Meeting of the Parliament

Meeting date: Tuesday, November 1, 2022

Official Report 1006KB pdf

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Low Income and Debt (Report)

The next item of business is a debate on motion S6M-06374, in the name of Elena Whitham, on behalf of the Social Justice and Social Security Committee, on “Robbing Peter to pay Paul: Low income and the debt trap”.

I ask those members who wish to speak in the debate to press their request-to-speak buttons. I call Elena Whitham to speak to and move the motion on behalf of the Social Justice and Social Security Committee. You have up to nine minutes, Ms Whitham.

15:03  

As convener of the Social Justice and Social Security Committee, I am pleased to open the debate on the committee’s important report on low income and debt.

YouGov research that was commissioned by Citizens Advice Scotland found that more than 600,000 people have encountered new debt problems during the pandemic, either getting into debt for the first time or seeing existing debt get worse. With the cost crisis, it is likely that we will see that number grow exponentially.

As the costs of basics rise sharply and energy prices skyrocket, households across the country are limiting their use of essentials and suffering a significant decline in their mental and physical wellbeing. People are desperately worried about the future, and we, as a committee, share their concerns. Spiralling costs will push an increasing number of people into debt because they simply do not have enough money to pay for all basic outgoings and bills.

As a committee, we set out to explore the specific challenges that people with low incomes face in accessing support and finding solutions to their debt situation. We wanted to find out what their key challenges are and how we could help them. What more could be done?

Our starting point for the work was a focus group with people who are experiencing debt problems. We wanted their experience to be at the heart of the inquiry and to inform the scope of our work. Their testimony shaped the questions that we posed in our call for views and the committee’s subsequent evidence-taking sessions.

What a stark picture those people painted. Despite receiving advice on social security entitlement and other forms of income maximisation, many people on low incomes simply did not have enough money to meet essential living costs. They were stuck in an inevitable cycle of debt, operating with deficit budgets, and there was often no obvious way out. Bankruptcy might be a short-term solution for some, but many people rely on money advisers spending significant time trying to negotiate reduced payments with public sector creditors or access charitable support, with the sole aim of enabling their clients to have enough money to live.

Participants from our original focus group formed our panel of experts by experience. The panel made recommendations to the committee on how things could be improved, which fed directly into the committee’s report. For us, this was about empowering people not just to tell us their story but to be involved in shaping change. The report title, “Robbing Peter to pay Paul: Low income and the debt trap”, is taken from a comment from one of our experts by experience.

I thank everyone who gave evidence to the committee and I particularly thank our experts by experience, who diligently engaged with us throughout our work. That would not have been possible without the organisations that supported them—the committee extends its sincere thanks to them all.

During this inquiry we were told:

“Problem debt has a particular stigma and shame attached to it that leaves people feeling trapped, isolated, unable to sleep. Many of these worries are related to wider stigma around poverty.”

Our inquiry was far reaching, and our recommendations span a number of different Scottish Government portfolios as well as local government and United Kingdom Government responsibilities. We looked at the school meals debt that is owed to schools, council tax debt, the advice sector, the availability of information and support, early intervention and prevention, mental health, and statutory debt solutions such as bankruptcy. I hope that my colleagues will touch on a range of those areas today.

In my remaining time, I will focus on just two of the key areas that the committee explored: public sector debt and money advice.

When we think of debt, we often think of the debt that is owed to private businesses, such as credit card debt and loans. Increasingly, we might think of debt as a result of fuel costs. We might not think so quickly about the role that the public sector plays in debt in areas such as social housing, benefit deductions, council tax, care charges and school charges.

We were told that the debt that is owed to public bodies is increasing as people struggle to pay bills. Collection of such debt can be quicker and harsher than collection from private creditors. Failure to pay council tax can result in enforcement action. CAS highlighted that council tax debt is one of the biggest debts that bureaux see. Local authorities tend to favour bank arrestments as a way of enforcing payment, which means that money can be seized from people’s bank accounts.

Steps have been taken to bring greater consistency to local authority debt collection, but we heard that that effort is not always felt on the ground. We were concerned to hear that public sector processes are not always sensitive enough to individual circumstances. Our experts by experience stressed that compassion must be built into processes and services. We cannot have rigid, faceless services that assume that the debtor is always wrong—that makes the whole experience worse and increases anxiety.

We need a fundamental change in attitude from the front-line services that are dealing with people in debt. The public sector should aim to lead best practice, by handling debt in a fairer and more considerate way. Debt recovery should be done proportionately, based on individual circumstances. People should be treated with compassion.

We were concerned to hear that people are sometimes failed by clunky systems that are not connected or easy to use. People must take it on themselves to navigate complex systems to get the support to which they are entitled—often at a time when they have limited emotional and financial capacity to do that. The burden of responsibility falls too often on the individual. That theme often emerges in our committee work.

Before I turn to the role of the free money advice sector, I want to touch on school meals, which is another important area in which quick action could be taken. Free school meal provision should be increased and rolled out at pace, and school meals debt should be written off. That is already happening in some but not all councils. As I said during my debate on challenge poverty week, weans need to eat.

Last but by no means least, I turn to the advice sector and the people across Scotland who are working tirelessly to help people who are existing in truly desperate circumstances. Money advisers are doing a hugely difficult but important job in helping people to navigate their finances—and advisers might be suffering from their own financial and wellbeing challenges in the process. Debt advisers told us that they are firefighting and hanging on by their fingertips. They are burned out by demand for their services, the complexity of cases and the lack of available options to resolve people’s problems. Witnesses raised issues around awareness of advice services, stigma around seeking help, channel choice and digital exclusion, as well as funding concerns.

Christians Against Poverty shared with us an example of one of the many people whom it supports through its debt advice. The client is coming to the end of a minimal asset process bankruptcy and their sole income is social security benefits. They suffer from depression, anxiety and panic attacks. Once they have been discharged from bankruptcy, they will have £8.55 a week to live on for food and all household items. Living on a budget of £8.55 is not sustainable, and the very tragic reality is that that individual will fall back into problem debt.

Debt advisers highlighted that many low-income households are

“the most prudent money managers you will ever come across. They know where every penny goes and can account for every part of their income. The problem is that the income is simply not enough to cover the costs.”

We must continue to use all available avenues to tackle poverty and resulting debt issues, and we must take a person-centred approach.

I am proud of the committee’s inquiry and the work that it has undertaken to shine a light on the complex circumstances that lead people to become indebted and their struggle to find solutions to that debt. The systemic and interlinking challenges of tackling poverty were interwoven in that work. We made a wide range of recommendations that we think could make a real difference to people who are the most marginalised and overwhelmed by their debt—those whose incomes are so low that there can seem no feasible way to pay off debt and no way out of the debt trap.

I hope that the Scottish Government, the UK Government and local authorities recognise the compelling evidence received by the committee on these issues and work together to enact much-needed collective change.

On behalf of the Social Justice and Social Security Committee, I move,

That the Parliament notes the conclusions and recommendations contained in the Social Justice and Social Security Committee’s 8th Report, 2022 (Session 6): Robbing Peter to pay Paul: Low income and the debt trap (SP Paper 211).

I note that I did all of that while having a menopausal hot flush. Yes—go me! [Applause.]

Thank you and well done, Ms Whitham. I look forward to seeing you back at the members’ business debate later on.

Before we move to the next speaker, I encourage those who have not already done so to press their request-to-speak buttons as soon as possible. I call Gillian Martin to speak on behalf of the Health, Social Care and Sport Committee.

15:12  

I thank the Social Justice and Social Security Committee for bringing the debate to the chamber.

Earlier this year, the Health, Social Care and Sport Committee completed its initial inquiry into health inequalities in Scotland. The rising cost of living inevitably impacted on our evidence.

Scotland has enduring health inequalities that are the result, in due part, of a number of historical factors that were outlined by several experts from whom we heard. We found that health inequalities increased across the population during the years leading up to the pandemic, then the pandemic exacerbated them. We heard that destitution rose during the pandemic. People from black and minority ethnic communities and disabled people were more likely to die, and caring responsibilities became almost insurmountable and caused mental health issues.

This is not a debate about health inequalities, but the inescapable fact is that poverty is the root cause of health inequality, and the rapid rise in the cost of living is set to worsen long-term health inequalities if action is not taken.

During our inquiry, we heard that the number of households in which spending exceeds incomes is rapidly increasing. We hear this phrase a lot, but the reality is that people are choosing between eating and heating, and that is impacting more and more families.

People with complex conditions or those who provide informal care have additional costs and often very little income. We heard that people with multiple sclerosis, for example, will face, on average, an additional £200 per week in bills. We also heard that some families have extensive medical equipment to power—many medical and mobility devices require charging or constant electricity to function. Members will be aware of recent coverage of a family facing an expected £17,000 energy bill to keep their daughter, who has cerebral palsy, warm and alive. The rest of the family will freeze to ensure that she can have heat in her room. Many people with disabilities or reduced mobility must have their heating at higher levels to stay warm or to prevent them from becoming seriously ill.

During our inquiry, people told us that they have had to stop social and recreational activities due to the increased costs. We and our predecessor committees have advocated for the importance of physical activity, social interaction and participation in social and cultural activities as ways to prevent ill health. If people are unable to afford to do those activities, physical and mental health suffers and social isolation increases. We heard of people being unable to attend health and social care services and stopping self-management because of financial hardship. We heard of pensioners being pushed into extreme fuel poverty and that, as a result of the cost of living crisis, and despite all the interventions that have been made by the Scottish Government, child poverty is on the rise.

The poorest and most vulnerable people in society are bearing the brunt of the crisis, and things could get significantly worse for a lot of households. Professor Sir Michael Marmot told us that inflation has a much bigger impact on households with low incomes than it does on households with higher incomes. That seems self evident. This is not just an exercise in philosophy—inflation is making a real difference and pushing people who live on the margins of their income into poverty, thus widening health inequalities. That was laid bare to the committee. We were told that people in the poorest communities are, quite literally, dying because of inequalities, poverty and the repeated challenges that they are facing. Professor Gerry McCartney told us plainly that

“rising mortality for our poorest communities will get worse, and ... get worse faster, if those challenges are not addressed properly.”—[Official Report, Health, Social Care and Sport Committee, 24 May 2022; c 24.]

We are left in no doubt that the cost of living crisis is an urgent public health and social justice emergency. As a committee, we have recommended targeted action to address health inequalities, including tackling underlying inequality and poverty, the root causes, at all levels: local government, Scottish Government and UK Government. Action is needed at all levels, and it is needed now, or we will be seeing widening health inequalities for generations to come.

I call Siobhian Brown to speak on behalf of the COVID-19 Recovery Committee.

15:16  

As convener of the COVID-19 Recovery Committee, it is my pleasure to speak about such an important topic, and I commend the Social Justice and Social Security Committee for bringing the debate to the chamber.

I will shortly talk about some of the COVID-19 Recovery Committee’s work within the context of the cost crisis. First, though, it is important to stress that the impact of the cost crisis is a cross-cutting issue that affects everyone. This debate is an excellent opportunity to highlight parliamentary committees’ welcome scrutiny of the issue.

