greater poverty than they are in already?
- Liam McArthur:
I hope that I can claim some of that time back, Presiding Officer.
I certainly accept the concern around direct payments to individuals, which is one that I and others have been raising. We might need to take at face value the assurances that we have been given. However, that is an issue that I expect to be kept under review.
Since the debate in October, we have heard no alternative prospectus from the Scottish National Party, either on welfare reform generally or on housing benefit specifically. The closest that we have come is the remarkable claim by Nicola Sturgeon that with separation from the UK will come an end to poverty in Scotland. In light of the Deputy First Minister’s assertion, it is hard to understand why the SNP is so keen to delay the fateful day when it believes that the poor will no longer be with us.
Any traces of SNP attempts at Westminster to amend the housing benefit elements of the bill are hard to divine. Doubtless, the bold group of SNP exiles were busy supporting amendments that were lodged by others, but it hardly demonstrates a vision or ambition for housing benefit reform on their part. It seems that the SNP supports no reduction in the welfare or housing budgets and that it supports only reforms that would result in recipients being better off, or no worse off.
This is a thorny and controversial area of policy. I am only too well aware of that reality from my own constituency, though anyone doubting that fact need only consider the case studies that were presented at the end of the SFHA briefing. However, to argue, as the Government motion does, that the proposals have gone “largely unchanged” through the process of scrutiny at Westminster is simply not true and diminishes the role that many organisations, from Scotland and elsewhere, have played in arguing their case, backed in many instances, as the minister acknowledged, by my Liberal Democrat colleagues.
For example, serious concerns have been raised about the underoccupancy provisions. It is worth bearing in mind, of course, that pensioners are already exempt from those provisions. In addition, however, the £470 million of discretionary housing payments can be used to assist people who are adversely affected and for whom no suitable accommodation is available. A further £30 million in DHP has also been allocated directly to local councils to provide specific assistance to help foster carers and those in adapted accommodation. I know that attempts were made to secure an outright exemption for people with disabilities who are living in adapted accommodation. Although enshrining that in the legislation might have been problematic, I can entirely appreciate the rationale and hope that that funding will help to address those entirely legitimate concerns.
Other changes to aspects of the Welfare Reform Bill were also successfully achieved, but I think that it is wrong for the Government’s motion to belittle those relating to housing benefit.
The SFHA makes a fair point that a considerable body of secondary legislation will flow from the bill. I know from experience of dealing with bills in this Parliament that that approach is increasingly causing concern, not least as it involves a degree of uncertainty and can limit the extent to which provisions are scrutinised and amended.
I also accept, as I did in October, that there is an overlap with devolved areas of responsibility. However, the SNP’s claim that the changes to housing benefit rules are
“compromising the Scottish Government’s capacity to deliver on its housing ambitions for Scotland”
seems to be part of the all-too-familiar pattern of blaming everything on Westminster. Ministers have done a pretty good job all by themselves of compromising the SNP’s ambitions to build 6,000 new social rented houses each year. The SNP’s 2011 manifesto commitment was made in full knowledge of the current financial constraints. However, a month after the election, Mr Brown claimed that the Government was committed to building only 6,000 affordable homes and that no target had been set for homes for social rent. By September, the target for new social rented properties reappeared, although it was significantly lighter, at 4,000 a year.
The distinction between social rented properties and those that are affordable is not irrelevant. Many people on low incomes are unable to secure a mortgage and the willingness of the SNP to compromise its housing ambitions will have an impact.
I fully acknowledge the concerns that have been expressed by those in the housing sector in Scotland about the changes that are being introduced. However, the SNP’s indignation would carry more weight were the party more forthcoming in setting out what it would do and how it would pay for it.
I move amendment S4M-2407.1, to leave out from “that will” to end and insert:
“; acknowledges the lobbying efforts of Scottish stakeholders that helped secure additional transitional support for households affected by the benefit cap and for foster families and disabled people living in adapted properties affected by changes to under-occupancy rules; further notes that, despite its support for welfare reform, the SNP administration has so far provided no clear view on the reforms that it wishes to see; recognises that SNP MPs did not feel the need to table amendments to the parts of the Welfare Reform Bill dealing with housing benefit reform; believes that Scottish tenants and prospective tenants have not been well served by the Scottish Government’s decision to abandon the SNP manifesto promise to build 6,000 socially rented houses every year and, instead, adopt a plan that involves an element of private purchase, and considers that the Scottish Government should devote its effort to meeting its manifesto promise on building 6,000 houses for social rent each year.”
- Jamie Hepburn (Cumbernauld and Kilsyth) (SNP):
I welcome this debate and hope in my remarks to draw on my experience as a former member of the Infrastructure and Capital Investment Committee and as deputy convener of the Welfare Reform Committee.
There is much concern about welfare reform—indeed, members have already highlighted some of that—and stakeholders have expressed to both of the committees that I have mentioned concerns about, for example, the effect on the disabled; the effect on those in poverty, particularly children; and what will certainly be a negative impact on housing policy in Scotland. I cannot recall who gave this evidence—members will have to forgive me—but the Infrastructure and Capital Investment Committee was told that there was no sense that housing policy, devolved or otherwise, was a consideration for the UK Government in its welfare reform agenda. That quite damning comment suggests the reason why it would be better for housing policy to be in the Scottish Parliament’s hands—and, in saying so, I very gently point out to Elaine Murray that I am not seeking to use the debate as an SNP Trojan horse with regard to the constitution; I am simply reflecting what the Scottish Federation of Housing Associations itself has said.
Citizens Advice Scotland estimates that, as a result of changes to housing benefit, around 60,000 tenants in Scotland will lose an average of £40 a month and that 97 per cent of those who claim local housing allowance will be affected. That will have a major impact on some people’s ability to meet their rent costs.
