The next item of business is a statement by Nicola Sturgeon on the bedroom tax and discretionary housing payments. The Deputy First Minister will take questions at the end of her statement, so there should be no interventions or interruptions.
14:40
In the light of correspondence that I received from the United Kingdom Government on Friday, I wanted to take an early opportunity to update Parliament on the Scottish Government’s plans to mitigate fully the impacts of the bedroom tax on the 72,000 families across Scotland who are affected by it.
The Scottish Government has been consistent in our view that the only legal way to make regular and on-going payments directly to tenants to compensate them for the loss of housing benefit that has been suffered as a result of the bedroom tax is through discretionary housing payments that are administered by local authorities. We have also been clear that the cost of fully mitigating the bedroom tax would be up to £50 million a year.
As members are aware, councils will receive £15 million this year from the Department for Work and Pensions to spend on discretionary housing payments, which leaves a potential shortfall of £35 million in the funding that will be required to mitigate the bedroom tax fully. As members are also aware, John Swinney made that additional £35 million available in the Scottish Government’s budget for this year, with the express intention of fully mitigating the impact of that tax.
Some £20 million of that additional funding has already been allocated to councils. I can advise members that the distribution of that money among councils was agreed at the Convention of Scottish Local Authorities leaders meeting on 25 April. That agreement allows us to target the funding as much as possible according to need. I am happy to confirm that, as a result, 12 councils already have the funds that they need to mitigate fully the bedroom tax in their areas. The remaining 20 councils have been allocated funding up to the limit of the Westminster-imposed cap on how much each council is allowed to spend on discretionary housing payments. However, that still leaves them short of what they need to mitigate fully the bedroom tax.
The remaining £15 million that the Scottish Government has set aside is intended to make up that shortfall, but it cannot be provided to local authorities until the DHP cap is lifted. That is why, on 31 January, I wrote to the Secretary of State for Work and Pensions, Iain Duncan Smith, to ask him to lift the cap on DHPs. That move would cost the DWP absolutely nothing.
Since then, we have written on a further five occasions. I also raised the issue personally with the Deputy Prime Minister at the joint ministerial committee in London. I am grateful to the convener of the Welfare Reform Committee, who wrote to the DWP in similar terms, and to a number of organisations outside Parliament, including COSLA, that have made the same demand of the DWP.
It is fair to say that the delay in receiving a response from the UK Government has been deeply frustrating. Of course, while we have been pressing for an answer we have also been considering an alternative method of getting money to those who need it, but it has always been the case that DHPs are the best and most effective means of doing so. I was therefore pleased finally to receive a positive response from the Parliamentary Under-Secretary of State for Scotland, David Mundell, on Friday, in which he stated:
“I am aware that the Scottish Government has indicated that it would like to spend additional funds on DHPs in Scotland … I am writing to you today to offer to provide Scottish Ministers with a power to set the statutory cap in Scotland. I propose to do so using section 63 of the Scotland Act 1998.”
It is important to stress—as will be obvious from the quotation that I have just read out—that the UK Government has not agreed to lift the cap, but has agreed instead to transfer powers to the Scottish ministers to allow us to do so. I welcome that, but it means that the legal process to effect the transfer of power will have to be completed before the Scottish Government can lay an order to lift the cap. As members will appreciate, that two-stage process will take longer than would have been the case had the UK Government decided to lift the cap itself. It is therefore vital that we move to get the process under way and completed as soon as possible.
Section 63 of the Scotland Act 1998 provides an order-making power for the transfer of executive functions from UK ministers to the Scottish ministers. In this case, it is proposed to transfer to the Scottish Government executive responsibility for the exercise of the power that is contained in the Child Support, Pensions and Social Security Act 2000 to vary the DHP cap.
The procedure for making a section 63 order is set out in the Scotland Act 1998. First, the terms of a draft order require agreement between the Scottish and UK Governments. The order then requires to be laid before both Parliaments for agreement and, ultimately, it has to be considered and approved by the Privy Council. I have written to David Mundell accepting the UK Government’s offer to transfer the power and to say that my officials will work with UK Government officials on the detail of the order. I can also advise Parliament that I will meet David Mundell tomorrow to discuss the draft order and the timescales for agreeing the final terms for laying it before both Parliaments and for having it considered by the Privy Council.
I undertake to write to MSPs as soon as I can to provide an update on the likely timescales for each stage of that process, including—of course—the parliamentary scrutiny stage and, indeed, the timescale for completion of the process. When the section 63 order has taken effect, Scottish ministers will then be able to lay an order varying or lifting the cap on DHPs. We will ensure that the order allows utilisation of the entirety of the £50 million that is available. We will also ensure that the order is laid as quickly as possible.
