This is our final evidence session on the legislative consent memorandum on the Welfare Reform Bill.
Thanks very much, convener, and thank you for the opportunity to give evidence on a very important topic. I am grateful to this committee and to the other committees that are looking at the issue for the work that has been done to date. Although the Welfare Reform Bill is a United Kingdom bill, it is absolutely appropriate that it should be given a high degree of scrutiny in the Scottish Parliament, given the potential implications for people in Scotland.
I agree with your comments, cabinet secretary. This morning, Mr Neil Couling, the director of working age benefits at the Department for Work and Pensions, confirmed that £2.5 billion will be cut from the benefits system in Scotland. What meetings have you had with Mr Couling or the UK Government in relation to the Welfare Reform Bill? What did you discuss? What representations did you make on behalf of the Scottish people with regard to that massive cut?
As I indicated in my opening remarks, there has been extensive discussion and engagement between the Scottish Government and the UK Government. As far as I can recall, I have not met Mr Couling personally. I have met Iain Duncan Smith and have spoken on the telephone to Lord Freud, who is leading the bill in the House of Lords. My officials are in regular contact with DWP officials about the issues that we have been seeking to pursue in the context of this bill.
One of the concerns that was expressed this morning relates to housing benefit. Disabled people living in a two-bedroomed house will be disadvantaged or have their benefit cut. Mr Couling suggested that such people should move. Is that practicable?
For many people, that would not be practicable, and I will give you two reasons for that. First, people with disabilities might be living in houses that had been specifically adapted to meet their needs. Simply saying to people in those circumstances that they must move house is not a practical or desirable option. Secondly, we know that we have issues of supply of one-bedroomed properties, for example, and that much larger numbers of the Scottish population need such properties than there are properties available. The UK Government needs to be mindful of not only its policy intention, but the realities in which it seeks to implement that policy.
For your information, cabinet secretary, and in case you missed this morning’s meeting, we asked Neil Couling from the DWP whether the UK Government had made up its mind on the question of the Scottish ministers consenting to subordinate legislation. He appeared to rule that out and to say that the UK Government had made a decision. It would be unfortunate if it were to do that publicly without first letting the Scottish Government know.
I shall take your two points in turn. Your first point was about the UK Government’s position on a consent amendment to the bill. So that I am not misleading anyone here, let me say that the position of the UK Government was recently communicated to me by Iain Duncan Smith—who I have to say has been very constructive in all the discussions that I have had with him. The UK Government’s position is that it is not convinced that such an amendment is appropriate, so I do not want to suggest that it is saying that it is open-minded to a consent amendment at this stage. However, it might be prepared to have further discussions, short of that, about the involvement of the Scottish Government in any future regulation making. Obviously, I would have to make a judgment at some point about whether that takes us far enough, given the extent of the detail.
I appreciate your clarification of the current position, because Mr Couling said in his submission and at this morning’s meeting that the UK Government wants to work with the Scottish Government and involve it in the process. He also made the point that it is not the usual practice to include significant amounts of policy detail in a bill, because it is appropriate for much of the detail to be contained in regulations. I do not say whether his view is right or wrong; I merely seek your comment. Is that not the case for Scottish and UK legislation?
To be fair, there is an element of truth in that. I have sat at this table with your predecessor committee and discussed legislation that has much of its detail in regulations. However, frequently, by the time the bill has reached stages 2 or 3, the committee has that information in draft form and we can have a meaningful discussion.
Mr Couling made the point that the bill is a framework.
I am not denying that, but the public and stakeholders look to the Government to determine what will be the impact on Scotland of UK Government decisions. I am not saying that the approach that has been taken with the bill is a unique and unknown way of handling legislation; I am saying that I cannot assess the impact sufficiently to enable me to answer your questions, unless we get more of the detail. That is why I am asking for us to have a role in the regulation-making process later on, so that we have a right to be consulted in a way that enables us to manage the impact.
