Meeting of the Parliament

Meeting date: Tuesday, April 23, 2013

Official Report 756KB pdf

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Welfare Reform

The next item of business is a debate on motion S4M-06244, in the name of Michael McMahon, on behalf of the Welfare Reform Committee, on the impact of welfare reform on Scotland. Mr McMahon, you have up to 13 minutes. We are very tight for time today, so members should stick to their allotted times.

14:21

I am pleased to open this debate on behalf of the Welfare Reform Committee.

The rhetoric around welfare reform and the United Kingdom Government’s austerity agenda has been discussed at length. In having this opportunity to address the topic and speak on behalf of constituents who are extremely concerned about the impact that welfare reform will have on their families, I feel confident in saying that representatives in this Parliament are all in it together.

The motion invites the Parliament to note the research that the Welfare Reform Committee commissioned from Sheffield Hallam University. I place on record the committee’s thanks to Professor Steve Fothergill and Professor Christina Beatty for their work in producing the research.

The purpose of the research was to analyse the impact of welfare reform on Scotland, nationally and across each of the 32 local authority areas. The headline figure is that the UK Government’s package of welfare reforms will result in a loss of £1.6 billion per year to the Scottish economy. That averages out to about £480 for every working-age adult in Scotland.

I want to go beyond the headlines and say a little about what the figures actually mean. The loss per year is averaged out across the working-age population, but we know that it will be experienced by a far smaller group of people. Within that smaller group, we know that particular people face the biggest losses. Women, one-parent families and disabled people will be faced with losses that are far greater than the majority of members would think are fair.

The committee’s report details the impact of nine aspects of welfare reform. I will highlight the potential impact of just three: incapacity benefit; the move from disability living allowance to personal independence payments; and the underoccupancy provisions for people in the social rented sector, which are otherwise known as the bedroom tax.

I quote from page 10 of our report:

“Sickness and disability claimants can also expect to be hit hard. The individuals adversely affected by the incapacity benefit reforms can expect to lose an average of £3,500 a year, and those losing out as a result of the changeover from Disability Living Allowance to Personal Independence Payments by an average of £3,000 a year. Often these will be the same individuals: most DLA claimants of working age are out-of-work on incapacity benefits and in both cases the groups most exposed to benefit reductions are those with less severe disabilities or health problems. The same individuals may also find that they encounter reductions in Housing Benefit entitlement.”

Therefore, a person could be faced with a loss of income of around £7,000 a year, simply as a result of three of the nine benefit changes that were analysed in the research. That is a £7,000 loss each year for individuals who are among the most vulnerable in our society.

Beyond that financial loss, vulnerable people are being threatened with the loss of security in their lives, such as the security of a safe home, close to the support of family and friends. Just this morning, the committee heard from people who feared the loss of those securities.

Who is being affected by these so-called reforms? Is it the apparently feckless claimants who see a life on benefits as something to which they are entitled? Is it the families who have not worked in three generations—families that the Joseph Rowntree Foundation found no evidence of when it carried out research in some of the country’s most deprived areas? Or is it the many people who have told the committee their stories, expressing their fear, confusion and anger when faced with the tattered rag that has replaced the safety net of the welfare state? Those people include Ian Megahy, a veterinary surgeon, who explained that, when he had to stop work:

“I was a senior partner in my own practice and a part-time university lecturer.

Before I stopped work, a client took my business partner aside and virtually accused him of being a callous so-and-so for allowing me to be at my work. A lot of the general public think that the chronically ill are feckless people who give up, sit about and do not try. I have made massive efforts to get better. I have a list of 38 treatments—medicines, procedures and so on—that I have tried. I desperately want to get back to my work. I love my work.”—[Official Report, Welfare Reform Committee, 5 February 2013; c 530.]

They include Henry Sherlock, who said:

“I fear, without a doubt, I will only lose more income once I have to go through this undignified process once again. I am tired of fighting officials who seem to think they know more about my disabilities and needs than I do. It now makes me feel ashamed of who I am. I am being punished for being disabled and feel powerless.

Being blind is an isolating disability. If my benefits are slashed in any way, I will become even more isolated. I would not be able to afford to use my computer. This is the only true way of providing me with information and communication. I would not be able to afford the Internet, which will cut me off from family and friends. I would not be able to afford the additional high cost of assistive technology I use, which will leave me in danger. I will not be able to afford the support I need.”—[Official Report, Welfare Reform Committee, 18 September 2012; c 248.]