Although there is, as I am sure members will appreciate, still much work to be done to ensure that the process is completed smoothly and quickly, it is important today to stress that local authorities should now plan on the basis that all losses of housing benefit that are incurred by social tenants because of the bedroom tax can be fully mitigated. As I said earlier, £35 million of the available funding has already been allocated and 12 councils already have sufficient funds to mitigate fully the bedroom tax in their areas; those that still have a shortfall can now plan on the basis that that shortfall will be met in full.
I will shortly respond to a letter from the president of COSLA and will give local authorities these reassurances in writing. I assure Parliament that we will start working with COSLA immediately to ensure that distribution of the remaining funds will get the money to where it is needed in order that the bedroom tax is fully mitigated in every local authority area in Scotland.
I want today to encourage local authorities to review their discretionary housing payment procedures to ensure that there are no unnecessary barriers to tenants applying for a DHP. The point about encouraging and enabling tenants to apply for DHPs is a very important one. The Scottish Government is able to mitigate the impact of the bedroom tax; unfortunately, however, we are not yet legally able to abolish it. That means that tenants are still legally responsible for the rent that is due as a result of the reduction in their housing benefit. It is important, therefore, to send this very clear message to social tenants today: If you are affected by the bedroom tax, help is available, but you must apply for this help. You must engage with your landlord and apply for a DHP as soon as possible to enable you to pay the shortfall in your rent, and you should do so even if you have been refused a DHP in the past.
Let me make it clear today that as a result of Scottish Government action, there will be no need for anyone to fall into rent arrears or to face eviction as a result of the bedroom tax. [Applause.] I hope that this statement has been helpful in setting out the steps that we now require to take to make good on our commitment to mitigate fully that iniquitous tax. I am proud that this Parliament has come together to protect the people who are affected by the bedroom tax, and I want to thank members in the chamber, including those on the Labour benches, who have worked with us to achieve that.
However, I will close with this reflection. There can surely be no better or stronger illustration of the need for this Parliament to have powers over welfare than the scandal of the bedroom tax. It simply cannot be right—it is not right—that a tax is imposed on Scotland against our will by a Westminster Government that we did not vote for, thereby forcing the Scottish Government and the Scottish Parliament to divert money from other devolved responsibilities in order to mitigate its impact, and then, to add insult to injury, for us to have to jump through legal hoops to be able to spend the money that we have set aside. That makes no sense whatsoever.
What would make sense is for this Parliament, rather than having to mitigate the bedroom tax, to instead have the power to ensure that we do not have a bedroom tax in the first place. With full powers over welfare and taxation, this Government and this Parliament will be able to make the right decisions for the people of Scotland on such vitally important matters. That will be a much better position for all of us.
The Deputy First Minister will now take questions on the issues that have been raised in her statement. I intend to allow 20 minutes for questions, after which we must move on to the next item of business. It will be helpful if members who wish to ask a question press their request-to-speak buttons now.
I say to members at the outset that we will be extremely tight for time all afternoon, so I ask that questions and answers be kept as short as possible. In that way, I hope to allow everybody to get in.
I thank the cabinet secretary for an advance copy of her statement.
This day has been a long time coming; in fact, it has been over a year since Scottish Labour called for the SNP to help people who are struggling with the bedroom tax. The SNP has rejected our calls at every turn—preferring to use people’s misery to boost its vote in the referendum instead of using the powers that it has now. We should be in no doubt that it has those powers. We demonstrated that, but the SNP preferred to blame the Tories instead of looking at what it can do now to protect people.
It took mass campaigns, petitions to Parliament and a member’s bill to force the SNP to act. It bowed to that pressure last September and announced an extra £20 million as a response to the member’s bill, but that amount fell well short of what was required. Finally, at the budget in February—again, in response to Labour’s persistent calls—the SNP finally agreed to mitigate the bedroom tax fully. At every step of the way, we have pushed and pulled the SNP along. The delay is the SNP’s. I want to know why it has taken more than a year for action to be taken by this Scottish Government.
Although I absolutely welcome the transfer of power from the UK Government to the Scottish Government using a section 63 order, we could have done this a lot quicker. We need to be swift in implementation so that the burden of the bedroom tax is lifted from everyone in Scotland. The cabinet secretary agrees that the bedroom tax is wrong and she agrees that it should be fully mitigated. Does she therefore agree, given the underspends in some local authority areas, to cancel out any bedroom tax debt for 2013-14?
It did not take Jackie Baillie long to shatter any sense of consensus.