Like other committees, we have just completed our pre-budget scrutiny. Last week, we wrote to the Deputy First Minister with our recommendations, which included calling on the Scottish Government to clarify whether the cost crisis will affect the funding of the Covid recovery strategy. As members are aware, the strategy was published in October 2021, well before the scale of the cost crisis was apparent. During evidence, we heard how the impact of the cost crisis could affect the funding and delivery of the strategy, with stark warnings that it will pose significant challenges for organisations, service providers and individuals that are even greater than those faced during the pandemic. The Scottish Government’s budget is worth roughly £1.7 billion less than it was last December, and we asked whether the Government intends to refresh the strategy to reflect any policy changes in the light of the cost crisis.

In a similar vein, at a recent Conveners Group meeting, I asked the First Minister whether the Government’s priorities for recovery had changed in the light of the cost crisis. She confirmed that its aims and objectives for recovery had not changed but that the context had. The First Minister spoke of the importance of focusing on inequalities made worse by the pandemic and the cost crisis, particularly for ethnic minorities and those who are less well off.

Among many other things, the report considered bankruptcy and digital exclusion, both of which have been impacted by the cost crisis. The COVID-19 Recovery Committee also considered those areas as part of our scrutiny of the Coronavirus (Recovery and Reform) (Scotland) Bill. Put simply, the bill was introduced to make permanent some provisions that were introduced through emergency Covid legislation in relation to public health and public service reform, which covered the remote delivery of public services. The aim was to retain service improvements that had been brought in during the pandemic and support resilience against future public health threats.

We heard about the experience of delivering public services remotely, including increased flexibilities and resource savings. However, witnesses highlighted some of the barriers to accessibility that exist for some users. The committee recommended that the bill be amended to ensure that all local authorities provide a choice of remote or in-person services, including the provision of hard copy documents where required.

We also considered the bill’s provisions on bankruptcy. Before I go on, it is worth explaining that people can only be forced into bankruptcy by their creditors if they owe more than a certain amount of money. Covid emergency legislation increased the debt threshold at which a creditor could make someone bankrupt, to protect people from harsh outcomes during the pandemic, and the bill set it permanently at a higher rate. The committee heard mixed views on what the debt threshold level should be, and it noted that the cost crisis had escalated considerably since the bill was introduced. The Government subsequently acknowledged the need to keep the threshold under review, particularly in the light of the current economic situation.

I turn to the committee’s future work. We are about to look at the impact of Covid on the labour market, focusing specifically on the proportion of economically inactive people who are on long-term sickness absence, as well as those who have chosen early retirement.? I am sure that issues relating to the cost crisis are bound to come up over the course of our inquiry.

As has been the case with Covid itself, this issue is a complex one that will not go away any time soon. As other members have said, addressing it will require actions from both the UK and Scottish Governments. Today’s debate highlights the strong parliamentary scrutiny that is being carried out to ensure that we can respond appropriately to the fiscal pressures that we all face.

I advise members that we have a little time in hand, so, for the foreseeable future, members who take interventions will get their time back.

15:21  

I am grateful to Elena Whitham and her committee for their substantial work on this inquiry. I thank the individuals and organisations who took the time to give evidence on the issues that are affecting people and on how Governments can target their efforts to help those who are most in need. I also thank Gillian Martin and Siobhian Brown for their contributions on behalf of their committees.

The continuing negative impact of Brexit and the current cost of living crisis have pushed households into hardship, and I am acutely aware of that. Those pressures have been made worse by the economic mayhem that the UK Government has caused over the past few weeks. All of that has exacerbated existing inequalities and financial stress since the committee published its report and the Scottish Government provided our response on the actions that we are taking and our plans for the future.

The committee’s recommendations raised a number of issues that span a wide range of policy areas and local, Scottish and UK Government responsibilities. Within our limited powers and finite budget, the Scottish Government is already addressing many of the recommendations in the inquiry report. We will continue to work across Government as well as with partners, including the Convention of Scottish Local Authorities, to improve the response to and the services available for people who are experiencing problem debt.

Households are facing the most severe economic upheaval in a generation, with alarming rises in energy bills, food prices and inflation rates undoubtedly hitting people who are on the lowest incomes the hardest. The Scottish Government’s budget is not immune to such economic shocks. As the Deputy First Minister set out last month, our budget is now worth around £1.7 billion less than when it was set in December, because of increasing inflation.

Yet, in stark contrast to the UK Government, the Scottish Government has taken sustained and significant action to tackle poverty. This year, we have allocated almost £3 billion for support that will mitigate the impact of increasing costs on households, more than £1 billion of which support is available only in Scotland. Through free childcare, bus travel, prescriptions, eye tests, dental check-ups and period products, we are supporting households in all areas of life through a range of actions, all of which will help people through this crisis and beyond.

Putting a total of £150 million in the pockets of low-income families through bridging payments over this year and last is also providing direct cash support to households now. In direct response to the additional pressure that families face this winter, we are also doubling the December payment for eligible families.

One of the budget measures that had been hoped for was that free school meals for primary 7 pupils would be provided in this financial year, but that has been delayed by at least one year. Will the cabinet secretary confirm that, in the next academic year, every child in Scotland who is in P7 will have free school meals?

As Jeremy Balfour will be aware, the free school meal provision in Scotland is way in excess of that offered anywhere else in these islands—particularly England, where his party is in power.

The fact that pupils are already receiving free school meals in primaries 1 to 5 is saving parents £400 per eligible child per year. We continue to work with our partners in local authorities to plan for expansion of that provision to pupils in primaries 6 and 7. That is being supported by £30 million of capital investment.

We will get on with supporting families in as many ways as we can.

Our actions show that the Scottish Government will always do what it can to help those in need and take action to tackle child poverty, reduce inequalities, and help households to maximise their money. Through up to £86 million in discretionary housing payments, we are fully mitigating the bedroom tax for 91,000 households this year, supporting tenancies and reducing the chances of getting into debt and rent arrears. We have now committed to additional funding to mitigate the benefit cap as far as we are able for up to 4,000 families.

That is a clear commitment in our tackling child poverty delivery plan and an example of our track record of using all of the powers available to us to soften the blow of the worst of the UK Government’s policy decisions. We also recently announced that local authorities can use their discretionary housing payments budget to support households with energy bills—we have committed an additional £5 million for that.

Financial pressures are often felt most acutely by people who rent their home. That is why we took action through the Cost of Living (Tenant Protection) (Scotland) Act 2022, which came into force last week, to help tenants through the challenging months ahead by freezing rents and preventing evictions.

When people are in need of a safety net, our Scottish social security system, built on the principles of fairness, dignity and respect, provides 12 benefits, seven of which are unique to Scotland. In just over a week, our package of five family payments will be worth more than £10,000 for eligible families by the time that their first child turns six. That package includes the Scottish child payment, which we doubled to £20 per week per child in April and will increase again to £25 when we extend it to under-16s on 14 November. That is a 150 per cent rise in eight months, which is way ahead of anything available anywhere else on these islands.

In addition, our child winter heating assistance supports the families of almost 20,000 severely disabled children and young people, with payments totalling around £4 million each year. This year’s payment of £214.10 is already reaching people. Again, that is a Scottish benefit that is available only to those in Scotland, as is our new winter heating payment, which will replace the UK cold weather payments. That guaranteed £50 annual payment will be paid from next February to around 400,000 low-income households. That is backed by investment of £20 million and is guaranteed help with winter fuel bills for thousands of people in need.

I note what the cabinet secretary has said about the child winter heating assistance. Does she agree that disabled people over the age of 16 also face increased fuel costs? What can the Scottish Government do to support those families?

We recognise that. Many of the things that I have already talked about will help people with disabled family members. The Scottish welfare fund, which we also fund, is available to families that have someone with a disability. We will continue to look at what more we can do within the context of a very constrained financial outlook.

We are already spending £460 million above the level of funding that we receive from the UK Government in relation to benefit expenditure. That is substantial.

We are doing much more to support people. We are also leading the way with the provision of the most generous universal free school meal provision in the UK, so that our children are not hungry in school and can focus on learning. We also continue to provide funding for local authorities across Scotland for schemes such as the council tax reduction scheme, and the Scottish welfare fund, which I just mentioned. Those schemes can provide much-needed support to vulnerable households.

Furthermore, we are the only part of the UK to have a statutory debt repayment scheme, which offers important protections for those taking control of their debt. We have also taken action on the protected minimum balance that can be retained in relation to a bank arrestment—the minister will say more on that later.

We recognise that financial difficulties can sometimes overwhelm people. At those most difficult times, advice services play a vital role in helping people to understand what they are entitled to and what their rights are. That is why we have allocated £12.5 million this year to advice services, including advice on debt, welfare and income maximisation. Over the past four years, our Money Talk Team service has put just over £47 million into the pockets of almost 21,500 people. We have also committed to an additional £1.2 million package to enable the expansion of energy advice services. That is in addition to our welfare advice practitioners in general practices, who help people when they go to see a health professional.

I will close now, Presiding Officer.

I can give you a bit more time, because we have a bit of time in hand.

That would be extremely helpful. Thank you.

We have tried to bring together in one place all the information that I have described, because we know that it can be challenging for people to find out what they are entitled to. That is why we recently launched a cost of living website, as part of the Scottish Government’s website, which provides trusted advice to help people to understand the significant range of support that is available.

We are acutely aware of the growing impact on low-income households of debts to the public sector, which Elena Whitham mentioned. Local authorities have powers to write off arrears, and we continue to encourage them to share good practice on debt assistance and collection and to show empathy and dignity when they are working with people who are struggling with debts.

The UK Government holds many of the levers that would lift households out of poverty, and I remain deeply concerned about its long-standing approach to social security. Although we are using all of the powers that are available to us to support households where we can, including uprating our benefits, the social impacts of real-terms cuts to UK Government benefits are significant, and more people on a low income are being driven into poverty or deeper into poverty. I urge the UK Government to reflect on that when it comes to its budget statement.

We cannot have further austerity inflicted by the UK Government. As the First Minister told the Prime Minister last week, the UK Government holds the levers over energy, tax and the bulk of benefits, along with business support and regulation that could help to address the crisis and support households, public bodies and business in the future. We have called on the UK Government to provide an inflationary uplift to the 2022-23 budget to enable the Scottish Government to take further steps to support people with the cost of living crisis, provide fair public sector pay uplifts and support public services, given the fiscal constraints on devolution.

I once again thank the committee for its comprehensive report and for bringing the debate to the chamber to allow us to shine a light on all those issues.

15:32  

I thank all those who contributed to the Social Justice and Social Security Committee’s inquiry, and I thank organisations for the helpful briefings that they have provided to members ahead of the debate.

It is vital that we understand the challenges that are faced by people on low incomes and the debt problems that that drives, in particular in the context of the global cost of living crisis, which is placing more and more people further into debt, with the accompanying misery that that produces.

Prior to the outbreak of the Covid-19 pandemic, it was estimated that 600,000 people in Scotland were in debt. The real problem is that the pandemic has not only exacerbated money problems for people in Scotland, but is now driving them. Across the UK, the cost of living has been increasing since 2021. In September this year, inflation rose to a 40-year high of 10.1 per cent. Naturally, it is those in low-income households who are worst affected by that increase in inflation. High food and energy prices are among the consequences of high demand from consumers, supply chain issues and—most importantly, as we need to recognise—the fallout from the war in Ukraine.

Those who are living on low incomes are more likely to be in debt. Around half of low-income and middle-income households have at least one debt; in comparison, the figure is less than two in five for higher-income households. One of the key messages that came out of the inquiry from those with lived experience concerned the vital role that advice services have to play and the role that early intervention can and must play. The role of local authorities in supporting and providing such advice to individuals and families on low incomes is important.