As for specific changes that are being made to housing benefit as part of the welfare reform agenda , I have to say that, in its underoccupancy changes, the UK Government is using the term “underoccupancy” in a way that I do not recognise—or, at least, that I do not recognise as being fair. How can an individual who has lived in a house for a long time—and, indeed, who might well have raised a family there—be said to be underoccupying their home? Such a view treats a person’s house as an asset rather than as a home.
That not only represents a cultural shift but is bad policy in two ways. When he gave evidence to the Welfare Reform Committee, David Ogilvie of the SFHA made it quite clear that there are not enough one-bedroom properties in Scotland to meet demand if this agenda is forced through. The other way in which it is bad policy is one that I had not considered until I met the chief executive of the local housing association in Cumbernauld and visited some new flats that have been built with help from the Scottish Government. He told me that the rent for those two-bedroom flats was £65 a week, but if someone is suddenly found to be underoccupying a flat, they will have to find a one-bedroom property elsewhere in the private sector that is likely to cost more. It is a ludicrous proposition that will have a net cost to the taxpayer.
Although I realise that time will get the better of me, I want to mention a number of other issues. Kevin Stewart set out the direct payments issue quite clearly in his intervention, and his comments do not need to be repeated. Concern about the impact on this Parliament’s world-leading homelessness legislation reflects the fact that the welfare reform agenda does not take cognisance of our housing policy or, indeed, the effect on social housing providers in bringing forward houses in future. Such negative changes suggest that we are absolutely right to be concerned about the changes to housing benefit, and I say to Mr Johnstone that the approach does not strike me as the Tories standing up for working people.
- The Deputy Presiding Officer:
I am afraid that you must close, Mr Hepburn.
- Jamie Hepburn:
I look forward to assessing the changes in the Welfare Reform Committee and commend the Government motion to the chamber.
- Margaret McDougall (West Scotland) (Lab):
The incoming housing benefit changes are extremely worrying and will have a significant effect in Scotland. The Scottish Parliament information centre has estimated that as of December 2011 more than 475,000 people in Scotland were in receipt of housing benefit: 80 per cent in the social rented sector and the other 20 per cent in the private sector.
The UK Government claims that the reforms are needed to tackle growing expenditure on benefit and are driven by its desire to create a fairer system. However, it is hard to see what is fairer about a proposed system that could have devastating effects on not only Scotland but the whole UK; that could penalise people because there is not enough housing stock or housing of the right size; and that could see homelessness rise.
The benefit reforms will hit the poorest and most vulnerable people hardest and will damage local economies. North Ayrshire Council estimates that the reforms will mean a £50 million loss to the North Ayrshire economy during the next six years. Many other local authorities are in a similar position.
The Government estimates that the bedroom tax could affect up to 39 per cent of the working-age households that are in receipt of housing benefit, but that is only a rough estimate, because many local authorities are still trying to develop a complete picture. People who are affected will have their housing benefit cut by 14 or 25 per cent, depending on the number of bedrooms by which they are deemed to be underoccupying, which represents average losses of £27 or £65 per month. Those are substantial amounts for people on low incomes.
The Scottish Government and councils need to start working together to develop local housing strategies and policies—in particular, allocation policies—to meet the demands of each area. They will need to ensure that the housing stock can be maximised to meet tenants’ needs, and they must ensure that people are not unfairly penalised, do not fall into debt and are not evicted because they can no longer afford their rent as a result of the benefit change.
The proposed universal credit raises many other issues, not least the direct payment of the housing costs element to tenants. Universal credit is supposed to simplify the benefits system. The Government’s target is for 80 per cent of forms to be completed electronically, which could make the benefit more difficult to access for people who are not computer literate or do not have access to a computer.
There is also the serious issue of what will happen to benefits staff in Scottish councils. Will they find a new role helping customers to move to universal credit through the electronic claim form? Will their posts be lost? Will they transfer to the DWP? We still do not know the answer to those questions. A valuable staff resource—people who have local expertise and who can deal with complex housing benefit claims—might be lost.
If councils do not provide support, Unison suggests that services such as citizens advice bureaux will be overloaded with people who are seeking help, support and advice. If advice is not available, many people will lose out on benefits to which they are entitled, which will have serious financial implications and could lead to homelessness.
We must stand with the organisations that oppose the reforms, which are not and never will be fair. Scottish councils and the Scottish Government must do everything that is in their power to mitigate the effects of the benefit changes. We cannot willingly allow the poorest and most vulnerable people in society to be left to bear the burden of a truly unjust reform.
- George Adam (Paisley) (SNP):
We need simplification of the benefits system, but not in the way that is proposed. The minister was right to say that independence is the way forward if we are to ensure that we can adequately house and look after all our citizens in Scotland. The issue is not just a Trojan horse to enable us to talk about the constitution again; the constitution is what can make a difference in people’s lives.
What do the Tories and Lib Dems say to people who are suffering from long-term conditions and who are worrying that they might be made homeless? I see that Alex Johnstone is about to stand up; I will gladly take an intervention from him.
- Alex Johnstone:
I am sure that the member is aware that part of the reason why many people are worrying is that they are listening to the propaganda that is being put out by him and by other organisations.
- George Adam:
Mr Johnstone is a far more experienced parliamentarian than I am, but his intervention was rather disappointing. The Tories do not have the answers for people who have long-term conditions. My wife has multiple sclerosis. Last night, we went to the Paisley and district branch meeting of the Multiple Sclerosis Society and at least three or four people approached me to talk about the issues. We are dealing with real people, who have real problems, and the reforms will have a dramatic and devastating effect on their lives.