I have already, in my statement, made it clear that I agree with Jackie Baillie about the importance of moving swiftly now to get the powers and to exercise them, and I undertake—again—on behalf of the Scottish Government to do everything in our power to do so.
The fact of the matter is that the Scottish Government has, all along, done everything that we could within our powers and our resources to mitigate the bedroom tax. It is not easy for John Swinney to find millions of pounds to mitigate a policy that has been imposed by a Westminster Government, but last year we found £20 million and this year John Swinney has found £35 million. It is interesting that the Labour Administration in Wales last year found a grand total of £1.3 million, and so far this year has contributed nothing, as far as I am aware, to mitigation of the bedroom tax. Perhaps Labour should spend more time directing its remarks at its own colleagues.
In continuing to attack the Scottish Government on the bedroom tax, Labour is aiming at the wrong target. The responsibility for the bedroom tax and its consequences lie with the UK Government. We are doing what we can to mitigate it, and that should be welcomed, but mitigating a policy will never be as good as having the power to abolish it. That is why Labour’s position on the matter, however sincere it might be, will always lack credibility for as long as it is content to leave the powers over welfare in the hands of a Tory Government at Westminster.
I take this opportunity—for no one else will—to pay tribute to the work of David Mundell MP for his great efforts to ensure that an alternative plan was put in place, should this Government have decided to take it up; for his shuttle diplomacy around Scotland’s local authorities; and now for the solution that has been placed in the Government’s hands, which not only demonstrates the effectiveness of the devolved settlement but solves the problem by devolving additional powers, which is something that this Government has always been keen on.
While this Government and the majority Opposition party argue about the success of their various campaigns, may I take this opportunity to ask one question that no one else has asked? What now for the tens of thousands of Scottish households that have been assessed as being overcrowded and who are languishing on waiting lists, in need of rehousing? Will this Government concentrate efforts and resources on delivering for those people, instead of claiming victory while ignoring the problem that we were trying to address?
I look forward to meeting David Mundell tomorrow and I am grateful to him for doing what Iain Duncan Smith has failed to do for three months, which is to reply to the Scottish Government’s request. I give David Mundell credit for that. To this day, I am not sure why it has taken the UK Government so long to decide to pass a power to the Scottish Government to allow us to do the work to lift the cap. It seems to me that the UK Government could have agreed to do that very quickly.
I welcome all additional powers, so I welcome the transfer of power to enable us to mitigate the bedroom tax, which we will use to the full. However, the additional powers that I want are those that will enable us to ensure that we do not have a bedroom tax in Scotland in the first place. I am talking about full powers over welfare, so that we can stop the Tory Government dismantling our welfare state and instead build a welfare state that fits the needs and values of people throughout this country.
On Alex Johnstone’s question about housing investment, this Government is investing significant sums of money in affordable housing. We are also, in the teeth of opposition from Alex Johnstone and his colleagues, abolishing the right to buy, so that we can safeguard social housing in order to meet the needs of people who rely on it.
We will continue to do that, but we will never be part of an attempt—such as the Tory Government has clearly made—to penalise people for what it obviously considers to be the crime of being poor. We are on the side of people who are struggling to get out of poverty. That is the difference between this Government and the Tory Government at Westminster.
The DWP currently provides £15 million of the £50 million that is required to mitigate the bedroom tax. Does the Deputy First Minister share my concern that the UK Government might choose to withdraw that funding at any time?
Yes. That is a real concern and it is something on which we will continue to engage closely with the UK Government. Until such time as this Parliament has full powers over welfare—I hope that it will be sooner rather than later—it is important that the UK Government continue to provide that support.
I go back to my original point. The imposition of wrongheaded policies that require money to be taken from other areas in order to mitigate their impact is not the best way of governing a country. It would be far better if this Parliament had the ability to decide on the kind of welfare policies that we want and to fund them properly, rather than being in the ridiculous situation of having to pick up the pieces of the mess that Westminster has made.
I thank the Deputy First Minister for the advance copy of her statement. She knows that I have taken a close interest in the matter for some time in relation to, first, increasing the DHP funds that the UK Government provides, and secondly, lifting the cap. John Swinney and I have been in regular dialogue about the matter, and I am pleased that change is about to be made.
I spoke to the Secretary of State for Scotland in the past few days, and he told me that the order to which the minister referred in her statement will be processed with the necessary speed, so that we can get on with it. I tell the Deputy First Minister that I will continue to provide constructive support in this matter.
I take the opportunity to thank Willie Rennie for his contribution. I know that he has tried to help to get us into the position in which we are now in. I welcome his report of a commitment from the secretary of state to a swift process; I will be looking to pin down that commitment when I meet David Mundell tomorrow.