There was also Lesley McMurchie, who told us:

“My husband paid in for many years with the view that, when he was older ... he would be looked after. He is not being looked after. In fact, the state has contributed to putting him in a worse position than he was in in June last year. I am a history graduate and I thought that, when we set up the welfare state, it was to be there for people such as my husband who worked hard and did his best so that, in times of need, something would be there for him, but it is not there. ... There should be something there for those hard-working men and women who have contributed to society; they are being left with nothing.”—[Official Report, Welfare Reform Committee, 5 February 2013; c 533.]

On the point about something needing to be there, does the member think that there is enough there to help the 45 per cent of people on benefits who have a mental health problem? Are we doing enough for them?

That is a very easy question to answer: no, we are not. Indeed, in relation to that point, I will talk later about some of the evidence that we heard this morning. Instead of not doing enough for them, we seem to be doing less and are putting them in an even more difficult situation. I do not really think that that question helps Mary Scanlon’s position at all.

Mr McMahon, I draw to your attention and remind you of the fact that these are the committee’s views; it is not meant to be a political statement.

When I am asked a political question, Presiding Officer, there is only one way in which I can answer it.

I am sure that no one in the chamber this afternoon will be surprised to hear that the research highlights the link between the areas of higher levels of deprivation and the impact of welfare reform. Put more bluntly, the result of these welfare reforms is that the poorest areas will get poorer.

It has been understood that the biggest impact of welfare reform on an area basis will be felt in Glasgow. According to the research figures, the impact will be £279 million a year or £690 for every working-age adult. Across the UK, that puts Glasgow second only to Birmingham in terms of absolute financial loss and 23rd out of 379 districts in terms of average loss per working adult.

Many of the witnesses who gave evidence to the committee said that they supported some reform. Did the committee consider what types of reform people would prefer to see?

I am coming to the evidence that we took this morning. This morning, a lot of witnesses said that they understood that the system had to be reformed and streamlined. No one disputed the fact that a system that is 60 years old may not be fit for purpose in the modern era. I do not think that any of us has ever heard that argument. However, to be fair to the committee, in the first year we have worked towards identifying a picture of where the impact of the changes will fall.

A lot of the issues that must be dealt with are devolved, and the committee has been encouraged by the positive nature of the regulations and changes that the Scottish Government has brought forward in response to the welfare reform changes. We have looked at what changes can be made so far and have built up a picture of what the impact will be. I assure the member that, as we move forward, based on the evidence that we heard this morning, the committee will make recommendations on where more mitigation could come from. We will also continue to criticise the Welfare Reform Act 2012 when we see the impacts that it is having on people. I will speak about some of those.

Unfortunately, this morning’s evidence session was informal—it was not televised or officially reported—but it was open to the public and the media were there. The reaction that we have had from the public and the media who were there will make difficult reading for people in their newspapers tomorrow morning. We heard a woman break down in tears talking about having to eke out her money by eating toast for a week because of the money that she will lose through the bedroom tax. Anyone in Glasgow this morning who shed a tear last week might have found the space to shed a tear for that woman as well.

We heard from people with learning disabilities—people who have steady supported lifestyles at present. A married couple who both have learning disabilities are now fearful of losing their home because they will have the support that they have depended on taken away from them. For anyone not to be moved by what we heard this morning and not to want to see changes to the welfare reforms that are being implemented would be beyond anyone’s measure.

So, yes, we will produce some suggestions. To hear witness after witness talk about their individual experiences and then to see the research report that shows how widespread the impacts will be, not just in Scotland but throughout the United Kingdom, demands that we look for alternatives and see where we can have change.

I close with the words of Marlene Hepburn, who appeared before the committee earlier this year. When she was asked what questions she would put to lain Duncan Smith if she had the opportunity, Marlene responded:

“I would just ask him where is his heart and where is his sense.”—[Official Report, Welfare Reform Committee, 5 February 2013, c 532.]

Looking at the findings of the research and at the impact that welfare reform will have on the most vulnerable in our society, it is difficult to find an answer to that question. How helpful it would be if the secretary of state would show the respect that is due to this Parliament and the people of Scotland and appear before the Welfare Reform Committee to provide some answers. If members on the Conservative and Liberal Democrat benches have any influence at all, they might want to impress on their colleague at Westminster the need for him to come and talk to us about the evidence that we have heard from people, which I have outlined, including those from whom we heard this morning. If he were to do that, it might change his views.

On behalf of the Welfare Reform Committee, I move,

That the Parliament notes the Welfare Reform Committee’s 2nd Report, 2013 (Session 4): The Impact of Welfare Reform on Scotland (SP Paper 303), commissioned from Sheffield Hallam University.

14:34

The motion asks us to note the Welfare Reform Committee’s second report, “The Impact of Welfare Reform on Scotland”. For the Government’s part, I am happy to note the report. I welcome the report and the committee’s work in general as a very valuable contribution to a growing body of evidence on the dreadful and, as we have just heard, at times heartbreaking impact of the UK Government’s welfare reform agenda.