Cutting council budgets and services harms the poorest in our society. Sometimes the Parliament does not recognise that enough. COSLA has already warned that further cuts to council budgets and services will mean the removal of services for the most vulnerable in our society.

Does not the funding of all our public services—whether they are local government or national health service services—really depend on the decisions that are made for the forthcoming financial statement? If what are believed to be deep public sector cuts come from Miles Briggs’s Government, is that not the biggest threat to public services, whether they are local government services or services anywhere else?

I can give Miles Briggs time back.

Thank you.

We have to look at the history and the fact that the Scottish Government has the highest budget in the history of devolution, but it decided to cut council budgets. That shows where the Scottish Government’s priorities have been and the consequences that those have.

People who are likely to experience poverty and debt are among the most marginalised in our communities. People with disabilities are most likely to face the highest excess costs in the UK. One in five disabled people and one in four families with disabled children face extra costs, which are now estimated to be more than £1,000 a month.

Other groups, including women, young parents and people who live in rural areas, were also highlighted to the committee. More needs to be done to ensure that those groups are provided with equal opportunities in order to stop them being disproportionately affected by debt.

Will the member take an intervention?

If there is time in hand.

You have time in hand.

Miles Briggs mentioned young parents. Does he agree that the UK Government’s Department for Work and Pensions policy on how young parents under 25 are treated in respect of their welfare provision exacerbates the poverty that those young parents face?

I agree with Elena Whitham on that and, as I have said in committee, I hope that the UK Government can look at the issue. We have heard evidence that that needs to change. I am happy to accept that.

People with lived experience have provided the committee with a lot of key thinking on issues that we need to take forward. There is a lot that the Scottish Parliament and councils need to do to change, and I want to focus on our role.

It is important and incredibly concerning that Scottish National Party and Green ministers have now targeted employability schemes for some of the largest budget cuts without any information about the impact of that or, indeed, without providing any assurances on what the schemes will look like and whether they will be restarted. We need to ensure that ministers monitor and consider the unintended consequences of that.

SNP and Green ministers have highlighted digital exclusion in the past. That was also highlighted by Siobhian Brown, from her committee’s work. We have not seen enough on that for people who live in poverty in rural communities, in which advice services are not necessarily local. Access to those services and to the online services that are provided by many charities across the country needs to be improved. That is something that has not been touched on yet, and we need to see action on it.

Ultimately, we need to see action from every level of government. Our local councils need to be properly resourced to be able to play their role, and both Governments need to work together to deliver on the targets that we all signed up to.

Parliament has previously debated the need for more to be done to tackle child poverty in Scotland. The Audit Scotland report in September pointed to the need for the Scottish Government to take a better strategic planning approach. Audit Scotland concluded that SNP ministers need to focus on a more long-term strategy to prevent children from falling into poverty. All of us agree that it is not acceptable in 21st century Scotland to see such numbers of children living in poverty, but how we work together across the Parliament to deliver on that is important.

I make no apology for highlighting that the number of children who still live in temporary accommodation is increasing, especially in the capital. The Scottish Government is simply not doing enough to provide resources to councils to help to prevent that or to rethink policy around that area. I have asked the cabinet secretary to act on that previously. We have seen the situation getting worse, not better.

The committee heard that an area in which the greatest difference can be made is access to free school meals. The cabinet secretary touched on that earlier. We are not seeing the agreed progress on delivering that policy. There were clear commitments in the programme for government that are now not being met. I hope that, if anything comes out of this debate, it is the need for leadership from the Scottish Government on that issue and for delivery of that promise. If the Scottish ministers and local authorities respond to the issue in the same way as they did during the pandemic, for example, the policy could be delivered without further delay.

Scottish Conservatives support the delivery of free school meals. We believe that all primary school and special school children should be given free breakfast and lunch. We also support continued provision for eligible children during the school holidays. We have seen the evidence that that is a crucial way of preventing people on low incomes from dropping under the poverty line and of ensuring that children from the most deprived backgrounds are cared for and receive access to nutritious food. We have all signed up to that but we need a focus on delivering it. I had hoped that we would have seen that before the winter.

I call on the cabinet secretary to make that happen. She could chair a free school meals delivery group with COSLA to drive delivery of the policy before Christmas. I hope that she will take that on board and consider it.

Yesterday, I visited Fedcap Scotland in Livingston to learn more about the employability support schemes that it provides. I was hugely impressed by the work that it is doing and the support that it provides, which genuinely takes a person-centred approach. We often talk about that, but what does it mean? For many of the people who are furthest away from the employment market, their mental wellbeing also needs to be considered, so I was impressed with what Fedcap is doing. I do not have time to expand on the point in this debate, but we also need to consider generational unemployment in Scotland and what additional support can be given to families.

If we aspire to be a just, fair Scotland, we must afford all our citizens fair and equal opportunities. The Covid-19 pandemic and the war in Ukraine are two of the chief reasons why we are now witnessing global cost of living increases and seeing more people in Scotland and across the UK fall into debt problems and face significant living costs. We want the Scottish Government, Westminster and local authorities to work together to take on that unprecedented crisis and try to provide solutions for all our people.

I hope that local authorities and, importantly, the Scottish Government can implement the report’s actions and recommendations. There is a lot of good work in the report, and I look forward to ensuring that the committee continues to pursue it.

I note that a number of members have been coming in and out of the chamber. I remind members that those who are participating in the debate should remain in the chamber for all the opening and closing speeches.

15:42  

I put on record my thanks to the many organisations and people who gave evidence to the Social Justice and Social Security Committee as part of our inquiry and those who took the time to respond to the committee’s call for written views.

Hearing from representatives from local authorities, third sector organisations, tenants associations and advice services was an eye-opening experience. Charities such as Shelter Scotland, Aberlour, the Child Poverty Action Group and One Parent Families Scotland all gave evidence. That highlighted the breadth of the issue and the fact that people from all demographics and backgrounds are feeling the bite. I am sure that my committee colleagues agree that it was a stark reality check.

People were struggling before the cost of living crisis. Citizens advice bureau requests for advice on debt almost doubled from 4 per cent of total requests in May 2021 to 8 per cent in May 2022. That was before the cost of bills began to skyrocket. Now, households across Scotland face prices rising at their fastest rate for 30 years. Not being able to keep up with bills can be the trigger for a downward spiral into severe problem debt. Without significant and urgent action from the UK and Scottish Governments, bills will continue to rise and more people will be forced to take on debt just to cover their essential costs, including many who had never contemplated income insecurity before.

The people on the margins, who were just about scraping by before, are now finding that they have no space left to move. They have no financial resilience and they have no buffer to protect them against rising bills or the rising tide of poverty. Failure to act now and prevent more people from falling into debt is not only unacceptable but bad economics. We know that debt causes financial insecurity, homelessness and mental health issues, which all require state resources and intervention. To put it simply, by allowing people to fall into problem debt, the Governments are costing their future selves more money.

One money adviser told us that his advice web chat was the busiest after 10 pm. People are lying awake in the early hours of the morning, searching for help, unable to sleep because they are so worried about being unable to make ends meet. They are desperate for solutions.

In many cases, people are reaching out before they are in debt. They can feel that they are being squeezed and pushed to the edge, and they are desperately seeking a way to budget better and to cut where they can. However, the reality for too many people is that the choice is about which essential bill not to pay, because there is nothing left to cut that they have not already sacrificed.

Money advisers report that they have run out of options. They are struggling to help people to budget when outgoings such as rent, council tax, heating and electricity eat up people’s entire income streams, leaving nothing left to pay for food or essentials or to pay off debt, including credit card bills and bank loans.

One witness told the committee that

“there is no resilience. There is no disposable income anywhere. We are now relying on charities to help such people out ... I do not know how sustainable that will be for those charities.—[Official Report, Social Justice and Social Security Committee, 28 April 2022; c 3.]

As always, the third sector is stepping up in the absence of proper Government action. The demand on it is increasing, yet the SNP Government cut the overall funding to the sector by more than £1 million in its previous budget. I sincerely hope that it will choose not to repeat that mistake this year.

Money advice services are also being pushed to breaking point. They have made it clear that, the more the problem grows, the harder they are finding it to prioritise those they support.

Not that long ago, I visited a citizens advice bureau in Cambuslang that supports my constituents. I could not believe the amount of work that the bureau is having to do. The staff were rushed off their feet. I take the opportunity to thank Sharon Hampson and her team at the bureau, as well as bureau staff across the country, for their work.

Referrals to such services are increasing, yet there has been no increase in the number of staff who are available to deal with that rise. Scottish Labour has called for more funding to be directed to those services. They are the last line of defence for many people and we cannot leave them underequipped.

It is time that the Scottish Government ensured that the tools are available to allow such services to deal with rising demand and demand in the long term. It cannot allow staff to burn out.

The Scottish Government has powers to alleviate the suffering of soaring numbers of people in debt and the stress on an underresourced sector. It has a responsibility to do more to protect people, and the committee’s findings show that it has powers to act in a number of areas that would address the effects in Scotland.

In September 2019, the Minister for Business, Fair Work and Skills pledged to take forward a wide-ranging review of Scotland’s debt solutions. Almost three years later, following serious shocks to personal finances, the Government has not yet published its findings.

The Scottish Government also promised that a review of the Scottish welfare fund would commence in the first year of this session of Parliament, but we are still waiting. It must expedite that, given the current crisis.

As the member will be aware, the review of statutory debt solutions will be carried out in three phases. The first phase was an initial response to the crisis that we faced during the pandemic, when recommendations were implemented. We also took forward further recommendations as part of the coronavirus recovery legislation. In this second phase, we are considering further action on statutory debt solutions and I am meeting stakeholders to discuss that later this week. I will set out the third phase in due course. That will entail a longer, wider and comprehensive look at our statutory debt solutions landscape.

I assure the member that we are taking forward actions from the review process, with work already having been implemented during the pandemic.

I acknowledge the work of the review group so far. However, as the minister acknowledged in his intervention, the detail of phase 3 has not yet been set out and we still do not know when that work will continue. Families are facing crisis today.

In expediting the review of the Scottish welfare fund, the Government should consider mechanisms to speed up the turnaround times for crisis applications, to allow for quicker decision making. That currently takes around 48 hours, which is a long time for anyone who is cold and hungry.

Scottish Labour has repeatedly called for more money to be directed towards the Scottish welfare fund. The committee heard that the money available is being spent really quickly. As more and more people turn to crisis grants, there is simply not enough to go round. Those solutions are just sticking plasters. The Scottish welfare fund is meant to be an emergency lever, not the long-term answer to financial difficulty.

The money advisers to whom we spoke were clear that people are using the fund to cover the absolute basics. We can see that in the fact that more than a third of applications are refused because they are repeat applications. If things continue as they are, people will not be able to hold out for much longer. The Government must take further action with the future in mind.

One thing that the Government could do is review the law around the amount of money that sheriff officers are able to arrest from a person’s account. As of today, the minimum protected balance stands at £1,000, regardless of the source of income, which means that people even lose money that they receive specifically for childcare or housing costs via universal credit. The Joseph Rowntree Foundation estimates that a single person needs the equivalent of £1,768.53 in take-home pay per month for a decent standard of living. Current rules mean that people who have their money arrested could be left with just over half that amount. That is before we even consider family circumstances or the potential additional costs of being a disabled person or having caring responsibilities, so it is no wonder that people find themselves in perpetual crisis.