Mr Couling set out this morning the position with regard to what will be in the bill and with regard to the fact that the UK Government will not ask the Scottish Government for permission. However, he conceded that there will be on-going discussion. Indeed, he made the point, on the issue of detailed involvement, that there had been 70 contacts between the UK Government and the Scottish Government. According to him, those meetings, which were all between officials, went swimmingly. He mentioned one meeting between you and Iain Duncan Smith and one phone call that you had with Lord Freud. There have been a lot of meetings. He also made the point that we are now at a stage at which the legislation has progressed through the House of Lords and UK parliamentary committees. Why, in that case, do we still have a public perception that we have not got much of the detail?
We do not have much of the detail. I am not saying that there has been no engagement; on the contrary, there has been engagement between the Scottish Government and the UK Government. As you would expect, the Scottish Government has been trying to find out what we need to know and the UK Government has been trying to be helpful, which it has been in many instances. The engagement has been constructive, but at this stage we are still lacking some of the key details. For example, we do not know the rates at which universal credit will be paid or the rate at which it will be withdrawn in certain circumstances; we do not know the precise structure of the personal independence payment or the levels and rates at which it will be paid; and we do not know how those different parts of the system will interact. I am not saying that there has been no engagement; I am saying that that process has not yet resulted in our feeling as if we have all the information that we need to assess the impact of the policies.
The committee has seen the papers from the Scottish Government and we support the idea that the bill is a good opportunity for kinship care. That is identified, as are the questions about child poverty. The detailed questions about rate levels, or what rates will be paid in the future and so on, do not appear. That was not the level of detail that was being sought in the meetings between UK and Scottish officials. Those 70 meetings were not in pursuance of what the rate would be for universal credit, or any such questions.
You are right, but one of the things that we have been pursuing is an amendment to the bill that would give the Scottish Government a role when all that detail is being worked out through the regulations. That is the point that we have been pursuing with the UK Government in order to deal with the fact that big pieces of the jigsaw are missing.
The explanation that Mr Couling gave was that the UK Government would be concerned that, were there a statutory obligation in the bill for the Scottish Government to be consulted or to give permission as you describe, that could lead to an unreasonable delay in the implementation of reserved legislation. I understood you to say that although that might not unduly worry you, you appreciate the point that has been made and that there is something between that and the current position that you have to try to assess as being sufficiently meaningful for you to be satisfied. Can you clarify that in terms that are easy to understand?
I understand the point that was made to justify the position of not agreeing to a consent amendment, if I can use that shorthand. I do not necessarily entirely agree with that position. I still believe that the optimal outcome would be to make such an amendment to the bill. I understand that there are precedents in other legislation for that approach. However, if the UK Government’s position is such that it is not prepared to go down that road, then we will continue to have discussions to see what else might be possible, such as whether there is a role for the Scottish Government to be consulted on the regulations. However, we need to have those discussions and I need to reach a point where I make a judgment about whether we have protected the position of the Scottish Government sufficiently.
I am intrigued. It struck me at the meeting this morning, which was my first as a member of the Health and Sport Committee, that there is a distinction between broader concerns about the Welfare Reform Bill and other concerns. We heard from a number of organisations about general concerns about the bill and I think that you said that there was potential for damaging consequences. It seemed to me that some of the rhetoric that was being employed was informed by not understanding or not knowing—I think that that is the point that you have been addressing—the potential impact of some things in the bill.
There is a distinction between the broad policy and the particular issues on which we are being asked to give legislative consent. I talked about potentially damaging consequences because, as I said, much of the problem is that we do not have sufficient detail.
Are you characterising refusal to agree to the legislative consent motion as gesture politics, in the sense that it would not hinder the bill’s progress but would create an additional responsibility for the Scottish Government to deal with the consequences in a different way? I have always thought that you were above gesture politics, cabinet secretary, but is that what you are suggesting?
No, I would not describe it as that. One of the consequences of the Parliament’s not giving legislative consent to the universal credit and personal independence payments is that the consequential amendments that we would be able to make by regulation—secondary legislation—would require to be made by primary legislation. The Parliament has greater powers of scrutiny over primary legislation than it does over secondary legislation and it may be that, not having the detail, it would welcome that greater scrutiny over changes—albeit consequential changes—that would require to be made.