I welcome Willie Rennie’s offer to continue to be constructive. I regret that we have a Tory-Liberal Government at Westminster that is imposing a policy that necessitates our efforts to mitigate it; nevertheless, I take Willie Rennie’s contribution in good faith and will continue to ensure that we work together in Parliament to do what we think is right, which is to take away the impact of this iniquitous policy.
On the basis that the Scottish Government’s mitigation of the bedroom tax means that funds must be diverted from other Scottish budgets to pay for Westminster mistakes, does the Deputy First Minister think that it is misleading and absurd of the UK Government to claim that an independent Scotland could not meet the social protection needs of her people?
That claim is not only ridiculous, but completely and utterly false. The fact of the matter is that social protection payments are more affordable in Scotland than they are in the rest of the UK. They take up a smaller proportion of our tax revenues, our gross domestic product and our economy as a whole, so we can more than afford to support a decent welfare system of our own.
What we lack in Scotland and in this Parliament is the power to determine what that system looks like. The time has long passed when we were prepared to watch Westminster Governments dismantle the welfare state; instead, we should take the powers that would allow us to build one that is fit for purpose and of which this Parliament and country can be proud.
The Deputy First Minister said in her statement that no one need fall into rent arrears or face eviction due to the bedroom tax. That is very welcome. However, the point is to ensure that no one affected need pay it at all, which is an objective that we share. Will she categorically confirm that any tenant affected by the bedroom tax who applies for DHP support will automatically get it? What plans does she have to ensure, proactively, that such tenants apply?
My answer to that question will be in two parts. First, Iain Gray knows as well as I do that local authorities administer discretionary housing payments and that they require to receive, assess and adjudicate the applications. I make it absolutely and unequivocally clear that the purpose of the money that the Scottish Government is making available to local authorities in this year in our budget is to ensure that no tenant is affected by the bedroom tax. We will expect local authorities to operate the DHP system and provide the money that we have made available in a way that delivers that objective. If Iain Gray or any other member has concerns that that is not happening, I am sure that they will feel able and free to bring that to my attention.
I turn to the second part of Iain Gray’s question. I am grateful to him for giving me the chance to reiterate a point that I made clear in my statement. If I have a concern about this, it is that people reading the newspapers, watching the television and hearing the statement may think that they no longer have to think about the bedroom tax. However, we are not able to abolish the bedroom tax. The legal responsibility to pay the shortfall in housing benefit lies with the tenant. The help is available as a result of the money that we are making available, but tenants must apply for it.
I hope that all MSPs will help to communicate that message through their constituency networks. I know that local authorities and housing associations will take the time and make the effort to communicate that message to their tenants, and we in the Scottish Government will also do everything that we can to make sure that that message gets across fully.
I welcome the eventual decision to allow the Scottish Government to lift the cap. That will be very reassuring to the people I know who suffer from motor neuron disease and live in adapted homes and who were told by Lord Freud to take in a lodger or work longer hours, or risk losing their homes, as some already have. Surely full control of welfare is the only way to protect those vulnerable people.
Christina McKelvie raises an important point because, as members are aware, a significant proportion of the households affected by the bedroom tax contain at least one person with a disability, which is one of the reasons—it is not the only reason; it is one of the many reasons—that makes this tax so deeply unfair, wrong and iniquitous.
We need to do what we can to mitigate the bedroom tax, which is why I have set out the action that we are taking. Christina McKelvie is correct—this takes us back to the point that Iain Gray just raised—that we are not able to abolish the bedroom tax. I want us to be in a position in which we are not asking tenants to apply for help to enable them to mitigate the impact of the bedroom tax; I want us to be in a position in which we can abolish the bedroom tax. As a Government, we have made it clear that, if we get those powers, we will immediately exercise them to ensure that the bedroom tax is, once and for all, a thing of the past.
The cabinet secretary has quite rightly raised concerns about the timescale of the introduction of the section 63 order. I think that the last time that that procedure was used in the Parliament was in relation to the Rural Affairs and Environment Committee in 2008. We could be looking at having the order in front of Parliament in November or December at the earliest. Will the cabinet secretary confirm that that is the case?
In the meantime, the cabinet secretary says that that is the only way in which moneys can be got to those who are affected. However, some local authorities have told the Welfare Reform Committee that they have ideas and schemes for providing support and that those methods have been approved by Audit Scotland.
Is the cabinet secretary able to assure us that no local authority that has a mechanism for getting assistance to people will be prevented from using it and forced to pursue the Scottish Government’s preferred method of DHPs?
I understand and share some of Michael McMahon’s concerns about timescales; indeed, that is why I put such an emphasis on the issue in my statement. I will come back to that matter in a second.
