Our second item of business is the first evidence session for our women and welfare inquiry. I welcome to the meeting our first panel on the subject: Howard Reed, the director of Landman Economics and previously the chief economist to the Institute for Public Policy Research; Morag Gillespie, a senior research fellow at Glasgow Caledonian University; Dr Helen Graham, a research fellow at Edinburgh Napier University; and Professor Diane Elson, the chair of the Women’s Budget Group and an emeritus professor at the University of Essex.
I welcome you all. Does any of you have a prepared statement to make, or will we just go to questions?
I will say one or two things about women and welfare and why your committee is conducting an inquiry on the subject. I have two issues that I would like to bring up.
The first issue is the unpaid work of caring for families and communities. Men and women participate in that, but women do more of it and have more responsibility for it than men, which makes a difference to the way in which women interact with the welfare system.
The second issue is what I call the wallet and the purse issue, which is about the fact that it matters whether payments go into the wallet or the purse. Although the money might be distributed through the family, whose hands it goes through—whether it goes to men’s wallets or women’s purses—makes a big difference to bargaining relationships within households.
I encourage the committee and the Scottish Parliament to address that, because you have a wonderful opportunity to reframe how we think about the issue. I would like to see it framed in terms of the social security that everybody needs at some phase in their life. A divisive discourse has been building up about those who are on welfare and those who are taxpayers, but we are all taxpayers and we all receive welfare benefits at some phase in our lives. Anything that you can do to develop a vision for social security as part of a decent society in which everyone can live with dignity and we can all contribute in different ways, whether through paid work, through unpaid caring for our families and communities or through volunteering, would be a great service to people in Scotland and the UK in general.
You will be aware that the committee has commissioned research. As someone who studied sociology, I am aware of the phrase—I have used it—that sociology is a complex explanation of the patently obvious. We suspected that the research would show us where richer or better-off areas sit in relation to more deprived areas as welfare reform rolls out, so I suppose there were no surprises. What did affect the committee was the scale of the impact on individual people, which is why we are looking specifically at women.
The phrase “a helicopter view” was used in the submissions. I suppose that that is the same idea as the complex explanation of the patently obvious. If we had a helicopter view of the issue, we would expect to see certain things. Could you all give us your perspective on what we would have to look at specifically if we took that helicopter view?
When I looked back at my submission, I was a bit worried because it mostly takes the helicopter view.
I find the term “welfare” unhelpful because of its pejorative nature, particularly in the USA, and because it is confusing. Every one of us benefits hugely from the welfare state, which includes all manner of different, often universal, services such as education, health services, child benefits, having our streets cleaned and public planning. All those services are part of the welfare state. Social security is also part of the welfare state and I am interested in seeing how we can improve people’s social security. I sometimes feel as though I am in a minority of one because everyone talks about welfare but we should be aspiring to underpin people’s lives with some social security when they need it.
In order to do that, we need to look at the trade-offs between, for example, taxes and benefits. Members will be aware from the submissions that, when there is a recession, we can respond in two ways. We can bring in more money or cut benefits and services. Alternatively, we can do a mixture of the two, which is more common, and the balance between them determines who gains and who loses. In the UK, we have seen men gaining and women losing, because men gain more from gifts through the taxation system while women lose because of the cuts in benefits and do not get so much from the tax gains. Other people can say much more about that, but that is the principle.
The other problem in the system, which has been tinkered with for 60 years, is that there are two areas that I can think of where benefits are part of the problem. Perhaps more in the UK but also in Scotland, we have used housing benefit as our response to unaffordable housing. Unfortunately, for too many people in ordinary jobs, housing is unaffordable. As one of the witnesses in the previous evidence session said, we need to look at the housing supply and whether the cost of housing can be addressed. Either we must do that or there must be an economic strategy that does not create jobs that pay the minimum wage. In effect, a high-wage economy is needed.
One of those problems must be dealt with—but not through the benefits system—to make housing affordable for ordinary people. It is not sustainable for housing not to be affordable for ordinary working people. Paying benefits will potentially stoke the flames of that. I am not for a second suggesting that the benefits should be stopped; rather, I am suggesting that we work towards a different balance in the system in relation to support for the supply and demand.
There are similar issues in childcare. It may be that support for the supply side such as is provided in Sweden, for example, would be more beneficial in the long run.
All those areas—tax, other social services, childcare, training and minimum wage protection—must be part of the context in which social security decisions are made.
The thing about a helicopter view is that, although you miss some of the detail in taking an overall view of the cumulative impact of the cuts to benefits and tax credits over, let us say, the 2010-15 period, it is quite important to measure the relative impact of each of the different reforms.
Landman Economics, in conjunction with the National Institute of Economic and Social Research, carried out a big project for the Equality and Human Rights Commission that looked at the cumulative impact of all the benefit changes over the period 2010 to 2015, and we found that there have been around £21 billion to £22 billion of cuts.
There has been a lot of focus on the bedroom tax—I saw that your previous agenda item was about the bedroom tax. It is important to focus on that, because it is a very damaging cut for the people whom it impacts, as is the benefit cap under which benefits for families are restricted to a maximum of £500 a week. They are nasty cuts, but some of the cuts with the biggest impacts, such as the changes to uprating, have received the least attention. For example, changing from the retail prices index to the consumer prices index cuts benefits by, on average, 0.7 per cent a year and the cumulative impact of that is massive, as is the cumulative impact of all the big cuts to tax credits that were made in 2011, 2012 and 2013.