On the broad timeline, there is a notion, which we know is not completely true, that the provisions will be phased in over a long time and that we have enough time to pursue legislative solutions here. What timeframes are we looking at?
On the UK Government’s current timescale, the universal credit would be phased in between 2013 and 2017, so it is likely that there will be double running for a period, with some people in a new system and some people in the current system. To be frank, that requirement would also exist if we had to make the consequential changes by secondary legislation. We would need to ensure that there was alignment between the changes that we were making and the changes that were being made at the UK Government level. That requirement will exist in the complexities regardless of whether we give legislative consent and do things by secondary legislation or whether the alternative approach is taken.
So we have time, and we do not need to seek additional time from the UK Government for other options.
If we were dealing with primary legislation, the timescales for that are longer than they are for secondary legislation, as all committee members know. We would need to factor that into our planning and still ensure that we aligned with the UK Government timescale.
But there should be no impediment with the timescales that have been presented to us.
We would need to work to ensure that that is the case. Obviously, the key thing with the universal credit is that the effect of the consequential amendments is to a large extent about ensuring access to passported benefits. As health secretary, I would not want people not to be able to get access to passported benefits, and I am pretty sure that members of the committee would not want that, either.
That leads in quite nicely to my question. This morning, Mr Couling said that the consequence of not passing a legislative consent motion would be that we would have to do primary legislation here, and you have confirmed that. Is it possible for us to pass a legislative consent motion that accepts certain parts of the bill, such as those on data sharing and industrial disablement, which you have already mentioned, and to seek amendments to other parts, such as on the social mobility and child poverty commission, which you have asked for amendments to, and the involvement in subordinate legislation? Do we have to pass a legislative consent motion on all or nothing, or can we pass a series of legislative consent motions or motions that seek amendments?
As far as I am aware, there is nothing that would prevent Parliament from passing a partial legislative consent motion. It could agree to some of what requires consent and withhold consent on other aspects. Obviously, it would be up to the Parliament to decide whether that was the correct thing to do, but there is no technical reason why that could not be done.
That might simplify the need for primary legislation from us if we did not pass a legislative consent motion.
Primary legislation would be required around what would be described as the most controversial areas, which are universal credit and the personal independence payments.
To be clear, we cannot do anything about them, but we can do something about the passported benefits that are a consequence of them.
Yes.
I presume that the Government already has plans about which benefits it thinks should be passported and which should not. An issue that arose in the evidence this morning is that a number of disabled people will lose their benefits under the new system, but they will nevertheless require passported benefits basically to survive. An automatic passport system that is given under legislative consent may therefore not be adequate. Are you preparing possibly to go further in that regard, or will you just go for passported benefits in the new system?
We have not taken final decisions on that. For clarity, the decisions that we will require to take in due course on what benefits are passported and in what circumstances will exist regardless of what Parliament decides to do about a legislative consent motion.
Do you intend to issue a consultation document on that? I know that you are having discussions with stakeholders; is the next step a consultation document?
Yes. In due course, we will consult about the shape and nature of passported benefits, as we have done with the successor arrangements for the social fund.
Thank you.
I am not here to speak for the UK Government—perhaps that is just as well. My previous understanding was more in line with yours. This is not meant as a criticism, but given everything that I know about the UK Government’s deficit reduction plans, my strong feeling is that there is a budget reduction driver in all this. However, I will look at Mr Couling’s evidence and see what that tells us, unless my officials can enlighten us any further.
I have a couple of questions, the first of which relates to this morning’s evidence. We were quite clear this morning that whether or not the LCM is passed will make no difference to the welfare reforms coming to Scotland; technical changes will have to be conducted either at a Scottish level, or by subordinate legislation elsewhere. On that basis, I asked the witnesses from the disability rights groups whether they wanted us to pass the LCM, because of the wider welfare reform implications as opposed to the narrowness of the LCM itself. Inclusion Scotland, Capability Scotland and the Scottish Disability Equality Forum all said that they would still like us to vote down the LCM. How do you feel about their strength of opinion on that?