I listened to Alex Johnstone’s speech—or rather, his turn, as I think he put it. It was indeed a turn, which would probably have gone down better at Blackpool pleasure beach than anywhere else. I am still waiting for the detail. Where is the hope for people who suffer from long-term conditions? How can we maximise the use of the existing housing stock, as he says that we should do?
The problem is that many local authorities are still suffering from the Conservatives’ previous housing ideas, which is why local authorities no longer have the good housing stock. Thankfully, the Scottish Government has managed to take the situation forward and to ensure that we retain some social housing stock. We hear nothing about that from the Conservatives.
Alex Johnstone mentioned flexibility in the system but said absolutely nothing about it. I am still waiting to hear what that flexibility is and what I should tell the people whom I met last night. There is just fear and a complete lack of detail.
A document from HM Revenue and Customs said that the housing benefit and welfare reforms could push 118,700 children in Scotland into poverty. Most of us never got involved in politics to do that, and the same probably applies to many of my colleagues on the Tory benches—it is surprising to have to say that about the Lib Dems, too.
In Renfrewshire, 68 per cent of all tenants receive some form of housing benefit. I spoke to the housing department there today and was told that the effect on how it goes about its business will be massive. That department does not know the detail of the reforms, although it is one of the bodies that will deal with them.
Renfrewshire’s population is split 50:50 between working-age people and older people. As Jamie Hepburn said, we do not have the housing to deal with the need for one-bedroom homes. The Tories say that they want everybody to work for themselves and to make their way in the world but, under the proposals, every under-35-year-old will be staying with his mother and father, because he will be unable to get a bedsit.
We must look at the difference that the reforms will make. Last April, the local housing allowance for private lets was reduced from 50 to 30 per cent of rents. That has left many people who rent from private landlords at their mercy, which is a worry.
There are other issues. I mentioned child poverty, and looked-after children will also be affected. In some cases when a family gets sorted and a child comes back, there might be no bedroom for that child. As corporate parents, we should all look to take that on board.
- Margaret Burgess (Cunninghame South) (SNP):
I say to Alex Johnstone that I will not apologise for talking about how the issue will affect people in my constituency and elsewhere in Scotland. We have heard from all the organisations from which he seems to have got a different message. Every organisation that sat round the table at a Welfare Reform Committee meeting said that the benefit reforms, including the housing benefit reforms, would have a detrimental impact on all the poorest and the vulnerable in our society. They went as far as saying that the reforms would push child poverty back to its 1999 level. The Official Report will show that that was said.
I take issue with Alex Johnstone’s references to propaganda and scaremongering. There has been no more scaremongering than there was when the Conservatives talked about people who got £2,000 a week in housing benefit. The answer to a freedom of information request was that, of the 5 million people in the UK who receive housing benefit, about 10 receive £2,000, and they have particular circumstances. The Conservatives put out propaganda about that, which the tabloid press picked up. We should correct that image.
We have heard from other members about the issues that will arise for local authorities. My local authority reckons that about 3,000 people will be affected by the housing benefit reforms and that people will lose as much as up to £10 a week, simply because of the single-occupancy rule. I have no issue with people moving house if they want to do so, but I am concerned about forcing people to move simply for the crime of having a bedroom that is not being used. Making such people move is fundamentally wrong and is against everything that I thought that we in Scotland stood for. People should be able to have their home for the rest of their life, if they want. Unfortunately, that will no longer be the case for somebody who is poor. I have an issue with that.
We hear people say, “Let’s give people financial responsibility.” I say, “Let’s get real.” Nobody can teach us better about budgeting than those who are on low incomes or benefits. They could teach us all something about budgeting.
Those people are really struggling just now. Every single penny counts. They simply cannot afford an extra pound in rent. They are struggling to pay for essential items; they are not buying luxuries or having a coffee. They are struggling to decide whether to buy a loaf of bread or a tin of beans for the kids—and sometimes the children go without. It is not right to put an extra burden on people who are in such circumstances by telling them, “There’s your money; sort out how you are going to pay your rent yourself.” They do not want that, and neither do the local authorities.
From my previous job I know that there is nothing more distressing than witnessing the despair of someone who is about to lose their home. It is the final straw for them and comes at the end of a financial and mental struggle from which their health and relationships often never recover. Citizens Advice Scotland anticipates that demand for advice in such circumstances will increase, and it is right to point out that it is cheaper to provide good debt and welfare advice than it is to deal with homelessness and bankruptcy—and good advice has better social outcomes. I have seen it working at first hand and it truly makes a positive difference to people.
The poorest and most vulnerable are being penalised simply because they are poor and vulnerable, and that is absolutely unacceptable. We have heard today about the Tories being for the working people. A lot of the people whom we are talking about today work but do not earn enough, so they get help with their rent. They will not be helped by today’s budget because any assistance that has been given through benefits is taken away through taxes. They will not be better off.
The devolution of social security would allow this Parliament to do much more for the most vulnerable of our citizens.
- Malcolm Chisholm (Edinburgh Northern and Leith) (Lab):
I have no time to deal with all the housing benefit cuts that started last April, continued this January with the extension of the single room rate, and will be ratcheted up in a year with the underoccupancy and other provisions. I will concentrate on the negative effect that the changes will have on our historic homelessness commitment. It appears that the UK Government did not give that commitment any thought or consideration when it was making the changes.
Many members have spoken about the underoccupancy measures. The Scottish Government estimates that they will affect 95,000 people in Scotland. Alex Johnstone talked about people moving to smaller homes. Yes, we could incentivise that if people want to do it. City of Edinburgh Council offers people an incentive to do that, and that is fine if that is what they want to do. However, the UK Government has not taken on board the fact that, in many cases, no suitable alternative accommodation is available. In written evidence, the Scottish Council for Single Homeless told the Infrastructure and Capital Investment Committee:
“There is clearly a mismatch between housing benefit policy and the requirements of the homelessness legislation.”