Even before universal credit is rolled out, there have been quite big cuts to some elements of welfare benefits. Some of those cuts were meant to improve work incentives, such as the disregards. Indeed, the amount that people can earn before they go on to the taper has been cut several times even before the main policy has been rolled out.
The nice thing about taking an overall view is that it allows us to assess all the benefit and tax credit changes that we are able to assess—we cannot quite assess everything because the data is not very good. Some of the disability benefits, such as the personal independence payment, are hard to model with the data that we have, because we do not have enough information about how disabled people are impacted. However, the stuff that we can do shows that there are big impacts, with women bearing the brunt of them. Depending on the precise definitions that we use, the cuts for women constitute a third to two thirds of all the cuts. I have seen analyses showing that 85 per cent of the cuts are impacting women. Whatever methodology is used, women are disproportionately impacted, which is not surprising because women receive the bulk of benefits and family-related benefits and tax credits.
The helicopter view is, if you like, my specialism, but a whole host of things are going on within that view, so it is important to have both views.
11:30
The most successful welfare states across Europe in terms of gender equality and, more broadly, poverty alleviation and general quality of life either support women’s caring role or take on some of that responsibility and facilitate women’s role as workers and autonomous adults. The problem with the UK welfare system is that it does not do either of those things very effectively. It places quite a strong expectation on people—even those with quite intense caring responsibilities—to work but it does not do enough to facilitate that participation through childcare and active labour market policies. You could look at countries that do that more successfully to see where the UK is lacking.
Professor Elson, do you want to comment on that?
I support the points that have been made. We need a broad overview in which we recognise the distinctive positioning of women and men because of their distinctive responsibilities in relation to care and the way that men and women are still raised according to stereotypes that affect the kind of work that they go into in the labour market. We also need the detail about how the individual benefits interact with one another and how they impact differentially on different groups, particularly women and men.
I have had no indication that colleagues want to ask questions, so I will ask a specific one. Written submissions that we have received refer specifically to the need for greater attention to be paid to employment support and the need to take account of gender barriers. It appears, from the submissions, that zero-hours contracts are regarded as one of those gender barriers. How big is the differential between how men and women are affected by zero-hours contracts? Has any analysis of that been done?
Yes. Fifty-five per cent of zero-hours contracts are held by women.
I will try to be as fair as I can be to the other side—we do not often do that in this committee—and suggest that it could be argued that women predominantly prefer to have the flexibility of zero-hours contracts. I can see that Morag Gillespie is going to come right in on that issue. I am trying to be fair in putting that argument, but an answer to it is already coming towards me.
Like many such issues, it is about balance. Nobody—neither man nor woman—wants to be sitting at home waiting to find out whether they are going to get any work that will allow them to pay the rent or the electricity bill, for example. For zero-hours contracts to work properly, there needs to be a degree of flexibility on both sides, but there has been an accumulation of problems around insecure employment. The Trades Union Congress recently produced information that pointed out that women are also disproportionately likely to be affected by short-hours contracts whereby the employer guarantees only a small number of hours. That practice is becoming more predominant in the retail sector. We therefore need to regard zero-hours contracts almost as a symbol of insecure employment rather than as constituting the whole problem of insecure employment.
It is about balancing the needs of employees and employers and employees having the right to be able to earn a wage, because people on zero-hours contracts face a real problem when they try to claim benefits. A zero-hours contract is really the ultimate route for exploitation if an employer chooses to deal with it in that way. Some people do fine with zero-hours contracts in some circumstances but only because they have employers who behave in a reasonable way. We cannot assume that employers will always behave in a reasonable and measured way, which is why zero-hours contracts are a problem.
Women are disproportionately affected not only by zero-hours contracts but by insecure self-employment. There has been a huge rise in self-employment in Scotland, including self-employment among women, but a fall in income from self-employment. I do not think that those things are unassociated, although I have not actually seen something that draws them together in a full and coherent way. I suspect that, increasingly, people are doing the jobs that they used to do but on a self-employed, contractual basis. For example, they are possibly delivering canteen services for local authorities or health services where they used to be employees.
I have a couple of points to make on zero-hours contracts. One additional problem that is coming down the line for people on zero-hours contracts who claim universal credit is the start of what is called in-work conditionality. Most people who claim universal credit will be required to look for work of at least 30 hours a week—it could be 35; I cannot remember—on a regular basis, so people who work low numbers of hours could face sanctions for not working enough hours. If someone is on a zero-hours contract, it might be difficult to guarantee that they will have 30 hours a week and, in some circumstances, that might be impossible.
For self-employed people, the situation could be even worse because of the minimum income floor provision in universal credit whereby people will be assessed as though their income is equal to 35 hours a week at the minimum wage even if they are earning way less than that. There will, however, be exemptions—for example, for people who are in the first year of running a business.
Those are two of the most problematic aspects of the new system. The DWP has not really addressed how it will implement those aspects, but we will probably find that out in the next year or two.
Flexibility is important, but we must distinguish between the flexibility for people to combine earning a living with caring for their family and the flexibility that some employers want, which is the flexibility to vary the size of their labour force according to daily fluctuations in demand. Those are two very different kinds of flexibility.
The flexibility that we want for a decent society in which men and women live in equality and people live less stressed lives is the kind of flexibility that allows people—men and women—to combine earning a living with taking care of their families. A good example is the situation that my son and his partner enjoy. My son works for a big non-governmental organisation that grants parental leave and that allowed him to reduce his working week to four days when he became a father. My daughter works as a researcher for a parliamentary committee at Westminster, and she had a long paid maternity leave and then the possibility of taking further unpaid leave without loss of seniority. She will recommence her employment at the beginning of June.