I have great respect for all those organisations. I have read evidence from other organisations that take the opposite view. We—you as a committee, we as the Government and the Parliament as a whole—will need to reach a judgment on this.
It is of course right to say that the third sector and voluntary sector have varying views on whether the LCM should be supported. To me, weighing up that argument involves a delicate balancing act. In regard to my personal view, you mentioned discussions on how the tax and benefits system impacts on kinship carers. You said that discussions had begun on how the reforms might affect the Scottish devolved policy on self-directed support that we want to implement. If the Scottish Government and the Scottish Parliament were not to support the LCM, do you think that that would affect the good will of the UK Government with regard to reaching an accommodation on kinship care and self-directed support, or do those matters stand up to scrutiny on their own merits as something that the UK Government should do, irrespective of how the Scottish Parliament disposes of the LCM?
I like to think that, before we even get to that point, we will make progress on kinship carers. The case for what we are arguing for in that area is overwhelming, in my view. Without going into the detail of the discussions, I can say that there are elements in the DWP that think that our argument has merit. I therefore hope that we can make progress on that before we go much further.
Can I just clarify that you would expect such constructive engagement to continue, irrespective of how this Parliament and the Government decide to dispose of the LCM? Are you confident about that?
I would certainly hope so, yes. From our part, we intend that to be the case.
If we imagine this to be a negotiation between officials, yourselves and the UK department, were the issues of kinship care and child poverty the deal-breaker? You had not made progress on those issues, and they were the ones that really featured. Kinship care was raised in the Iain Duncan Smith meeting, was it not?
Yes. The kind of issues that I am talking about are the issues that we have been pushing. Respecting that they are reserved issues—for the time being—we see an opportunity to make progress on kinship care. We want an engagement on the interrelationships between this policy and our policy. We want to understand how vulnerable people will be treated in relation to universal credit. The key issue, however, has been our seeking to get an on-going role for the Scottish Government in creating the regulations and putting the flesh on the bones of the policy as it takes shape. That has been part of the package of measures that we have been seeking to progress.
Yes, but Mr Couling expressed surprise at the idea of what was added to the LCM, to try to bring it up to date. I hope, like you, that the UK Government will come along and say, “You were right about kinship care”, because that could make a difference. If the UK Government were to give us reassurance on child poverty strategies, and an assurance that it would keep us up to date on all the developments, would we have a deal on the LCM, from your point of view?
Yes, if we make progress on all those things, and in particular if we make satisfactory progress on the role of the Scottish Government in creating the regulations, of course that would be taken into account. It would of course be a critical factor in coming to the final decision on an LCM, but to date we have not made that progress.
But in regard to all the things that were or were not mentioned, or which are now being mentioned, what is on the list now?
We have not changed the things that we have been seeking. We have concerns about the overall policy direction, but we accept that, for the time being, that is in the UK Government’s gift, as Jackson Carlaw said. We do not agree with the direction of travel on many issues, but the ones on which we have sought to make progress are those that I have talked about. We have not yet made that progress. If we make it, that will be taken into account in our final decision.
I have a couple of points about Mr Couling’s evidence. On kinship care, the words that he used, as the Official Report will probably show, were that his minister is sympathetic to the Scottish Government’s view. I took that to mean that a productive discussion is taking place at some level.
Your points about Mr Couling’s evidence are encouraging. I do not want to go too far into the realms of private discussions, but his characterisation of ministerial sympathy on the issue of kinship care is certainly in accordance with my reading of the situation. However, that sympathy needs to be translated into real commitment.
I want to go back to technical issues. We have explored what will happen if we agree to or do not agree to the legislative consent motion. One issue on which you are pressing the UK Government is the involvement of the Scottish Government in subordinate legislation. Given that, as you said, many of the issues are unknown because they will be dealt with through subordinate legislation, what would be the consequences for policy making in Scotland if the Scottish Government was not involved in the subordinate legislation at UK level?