The Government must consider making money advice a mandatory service, and it must also give the protection of long-term funding. Not doing so means that an alarming number of staff are short-term funded, project funded or funded to deal with specific challenges, which limits the number of people who are available to deal with the wider context and prevents forward planning, because services are unable to be sure about future staffing levels.

Scottish Labour is a strong advocate of the breathing space policy, which allows people who face a mental health crisis to have some time free of being chased by creditors. We are disappointed that the Government did not acknowledge that in its response to the committee’s report. I strongly urge it to reconsider and, in doing so, note the impact on mental health services and the NHS of not acting.

The report that we are discussing, of which I am proud, went further in its recommendations, and I am sure that my colleagues will speak about them. Scottish Labour is proud to give the recommendations our support. However, we note that the Government has suggested that it is working towards many of them, so we are looking for a quick update from the Government on all those areas.

One such area relates to school meal debt, which we have heard about already. I am proud that, in the absence of Government leadership, Scottish Labour-led South Lanarkshire Council has pushed ahead to wipe off that debt.

You need to wind up now, Ms Duncan-Glancy.

The Government must go further in encouraging more local authorities to follow suit.

People cannot wait any longer. What more will it take for the Government to realise the gravity of the situation? Too many people cannot afford to pay their bills or put food on the table. They cannot afford to wait any longer.

We move to the open debate.

15:51  

Although it feels like just moments ago, it has been four months—and almost as many Prime Ministers—since the Social Justice and Social Security Committee published its report. Even as we carried out the inquiry, events were overtaking us, and witnesses were having to react to news so much that I am sure that, if I were to ask CPAG and Crisis today the same questions that I asked them during the inquiry, they would have a lot more to add.

The cost of living crisis has undoubtedly deepened recently, and the attack from UK Tories on the economy and people on low incomes has made worse a situation that called for action long ago. Instead of taking that action, the UK Government has ignored the situation, tanked the economy, put interest and mortgage rates out of control and failed to act on skyrocketing fuel costs, with bills more than doubling. Instead, it has simply lined the pockets of energy companies.

This is what we are talking about: people who are trying to afford a roof over their heads, food and warmth. Last week, one constituent summed it up for me when she said:

“it’s not even the cost of living—this isn’t living. It’s the cost of surviving.”

Before I get into the issues that the report raises, I want to reflect on the committee’s work overall. It is incredibly meaningful to me to work on the committee in the Parliament that scrutinises policy aimed at tackling the worst things that I have been through personally. Having that lived experience, I know how important it is that we inform policy through lived experience. It is right that, as a committee, we have focused so much on that by hearing from individuals as well as from organisations that help or represent them. It is often difficult to listen to that evidence, particularly the evidence from our experts by experience, some of whom were still living through a very difficult period in their lives when they spoke to us. When we ask people to tell strangers about what they have suffered, often with associated trauma, in the hope that it might change things, it is incredibly important that we take action off the back of that.

In social security perhaps more than in any other Government portfolio, it is clear that to go further—as the SNP Government, I and most other members would like to do—we have to break free of the UK and its Tory Government’s string of harsh and punitive welfare policies. We heard consistently and clearly from witnesses throughout the inquiry how much of an impact harmful UK Tory policies, such as the two-child limit, the cut to universal credit and the under-25 penalty—the list could go on—had on pushing them into poverty and keeping them there. The impact is huge.

When we announced that we were doubling the Scottish child payment, that news came at the same time as the announcement that the Tories were slashing universal credit—the largest overnight cut to welfare since world war 2. Therefore, we are fighting against the tide in this Parliament, and every policy that the Scottish Government introduces to help people seems to be matched, or even outdone, by the Tories going the other way and ripping money out of the hands of those who need it. I say that not just to have a pop at the Tory UK Government, although I am happy to do so.

The member is making a very negative speech. Does she welcome the fact that, between 23 and 30 November, people on tax credits will receive a cost of living payment of £324? Does the member support anything that the UK Government is doing to support people?

I genuinely struggle to respond to a comment that it is wrong to be negative about such a negative situation. We are discussing the situation that my constituents find themselves in because of UK Government policies. They are going through a negative experience. I absolutely welcome changes to the UK Government’s decisions but, because of those changes, we cannot know from one month to the next what our overall budget will be. Given that we cannot borrow or overspend, that is a ridiculous state of affairs.

I outline those issues because I genuinely think that many people do not realise just how many levers there are to which we do not have access. With the Tories down south becoming increasingly litigious around the Scottish Parliament taking decisions that they see as outwith our remit, our limited powers are an important bit of context in the debate. We are beholden to a right-wing Government that decides on the high-level social security system design and, what is worse, our budget. The Joseph Rowntree Foundation has estimated that 1.5 million people have been plunged into poverty since the Tories took office. That is outrageous, and it shows that the cost of living crisis that we are tasked with tackling is Conservative made.

Over the past year, constituents have asked me how a Government could make such huge mistakes, and I am scared that the answer is that they are not mistakes. My experience of claiming universal credit and personal independence payment suggests that sanctions and punishment for being poor are exactly what the system intends.

I am proud of the work that is being done in the cabinet secretary’s portfolio in this session of Parliament. The work on equalities, preventing homelessness, increasing tenants’ rights and tackling poverty is astounding, and that is before we even get to the monumental changes that are being introduced by Social Security Scotland on adult disability payment. That payment is a world away from what I am used to dealing with through the DWP. If anything proves that we can do better here, it is that.

The Tories can pretend that the SNP is hiding behind the issue of reserved powers, but anyone who thinks about the issue for 10 seconds or looks into it, however briefly, can tell that that is all it is—pretence.

I call Maurice Golden, to be followed by Paul McLennan. You have around five minutes, Mr Golden.

15:57  

The speaking line-up is perhaps a case of a rose between two thorns, Presiding Officer.

I thank the committee and the clerks for the report. Before the pandemic, more than 600,000 Scots were estimated to be overindebted. Citizens Advice Scotland suggests that, as the pandemic raged, 60,000 people either saw their debts get worse or were plunged into debt for the first time. The problem is likely to get worse. Putin’s invasion of Ukraine has resulted in energy prices skyrocketing and households, especially the most vulnerable, struggling with ballooning bills. Those households are the ones that are most likely to face poverty and struggle with debt.

The committee report points out that disabled people face higher costs—one in five individuals, along with one in four families with a disabled child, contend with extra costs of more than £1,000 per month.

What is the member’s view on the rumours that the UK Government is considering means testing the essential benefits for disabled people?

I do not comment on rumours. That is a matter for the UK Government, and I would hope that the member can raise it through the appropriate channel, which is about 500 miles south.

I also want to raise the impact of digital exclusion. As a representative of rural communities, I know how difficult it can be for people to access online resources. As the committee report highlights, those who are digitally excluded might take longer to seek help with money problems, and that delay can make the problems worse. With so many people dealing with debt, it is no surprise that advice services are under enormous pressure. The committee heard how they are “stretched to breaking point”.

The crisis that families face is bigger than any one political party, so we need Scotland’s two Governments to work together to help those who are most in need. I note that the committee report recommends that the UK and Scottish Governments should continue to look at ways to tackle inflation, rising energy prices and the cost of living crisis. Both Governments have already taken action.

What impact are policies such as the two-child cap, the benefit cap, the five-week wait and the lower universal credit payments for parents under 25 having on people who face challenges with debt?

Well, the UK Government’s energy bill cap has helped. It announced a £37 billion package to help families with the cost of living crisis, and that needs to be focused on.

Balanced against that, the Scottish Government failed to eradicate fuel poverty in 2016, as it had promised to do. The SNP’s policy is to increase customers’ electricity bills through heightened transmission charges in order to subsidise predominantly big business. That is the reality, and that is the problem that SNP and Green members have in this Parliament. They are not willing to stand up for their constituents and take the Scottish Government, which is failing Scottish families, to task.

However, I welcome the fact that the Scottish Government has committed £12.5 million to support debt income maximisation services. I hope that it takes note of the warnings in the report about the severe strain that money services are under, and of the committee’s recommendation that specific funding be provided for services that support people who are suffering mental health issues.

The committee also recommends that the Scottish Government and COSLA look into writing off school meals debt. My position, and that of my party, is that parents should not be in danger of running up school meals debt in the first place, so let us make school meals free for all children in primary and special schools. If a cost of living crisis is not the right time to do it, when is?

To go back to my earlier comments on digital exclusion, I note that the committee urges the SNP Government to support access to the internet through public spaces such as libraries. That is not a luxury. Digital access is needed to apply for benefits and other Government services, but it is increasingly hard for councils to support such services after years of underfunding by the SNP Government.

Just yesterday, the front page of The Courier warned about a £51 million black hole in the Angus Council budget. Across Scotland, local authorities have little option but to cut services and raise council tax—a combination that serves only to pile more pressure on people who are already struggling.

What we really need is a long-term solution that both helps people who are trapped on low incomes and prevents people from falling into debt in order to meet basic needs. That solution is ensuring full employment in high-quality, well-paid jobs. My party has already offered ideas on that, including rapid retraining courses, especially in the digital sector, and job security councils to provide meaningful opportunities.

The challenges that I and others are outlining today are tough, but not impossible, to tackle. We need both Governments to work together.

We have now exhausted most of the time that we had in hand, so interventions will probably have to be accommodated within members’ speaking allocations.

16:03  

I am grateful for the opportunity to speak in the debate. I am a member of the Social Justice and Social Security Committee, and hearing evidence from many groups and individuals was at times a heartbreaking experience.

The committee looked at the challenges related to low income and debt in Scotland. That was to help the committee to develop its priorities for work throughout the session, and I think that we have already picked up some of those points and will develop them during the session.

The main issues that were raised were social stigma around problem debt; digital exclusion in accessing support services; signposting to free debt advice, which we have heard about; the links between problem debt and health, which Gillian Martin talked about; the high cost of childcare; and issues with statutory debt solutions.

Of course, the issue of low income and debt has worsened since we held the inquiry. Food inflation is now approximately 15 per cent, with the price of some basics increasing by up to 25 per cent. The UK inflation rate is the highest in the G7, and mortgage interest rates have rocketed, with two-year fixed-rate mortgages now at more than 6 per cent. Energy costs have increased massively, with the UK Government backtracking on its support package. The UK already has the worst poverty and inequality levels in north-west Europe.

The impact of Brexit on the cost of living crisis cannot go unnoticed. Soaring prices and labour shortages are consequences of a decision that we in Scotland did not make. Only this morning, The Herald reported that exports have dropped by 13 per cent since Brexit. Last week, I offered Labour MSPs the opportunity to stand up and advise me of any benefits to Scotland of Brexit; I now offer that opportunity to Tory MSPs. There we go—nothing. There is no doubt that Brexit is making people in Scotland poorer.

We can all have political discussions, but I want to focus on quotes from witnesses at our evidence sessions. Peter Kelly from the Poverty Alliance said:

“we need to remember that the cost of living crisis comes on top of budgets already being stretched for people on low incomes during the pandemic, which comes on the back of the fact that benefit levels were unfrozen only at the start of the pandemic. We need to remember that the context in which we go into the inquiry is one in which people already face significant challenges. We must bear that in mind when we think about solutions.”—[Official Report, Social Justice and Social Security Committee, 12 May 2022; c 5.]