That is the decent kind of flexibility, which is what we want. It is the kind of flexibility that is beneficial to employer and employee and that creates the kind of society that we want, in which people can combine caring for their families and earning a living. However, as Howard Reed and Morag Gillespie have pointed out, the kind of flexibilisation that we are seeing in much of the labour market actually makes it difficult to do that. If people do not know what hours they will work in a week, how can they organise their childcare or their care for their elderly frail parents? Zero-hours contracts assume that people have no other responsibilities. Maybe that works for some people, such as young people with no caring responsibilities, but for anybody with caring responsibilities zero-hours contracts are a disaster.
The way in which childcare is subsidised is also problematic for working parents who have irregular employment. People organise their childcare, pay for it and then get tax credits to subsidise a certain proportion of that. That is fine for those who have a steady job and income, but it is problematic for those whose hours and income change a lot. The tax credit system is not very responsive to changes in people’s circumstances—it is quite cumbersome. A universal model of childcare that was available to all would accommodate that better than the system that we have at the moment, which operates through the tax credit system.
My question follows on from the area that the convener began to explore. According to the written submissions from Engender and Barnardo’s, innovation is needed to diverge from existing employability models that replicate gender segregation in the labour market. How could that be done?
I know a bit about modern apprenticeship schemes and a little about employability services, and one of the difficulties with those schemes is to do with the complexity of provision. It can even be a challenge to find out who has responsibility for making decisions, particularly with apprenticeships. Modern apprenticeships tend to reinforce existing occupational gender segregation in the labour market, and that needs to be tackled at different levels, including with employers and through careers guidance for young people at school. It is also about raising children’s expectations of what they might do in later life. The issues are the same with employability services—the inevitable journey that people seem to be on is not being challenged.
With regard to Diane Elson’s points about the lack of flexibility in care, women can often be left with very little choice about where they work, because they have to do what will accommodate their lives, which are often more complicated because of their care responsibilities. As Helen Graham has said, a different approach to childcare could ease those pressures and allow women to make choices in the freer way that men, who are much less often burdened with unpaid caring roles, often do.
As with many of the problems that we are discussing, the problem needs to be tackled in more than one place, by which I mean not only in education and school, but certainly by careers guidance, Skills Development Scotland and employability services. Such services seem to provide less specialist support for lone parents—Helen Graham might want to say more about that—as well as, for example, women survivors of domestic abuse who want to move towards work at some stage. They will probably need a lot more support than is available in the standard support package, and the system has to be able to accommodate those kinds of things to help people move forward. We should not simply work with the target numbers, which means working with the people who are closest to the labour market. Even financially for the country and for the public purse, it is important that folk who need extra support are helped to move forward.
On a point that Professor Elson made in her opening comments, does the panel have a feel for what effect the single household payment will have on women and families?
Do you mean under the universal credit system?
Yes.
That has been a concern for us in the Women’s Budget Group in London. We submitted a lot of evidence to the parliamentary committees in Westminster that considered the various stages of the Welfare Reform Bill, which introduced universal credit. I could see from other submissions that many groups shared our concern about concentrating six benefits into universal credit. At the moment, the benefits can be paid to different people in a couple household, but universal credit will be paid to one person, and there is a particular concern that, if the payment goes primarily to men, women in abusive relationships will be affected, as they will find it harder to leave those relationships.
There is also a question about what the measure will do in general to the caring, sharing and bargaining that goes on in households. When money comes into men’s hands and women’s hands—to the wallet and the purse, as I have said—it is, of course, shared in households, but we also get bargaining and different senses of entitlement, as a result of which people often think, “The money came in through me, so I have more say on how it gets spent.” There is a lot of concern about the concentration into one payment.
11:45Another problem is the fact that the payment is made once a month. Going back to our discussion about devolution and what the power responsibilities are going to be, I think that, if the administration of universal credit were to be devolved in some way to Scotland, the number 1 question to consider would be: could you have a system in which all the payments were not made to one person once a month? Could it be possible to designate a person in a household, as is the case with some tax credits? There could be some kind of splitting; some of the payment could go to the main carer, for example, and some of it to another person in the household. If no splitting were possible, the payment could be designated for the main carer. If you could do something different in the way that universal credit was rolled out and administered, that would be very valuable.
Do the other witnesses have any comments on that? Is there agreement on that point?
The only thing that I would underline is that making the payment a month in arrears might be a big problem in some cases, given some people’s ability to manage money over that long a period of time. The state’s reason for introducing the new system is that it matches up with the way in which most people are paid in the labour market, but that might not be the case for people on zero-hours contracts, who might well be getting paid from week to week. It might be better to have flexibility and allow the claimant to choose how often they want the money to be paid. I do not see why that would be a bad thing.
Lots of people on low incomes pay for things weekly—or, indeed, not even weekly; for example, people with fuel meter cards have to pay for that as and when. That is where the strategies do not join up well. On the one hand, we are looking for people to live on quite a hand-to-mouth basis—lots of people still get paid and live from week to week or fortnight to fortnight—while, on the other, we almost want to pretend that they are white-collar workers with monthly salaries. Lots of people’s lives are not quite that tidy, and we need to accommodate the differences.