That would obviously make things more difficult. I have made clear that I accept that we are talking about a reserved matter, but it is one that has big implications for devolved issues. Changes to eligibility for disability benefits or the rate at which those benefits are paid potentially have an impact on charges for social care and on who can access it. Such changes also have an implication for the health service and a big potential impact on advice services. Involvement in the subordinate legislation would allow us to plan our response and policy making in a much more managed way than if we did not have it.
It is important to put it on the record that 350,000 people in Scotland are in receipt of disability living allowance and will be impacted on.
I am trying to get a list of things that we want in the bill. The cabinet secretary rightly listed the issue to do with kinship carers and we have heard that there might be progress on that. We had a response this morning on aids and adaptations, which was a welcome recognition of reality.
I did not hear that evidence, although my officials recounted it to me. That exchange really brings into sharp relief some of the human consequences of the reforms. Without getting into a debate about the policy intention or the principles underpinning this, I would say that when you are dealing with housing, you are dealing with some very personal and sensitive issues. We need to be very mindful of the consequences.
That is very good of you. Thank you.
It is a bit like groundhog day because we are referring to the evidence that we heard this morning. We heard that 40 per cent of appeals against work capability assessments were successful but that the success rate almost doubled when an advocate or representative was there. I asked the civil servant this morning whether there would be any financial support from the UK Government to Scotland to allow the Scottish Government, local authorities and the voluntary sector to meet their income maximisation responsibilities. You may not be surprised to hear that the answer that I got was negative. Are there on-going discussions to make the case for additional financial support to bolster that vital job?
You can take it for granted that we will make that case. This goes back to an earlier discussion that we had. One of our big interests and responsibilities is to mitigate as far as we can some of the impact of the reforms. Without knowing all the detail we cannot yet assess the extent to which those mitigation measures will be required. I would expect demand for advice support to increase. I am not too surprised at the response that you got this morning, but that is one issue on which I am sure there will be discussion between the Scottish and UK Governments.
I am sure that we will all benefit from reading the Official Report. Neil Couling also said that, from his 25 or 30 years’ experience in the area, he believed that the person who turned up for an appeal got a better result than people who had advocates representing them. I do not know whether he has information to share from right across the board, but there is an issue there. We as a committee will need to weigh up information that we are getting from campaigning groups, as against—
I am getting into the realms of pure speculation here, both about what he might have said and about what he might have meant.
That is why we all need to read the Official Report.
It may be that somebody who turns up has a better chance of success than somebody who does not turn up, but somebody turning up with an adviser has a better chance than somebody just turning up on their own. I suspect that there is some truth in that.
We will need to read the Official Report before we reach conclusions about what the committee’s report will say on any given area. There was to-ing and fro-ing on that issue.
From the Government’s record on trying to ensure that council tax does not financially penalise people who can least afford it, you can take it that we will do everything in our power to protect vulnerable people as much as we can. We support further devolution of the power to deal with council tax, but we would prefer it not to come with a 10 per cent cut. In the coming weeks, we will consult on how we handle that devolution from the UK to Scotland.
There are opportunities, which I welcome, to apply Scottish solutions to the problems.
I referred to our consultation on the social fund successor arrangements, in which we are asking how to do that better. In response to Richard Simpson, I said that we have an opportunity to consider whether we can deal with passported benefits differently.
What are the cost implications of the 10 per cent shortfall to the Scottish Government?
Council tax benefit is worth £380 million to Scotland right now. I will let the more arithmetically—[Interruption.] The figure is £38 million.
I will follow up what the cabinet secretary said. Mr Couling told the committee that he predicted a £2.5 billion cut to Scotland.
That is the cut to the total benefit bill and not just the cut to council tax benefit.
Yes—that is what will come out of Scotland. I do not mean to be cheeky, but how do we mitigate a £2.5 billion cut?