Miles Briggs talked about the impact of inflation. The UK Government must increase benefit rates in line with inflation next year; that has not been guaranteed by the new Prime Minister, but it must be guaranteed and delivered.

On the two-child limit and food banks, Kirsty McKechnie from the Child Poverty Action Group said:

“All families are being affected at the moment. However, evidence from the Trussell Trust shows that, because more families are being affected by the two-child limit on benefits, an increasing number of families with younger children are using food banks, which is impacting on the early years of a child’s life.”

There have been surveys that have said that 35 per cent of people under 25—people with young families—might not have sufficient funds to heat their homes this year.

Kirsty McKechnie went on to say:

“We think that there might be a direct correlation between food bank use and the two-child limit.”

On universal credit and rent arrears, Betty Stone of the Edinburgh Tenants Federation said:

“The worst thing that was ever done was the introduction of universal credit and handing the money to people in their hands. I have found that rent arrears have gone through the roof since universal credit was introduced.”—[Official Report, Social Justice and Social Security Committee, 19 May 2022; c 4, 18.]

The support that is provided in Scotland is unique and unmatched across the UK. The Scottish child payment is unique to Scotland, and is the most ambitious child poverty reduction measure in the UK. From 14 November, the five family payments, including the SCP, could be worth more than £10,000 by the time a first child turns six and £9,700 for subsequent children. That is an incredible help from the Scottish Government.

In March, the Scottish Government uprated eight other Scottish benefits by 6 per cent, which was about double the 3.1 per cent consumer prices index rate by which most UK Government benefits were increased at the same time. In line with Scottish Fiscal Commission forecasts, the Scottish Government is set to invest £4.2 billion in benefits expenditure in 2022-23, providing support to more than 1 million people. That is money that will go directly to the people who need it most and which will support people to live independent lives. The Scottish Government’s second benefit take-up strategy, which was published in October 2021, sets out how the Government is working to ensure that people can access the support that they are entitled to.

Fiscal flexibility is essential in a demand-led directorate such as social security. At the moment, the Scottish Government is dealing with an inflationary impact that is reducing the Scottish budget by £1.7 billion. We have a fixed budget, coupled with extremely limited borrowing powers. We need a realistic fiscal framework to be renegotiated; right now, within the devolved set-up, the UK Government could allow the Scottish Government to have realistic borrowing powers with agreed criteria. However, Scottish Labour would not support that; we are in the ridiculous position that Labour would vote against giving this Parliament more powers to deal with the issue.

The Scottish Government is supporting the most vulnerable people through the powers that it has. It could do much more if Scotland was an independent country.

16:08  

It is a great pleasure to speak in the debate. I extend my thanks and compliments to the committee and, in particular, to the convener, for an excellent report that covers so much that affects every one of our constituents day in and day out.

In the short time that I have in which to speak, I will concentrate on one aspect of the report: namely, paragraphs 165 to 174, which deal with school meals debt. I thank Aberlour for its evidence to the committee, and I thank the committee for the weight that it has attached to this important matter. I will concentrate on this small aspect not because the other matters in the report lack importance, but because cancelling the debt would be a significant and simple step to take to alleviate the pressures on our families and their children—a significant number of whom are fully aware of the problem that their eating at school causes their family.

I welcome the recommendation in paragraph 172, which is

“that the Scottish Government works with COSLA and local authorities to write-off individual school meal debt to allow families a clean slate as they move into the new school year and”—

for those moving into high school—possibly a “completely new school setting.” That debt should not follow them.

I also echo the committee’s call in paragraph 173:

“We urge the Scottish Government to implement its free school meal expansion as soon as possible.”

That echoes Scottish Labour’s call for the Scottish Government to stop passing the buck—to provide funding for all local authorities to write off existing debt relating to provision of school meals, and to deliver on its manifesto commitment to roll out free school meals to all ages in Scotland’s primary schools. That supports the convener’s remarks in her opening speech, which I welcomed.

I call for that on the basis of the evidence that Aberlour submitted to the committee. I believe that it is right to put in the Official Report some of the facts that Aberlour found. There is concern about the level of school meals debt in schools across Scotland. The level indicates that many families with children who are not eligible for free school meals are struggling to afford to feed them. There is an inconsistent approach across Scotland as to how individual local authorities respond to school meals debt and how they help and support families in such circumstances, who might be experiencing financial hardship.

Fewer families are eligible for free school meals than were eligible 20 years ago, as a result of the income thresholds for eligibility having failed to keep pace with inflation. There is real concern about hidden school hunger, particularly among secondary school pupils, who do not receive the free school meals that are so often trumpeted—rightly so—and are provided for children in primaries 1 to 5, but not P6 and P7.

It appears that free school meals eligibility does not benefit enough low-income families. The income threshold for eligibility for free school meals, along with other benefits, for families who are in receipt of child tax credit, is currently £17,005, or £7,920 for those who are in receipt of child tax credit and working tax credits. When those thresholds were introduced, back in 2002, they were £13,230 and £5,060 respectively. Those income thresholds have changed very little in monetary terms in the past 20 years; they have failed to keep pace with inflation during that time. It is therefore clear that eligibility for free school meals, particularly at secondary school, has not kept up with inflation.

How often have we heard—rightly—the call for the Scottish Government’s budget to be increased because of inflation? Here is an opportunity for the Scottish Government to show that it believes what it says, by increasing the eligibility amounts by, at the very least, the rate of inflation. It could also open up the opportunity to have free school meals to young people in our high schools. I ask the minister this: will the Scottish Government increase the eligibility amount for free school meals in line with the historic rate of inflation, to ensure that more children from low-income working families receive that entitlement and to reduce the likelihood of hunger in our secondary schools.

I have spoken about my final topic in the chamber many times and will continue to do so. Article 27 of the United Nations Convention on the Rights of the Child provides for an adequate standard of living and states that

“parties recognize the right of every child to a standard of living adequate for the child’s physical, mental, spiritual, moral and social development.”

That includes the right to food. When will the Government bring the UNCRC back to the chamber, so that our young people can recognise the rights that the Scottish Government and Scottish people want to give them and—this is possibly more important—so that we can enforce those rights?

16:13  

Presiding Officer,

“Britain and the United States are poor societies with some very rich people.”

Those are not my words but a headline from that well-known radical left-wing broadsheet The Financial Times. That is the reality that we are living in. There are communities where most people are, to a greater or lesser extent, struggling. They struggle to eat enough of what they need to stay healthy, to stay warm and to give their children what they need to get through the school day. They struggle to sleep without experiencing that terrible jolting thump of the heart as they wake and remember the looming bills.

For the poorest people, it is even worse. Last year, the lowest-earning 5 per cent of households in Britain were 20 per cent worse off not only than their counterparts in Norway, Germany and Switzerland, but than those in Slovenia.

Those households—families, couples and single people—are not doing anything wrong. On the contrary, most of them are doing exactly what they have been told to do. They are doing what they have been told will be their route out of poverty and their pathway to the sunny uplands of prosperity and peace of mind. They are working.

However, as the committee’s report so vividly shows us, that work and the social security to which our citizens are rightly and fully entitled are just not enough to keep our neighbours, our constituents and our friends out of the chilling chasm of debt. That debt is not incurred frivolously through expenditure on the luxuries that the rich take for granted; it is incurred through spending on food, rent, council tax and school meals.

The committee has made wise and sensitive recommendations about changes to processes, attitudes, resources and regulation, but wider reforms are needed—reforms to work, social security and taxation, along with consideration of the fundamental question of what our economy is for.

We need decent pay for everyone. We need not a situation in which people can just about manage if they take three jobs and never see their children, but pay that means that families can thrive, that they can pay their bills and still have a little left over, and that they can enjoy the short years of childhood instead of merely enduring them. That means having a genuine living wage, so I am proud that we are making good progress on that here, in Scotland.

We need decent conditions and work that brings security, respect, fulfilment, equal opportunities and an effective voice for workers. That is what the fair work agenda means. Sooner rather than later, all work in Scotland must become fair work.

We need wealth distribution. Yes: that means taxing the rich. That might make some of us nervous, but our constituents are way ahead of us. The Scottish social attitudes survey that was published yesterday shows that 68 per cent agree that Government should redistribute income

“from the better-off to those who are less well-off”.

More than half of that 68 per cent agree strongly, while only 4 per cent of those surveyed strongly disagree. The Westminster Government—whatever its iteration is today—likes to talk about having a mandate: that 68 per cent sounds like a very clear mandate to me.

Inequality is not just bad for the poor, it is bad for everyone. It is bad for individuals’ health and wellbeing, for communities, for educational outcomes and for economic success. During the fleeting fiasco of the Tory plan to scrap the 45 per cent tax band, even City of London traders were not dancing on their desks; rather, they were warning how pointless it is to be privately rich and publicly poor.

We need social security that is dignified, respectful, humane and sensitive in terms of both its levels of payment and its processes. We have endured years of toxic rhetoric from Westminster and the media, deliberately inadequate systems and consciously cruel implementation. All of that has literally cost lives. I am thankful that we Scottish Greens have successfully argued for mitigation in Scotland of some of that bitter cruelty, including the bedroom tax, the benefits cap and the obscenity that is the rape clause. However, there is much more to do. I and, I know, others are determined to do it.

One thing that we really need to progress faster is implementation of a universal basic income, which the Greens have long supported. That measure would place dignity at the heart of our economy. One’s worth should never be measured by one’s ability to contribute only economically. Our worth as humans goes far beyond being cogs in a labour market machine. A universal basic income would also prevent people from being penalised by the clawback of money for late payment or non-payment of debts. The Scottish Government’s work on a minimum income guarantee is very welcome, but we need to go further as soon as we can.

Finally, we need opportunities for people to build better and to co-create a shared future, as well as securing their own livelihoods now. A truly just transition to a future economy will be one that brings everyone along, with support for responsible small and larger businesses, with green jobs in the caring and creative sectors as well as in renewables sectors, and with employment that recognises that we are, first and foremost, human beings and not human resources. This is what our economy is for; it is to sustain us, as people, and the earth that we stand upon. If there are wealth creators, they are certainly not the billionaires. The wealth creators are the people whom we should support.

16:19  

I thank the Social Justice and Social Security Committee and its clerks for producing its important report. The Parliament is rightly spending a great deal of time on discussing the cost of living crisis and its impact on our most vulnerable communities, and I welcome today’s focus on those with low incomes who are in danger of falling into debt.

We have many great organisations in Scotland that are working on the matter. In particular, I mention the work of Christians Against Poverty and its service to help people who are struggling with debt. Emma Jackson, its chief executive officer, provided concerning figures when she gave evidence to the committee. She told us:

“A third of our clients at CAP say that they regularly miss meals because they do not have enough income, while a quarter are reporting that they are skipping putting the heating on.”

She went on to say:

“about 65 per cent of our clients say that they have had to borrow from family or friends to afford food or fuel”.—[Official Report, Social Justice and Social Security Committee, 12 May 2022; c 4.]

The situation is forecast to get worse over the winter.

In last week’s debate, I highlighted the work that the UK Government is doing to assist the most vulnerable in our communities with their heating costs and I talked about the measures to get more money into such people’s pockets. I ran out of time in that debate, Presiding Officer, so I will not go over all those measures again; you will be glad to hear that I intend to finish on time.