There are other problems with the design of universal credit, and Howard Reed has mentioned a couple of them. For all the rhetoric about universal credit encouraging people into paid employment, the disregard for second earners and the design of the tapers will affect second earners in couple households, many of whom will be women. Given the low pay that many women are likely to get, it will not be worth their while financially to take on a job, what with the loss that they will incur.
That is completely at odds with the idea of wanting everybody to be in the labour market, and it contrasts a lot with the regime for women who are lone parents. About 95 per cent of lone parents are women, and there is now every pressure on those parents to take paid employment from when their children are at quite a young age. However, for a woman in a couple household under the universal credit system, the pressure might be in the opposite direction. They might feel pressure not to take on paid work, because there will be no financial gain to speak of. If you had some control over the administration and design of universal credit in Scotland, you could take into account the disregard for second earners—and, indeed, the extent of the cutback in universal credit for second earners who earn more—and perhaps make a difference for people in Scotland.
I want to start with a point that I brought up with the previous panel. In a letter to the Scottish Federation of Housing Associations, Neil Couling, the director general of the universal credit programme, wrote:
“we believe the system is ‘safe and secure’.”
Do you think that universal credit is going to be “safe and secure” for women?
I am shaking my head, because there are so many question marks over that. It will clearly not be safe and secure for women who are at risk of abuse or who are in abusive relationships, and it will not be secure for many women even if they are not in abusive relationships, given that the money that they had been getting in their hands will be moved away from them. There will have to be more bargaining in households about how that money is spent, and, as Morag Gillespie has pointed out, it will make budgeting that much harder.
On Howard Reed’s point about women who are self-employed, we know that a disproportionate number of women are in low-hours self-employment, in which earnings are very low. I do not think that universal credit is going to be safe and secure for them.
I agree. Everything that all of us have been saying suggests that there are many issues to address. In essence, universal credit, when we consider its principles, is not a completely bad thing. When we think about how it works and about if, or where, there is a desire to have a system of means-tested benefits, it can be seen that some principles underpinning universal credit are not necessarily bad. Like anything, however, the devil is in the detail, and things such as the taper rates, the specific rules that apply, the treatment of benefits and what is or is not disregarded make the programme just now problematic and fraught with bear traps for women.
As well as the housing benefit issues that have been discussed, I am worried about the long tail before Scotland will be able to have more control over the housing benefit element of universal credit. That is a problem, because it delays the time when it will be possible to deal with the situation.
It would therefore be wiser for us to control all the elements of welfare here so that we could tailor them to our needs and perhaps make them a little bit better than the so-called “safe and secure” universal credit, which seems to me not to be safe and secure for anyone.
When you look at what is being devolved and the limits of the powers to vary and change what is in place, it seems very limited. I feel that there is much more scope for us to do more, because Scotland has powers over other aspects such as housing, childcare and economic strategy—which affects the kinds of jobs that are being created—that are crucial for a good, integrated system that connects the different parts of people’s lives. We have to join all those things up with tax powers and the benefits system. It makes much more sense if they can integrate in an effective way that benefits women, because that, in many senses, is the problem: changes to benefits are happening in a silo and are not taking into account the wider context in which people live their lives. There is at least the potential to do that in Scotland.
If the guy who said that universal credit was “safe and secure” meant by “safe” that it provided an adequate safety net in the form of a minimum income below which people could not fall, he was completely wrong—and I say that for two reasons. First, with the amounts of benefit under the existing system and after the transfer to universal credit being cut in real terms as a result of the 1 per cent uprating, and with another two-year freeze on working-age benefits, it is becoming increasingly impossible for people in receipt of benefits and tax credits to make ends meet, because the amounts that they are receiving are just too low.
Secondly, a growing number of people are falling through the system because of sanctions. We know from statistics on jobseekers allowance and employment and support allowance that the number of sanctions per month has rocketed since the rules were revised in 2012. Work that I have done for Oxfam on the effectiveness of sanctions shows that they have no real impact in reducing unemployment; indeed, if anything, they increase the level of inactivity in the claimant groups. Given that universal credit will have an even more draconian sanctions regime than the existing JSA and ESA system, I fear that more and more people will fall through the cracks and disappear off the radar of the official statistics. That is very worrying.
Obviously, I cannot comment on the security of the computer system at the moment, but my understanding is that the information technology system on which universal credit is based is pretty much in disarray. What it is trying to do, which is to bring in real-time information from different sources, is extremely complicated and I suggest that, if the Scottish Government wants to take that on, it should be careful what it wishes for.
I do not think that Mr Couling was suggesting that only the IT system was “safe and secure”. I do not know if you have come across Mr Couling, but I have previously said that he lives in cloud-cuckoo-land and I think that this is another example of the strangeness of his opinions.
The witnesses do not have to comment on that. I think that it was a rhetorical point.
Changing tack slightly, I am aware that many women have caring responsibilities for young and old folk at the same time; indeed, a number of people refer to them as “sandwich carers”. I know some folks in that position. They have employment for a fixed number of hours and their employers are flexible about when they work them, so the employer fits in with the employee’s needs. I recognise that that is extremely rare, but has there been any analysis of the benefits to employers of allowing that kind of flexibility so that people can take care of all their responsibilities at the same time?
The benefits to employers include the retention of staff in whom an employer has invested time, invested in training and so on and of staff with firm-specific skills who know about a particular business. That is an important benefit.