In a fixed budget—members all know that it is about £30 billion—the challenge is significant. The total benefit bill in Scotland, including state pensions, is about £12 billion, so £2.5 billion will be a big chunk off that. The Scottish Government has devolved responsibilities and it will be our responsibility to work with stakeholders to do whatever we can to mitigate unintended or unwanted consequences of the changes. However, I would be remiss if I did not readily acknowledge the challenges that they pose for us.
I will finish my point, which relates to the cut and efficiencies. Does the situation give us an opportunity to push forward public service reform? One witness said that efficiencies could be built in and that a single agency could operate in Scotland.
Are you talking about council tax?
Yes.
We will consult on those things in due course. We would want to deal with a 10 per cent cut as far as possible without impacting on people who get benefit.
Are there solutions that you have been looking at?
Of course, but we will consult in due course on exactly how we deal with the cut. We have just been talking about a reduction in the benefit bill but, under our constitutional arrangements, if any Government seeks to make savings by supporting people into work or through better management of the benefit bill, we will not realise the benefits from that. We are not saving money to spend on prevention or on further supporting people out of benefits, and that is another frustration for us.
I have two questions, the first of which is just technical. The £380 million has presumably been more or less frozen in cash terms for the past four years due to the council tax freeze. As the council tax has not risen—I am not suggesting that it should have as that was a very popular policy, but nevertheless it did not go up even by inflation—we have taken that money out of our own budget over the past four years. Can we have a calculation—not today, but at some point—of what that amount would have been if it had stayed the same in real terms?
I am happy to provide the figures; I do not have the figures going back on benefit. I am not sure that that argument would cut much ice with people who have benefited from the council tax freeze—
No, and it might not cut much ice with the UK Government either but, in negotiating terms, one could say, “Can we go back to an amount in real terms, rather than sticking with the figure from four years ago?”
I agree, and I am happy to take that point away. You have articulated the situation pretty well. People in care homes might rely on the mobility element of their benefit to get their weekly trip out of the care home, which can be their only way of connecting with the outside world. I agree with the importance of that and I am happy to look further at what we can do to raise the profile of the issue.
I think that that is all, but Jim Eadie wants to come in briefly.
Cabinet secretary, you will be aware of the research that was recently published by academics at Sheffield Hallam University, which showed what the impact of the welfare reform changes would be on Scotland and on other parts of the UK. It highlighted that 115,000 of our current total of 275,000 men and women in receipt of incapacity benefits would have their benefits cut because of the introduction of tougher rules such as a tougher medical test; the retesting of existing claimants; new requirements to gauge work-related activity; and time limits on means-tested benefits. I am interested to know whether the Scottish Government has carried out—either through the welfare reform scrutiny group or by other means—an assessment of the economic and social impact that those changes would have on the people of Scotland.
I have seen that research, and some Scottish modelling has been done on that basis. I can supply the committee with the impact analyses that we have carried out to the extent that they cover the point that you are making. My understanding of the UK Government’s position is that transitional support would be provided for people in the losing-out category to prevent cash reductions. However, we do not know at present the length of time for which that support will be available. I can certainly make available—if it is not already—the impact analysis work that we have done, which covers some of that area.
That is very helpful.
That is a matter for the Parliament rather than for the Government. As cabinet secretary, I would strongly welcome on-going committee scrutiny from a stand-alone committee to scrutinise the implementation. It is important for the Government to have an on-going role in the implementation through regulations, and it is equally important for the Parliament to have an on-going scrutiny role. The journey does not end when the bill receives royal assent—indeed, in many respects, it only begins at that point. It is very important for the Parliament to oversee the implementation.
That concludes our questions for today, although I just have one wee question on the other side of the equation. If there is a greater incentive to be more successful in getting people back into work, there will be a consequential improvement in what the Scottish Government has to spend in that area. Have there been any figures or estimates, or any policy work, on that?
Do you mean on the benefits of getting people into work?
Yes.
I am not aware that any specific work has been done to quantify that, but I will certainly check to see whether it has, or whether there is some work that we could do.
It was just that, when you mentioned that issue, I thought that there had been some discussion on policy. If there has been, we would welcome the information.
Thank you.
As previously agreed, the committee will now move into private session.
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