It pointed out that more than 75 per cent of social rented houses in Scotland have two or three bedrooms, while many homeless people, particularly those who have new rights coming on stream this year, are single. The result will be that many people in existing tenancies will build up rent arrears because their housing benefit will be cut by 14 or 25 per cent. More people who are in such housing will become homeless and, crucially, single people who are currently homeless will not be able to be offered a house because not enough one-bedroomed accommodation will be available. That single policy will have a negative effect on our homelessness commitment, and that was flagged up by the Infrastructure and Capital Investment Committee in its report this week on homelessness.
Many councils are, rightly, looking more to the private sector to deal with some of the homelessness issues, but even there a series of measures will have a negative effect. Last year, it was the reduction in how much housing benefit someone could get to the 30th percentile, and next year housing benefit will be uprated by the consumer prices index rather than rent levels, which historically have risen faster. There is also the shared accommodation rate for anyone under the age of 35 that is already kicking in in the private rented sector.
There is also an issue around the lack of availability of shared accommodation and its unsuitability for many people. For example, a single person who had separated from their partner would have to live in shared accommodation and would be unable to have any of the children of the previous relationship staying with them, so that measure will also be entirely negative for the homelessness commitment.
The third issue that has been raised concerns the abolition of choice for tenants about whether housing benefit is paid directly to them. Of course, that has created a lot of anxiety in the housing associations. On 26 October, evidence was given to the Infrastructure and Capital Investment Committee, which can be found at column 226 of the Official Report and which I do not have time to quote in detail, about how mortgage lenders are very anxious about the effect that the decision will have on the ability of housing associations to have a regular income stream to repay their borrowings. I also have not had time to mention the on-going consultation on housing benefit for temporary accommodation, but such an approach will necessarily be used more in the early days, post-December 2012. If it is negatively affected, there will be more negative effects on our homelessness commitment, too.
In conclusion, I believe that we need to consider the whole issue of the devolution of housing benefit, irrespective of the views that we hold on any other aspects of devolution or, indeed, independence. There has always been a logical case for the whole of housing policy to be considered in its totality.
- The Deputy Presiding Officer:
You really need to close.
- Malcolm Chisholm:
I hope that that will be one of the conclusions that we draw from this whole sorry experience.
- Bob Doris (Glasgow) (SNP):
I will start by paying tribute to Margaret Burgess for her speech. It was exceptional in outlining the devastating effects that these reforms will have and she correctly identified the fact that the landscape for benefits in Scotland is changing. Other negative changes are coming. For example, nearly 85,000 households in Scotland will no longer be eligible for tax credits from this April, and that is before one starts to mention the disability living allowance and incapacity benefit reforms. It is important that we view the housing benefit cuts within that context.
As we have heard, there will be draconian sanctions such as the underoccupancy penalties, which will see the UK Government introduce cuts to the amount of housing benefit tenants can receive if they are deemed to have a spare room in their council or housing association home. That reduction will essentially mean that households deemed to be “underoccupied“—another term that I have issues with, like others who have spoken—will be charged a penalty as the reduced amount of benefit will become rent paid directly by the tenant through additional top-ups from any other benefits or incomes that they have.
I will look at the area where I stay and at how these changes will affect people there. According to the SFHA, the average weekly rent charge for two-bedroom households in north Glasgow is £63.88 a week, or about £283 a month. For households that are deemed to be underoccupying a property by a single bedroom in that area, the proposed 14 per cent benefit cut equates to an additional £465 a year—the equivalent of seven and a half weeks’ rent—that they will have to find from their own resources. The Tories are actually saying that if people need a year’s shelter, they will pay for 10 months but for the other two months that person is on their own. That is not acceptable and we should not be accepting it in Scotland.
In north Glasgow alone, the SFHA estimates that the change will affect almost 1,700 households. I will talk about a couple of constituents whose experience relates directly to this point, although I will not name them. One is about to reach retirement age and they are currently underoccupying their accommodation as they have a spare room. They are worried about their benefits being cut. They are also looking perhaps to go into sheltered accommodation but, because they have not reached retirement age, they are worried about being reassessed for personal independence payments and other benefits. They are unsure whether they should move to sheltered accommodation as they are worried on a number of levels about whether they will be able to sustain their income and stay there. It is not merely a question of the housing benefit reforms, but of how they will impact on other wider welfare reforms.
Another constituent who came to see me just the other day needs a two-bedroom property but is seriously considering whether he should get one or not. His son, who sometimes stays with him, will be deemed not to be entitled to that bedroom and housing benefit will therefore not cover it. Those are real people who will suffer real and direct impacts from these ill-considered, inappropriate reforms.
The UK Government has chosen to ignore exemptions in such areas and the most vulnerable people in society are likely to suffer. If someone’s partner has come back from hospital and needs a spare room because of their medical condition, they will not have that spare room. If someone’s child has been taken into care and they want that child to return to their accommodation, they might no longer have the benefits to support that child in their home. Those are the most vulnerable people in society, whom we should be defending.
I will refer briefly to the Labour amendment, which talks about mitigation. From what I can see and from the search that I have undertaken, a lot of mitigation activities are already taking place. For example, in November, £100,000 of funding was announced to support three strands of activity involving the Chartered Institute of Housing, the Convention of Scottish Local Authorities and local authorities to see what they can do to mitigate the worst aspects of housing benefit reform and its impact on the most vulnerable people in society. Unfortunately, the key phrase is that we should mitigate “where possible”. Anyone in the Parliament who pretends that we can mitigate all the effects is in absolute denial.