The committee made many observations about promises of action that the Scottish Government has not yet fulfilled. We welcome the Government’s commitment to a full and independent review of the Scottish welfare fund and ask for the review to be concluded and a report published as soon as possible. I understand that the review is under way and I ask the minister, when he sums up the debate, to clarify to the Parliament the review’s timetable. When can we expect to see its report and recommendations? Will the recommendations be acted on in time to help people during the crisis over the winter? The committee has called for the review to be completed before the end of the year. Can the minister confirm that the report will be published this year?

The committee also called for the Convention of Scottish Local Authorities and the Scottish Government to work together to develop national standards for council tax collection. In her evidence to the committee, Emma Jackson made the same, important point. However, in its response to the committee, the Scottish Government again passed the buck, suggesting that it is not minded to legislate on a local government issue. The whole purpose of a national standard is that it is developed and agreed nationally, so that someone in Dumfries and Galloway who has council tax arrears has the same experience as someone in Aberdeenshire. It is not rocket science, and a national approach is long overdue.

The committee also recommended that the Government move ahead with free school meal expansion as soon as possible. The Government said in its response that it is committed to doing so within this parliamentary session but, again, there is no timetable; there are just empty promises from the SNP-Green devolved Government.

Let me turn to early intervention and prevention. Councils are on the front line of social care provision and are best placed to make early interventions, but the real-terms cut of £700 million since 2014 has affected councils’ ability to provide services. Advisers and helpline staff who assist people in dealing with debt are cut to the bone, with phone lines often jammed and people unable to get through to someone who can help.

Audit Scotland has urged the Scottish Government to develop a long-term planning approach to address child poverty and has warned that policies are focused on lifting children out of poverty rather than on preventing it in the first place, which should surely be the single most important focus for any Government.

Does the member agree that the best and swiftest early intervention in that regard would be to provide a welfare state that addresses poverty at source as opposed to having to mitigate it?

The member misses the point completely. What we want is a society in which people do not rely on welfare but have the jobs and opportunities to progress. The best way to tackle poverty is by providing good education, getting people into well-paid employment and growing our economy. We want the Scottish Government to commit to develop schemes that provide employment for people. We want it to tackle the root cause of poverty and to focus on growing the economy, to provide the opportunity that our people deserve.

I again thank all the organisations that gave the committee such moving evidence about the people with whom they work and the stories that those people told. We face a difficult time. Many households are fearful of the future and are wondering how they will pay their bills and meet their financial commitments.

The Government should be doing all that it can to address those needs, but instead we get empty promises and diversion politics. The Government blames someone else while saying that there is nothing that it can do.

We believe that there is much more that the Scottish Government can do, including delivering on some of its promises of the past. We want to see a fair funding settlement for local authorities, so that they can deliver the help and services that are required in our communities. We want to see free school meals delivered, not only promised; debt services funded properly; economic growth and employment at the heart of Government policy—

You need to wind up now, Mr Lumsden.

—and an increased focus from the Government on the day job. The people of Scotland deserve a Government that thinks about their needs rather than stokes division and grievance.

16:25  

I thank the committee for its work.

There are no words that adequately convey the frustration that many of us feel at the moment. Many of us have been doing all that we can to try to mitigate the unfolding catastrophe.

The Scottish index of multiple deprivation identified that in one of the local authorities that cover my constituency, Aberdeenshire, nine data zones are among the 20 per cent most deprived in Scotland. All nine of those zones can be found in Fraserburgh and Peterhead, which are both in the Banffshire and Buchan Coast constituency, which I represent.

This year, I have held cost of living events and surgeries throughout the constituency to help people manage through the crisis. I invited Social Security Scotland, local authorities, Citizens Advice Scotland and food banks to work alongside me to provide urgent support. Those people came along to help in an utter crisis that has been caused by the UK Government’s policies. Under the Tory UK Government, inflation has run out of control, mortgage rates are at their highest since the great financial crash and energy costs have doubled. That is the Tory legacy of being in government for 12 years.

The member mentioned fuel costs. Does she agree that the biggest factor in the rise in fuel costs is the war in Ukraine?

It is the responsibility of the Government to provide stability to its citizens regardless of where the instability comes from. The Scottish Government provides stability while the UK Government is unstable.

As the cash squeeze continues, poverty worsens and financial struggle deepens, those with the least money are made to pay the highest cost to live. Low-income families cannot afford to bulk buy and create long-term savings on goods and are instead having to take out high-interest loans to pay for basic food items—and that is if they can even access credit. They do not have the fall-back of savings to dip into on a rainy day, because every day is a rainy day. The lack of judgment and of basic understanding from the UK Government, which should know better, is shocking.

Supermarket chains such as Morrisons are offering free hot food, such as potatoes and beans, for those who are struggling if they use the codewords and “ask for Henry”. After 315 years of the union and 43 years of neoliberal orthodoxy, folk in Peterhead and Fraserburgh have to use codewords at a supermarket chain to get a baked tattie with beans because they cannot afford food. The charitable impulse is decent but, my goodness, the necessity for it is repugnant.

Will the member take an intervention?

No, the member has said enough.

There is no doubt that the cost of remaining in the UK has pushed people into poverty, destitution and hunger and that Scotland needs the opportunity to break free. The differences are stark between the devolved Scottish Government and the UK Government, which seeks to destroy the wellbeing of our nation. We seek to build an economy with the wellbeing of our citizens at its very core. Even under the limitations of devolution, the ambition and compassion of the Scottish Government have seen us introduce the many mitigations that my colleagues have mentioned.

Those are the measurements of a Government that values the wellbeing of its population. Many of the witnesses the committee heard from welcomed so many of those actions from the Scottish Government. In the recent Scottish social attitudes survey, 74 per cent of adults reported that they trusted the Scottish Government to run Scotland’s affairs.

I have detailed some of the statistics and the steps taken to combat the damage that is being done. Behind each and every one of those statistics is a story of personal tragedy for individuals, families and children.

I conclude with a remark from a welfare officer who advises and supports people who are suffering from the unlevel playing field, who said:

“People talk about the ability to heat or eat. It is not an option any more. We are facing people that will suffer mentally and physically because they can no longer do either of those.”

We have the option of a better future, though. Scotland is a nation rich with energy, a world-renowned food and agriculture sector, and a sustainable fishing industry. We will do so much better with the powers that come with independence.

16:30  

I thank colleagues in the Social Justice and Social Security Committee for the work that they undertook to produce the report. Reflecting on all the contributions that we have heard so far, I believe the debate could not be more timely. People across my home city of Dundee and throughout the north-east fear the winter and the huge debts that they know they will end up carrying. The cumulative evidence of the inquiry shows what an extraordinary weight that is on the backs of those who can least endure it. With interest rates rising even faster than expected due to the disaster of the Tory economic dogma of recent weeks and the grotesque incompetence that the Tories have shown, debt will have an even greater impact on families.

The cost of living crisis means that those impacts will be felt even more broadly across the income brackets. As we know, debt is often the trigger for crises in families. We must do all that we can to lift the burden, the mental weight that comes with it and the impossible choices that ensue.

The picture of Scottish poverty is stark. We have an economy that does not work for many ordinary Scots. Two in three single parents in Scotland have little or no savings to fall back on; four in five parents with a baby report an impact on their mental health because they are worried about money; and nearly one in five households on low incomes in Scotland has gone hungry and cold this year, and that is before we enter the winter months.

With mortgage rates continuing to rise for thousands of people across the country, day after day, due to Tory mismanagement, it is clear from the report’s contents that many more will continue to struggle as the financial pressure of the cost of living crisis increases. The Social Justice and Social Security Committee’s report provides ideas to help to reverse that increase in poverty, which is why Scottish Labour supports the report’s conclusions and recommendations.

With more people struggling to get by, those questions—not just in the report—must be answered, every day, by UK and Scottish Government ministers. What more can they do to help? What more will they do to address the fuel poverty that so many people are experiencing? The answer is not another policy review or consultation—we have got plenty of those—but immediate action. As the committee reported, we need immediate action, such as the Scottish Government making use of its devolved powers to the fullest possible extent. As we enter an incredibly hard winter, we need practical solutions for low income and debt that will help struggling families now.

Scottish Labour has presented a plan that, if implemented now, would make a positive difference immediately to people’s lives. Our cost of living plan would wipe out school meals debt, provide funding for debt advice services and relieve people of some of their debt burdens. Those are real and practical measures that this Government could take. We know that the actions in our plan, such as wiping out the school meals debt, will benefit up to 11,000 families. However, Scottish Labour is not just suggesting those things; we are actually doing them. Labour minority-controlled East Renfrewshire has introduced a £4.4 million package to help to tackle the cost of living crisis, including direct support for the most vulnerable this winter, support for those in communities facing isolation and loneliness, and support for the citizens advice bureau to allow increased provision of money advice and benefits assistance for residents. All of the things that Pam Duncan-Glancy and Martin Whitfield set out today have been put into action by Labour councillors.

That is just one council doing whatever it can to help; I know that councils across Scotland are eager to do more. If they were not staring down the barrel of devastating cuts, they would and could do more to help people who are struggling. This Government could provide funds for money advice centres that would allow them to plan for the long term rather than the short term. The precarious nature of one-year bits of grant funding here and there is incredibly difficult for organisations, and there has been no extra funding to help with the demand arising from the cost of living crisis, as there was during the pandemic. That limits the ability to increase capacity and help the greater numbers who we all know—we hear them daily—are seeking support and advice from their citizens advice service. At a time when more people than ever are turning to those types of organisations, it is absolutely essential that we fund them properly.

I urge the Scottish Government to move quickly and take up the recommendations in the report.

I call Marie McNair, who will be the final speaker in the open debate. You have up to five minutes, Ms McNair.

16:34  

I welcome the opportunity to speak on behalf of my constituents in the debate. This is an important debate at a time when many people are struggling to cope with the effects of the cost of living emergency.

The Westminster Government’s crashing of the economy has made what is already a difficult and challenging time for many people much worse, with inflation out of control, mortgages spiralling and the cost of fuel making people choose between heating and eating. I am worried about the emerging situation of people having to borrow to pay for essentials. That is not borrowing to invest in the value of their properties or, for example, to buy a car to allow them to take up employment; it is borrowing to enable them to eat, heat, clothe themselves and pay rent.

Inside Housing recently reported that more than half of social housing residents have used credit to cover essential household costs. That is a vicious circle for many, and it is simply unsustainable. The Scottish Government is doing much within its powers and budgets. The Scottish child payment is set at five times the amount that other political parties called for. The council tax reduction scheme is more generous than its equivalents in other parts of the UK. The mitigation of the bedroom tax, the benefit cap, the rent freeze, the moratorium on evictions, the £20 million fuel insecurity fund and millions more in discretionary housing payments help families to sustain their tenancies. At the heart of that approach is a new social security system that is founded on dignity, fairness and respect.

Contrast that with the Westminster system—from Governments of all political colours—that enshrined and promoted stigma, including the private sector medical assessments that caused so much misery and pain, and the sanctions regime that is used to horribly deny already inadequate subsistence levels. On the issue of debt, it is a system that has been devised to ensure that claimants need to get into debt to avoid going without. The five-week wait for universal credit does just that: it forces people to take an advance and then pay it back, meaning that they have less money in future months. CPAG’s evidence to the committee on the real impact of that approach is heartbreaking and fully captures a Westminster benefits system that is, frankly, setting people up to fail. It cited the case of a young homeless woman. The DWP is deducting £63.30 per month from her benefit to recover an advance payment. There are two other deductions, of £8.95 and £8.96, which leaves her with just £56.02 per week to live on, which is senseless.