Assuming that, as is our clear intention, we are able to get the power transferred and to exercise it timeously to get to local authorities the full £50 million—£35 million of which will come from the Scottish Government—I believe that there will be no requirement for local authorities to look at alternative schemes. Having looked very closely—as I am sure Michael McMahon has—at the examples that he is talking about, I think that no alternative scheme works as well or as directly as getting money to tenants through discretionary housing payments, and it is our intention and objective to ensure that we use that route to channel all the available funding.
I am obviously aware of the precedents for the use of section 63 orders. I repeat what I said in my statement: following discussions with David Mundell, I will update MSPs as soon as I can on what I consider to be the likely timescales for every stage of the process. It has to be done as quickly as possible, and I certainly hope to be in the position of bringing an order to Parliament earlier than the timescale indicated by Michael McMahon, which is based on precedent. However, I will be in a better position to advise MSPs once I have had the discussions that I referred to, and I certainly take heart from the secretary of state’s comments, as reported by Willie Rennie, which suggests a willingness by the UK Government to move as quickly as possible on the matter. The Scottish Government will certainly be willing to move quickly.
The process need not be overly complicated. Let us get the power transferred; once that happens, we can move quickly to exercise it.
Although I welcome the announcement, does the Deputy First Minister consider that the new power will assist people who have been left with no choice but to use food banks to feed themselves and their family? If not, what support is the Scottish Government able to provide in that respect?
Taking away the impact of the bedroom tax will obviously help a lot of people. As I indicated, more than 70,000 families are affected by the bedroom tax, and they are the people who will be helped by the action that I have outlined this afternoon.
Nevertheless, it is important to point out that the bedroom tax is but one aspect of the welfare cuts and changes that the Westminster Government is implementing, and many other changes are having a big impact on people. It is estimated that, cumulatively, those changes will drive up to an additional 100,000 children into poverty by 2020, and the changes as a whole are driving the explosion in demand for food banks.
It is a scandal that in a country as rich as Scotland so many people are reliant on food banks but, as the member will be aware, we as a Government are seeking to help with the provision of food banks as much as possible. I recently announced additional funding for that, and we will continue to help. However, we need to get ourselves into a position where we are not sitting by passively while policies get implemented that consign so many more of our children to a reliance on food banks and drive them into poverty, and that will happen only when we are responsible for designing our own welfare system.
Although both the Government and the Opposition should be proud of their work on defeating the bedroom tax in the social rented sector, the Deputy First Minister will be aware that it was introduced first in the private rented sector. Does she agree that, with property for social rent unavailable and owner occupation unaffordable to many people, the private rented sector is not just a free market choice and that our long-term ambition should be to reverse the introduction of the bedroom tax in the private rented sector in an independent Scotland?
Although I have great sympathy with Patrick Harvie’s view, he will understand why with the powers and resources that we have at the moment we are right to focus on the bedroom tax in the social rented sector; indeed, I know that he agrees with our approach. He will be aware of the Government’s commitment to improving the provision and quality of accommodation in the private rented sector; nevertheless, I certainly have a lot of sympathy with the long-term ambition that he has asked me to share.
In the meantime, of course, we must continue to do as much as we can to provide good-quality social rented accommodation to ensure that we do not end up in the situation that Patrick Harvie has described where people cannot afford to own property and do not want to be in the private rented sector. We will continue to focus on a range of things to achieve that ambition.
The cabinet secretary will be aware of the wide disparity in DHP awards, with an average award of £710 in Aberdeen, compared with £140 in South Ayrshire, and 45 application refusals in Stirling, compared with 7,500 in Glasgow. What is the Scottish Government doing to ensure that the money that it is responsible for distributing though DHPs is awarded equitably and fairly?
I will repeat something that I said to Iain Gray, which is a statement of fact: it is the responsibility of local authorities to administer DHPs and we do not have the power to direct authorities as to exactly how they do that. We have made it very clear that the whole purpose of making the money available and of getting the power to increase the cap is to enable enough money to be available through DHPs to mitigate the bedroom tax fully. The decisions that are being made on DHP applications have to reflect that.
The average DHP award overall was £357 in the last financial year, and more than 70,000 awards were made in total. We have gone to great lengths to make that money available and to get the power that we need to spend it.
To be fair to local authorities, in the main, they dislike the bedroom tax and its impact as much as the Scottish Government and the Opposition do. I know that they will wish to work with us to ensure that what I have announced today has the effect that all of us want it to have.
My apologies to Sandra White and Alex Rowley for the fact that I was not able to call them. We need to move on to the next item of business.
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