I say to the Labour Party that the only Trojan horse in the chamber today might be a Scottish Labour Party that is giving succour to UK Tory welfare reforms by telling us that if we mention independence and a better way we are not in solidarity with other people in the UK. However, if we could kill the reforms stone dead in Scotland, no one else in the UK would accept them either, so give us the controls now.
- Drew Smith (Glasgow) (Lab):
It is not possible to wholly separate the housing benefit issues from the wider programme of welfare reform. As a member of the Welfare Reform Committee, I have taken a close interest in the cumulative effect of the changes. Taken together, the package represents a serious attack on the principles of a contributory welfare system—a system to which we all pay in when we can in the expectation that we will be supported, at least to a minimal level, when we need help. There is no doubt in my mind that the changes will further increase levels of poverty across Scotland and the UK and in my city of Glasgow.
I am aware of constituents who have already experienced hardship as a result of the changes to local housing allowance. I am particularly concerned about the impact that that will have on women and children. Maeve Sherlock outlined many of the reasons for that in her excellent speech in a debate that took place last year in the House of Lords. Anyone who is not convinced by the seriousness of the risks that the changes pose should read her demolition of the UK Government policy in Hansard, in which she describes how single mothers will be forced from work and from their local area, where they might rely on other family members to support childcare. That could happen because of a cut of just £12 a week, an amount that Baroness Sherlock rightly says could just as well be £1,200 to a mother on a low income—£12 a week could be the cost of a pair of children’s shoes or of putting a family meal on the table.
The changes to housing benefit will force families to move. In my area, that is likely to mean that single people without children who are on low incomes will be shunted into the city from the surrounding areas. In Glasgow, there are more than 1,500 single housing benefit recipients who are aged between 25 and 34. They could be forced to move from communities in which they might have grown up to something that is frankly close to a ghetto. The likely beneficiaries will be the private landlords who make money from cramming people into tenement flats that have been designated as houses in multiple occupation.
I do not have time to discuss the hugely disturbing effect that the changes will have on social landlords. Their risks will rise and their incomes will fall. The higher levels of rent arrears and the cost of recovering rents will diminish their capacity to borrow to fund new housing or improvements to existing stock. That is before I even get to the economic and, just as important, social cost of eviction.
As members have said, we in this Parliament should be concerned about the impact that all that will have on our efforts to beat homelessness. I commend the Infrastructure and Capital Investment Committee’s report on the 2012 homelessness target. In Glasgow, we have the highest level of homeless applications, but we are already 90 per cent of the way towards meeting the target. We have rightly closed large-scale homeless hostels, but there is a real danger that they will return because of the shortage of temporary furnished flats, which are the key option in eradicating homelessness.
In my view, therefore, the housing benefit changes represent the single biggest housing policy intervention in Scotland since the Parliament passed its groundbreaking homelessness legislation. In this case, and particularly for the coalition parties, that should be a cause of shame rather than pride.
We have not heard whether the Government will support the amendment in the name of my colleague Elaine Murray, which seeks to encourage the Scottish Government not simply to lament what the coalition is forcing on us, but to produce a clear strategy to mitigate the worst excesses of Tory misrule. My colleague Margaret McDougall outlined a number of areas in which the Government could do that, such as allocation policy and the difficulties with online applications—although, unfortunately, the Scottish Government has cut the budget for digital inclusion. The Labour Party has always argued that the Parliament should have that role should we ever find ourselves in this situation. Today’s poll tax is called the bedroom tax.
The Scottish Government claims that it wants control of the whole benefits system, but it must demonstrate its political will with the powers that are already at its disposal to mitigate the worst effects. I take Bob Doris’s point that it will not be possible to mitigate them all, but we need a clear plan to mitigate what we can.
In great challenge comes opportunity, but in grasping the opportunity the Scottish Government must understand that it will be required to make choices about its priorities in changed circumstances and that it must put resources as well as rhetoric behind the plan that it must develop and present to the Parliament.
- John Mason (Glasgow Shettleston) (SNP):
Housing benefit affects a lot of people and, if this goes wrong, a lot of people will be seriously damaged. We have heard a lot of figures this afternoon. Glasgow Housing Association states that 70 per cent of its tenants—about 41,000 people—receive some form of housing benefit and that 63.4 per cent of its income comes through housing benefit. It is interesting to note that GHA is about to start building one-bedroom houses for the first time since the housing stock transfer.
We have heard some of the major concerns both in the chamber this afternoon and from those organisations that have briefed us. Among those concerns is the underoccupation penalty, or bedroom tax, which the SFHA and the National Housing Federation estimate will affect some 70,000 households in Scotland, or 32 per cent of working-age claimants. Barnardo’s makes the point—which Elaine Murray and Kevin Stewart raised in the debate—that there are often good reasons why siblings cannot share a bedroom. For example, one might need bulky medical equipment.
There is also real concern about direct payments to claimants, which was touched on by Drew Smith. I presume that that is the Tory idea of encouraging self-reliance; however, the reality is that it is putting pressure on vulnerable people. Rent arrears are already a challenge for housing associations and will probably get worse, resulting in a danger of evictions and homelessness. That will also make housing association income less secure and more of a risk for lenders. In addition, we have the major problem of the secondary legislation, which we await from Westminster.
There are other concerns. For example, Margaret McDougall mentioned that the DWP expects 80 per cent of claimants to be online by 2017, but Parkhead Housing Association in my constituency has told me that only 30 per cent of its tenants are currently online.
Let us look at the Conservative amendment. Sometimes, when we look at the wording of these things we realise how ridiculous they are. The amendment states that the new benefits system will be
“simpler for people to navigate”.