With that kind of approach, staff can be more enthusiastic and committed. When they are in the workplace, they can concentrate on their work, because they know that they have that flexibility in their hours and can deal with their care commitments. Such an employer strategy creates a highly skilled and productive economy that believes in investing in employees, and I see the flexible hours arrangements that you have described as another way of investing in employees and maintaining productivity, retention and enthusiasm.
Has there been any major analysis of the benefits of such flexibility to the individual and to society as a whole?
I am not aware of any although it is possible that some exists. I am currently building a model of the English social care system—we did one for Wales a few years back—that looks at the impact of different funding packages for domiciliary and residential social care on income distribution and employment levels. A little bit of that is about people going into work when they are trying to care for relatives, but the work is not specifically targeted in the way that you have asked about. I agree that it would be good to see more work on that area.
We need to look at the wider implications of tackling that issue. I think that, in recognition of those issues and for other good sociological reasons, Norway actually delivers sandwich care services in which elder and childcare services are integrated. I would look at the wider implications of such an approach and to the Nordic countries for some indication of practice that might make a difference.
12:00
I have a quick question on the idea that certain benefits have a push and pull effect on women, depending on the circumstances. Should carers allowance be raised to the same level as jobseekers allowance? Would that help?
Yes.
That is pretty fundamental. It shows how little the system values care that carers allowance is the lowest of all income replacement benefits. Those who claim carers allowance do so because they are caring for at least 35 hours a week. In effect, they are unable to work because of a disability. It is not their disability, but it is someone’s disability. From the perspective of valuing care, carers allowance should be set at a similar level to employment support allowance, if anything.
It was slightly worrying to read one of the submissions by CPAG to the Devolution (Further Powers) Committee, and Engender’s submission to this committee also raises the concern that it looks as if the limits on what can be done about carers allowance are going to prevent it from being given to people who are in part-time work or part-time study, which is disappointing. The notion that someone is either a carer or in full-time work or education does not reflect the reality of people’s lives, even if it is administratively convenient. It would be disappointing if we were not able to accommodate some flexibility there.
Variation of the 35-hours-a-week rule is important if that can possibly be done, because there are people who may be students or have part-time jobs who are providing care to people who need it, perhaps as part of a care package, and they cannot get carers allowance under the current rules.
I want to pick up on a number of points that have been raised this morning. First, I want to go back to the issue of lone parents. I want to get your thoughts on the preponderant tendency of the welfare system to put people into silos by saying, for instance, “You are a lone parent”, “You are fleeing domestic violence” or “You are a carer.” One person in my case load is a lone parent, is fleeing domestic violence, has a disability and has a caring responsibility for a child. Given all of that, it has been very difficult to deal with the complicated miasma of benefits entitlement, and the impact has been a sanction.
I want to get some of your thoughts on sanctions and their impact. It seems to me that, a few years ago, the benefits agency—the DWP—was less likely to apply sanctions to lone parents, but that seems to have reversed. Many more lone parents are facing sanctions and the impacts that sanctions are having on them. Alongside that, there is an increase in children, young people and their parents accessing food banks. We cannot separate those issues.
Professor Elson, you have produced a very interesting document, which I am very supportive of, on “plan F”, which is a feminist budget for looking at all those issues. Will you give us an insight into how we should apply some of those intuitive ideas to create a welfare system that, as I said to the previous panel, actually meets the needs of the individuals who access it?
Thank you for mentioning the plan. We called it “plan F” because people talk about “plan A”, which is the Government’s plan, and the Opposition talk about “plan B”. We called ours “plan F”, meaning a feminist plan. It was developed jointly by the Scottish Women’s Budget Group, Morag Gillespie and her colleagues and the UK Women’s Budget Group in London.
The main thing that is relevant to this committee is that we want to position social security as part of the broader plan for investment in a caring and sustainable economy and to ensure that the money that is spent on social security, education, health, social housing and so on is seen as an investment in our people and our future.
We want joined-up thinking to be part and parcel of that. The case that you mentioned is one in which there has been no joined-up thinking. The sanctions regime and the drive to reduce the number of people who get jobseekers allowance and the money that is spent on it drive people to food banks. The impact that that is having on the health and wellbeing of children and lone parents—mainly mothers—who are in that situation is not factored in at all, but it will create costs for the health service, the education service and the crime and justice system.
Would you, therefore, suggest that the UK Government should apply a cumulative impact assessment to all the changes to the welfare system?
Yes. Howard Reed has been one of the pioneers of factoring in all the changes to see what they add up to.
We have done that, in as much as we are able to, given the data. One of the problems is that it is quite hard to apply to the area of sanctions the kind of techniques that Landman Economics has used to model the cumulative impacts of changes to benefit rates, tax cuts and so on, because we do not have the right information. The survey information that we used to model those changes does not show us whether people have been sanctioned.
There are fairly good statistics on the number of sanctions, and that data is broken down by areas such as lone parents, childless people, age and whether the sanction affects JSA or ESA, but statistics on what happens to people after they are sanctioned are almost non-existent. There seem to be no statistics on the implications of sanctions for people’s spending, their use of food banks and so on. The coalition Government did not seem to be interested in producing that kind of data. That is a huge problem.
We are flying blind at the moment. We know that the increased use of sanctions will have an adverse impact, but we do not know the magnitude of that. As we have said, the problem is only going to get worse as universal credit is rolled out, under the current rules.
We have a new Government in place, and yesterday the Prime Minister said that it would be an open Government that would work hard for everybody in the UK. Does there need to be an immediate review of the conditionality aspects of universal credit, and the whole system? Can the committee and the organisations that are represented on the panel add pressure to a call for that?