I am therefore not surprised to read a report from the University of Glasgow’s Centre for Population Health that concludes that 20,000 excess deaths in Scotland are likely to have been caused by Westminster-imposed austerity. Yet we are still pleading with Westminster to uprate benefits in line with inflation. The Joseph Rowntree Foundation has pointed out that food prices have risen faster than at any point over the past three decades. It also asserts that only ever uprating benefits by the level of earnings will leave this UK Government responsible for the biggest permanent real-terms cut to the basic rate of benefit in a single year. At the very least, Westminster should uprate benefits by inflation and get support to people who are in the greatest need.

The burden of debt will hit people very soon, with the onset of the Christmas period, which I know that many of my constituents are approaching with dread. There is a great demand on family budgets at this time. I welcome the Scottish Government’s doubling of the bridging payment, which will give some assistance.

However, it is appalling that the Westminster Christmas bonus is still set at £10. The Tories introduced such payments in 1972. Is it not astonishing that they are still set at £10 today? The Tories failed to uprate it in Government, and the Liberals and Labour did not rush to remedy the situation either. It is estimated that the Christmas bonus would be worth well in excess of £100 had it kept pace with inflation. During the cost of living emergency I call on the Tories, Labour and the Liberal Democrats to join with me in demanding that the bonus be uprated by the rate of inflation and recalculated to the value that would be necessary to compensate people for the failures of the past 50 years.

I will conclude with my usual mention of and tribute to the many food banks, support groups, advice agencies, housing associations and council services in my constituency. I am on their side, and I thank them for everything that they do.

We now move to the closing speeches. I call Foysol Choudhury to wind up the debate on behalf of Scottish Labour.

16:39  

I thank my fellow committee members and the clerks for their work in producing the report. We can all be proud of the report, even if the situation that it describes falls far short of ideal. As a member of the committee, I also thank the many organisations that gave evidence to us for their invaluable contributions. I agree with my colleague Pam Duncan-Glancy that it was an eye-opening experience.

The committee convener highlighted the section of the report relating to school meals debt. My colleague Martin Whitfield noted how little the threshold for free schools meals has changed in the past 20 years. I hope that the Scottish Government will look at the aspect of that that is under its control and make it part of any efforts to combat child poverty.

I agree with Paul McLennan that it is incredibly important, in relation to the issues discussed in the report, that the UK Government ensures that benefits are uprated with inflation. Maggie Chapman rightly noted the fundamental problems of low pay and in-work poverty and the need to address those.

I am grateful to Gillian Martin for highlighting the lack of data regarding people from ethnic minorities. That is a problem that we face all too often in the Scottish Parliament. My colleague Michael Marra noted the value of Scottish Labour’s cost of living plan and how a Scottish Labour-run council has been doing great work to take action on the cost of living.

A common theme that came up again and again in the committee and is represented in the report is that of false economy. We have systems in place to try to mitigate the effects of poverty and to try to ease people out of debt but, as Douglas Lumsden noted, the failure to provide and promote early intervention can lead to later, more costly interventions.

Evictions are an example of that. The committee heard that there is no moral or business case for threatening a tenant who is in arrears with eviction. The committee was told that the cost of evicting a single male with low support needs is in the region of £24,000. We begin to see a picture whereby every eviction is a failure. It is a failure of the system that should have been there to help and yet did not—it is a failure of the social safety net. That failure costs us even more in the long run.

Miles Briggs expressed his hope that UK Government policy on welfare could be looked at, given that the committee has heard that it perpetrates poverty in relation to young parents. I welcome that.

We see similar problems in the approach to debt—missed opportunities that cost more later. We cannot afford—monetarily or morally—to apply such false economies across our society. It is clear that we need interventions where they are most effective in people’s lives. Such interventions often end up being more cost effective for the state, too.

I urge the Scottish Government to think very carefully about its policy response to the committee’s report. We must be vigilant against a penny-pinching approach to early interventions.

Pam Duncan-Glancy highlighted the impact of funding cuts on the third sector organisations that are operating on the front lines of the crisis. The nature of that false economy—of trying to save money on early intervention services—can lead to catastrophic costs further down the line. Those costs can be greater both for the Government and for the real lives of the people behind the figures and case studies that we have heard about today.

I hope that the Scottish Government takes note not only of the scale of the challenges ahead, which the committee has highlighted, but of the strategic thinking that will be required to deal with them.

16:45  

I begin, like my colleagues, by thanking all those who aided the production of the committee’s report: the convener and my fellow committee members, the clerks and everyone who came to give evidence to the committee. A lot of work has gone into the report, and I hope that it can result in meaningful policy change for the better for those in Scotland who are struggling.

The convener helpfully set out the situation earlier when she said that we need Westminster, the Scottish Government and local government in Scotland to “work together”. However, I say gently to some SNP members that their speeches missed the point of the debate. To simply spend every minute of their speech criticising one of those three tiers of government, and not critiquing what is happening within local government or the Scottish Government, shows the weakness of their argument. Has Westminster got everything right? No, it has not, but neither have the Scottish Government or local authorities. We need to move beyond the idea that everything by Westminster is bad and everything by Scotland is good. We need those three groups working together in partnership for the sake of the people of Scotland.

I thank all the organisations—third sector organisations, in particular—that sent briefings for the debate.

The committee’s report makes it clear that there is a real and pressing issue with debt in this country. With more than 600,000 people struggling with debts of varying size, it is evident that the problem is not simply going to go away. There are key measures that can be taken in Scotland to help with that.

A number of great contributions have been made today, but I will focus on a couple of reflections that I believe are key to solving the crisis.

First, there is a need to be person centred and to take on debt and low income not as one big issue but by breaking the individual issues down. We have to acknowledge that each case is different and does not fit exactly into a cookie-cutter model. We need to look holistically across many council departments to ensure that income is maximised and that people are getting all the help that is available and everything to which they are entitled. Given that benefits are currently being provided both by the DWP and by Social Security Scotland, it can often be difficult for claimants to be certain that they are getting all the support that is available to them.

Jeremy Balfour will be aware that one of the duties on ministers in Scotland is to promote benefit entitlement. Does he agree that it would be helpful if the UK Government was to take the same position and actively promote the reserved benefits that are available to people in order to try to boost awareness of entitlement?

I will give you your time back, Mr Balfour.

Thank you, Presiding Officer.

I agree with the cabinet secretary that we need to promote all these benefits. When I have visited jobcentres in my region of Lothian and had conversations with the DWP, I have seen quite a proactive approach being taken. More can be done by both Governments, and I welcome what the cabinet secretary and the Minister for Social Security and Local Government have said about the fact that, at official level, there is a good working relationship. We have to recognise and build on that.

It is good to eliminate any stress or toll on people’s mental health, and mental ill health is closely wrapped up with debt as both a cause and a symptom. The report notes:

“2.5 million adults in the UK with a mental health problem considered taking or attempted to take their own life while behind on payments during the pandemic.”

That number is tragic, and it throws into sharp relief the burden that debt can bring for so many.

People who are struggling in that way can have a debt and mental health form completed by a GP. That can help them to get better support, and it could help to write off debt. In Scotland, GPs can charge around £25 for that form, but GPs in the rest of the UK are banned from charging anything at all. I join others in calling for the Scottish Government to mimic that ban to ensure that all barriers to access are removed for those who need that vital support. That is a small step that can be taken but that would have a large effect, especially if it is taken in conjunction with wider mental health measures that others have mentioned.

As the cabinet secretary has said, more must be done with campaigns and signposting by the Scottish Government, at Westminster, and by local authorities.

Let us have a look at what is happening on the ground for lone parents, women and disabled people. The report states:

“14.2 percent of people in Scotland were identified as being in problem debt. However, only 20.5 percent of this group sought advice from a free debt advice provider.”

We need to work harder on that. I and other members have raised that point with the cabinet secretary in this debate and in other debates, and we have asked whether she will commit to meeting the third sector to talk about three-year funding for the sector. The Government still has not given that commitment. I find that disappointing.

We took evidence from people who offer debt advice, who are worried about their jobs next year and are struggling with debt themselves. That seems to be a strange position.

I have suggested a couple of steps that the Scottish Government could take to address the burden of debt that many are struggling with. There is a danger that, having had a debate and made our political points, we will leave the chamber and pat ourselves on the back. However, that will not help my constituents or the people of Scotland who are struggling with debt. We need to lay aside some of our ideology and say, practically, how all of us—at Westminster and in the Scottish Parliament, the Scottish Government and local authorities—can help to make things easier. We need a cross-party conversation and cross-party working, and maybe less political ideology when we speak.

16:53  

I thank colleagues across the chamber for their contributions in what has been, overall, a very thoughtful and considered debate, as such a substantive and well-written report merits.

Before I turn to the report specifically, I will respond to some issues that members raised.

Pam Duncan-Glancy raised the issue of mental health and a moratorium. Obviously, we provided a response on that in our response to the committee. Perhaps I misheard what Pam Duncan-Glancy said. I clarify that we have consulted on that issue and we are seriously considering it. I also draw Pam Duncan-Glancy’s attention to our programme for government commitment to a bankruptcy and diligence bill in this parliamentary session. I hope that that provides some reassurance.

Martin Whitfield raised two issues with regard to free school meals and the UNCRC. I think that he also raised the issue of eligibility. I am happy to reflect on the latter point, although I recognise that local councils have discretion around eligibility.

We have engaged with partners on debt. I note that we operate within extremely straitened fiscal circumstances.

We are engaging with the UK Government on the UNCRC. The timetable will obviously depend on that process and, indeed, on what decisions Parliament wishes to take if and when that legislation is reintroduced.

With regard to the eligibility criteria, the power rests with the Scottish Government to increase the earnings amount that would bring families with children in secondary school within the remit of free school meals. That would make a substantial difference. Will the minister undertake to reconsider that and push other interested bodies to try to achieve it?

That portfolio responsibility does not rest with me. I am happy to consider it but, as public finance minister, I stress the extremely challenging fiscal environment in which we operate. However, I recognise the member’s sincerity in raising those points.

Maggie Chapman made a thoughtful speech that got to the heart of the matter. We want to move to a situation in which, rather than having to react and redistribute, our economy pre-distributes and works for all. That is a medium to long-term aspiration, but that does not detract from the need to take action here and now, at this most pressing of times.

Douglas Lumsden asked about the welfare fund review. My colleague the Minister for Social Security and Local Government will update the committee on that soon.

Michael Marra raised the issue of support for advice services. We are providing £12.5 million in support for advice services. I am sure that he will correct me if I misheard him, but I believe that he said that we had not provided additional support. We have: we are providing an additional £1.2 million to enable the expansion of energy advice services.

A number of members raised the issue of three-year funding and funding for local authority services. I will not rehearse all the arguments that we will, no doubt, have over the coming months as we move into the budget process, but the reality is that, as the SFC has indicated, we have a real-terms cut to our budget. That, of course, necessitates difficult choices, which have been compounded by the reality that there has been a £1.7 billion in-year erosion of our budget. Notwithstanding that, there is a real-terms increase in the total funding available for local authorities.