We all accept that the present system is far too complex, but we have been promised simplification many times before and have not yet seen it. In this case, I will believe it when I see it. The amendment also says that it will be
“harder for people to defraud”
the system. The ultimate way of stopping people defrauding the system is to have no benefits at all. I presume that, as benefits are reduced, there is less and less room for defrauding. It is pretty clear that that is a smokescreen for just cutting benefits, which will have the side effect of less fraud.
The Conservative amendment goes on to say that it will be
“no longer possible to be better-off on benefits than in work”.
In the intervention that Mr Johnstone would not take from me, I was going to suggest that, if people are getting more in benefits than they would get if they were working, the answer is to increase the pay rate. I notice that the Tories have not supported the call for an increase in the minimum wage.
- Keith Brown:
Does John Mason acknowledge what appears to be an emerging anti-poverty strategy from the Tories and, perhaps more surprisingly, the Lib Dems that involves taking £150 million out of the Scottish economy and giving a tax cut to those who are on over £150,000 a year? Does he hear any support for that in his constituency?
- The Deputy Presiding Officer:
The member is in his last minute.
- John Mason:
It is very clear to me that both the Tories and the Lib Dems are out to help the rich and damage the poor.
Given what we have heard about the need for advice, Glasgow City Council’s attempt to close five of the citizens advice bureaux in Glasgow was shameful. Fortunately, pressure has made the council change its mind.
The Labour amendment talks about the need for
“a clear strategy to mitigate the impact”.
That is fine, but does that require more resources? I presume that that is Labour’s thinking. We have heard that there should be more money for housing—where would Labour save it from? Would it come from the health budget? I find it unacceptable if the Labour Party is going to cut the health budget and hit sick people.
- The Deputy Presiding Officer:
I remind members who took part in the debate that they should be in the chamber for the closing speeches, to which we now come. I call Liam McArthur. You have a strict four minutes.
- Liam McArthur:
As was predicted, this has been an emotive debate. I am delighted that Alex Johnstone has rediscovered why he came into politics, although I am a little worried that George Adam seems to be wondering why he did.
It is right and appropriate that MSPs throughout the chamber have had an opportunity to express concerns on behalf of their constituents. Margaret Burgess need offer no apology for the stance that she has taken in that respect, although I believe that she and John Mason are wrong to suggest that the proposals will punish the poor for being poor.
I was quietly surprised by the measured tone of a number of speeches. Jamie Hepburn made a number of salient points on the concerns that have been raised with him, and Malcolm Chisholm drew a clear link between his concerns about housing benefit and achieving homelessness targets. It would be disingenuous of me to suggest that I do not have some sympathy with that.
The point that was made about secondary legislation and attempts to understand the detail that is flowing through reflects concerns that I have expressed on many occasions about legislation that passes through the Scottish Parliament. I will therefore not criticise those who raise similar concerns about the welfare reform legislation.
A number of members made points about direct payments, including Drew Smith, Malcolm Chisholm, Jamie Hepburn and Kevin Stewart, to name but a few. Again, I have raised such points both in the chamber and directly with colleagues at Westminster. If the concerns come to pass as has been suggested, I sincerely hope that the UK Government will be prepared to look again at the matter.
I also understand a number of the concerns that have been expressed about the provisions on underoccupancy, although it is wrong to suggest that no changes have been made in response to those concerns.
Dr Murray suggested that the debate is a Trojan horse for independence. That appears to have excited the wrath of many members on the Government’s back benches. I know that feeling, given my intervention in the constitutional debate this week. I think that the debate might, in part, have been an attempt by the Government to justify the army of officials who now find themselves deployed within the Scottish Government to deal with welfare reform.
I return to the question that I raised at the beginning of the debate about the reforms that the SNP and the Labour Party wish to see. It is clear from what we heard this afternoon that they do not like what is proposed by the coalition Government—perhaps with the exception of the establishment of a universal credit. Despite the talk of “horrors” and “devastation”, we have not heard what changes they would make.
At least in the case of Labour, we have had an acknowledgement that spending on housing benefit has gone beyond sustainable limits. In January, Liam Byrne expressed the view that Beveridge
“would scarcely have believed housing benefit alone is costing the UK over £20 billion a year.”
“That is simply too high.”
He was less revealing about where, and the extent to which, cuts to housing benefit are necessary, but at least there was acknowledgement of the problems that we are trying to address.
In contrast, the view from the SNP appears to be that welfare reform is needed, but that it should not result in any reduction in the overall budget, including for housing benefit. Its policy remedy is separation from the rest of the UK. Although that would certainly allow a future Scottish Government to take a different approach, it would not absolve it of the need to deal with budgetary realities or the need to make the best use of housing stock. To pretend otherwise is a con.
Even simplifying and streamlining the welfare system, which the Deputy First Minister insists she supports whole-heartedly, would not be without consequences, including for many people who are in receipt of housing benefit in Scotland. Mike Russell took exception last week to my observation that even simplifying and streamlining the welfare system would create winners and losers, but if that is not the case, the SNP needs to explain why and how it would pay for additional resources. Notwithstanding my contribution to the constitutional debate this week, I believe that demanding more powers and promising to set up an oil fund does not adequately answer those fundamental questions.
- Margaret Mitchell (Central Scotland) (Con):
Given the intemperate terms of the Scottish Government’s motion, coupled with the equally intemperate wording of the Labour amendment, it was something of a foregone conclusion that today’s debate would, for the most part, generate more heat than light. That is a great pity, as an opportunity has been lost to look constructively at welfare reform and the housing benefit aspect of it. As Drew Smith said, it is not possible properly to assess housing benefit reform without looking at it in the context of wider welfare reform.
Instead, the tenor of this debate sells short those who are trapped in benefits poverty. It does nothing to address the problem of individuals who are welfare dependent. Welfare costs continue to soar to an unsustainable level and that presents great barriers to those who want to escape a life on benefits and to find work instead. That is bad for individuals, bad for communities and bad for society. What is worse is that it often triggers higher levels of debt, family breakdown, alcohol and drug abuse and crime.