Definitely. That is a really good idea. It is also important to get more clarification of how aspects such as in-work conditionality and the self-employed rules are going to work in practice. A lot of that is being kicked down the road at present. When people started to be put on to universal credit in 2013 or 2014, it was the “easiest cases”—in inverted commas—that were moved over. The self-employed were not moved over, for instance. Now, however, the Government is in a situation in which it will have to confront those operational issues if it is to be able to roll out the benefit en masse. To call for a review at this stage would be a really good idea.
Could this committee take that forward, convener?
We will be producing a report, and I think that that could be something that we might include.
I want to make a comment in relation to women. Even if there are marginally more sanctions against men than women, we know from studies of how people spend their money that have been conducted over the years—one or two have been done here, but others have been done by people such as Jan Pahl—that, even if women are not the ones who are being sanctioned, women might end up paying for the sanctions, because everyone who is sanctioned who is not moving into a job, which, as Howard Reed identified, is almost more likely to happen in areas where sanctions are not applied as heavily, is being supported by other people.
Who are those other people? We might need more research, but my guess from the existing research is that it will be mums, siblings, aunties and other people like that who are giving up their own resources. Therefore, there are wider implications, as the deepening of poverty from sanctions will be spread through communities. It will not just affect the individual people who are sanctioned. It is important to understand those wider implications.
That point goes hand in hand with Diane Elson’s wider point about costs. There are implications for public services and for the welfare state more widely. The Equality Trust, for example, has highlighted those quite effectively. It has not done that in a very gender-specific way, but it has highlighted the costs to public services of inequality, and that point is a good example.
I have a further point about conditionality. I think that I am right about this—other people can correct me if I am not. Under universal credit, one payment goes to one bank account in the household per month. If the male partner fails to comply with conditionality, it will result in the withdrawal of the benefit. That will impact on the living conditions of the woman even though she is not the one who is not complying with conditionality. That is a problem with the design of universal credit.
It is not impossible to revise how the system is designed in relation to conditionality, sanctions, how the payments are made, who they are made to, and how self-employed people are treated. Those things could all be revised and reformed without denying the basic principle—which I think is a good one—of trying to simplify the benefits system.
Those problems will become more apparent as the system starts to roll out. Howard Reed pointed out that there is no follow-up data about what happens to people who have been sanctioned. Perhaps that is something that you could do here in Scotland. The Scottish Government could set up a system of tracking people who have been sanctioned and denied their benefits to find out what happens to them and who is bearing the costs of that—how it is spilling over on to relatives, children and other public services. You could then show clearly all the negative externalities, as the economists would say, of that narrowly focused sanctions regime that has one aim in mind—to reduce the number of people who are getting those benefits and so reduce the benefits bill.
It is a poverty ripple effect, then.
Potentially, yes.
Yes.
Has any research been done to establish how many women have been sanctioned for missing an appointment because of care responsibilities? Often, women will have their appointment while their child is at school, but the child could be sick and they will then be unable to keep the appointment. Is there any information on that?
The UK Government statistics on sanctions give some information on why people in different groups were sanctioned, but I do not think that the information in those statistics is detailed enough to enable us to identify people who did not attend an appointment specifically because of caring responsibilities. UK household datasets such as the family resources survey or the labour force survey do not have information on who is being sanctioned, so we cannot use them as alternative sources of data to answer your question.
There is some qualitative research on specific individuals who have been sanctioned, but there is very little information on how big a problem it is—how many people have that specific sanctioning problem—in the whole of the UK or in Scotland. There is a gap in the empirical evidence; we just do not have the data at present.
We have the Fawcett Society’s recent study on jobseekers allowance and sanctions and the impact on women. Some of the groups that work with lone parents in particular, such as the Single Parent Action Network—
And One Parent Families Scotland.
—and One Parent Families Scotland and so forth have done quite a bit of work on the impact of the sanctions regime on lone parents.
There are quite a lot of examples of the problem, because the way in which the system is set up takes no account of lone parents’ caring responsibilities. We lack what Howard Reed mentioned—a big dataset for the UK as a whole that would allow us to say, “These aren’t just isolated cases. This is a typical thing that happens.” It is important to press for more information on those dimensions of sanctions regimes.
12:15
Advice agencies are also a good source of information about that. The Child Poverty Action Group is running an early warning system that is picking up on case studies and the citizens advice network systematically records data about inquiries relating to benefits, so they might have potential to gather more specific information. You might need to ask them about that, but they are sources of information.
When we mention a case study, it is terribly easy for it to be dismissed as an anomaly, or as something unusual or rare. However, when significant numbers of people with the same problem are needing advice, that starts to be evidence that is given more weight. As a qualitative researcher, I do not think that large numbers are necessary in order to give weight to evidence, but unfortunately that is often the way in which people look at it. However, advice services might be a good source of information.
One of the wider impacts of the sanctions regime is that it potentially affects a lot of people through the fear of being sanctioned. Even if lone parents have not actually received a sanction, the threat of being sanctioned every time they go to the jobcentre can affect them. In that sense, the sanctions regime has a wider impact that is maybe not considered enough when we think about the impact of sanctions.
I want to ask about universal credit. I remember when it was at the roll-out stage and consultation was still going on, and I am sure that recommendations were made that, if there was domestic abuse in a household, universal credit should be paid differently—that it should be paid to the woman, or that there should be a different split. Also, on the timing of payments, I am sure that it was said that, if there were extenuating circumstances, universal credit should be paid every two weeks instead of monthly. Is that happening?