We set out our aspirations on longer-term funding through the resource spending review, but, as members will appreciate, the biggest determinant of funding that is available to the Parliament is still decisions taken at Westminster by the UK Government. Given the volatility and uncertainty that we have seen at Westminster—if I can put that politely—that situation creates problems in terms of our having long-term funding that cascades down.

The minister will acknowledge that civil servants, teachers and doctors are guaranteed funding for three years, so why is the third sector different?

The member makes an important point. As a Government, we have a legal commitment to things that we have to fund, but the reality is that, for the Scottish Government to be able to provide more certainty, we require more certainty. I do not want to labour the point, but as members will be aware, under the fiscal framework, we are very much dependent on public spending decisions that the UK Government takes.

As Jeremy Balfour will appreciate, we are in a period of extreme uncertainty and will not have more clarity until 17 November. Although we await what comes out in that announcement, the mood music is that there will be a significant change and that there might be a return to austerity. That creates an almost impossible situation for us. I could give the member numbers, but they could become completely meaningless on the other side of 17 November.

I turn to the committee’s inquiry. Its report brought into stark focus the price that many Scots are paying for living under a UK Government that is overseeing growth in inequality and poverty that long predates the current cost crisis. As we have heard, Brexit has made, is making and will continue to make all of us poorer. The economic chaos that was visited upon us by the mini-budget will be felt by families and individuals for many years to come, which will exacerbate the challenging circumstances that we already faced.

Everyone is hearing of friends and relatives facing eye-watering increases in their mortgage payments. Inflation on everyday goods such as food is at record levels and shows little sign of abating.

Although the rise in energy costs is a global phenomenon, the Westminster Government is doing less than others. It is ending the energy price guarantee in April, which appears to be a direct result of the reckless decisions that were taken at the mini-budget. As a consequence, more Scots are at risk of robbing Peter to pay Paul.

That is not the approach that the SNP-led Government is taking. Our commitment to fair work seeks to give people an effective voice, opportunity, security, fulfilment and respect. That is also about ensuring that work pays and offers a sustainable route out of poverty.

We are providing an additional £140 million to local government every year to help it to reach a pay settlement for its employees that provides more support for those on the lowest incomes. That is a good example of—as the cabinet secretary made clear in her opening remarks—this Government doing all that we can with the powers that we have to tackle poverty, protect people from financial harm and mitigate the effects of Westminster Tories being Tories.

Will the member take an intervention?

I apologise, but, having responded to other interventions, I am really pressed for time now.

Our response to the committee’s report was published in September. That set out the significant range of actions that national Government, local government and partner organisations are taking to improve the lives of everyone on low incomes and facing problem debt.

I will highlight a number of those actions, some of which have been mentioned today. This year, £3 billion has been allocated to mitigate increasing costs on households, of which £1 billion is available only in Scotland. Our package of family benefits is more generous than that in England and Wales. That includes the Scottish child payment, which, later in November, will have increased by 150 per cent in fewer than eight months. Our unique baby box is now in its fifth year, with nearly a quarter of a million delivered across Scotland. Last year, an additional £150 million was provided to children in receipt of free school meals through bridging payments, with the December payment being doubled to £260. Discretionary housing payments of £88 million have been provided to support households with housing costs. We have taken protections against increasing rents and eviction action through the Cost of Living (Tenant Protection) Scotland Act 2022. Furthermore, this year, we have invested £12.5 million in advice services and a further £2.3 million for the early resolution and advice programme.

We also have an important story to tell on council tax reduction. The council tax reduction scheme, which has been in place since 2013, is Scotland’s oldest social protection measure. Currently, 450,000 households benefit from that, resulting in average savings of £750 a year for recipients. However, as the committee has set out, more could be done to make people aware of their entitlement, to support those experiencing difficulty in paying council tax and to create greater consistency in collecting council tax. I undertake to fully explore with COSLA how we might take forward the committee’s recommendations in that regard.

Scotland has also developed a set of far-sighted protections and statutory solutions for people facing issues of problem debt, with debt advice at the heart of those mechanisms.

We identified and responded quickly to the cost crisis—as we did during the pandemic—and we have already introduced a number of protections for people who are most financially vulnerable. We have reduced bankruptcy application fees and have removed all fees for those on certain benefits. That measure was introduced in response to the pandemic, but it has now been made permanent. We have increased the moratorium period, giving individuals six months breathing space to seek advice free from creditor pressure. That measure is also now permanent.

We have increased the level of debt that is required for a creditor to pursue bankruptcy action through the courts. That is now fixed at £5,000 as compared with £3,000 prior to the pandemic. In addition, from today, the protected minimum balance that can be retained when a bank arrestment is executed rises to £1,000, thereby promoting greater financial resilience.

The committee rightly highlighted the strong links between problem debt and mental health issues. As I said to Ms Duncan-Glancy, I can assure members that we are working across Government to design and implement bespoke protections for people experiencing financial and mental health crisis.

The hugely successful debt arrangement scheme remains the UK’s only statutory debt repayment scheme. Recent improvements have seen increased participation, bringing important protections for those taking control of their debt. I can confirm that more action is planned on flexibility. However, I recognise that it can be challenging for people paying towards their debt through DAS, and the current economic chaos will be amplifying those challenges.

The committee has made a number of recommendations relating to fees and debt ceilings. I will consider all those carefully, not least at a stakeholder round-table meeting later this week. However, I can announce that, later this year, I plan to bring forward additional protections to help people who are managing and paying their debt. I look forward to discussing those issues at my round-table meeting.

I thank committee members and everyone who gave evidence for their input to and extensive work on the inquiry. Most important, we should all be grateful to everyone who shared their experiences of debt and financial insecurity, which was, at times, harrowing.

I do not underestimate how traumatic reliving those experiences will have been for some people, but I hope that they know that we hear them, that they have been listened to and that, where we can do more, we will do more.

I also thank colleagues for their contributions to the debate, which has provided us all with a sombre opportunity to reflect on the pressures that households across Scotland face.

However, it does not have to be this way. Scotland is a wealthy country with a Government that works hard to do right by our people. We have lower taxes, including in relation to council tax and water charges.

Minister, you are way over your time. Please conclude.

There is much more that we can do. Having grown up in the area that I did in Scotland, I recognise the difference that having a Scottish Parliament has made compared with the situation for people who grew up in my area 40 years ago.

Thank you, minister.

With independence, we can do so much more.

I call Natalie Don to wind up the debate on behalf of the Social Justice and Social Security Committee.

17:05  

The striking evidence that was taken during the committee’s inquiry and the contributions that have been shared in this afternoon’s debate have been very powerful. I am pleased that we have had the opportunity to reflect on the Social Justice and Social Security Committee’s important report and the wider context of the cost crisis, which is causing significant hardship across Scotland. We have heard substantial contributions from committee colleagues that have served to highlight the stark and, at times, really difficult accounts that we heard from our experts by experience, witnesses and third sector organisations.

I am grateful for the contributions from all members across the chamber, including those from the Government. I am also grateful to the clerks for all their work associated with the inquiry.

As we have heard, our inquiry highlighted a number of specific challenges that are faced by people who struggle with low income and debt. Members’ speeches have covered a lot of areas, such as the wide scope of the inquiry, and I will try to capture some of those points in my closing comments.

As the convener stated, the evidence that we received on public sector and council tax debt was striking. There are examples of councils working holistically and of people working with one another across local authority departments to join the dots in relation to debt that is owed for housing, council tax or school meals, and to put individual support in place.

However, that is not true across all authorities. Some councils are taking proactive steps to write off specific debts and work on debt management with clients, but there is a feeling that others are making up for lost time during the pandemic and are pursuing debt in a proactive and, at times, aggressive way. We know that people can be scared to answer the telephone or a knock on the door and that that can cause worry, anxiety and a deterioration in mental health. A consistent and compassionate approach is needed across all council areas.

A number of contributions have focused on free school meals, and rightly so. Our inquiry shows that, with the current accrual of school meal debt, families are struggling to feed their children now. We welcome the Scottish Government’s commitment to expand free school meal provision to all primary school children, but we urge it to implement that expansion as soon as possible and to encourage local authorities to finalise the work to allow the expansion to be delivered. By combining the individual write-off of existing school meal debt with the prevention of future accrual of such debt, we can eliminate this public debt, which burdens only low-income families.

I highlight the evidence that was received on the relationship between debt and mental health. Mental ill health can be both a cause and a symptom of debt problems, creating a vicious cycle that can be extremely difficult to break. There are many challenges in providing money advice to people with mental ill health, and the issue should also be an important consideration in service delivery. The majority of our experts by experience noted the impact of debt on their mental health through anxiety and depression, and they felt that mental ill health impacted on their ability to deal with their debt.

As the minister alluded in his closing remarks, people with debt problems in Scotland have the opportunity to enter a moratorium on diligence, which prevents creditors from being able to take debt enforcement action against them. The committee called for the system to be adapted to provide better help for people in mental health crises. We hope that practical proposals will be brought forward as a result of the Scottish Government’s consultation on debt solutions and diligence.

In relation to physical health, the committee received evidence that people living with disabilities face higher living costs and are more likely to live in poverty.

The convener of the Health, Social Care and Sport Committee echoed that, and some of the stories that she shared were sobering and highlighted the extent and outcomes of the increased spending that those with poor physical health and disabilities are currently experiencing. No one should have to fall into debt to keep themselves or their family members alive.

For some people with low incomes, bankruptcy might be the only way to get a clean slate. We looked at the statutory debt solutions that are available to people on low incomes to see whether any changes should be made to the legislative framework. We made recommendations on application fees for bankruptcy and minimum debt thresholds. I note the opportunity for quick action through the Scottish Government’s consultation on debt solutions and diligence.

Digital exclusion is another area that numerous members have picked up on today, and it was highlighted regularly in the committee evidence sessions. We heard that digital exclusion is holding people back from accessing debt advice and applying for jobs and benefits. The committee has asked the Scottish Government what measures it is taking to support access to free internet services and devices in public spaces. We have also asked the Scottish Government to work with the UK Government and stakeholders to consider whether a model similar to that used during the pandemic could be developed to allow free access to trusted money advice websites.

We welcome the Scottish Government’s commitment to enhance funding for Connecting Scotland, which can, for the remainder of this parliamentary session, provide free internet access for up to two years for those who are most in need. Overall, we urge the Government to consider how it can support low-income households to continue to access an internet connection in the longer term. It is absolutely vital that families that are making difficult budgeting decisions are not forced to sacrifice internet access when online connectivity provides an essential lifeline to many services.

Our inquiry and today’s debate have highlighted a number of key areas where we, as a committee and a Parliament, might wish to undertake more in-depth scrutiny. We thank the Scottish Government for its response to our report and look forward to receiving a response from COSLA and the UK Government to aid our discussions on the next steps. In isolation, some of the committee’s recommendations might seem small but, collectively, they could make a significant improvement for people with low incomes who are trying to manage problem debt. However, change will require co-operation between local authorities as well as the Scottish and UK Governments. Change will require us to listen to people’s experiences on the ground with compassion and empathy. For change, we need to reach out to people and offer support, and not always expect them to know where to go and what to ask.

As one debt adviser told us during our inquiry,

“A lot of people fall into debt due to a change in circumstances like a relationship breakdown, bereavement, losing a job or having a child. People don’t decide to spend, spend, spend and then be in debt. The idea of wilful debt is a myth—certainly in the clients I see.”

That is not fair. There should be no stigma to being in debt. Everyone deserves the opportunity to have a fresh start.