Benefits fraud costs £1.5 billion every year and error and benefits fraud cost £5 billion a year. Five million people are trapped on out-of-work benefits and two million children grow up in households in which no one works. That is the unpalatable background against which welfare reforms and housing benefit reform have been tackled.
Let us be quite clear that Labour and the SNP, in what the minister stated, have both confirmed that welfare reform must be tackled. However, both parties have spectacularly failed to present any ideas about how that should be done, but prefer instead to carp from the sidelines about the biggest shake-up of welfare reform in 60 years. That point was very well made by Liam McArthur and my colleague Alex Johnstone.
- Keith Brown:
Will the member give way?
- Margaret Mitchell:
If the minister does not mind, I will—given the one-sidedness of the debate—continue to make my case.
It has taken political courage to introduce the reforms, which are based on achieving a very clear objective: to make work pay and to put individual responsibility at the heart of the benefits system. That involves rolling housing benefit and five other benefits into one payment—the universal credit, which is to be introduced in 2013. The advantages are clear and are recognised by other political parties. Margaret McDougall and Elaine Murray may be interested to know that the former Secretary of State for Work and Pensions, James Purnell, said that it is a good reform and that he had produced something similar himself.
One payment will save in administration costs and will introduce transparency so that individuals can see that they are better off for every hour that they work and every pound that they earn. However, the main aim—Margaret Burgess, who made a powerful speech, may be interested in taking cognisance of this—is to make work pay, especially for the poorest people in society.
It is estimated that housing benefit reforms will save £1.765 million by 2014-15, but this is not all about saving money, as some critics assert; it is also about having a simpler and fairer benefits system that will help people into work and in which work is seen to pay, and in which workless households will not be in receipt of more in benefits than the average working family receives in pay.
The reform is not easy, but it needs to be done. What is more, the general public—who are not, by and large, motivated by political point-scoring—understand the need for reform of the welfare system and support it.
- Richard Baker (North East Scotland) (Lab):
It is right that this Parliament should debate the very damaging impact that the cuts to housing benefit will have as part of the UK Government’s ill-advised changes to our welfare system. The housing element is crucial and will affect some of the most vulnerable families and individuals in our country. It will also affect housing providers—local authority providers and housing associations.
We on this side of the chamber have not been slow to criticise the Scottish Government when we have believed that it has made on matters that are within its power decisions that have been damaging for housing. For example, we opposed the 30 per cent cut to the housing budget and we share Citizens Advice Scotland’s concern that the decreasing budgets for housing services and for local authorities, alongside the impact of welfare changes and increased demand, will result in a perfect storm of challenges for housing providers.
At the same time, when the Scottish Government makes reasonable points about what will result from changes to housing benefit by the UK Government, we will, of course, agree. We have previously expressed concern about what actions Scottish ministers took to impress on their UK counterparts the need to make changes to the housing benefit proposals, but the fact is that the bill has been passed largely unchanged, despite the efforts of all those in both Parliaments and in civic society who have pointed out just how flawed it was. We have heard throughout the debate about the impact that the cuts will have on thousands of people in Scotland.
This will be an anxious time for many people as they face the prospect of either having to go through the upheaval of moving to a different property or meeting the costs themselves of an extra room that they need for what could be—as members have said—a host of perfectly justifiable reasons, such as disability issues or caring responsibilities. For the majority, of course, paying more is simply not an option. They will, understandably, feel that they are being kicked when they are down. We all accept that reforms in our welfare system have been required, but there will be no consensus that those changes are justifiable in view of the speed of their implementation, the depth of the cuts and their impact on the most vulnerable people. The poorest are paying the price for the mistakes of the superwealthy and the failing economic strategy of George Osborne and Danny Alexander.
Several very good speeches have been made. My colleague Elaine Murray opened for Labour by talking about the impact that there will be on individuals, particularly those who are in ill health or in disability situations. She also referred to the severe challenges that housing providers throughout the country face. They are without the stock that would enable them to reallocate tenants who will be affected, and they face the prospect of trying to recover lost income from tenants who cannot afford to pay. They are being placed in an impossible situation.
That is only one aspect of the difficulties that are being caused to housing providers, of course. My colleague Jackie Baillie pointed out in October, in an earlier debate on the bill, that removal of direct payments to social landlords will increase rent arrears and lead in many cases to court action. Jamie Hepburn also referred to that. More people might fall into debt and consequently find themselves homeless. The overall picture is gloomy for tenants and for those who provide their homes.
The Scottish Government has been right to criticise those cuts, but we need to hear from ministers now about what action will be taken to minimise their impact on those who will be affected, particularly the most vulnerable people. It is important for members to hear now from ministers about what scope there might be to mitigate the impact of the cuts and what actions are being taken. Those actions should include ensuring that there is adequate financial advice for those who will be affected and that local authorities will proactively contact people who receive housing benefit and tax credits, because I have been advised that reductions in tax credit might be compensated for by changes to their housing benefit entitlement.
There should also be work with local authorities and housing providers on provision of future stock and on the requirement for more one-bedroom homes, which will, unfortunately, result from the changes through the Welfare Reform Act 2012.
The debate must result in more than the expression of opposition, however much we agree with the Scottish Government on that point. It must also result in practical steps that are taken in Parliament and throughout Scotland to minimise the impact of the changes and to mitigate their effects on the vulnerable people and families who will suffer as a result of them. We appreciate that that is not an easy task for ministers and that they have not sought the task, but they must carry it out and rise to it.