I do not think that we know yet because, so far, the system has been rolled out largely for single adults without children. There is a worry that, although there are phrases about extenuating circumstances and the ability to make claims for changes, the people who might want to claim that there are extenuating circumstances are in a vulnerable situation and are not best placed to deal with the complexities and bureaucracy, especially if they have to go online and fill in a long form about their changed circumstances. There is a lot of worry that that will not prove to be either feasible or adequate.
What about domestic abuse? Is there any evidence about that yet?
We have not seen the roll-out for many people yet. It has mainly been rolled out for single people without children, so many of the difficulties that we have been talking about will only occur in the future—if no change is made to the design of the system. We cannot say whether such difficulties are happening now, because the system has been rolled out only to a minority of people—to the easiest cases.
I was also in Niddrie yesterday, and it was suggested that if the Scottish Government was to increase a benefit that it has devolved powers over—for example, carers allowance, which has been mentioned—universal credit would be reduced by the same amount, so people would not gain anything. Could that happen?
That is an interesting question. It depends on what exactly is done, but the answer is yes, as there are potentially some areas of difficulty in the division of benefits. That is one of the reasons why we need to take more of a helicopter view rather than just operate within a benefits system in which the UK Government makes all the rules and then potentially benefits from them. Why would the Scottish Government invest in increasing a benefit for someone if the only benefit was that the person’s universal credit payment was reduced and the UK Treasury saved some money?
You need to start thinking strategically, and it will be important that this committee talks to the committee that is looking at the devolved powers bill—
We are.
Right—I thought that you would be, but I mentioned it just in case.
Housing benefit is one of the areas in which you can—not immediately, but in the long run—actually do something different. However, you might want to look at whether you can reduce the cost of housing in the first place, to make it affordable for ordinary people. We will have a huge problem until we solve that. We have to have a society in which people can afford to live in a home; that assumption is becoming increasingly questionable.
In my early days as director of the Scottish Low Pay Unit in the 1990s, when we campaigned for a national minimum wage, one of the first things that I did was write an article in the Housing Monitor for the National Federation of Housing Associations about the seemingly intractable problem of low pay and affordable housing. We have not moved on a jot in the past 30 years in tackling the problem, which is really depressing.
You have to be smart about where you act so as not to have the effect that I have described, and so that people actually get the benefit and the money is not just swallowed up by the UK Government.
Margaret McDougall has identified a particular issue within a broader problem that we discussed this morning as we waited for the meeting to begin. In the context of the emerging complexity of the devolved system and its interaction with the UK-wide system, you will have to look at the impact of any particular measure on both the Scottish budget and the UK budget.
For example, we might say that there is a lot of in-work poverty and ask whether, if employers paid a living wage, that could be reduced, which would reduce the bill for tax credits and universal credit. If we had a policy in Scotland of paying a living wage throughout the public sector and in public sector procurement, that would be good for people in Scotland. However, as things stand, the benefits bill that would be reduced would not be the Scottish Government’s bill, but the UK Government’s bill. You will need to look at those issues and ask on whose budgets the costs of and savings from any particular measure will fall.
That is a problem. Although some of the things that you might want to do would be very beneficial for the Scottish people, you would still need to consider whether it was the Scottish budget or the UK budget that bore the costs or got the savings.
Clare Adamson wants to ask a supplementary before we finish.
The discussion has moved on a wee bit; my point is about sanctions. Forgive me if I picked you up wrongly, Professor Elson, but I think that you suggested that we all know that the sanctions regime is about reducing benefits payments—at least, that that is the general understanding. However, we are told officially by the UK Government that sanctions are nothing to do with targets or reducing the benefits bill, and that they are simply a mechanism for moving people into employment. Do you know of any research that shows that the sanctions regime does anything to improve people’s chances of employment?
I have undertaken research on that point. Last year, I did some research for Oxfam that looked across the 45 or so Jobcentre Plus districts in the UK and whether there was a relationship between the proportion of JSA claimants in each district who were subject to sanctions in a given period and the employment rate. We wanted to see whether the employment rate increased just after the sanctions were applied or whether unemployment fell, or whether something happened to the inactivity rates for people who are neither employed nor unemployed but who are simply not in the labour market.
Our research found that there was essentially no relationship between the employment rate or unemployment rate and sanctions. Areas where sanctions were applied with more gusto, shall we say, seemed to experience no benefit in terms of lower unemployment. Employment rates were, if anything, slightly lower in those areas, and inactivity rates were slightly higher. Those were the main findings.
It seems that, if anything, the wider application of sanctions is driving people out of the system entirely. There was not a very strong correlation, so I would not want to put all my eggs in that basket, but there was certainly no evidence to support the Government’s contention that sanctions are a measure that is helping people into work.
As I said, the lack of good individual data on what happens to people after they are sanctioned prevented me from doing a more detailed analysis at the individual level. Ideally, I would like to do that if the data were there; the research was the best that I could do at the area level. As far as I was able to tell, a more draconian sanctions regime has no beneficial impact.
Do you agree that any saving to the DWP in benefits costs from a sanction just pushes the societal responsibility on to the third sector and to local authorities, in terms of making hardship payments?
I think that that is true. There is some research that has looked at the matter. I am pretty sure that I read something—I cannot remember what it was. I think that the Scottish Parliament commissioned some research that found that there was a knock-on impact on health and social care services, for example, and on hardship payments and the greater use of food banks.
Although there may be a reduction in the overall up-front benefits bill, sanctions are pushing the problem into other areas, which may increase expenditure and need overall.
The sanctions regime is pushing the costs out to a wider network of people. I suspect that the extended family, friends and the community are helping to bear the cost. Certainly, the burden on food banks and their connection with the maladministration of benefits and sanctions shows that the community is trying to pick up the pieces when things go wrong for people, whether through sanctions or through a lack of benefits payments and so on. The wider community is paying for that, and in the long run there is a knock-on effect on services and on wider population health. We cannot tell what the implications for the health of us all will be in any detail until the damage is done.
On the point about fear, people are afraid of the jobcentre. They do not seek jobseekers allowance as a right, because they are not encouraged to do so, and they are not treated with dignity. I see the contrast with what happened when I was young and unemployed for a period and the way that I was treated in the dole office, as we used to call it, which was very supportive at the time—there was no sense in which going there was a shameful thing to do.
There has been an utter change in the notion of benefits for people who are unemployed. It has moved away from the idea that we should treat people with dignity and that they have rights towards a system that stigmatises them and puts them in fear. That is a very bad development.
If there is anything that you can do in Scotland to change how benefits such as jobseekers allowance and universal credit are administered to make it a less fearful and shaming process and one in which rights and dignity are not denied, and to change the human dimension of how people interact with their social security, that would be good, even if there was no change in the money.
12:30
We have heard evidence from people who have told us about their experiences of the system, and they have confirmed exactly what you have said. When they go for an interview, they feel that the official is trying to trip them up, catch them out or get them off the benefit, rather than supporting them back into work or giving them the support that they need in the circumstances in which they find themselves. That chimes exactly with the evidence that we have heard, and we have included it in our reports. We will continue to press the issue, because the major concern is that wider sense that the system is no longer there to support people, but instead exists to catch them out and prevent them from getting the support that they are looking for. That material shift in the whole process is unacceptable to the committee.
We have exhausted members’ questions, but it would be helpful if our witnesses concluded by commenting generally on the situation or by directing us to where we should look for further information on the issue that we are investigating, whether that is their own work or other work that has been undertaken. That would be most welcome.
I speak as an English person who feels very privileged to have been allowed to come and give evidence to the committee. If there is anything that you in Scotland can do to show the way forward for a more humane social security system that recognises that, under human rights treaties, people have a right to social security, and which reverses the changes that shame people and deny them their dignity, that would be wonderful. As we struggle with the issue in England, we could then say, “Look—it’s not impossible. They have made these changes in Scotland and they can show that it doesn’t have to be like this.” My plea to members of the Scottish Parliament is that they point the way forward to a better system in which social security is seen as a right and we are all treated with dignity.
I agree that, in Scotland, we must strive to do that as much as we can. Whatever we do, it will be important to carry out an equality impact assessment before we do it. We must think about things before we do them, so that we do not end up saying, “Oh no—we should have thought of that one. We should have seen it coming.” That happens to us all, but if we systematically think about the implications for women, disabled people and people who do not have full citizenship status and all the rest of it, we can start to understand which curve balls could come in and hit whatever it is that we want to do. When you look at women and social security—note, please, that I want people in Scotland to have social security—I ask that you encourage others to recognise the importance of understanding the gender implications for all the reasons that we have discussed.
I will give a daft example of people gathering data that they do not look at. Scottish welfare reform statistics do not tell us a lot about women, men and gender. That could improve. The one area where there is information about gender relates to the age and sex of children in families who get benefits. It appears that the families who get financial support through the Scottish welfare fund have far more boys than girls—56 or 57 per cent in comparison with 40-odd per cent. There is either something weird going on in Scotland or something wrong with the statistical gathering. My point is that that difference has been repeated in the quarterly statistics for a year and no one has noticed.
There are good reasons for gathering disaggregated information by sex, but the purpose is to consider the gender implications of the issue that you are looking at, whatever that may be. I only noticed the difference when I looked at the stats before coming here. Something weird is going on, but I suspect that it is probably a problem with the statistical gathering. There are marginally more boys than girls in our society, but not that many more.
There is a need to gather data, but the data must be used, too, so that we can say what the implications of an action are. People need to stop and think. They should not just gather the data, but ask what it is telling us.
I will make one point to underline Morag Gillespie’s point about equality impact assessments, which we have not said much about. It is important to assess the threatened reforms, as well as the reforms that have been recently undertaken. It is worth looking at the Equality and Human Rights Commission’s guidance. The EHRC has critiqued a lot of what the UK Treasury has done—or has not done—on gender impact assessments. It has some good material, and it would certainly be worth talking to it about best practice and how to improve assessments.
Much of the differential impact of welfare reform has come through the unequal distribution of care between men and women. In a system that has become polarised between the strivers and the shirkers, there is a danger that those who perform unpaid care work start to be lumped in with the shirker category and are considered not to be striving in the same way as people in work. That is quite dangerous. The system needs to recognise not just the intrinsic value of care, but its instrumental value and the saving to Government that comes from people providing care that would otherwise have to be paid for.
I thank you all very much all for your time and your contributions. We will draw heavily on your suggestions as we move forward.
Our next meeting will be on 2 June, when we will continue to take evidence for our women and social security inquiry.
Meeting closed at 12:37.Previous
Bedroom Tax Mitigation