All that can be done by Parliament and by all the other agencies that have responsibilities in the area must be done to help those about whom we have expressed deep concerns and about whom many people in civic Scotland and many experts who work in the sector have expressed concerns. Many people face the future with anxiety and uncertainty because of the heartless and damaging changes to housing support, which all right-minded people in Scotland and throughout the UK strongly oppose, and which Parliament will rightly oppose again today.
- The Cabinet Secretary for Infrastructure and Capital Investment (Alex Neil):
Quite a number of very good speeches have been made. I was particularly taken by two, one of which was by Margaret Burgess, who talked from her experience on the front line working with the citizens advice bureau in Kilmarnock. It is clear from such an experienced front liner that the human impact of the reforms will be devastating to individuals and families.
I was also particularly taken by Malcolm Chisholm’s speech. He is a former housing minister and has been prominent in campaigning for many long years for better housing, not only in Edinburgh but throughout Scotland. He, too, was scathing in his analysis of the impact of the reforms.
The first thing that I make clear to members is that, although housing is meant to be a wholly devolved issue, the Scottish Government was not informed or consulted by the UK Government about any of the reforms at any time prior to their introduction. Had we been consulted about the reforms, our strong advice would have been not to proceed with them because they are devastating to individuals and the wider economy.
As the minister said in his opening speech, if we add up the effects of not just housing benefit reform but the totality of the welfare reforms that are being implemented by the coalition Government in London, the annual impact will be to take £2.5 billion out of deprived communities in Scotland and £25 billion out of deprived communities throughout the UK. By any measure—
- Margaret Mitchell:
Will the cabinet secretary take an intervention?
- Alex Neil:
Sorry, but I do not have time.
By any measure, that is a devastating blow to the people who live in those communities.
In today’s budget, it was announced that the 50p tax rate for those earning more than £150,000 will be reduced and, in the same breath, that, over the next few years, an additional £3 billion will be cut from the UK welfare budget. That equates to about £300 million in Scotland. By any measure, the reforms will make the poor poorer and, combined with the tax measures, make the rich richer. I have never understood the Tory argument—
- Alex Johnstone:
Will the cabinet secretary take an intervention?
- Alex Neil:
No, not at the moment.
I have never understood the Tory argument for cutting tax for the rich to create incentives while devastating the living standards of the poor. When will the poor get an incentive and a decent standard of living? It is bad enough to get these reforms from the Tories—we expect it from them after the Thatcher and Major years and, clearly, we have the most right-wing Tory party in recent history. However, many people, particularly in Scotland, will be disappointed, to say the least, that these measures are being actively promoted by people who call themselves Liberal Democrats.
- Willie Rennie (Mid Scotland and Fife) (LD):
Will the cabinet secretary give way?
- Alex Neil:
The member has not been in the debate.
There is nothing liberal or democratic about the tax reforms or the welfare reforms. The Lib Dems thought that they had got a bad result in the elections to this place last year, but it will be nothing compared with the doing that they will get in the local elections in May. It will be a well-deserved doing indeed, for doing the Tories’ dirty work for them on welfare and taxes.
- Willie Rennie:
Will the cabinet secretary give way?
- The Deputy Presiding Officer:
Order. The cabinet secretary is not giving way.
- Alex Neil:
The member was not in the debate, Presiding Officer—obviously, he was not interested enough.
Many members have pointed out that the practical impact of the measures is extremely dehumanising. Take the example of an old person who has been living in the same house for 40 or 50 years and who has brought up two or three children in that house. The family have all gone, perhaps the spouse has died, and the old person is living alone in the family house. The Tories and the Liberal Democrats will come along to take away a large chunk of that old person’s housing benefit.
- Margaret Mitchell:
Will the cabinet secretary take an intervention?
- Alex Neil:
No, I will not.
That old person will be forced out of the family house and will probably be unable to find the right kind of housing in the same community with their friends and family. That is the kind of country that the Tories and the Liberal Democrats are creating—inhumanity of the worst kind.
As Malcolm Chisholm and others rightly said, there has been no regard whatever to the impact on homelessness. Indeed, the reforms do not even make financial sense because the cost of making someone homeless is more than £5,000. I do not know of many people on housing benefit who are getting £5,000 in their pocket. The cost to the public purse in Scotland of the impact of the reforms will be devastating. It is no exaggeration to say that some people will literally be driven on to the street as a result of the housing benefit reforms. They are ill thought out, costly, cruel and not the kind of 21st century policy that we should be promoting.
Of course, it is not only people who are out of work who receive housing benefit. In Scotland, 42,000 people who are in work receive it. One consequence of the reforms will be that, in many cases, people will be worse off staying in work than they would be receiving welfare. That defeats the purpose of the policy.
The DWP estimates that a fifth of single homeless people in Scotland will lose the prospect of a home as a result of the reforms. The DWP’s own assessment of the impact of the reforms points out that they will lead to increased rent arrears; increased homelessness; an increase in the number of children being forced to change schools, with adverse effects; a greater adverse impact on the rural communities that Alex Johnstone claims to represent; additional costs for councils, including increased pressure on services; and, of course, an adverse impact on the provision of housing in both the private rented and social rented sectors.
- Willie Rennie:
Will the cabinet secretary give way?
- Alex Neil:
By any measure, these ill-thought-out and inhumane reforms are utter madness. They will create in our society ghettos of people who cannot afford to live a decent life. We expect that from the Tories, as it is part of their philosophy to make the poor poorer and the rich richer, but the people who will never be forgiven by the Scottish people are Willie Rennie and the other so-called Liberal Democrats. Lloyd George must be turning in his grave at the betrayal by the so-called Liberal Democrats.
We will continue to fight these reforms and argue for a humane welfare policy that keeps people in work, puts people in work and takes people out of poverty rather than putting them further into it.