The independent experts from Sheffield Hallam University have reached the same conclusion that the Scottish Government reached when we carried out our analysis of the vast sums that are being taken out not just of the pockets of already vulnerable and hard-pressed people in Scotland but of local economies across the country as a result of the reforms. To be frank, the numbers are alarming. Professors Beatty and Fothergill find that when the reforms take full effect, they will take more than £1.6 billion a year out of the Scottish economy.

The cabinet secretary mentions the £1.6 billion that is highlighted in the report. Does that mean that she is opposed to all those reforms? That is the implication of what she said.

If, as a supporter of the United Kingdom Government that is implementing the welfare reforms, Willie Rennie would care to listen to what I am about to say, he might learn something about the impact of the reforms on ordinary people across Scotland.

I was coming on to talk about one of the changes that the Sheffield Hallam University research does not take account of—the decision by the Chancellor of the Exchequer in the June 2010 budget to change the basis on which benefits were uprated from the retail prices index to the consumer prices index. That would raise the figure from £1.6 billion to £2 billion. Over the five years to 2015, the total impact will be that £4.5 billion will be taken out of the pockets of hard-working people on low incomes, families, people with a disability, social housing tenants and people in other vulnerable circumstances.

Gavin Brown (Lothian) (Con) rose—

Before Gavin Brown starts talking about the ability or otherwise of an independent Scotland to pay for welfare and social protection payments, I point out that if we were independent, such payments would represent a smaller percentage of our overall wealth than is the case under the present arrangements—in other words, they would be more affordable, not less affordable, and we would not have to be subjected to the policies of a Tory Government that we had not voted for.

I am grateful to the cabinet secretary for giving way eventually.

The change to the use of the CPI makes up the largest single change, as her report shows. Will the Scottish Government make a clear commitment to reverse the decision to use the CPI, were responsibility for welfare to be devolved?

Is Gavin Brown making the argument that we should have those powers? If he wants to argue for us to have those powers, I will be happy to put forward the Scottish Government’s policies in an election in an independent Scotland, when we can make choices that are in the interests of the people whom we represent, rather than choices that are imposed on us.

Will the cabinet secretary give way?

No, I want to make progress.

A total of £4.5 billion is being taken out of the pockets of the poorest in our country. In other words, the UK Government is hitting people whom society should be helping rather than harming—people whom we should be protecting rather than pillaging. That is absolutely shocking. The committee’s report is a reminder of the fact that the UK Government is penalising the poorest in our society and—even worse—is failing to give us the full picture. Michael McMahon was right to say how utterly shocking and unacceptable it is that the UK minister who is imposing the welfare changes will not appear before the Welfare Reform Committee in public session to justify the UK Government’s decisions.

The committee’s report and the Scottish Government’s report are based on information from a variety of publicly available sources. They tell a story that the Department for Work and Pensions does not want people to hear; it prefers to peddle the myth of scroungers and skivers instead of focusing on the story that is playing out across Scotland right now. That story involves the changes to tax credit, the changes to child benefit, which is no longer a universal bond from one generation to the next but a muddle of confusion and unfairness, the changes to disability benefits that Michael McMahon told us about and—perhaps most seriously to date—the introduction of the bedroom tax.

The bedroom tax has been the subject of a great deal of discussion in the Parliament. I want to make two fundamental points about the policy. One is about fairness and the other is about the differing circumstances that exist in different areas of the country. I also have a general point to make about respect for devolution and the policy responsibilities of the various Administrations. It is clear from the bedroom tax that the UK Government has respect neither for fairness nor for the principles of devolution.

As we have discussed many times, the bedroom tax is patently unfair. It is a policy that has been designed to constrain out-of-control housing benefit in London, but which will wreak havoc on the rest of the country. Over the past 10 years, housing benefit expenditure in the social rented sector in Scotland has increased by only 6 per cent. The bill for Great Britain as a whole went up by 53 per cent in the same period. The vast majority—93 per cent—of the increase is attributable to England and almost a third of it is attributable to London. The picture is dominated by London and the south-east and yet we are being asked to pay the price for a policy that has nothing to do with the situation in Scotland.

Will the minister give way?

I have to make some progress.

It is clear that the UK Government is using national policy to address a localised issue. I am not telling anybody here anything that they do not know when I say that I do not like the fact that welfare is reserved to the UK Government, but that is the situation at the moment. However, the blunt tool of the bedroom tax cuts right across our devolved policy responsibility for housing. Quite apart from the rights and wrongs of the policy—frankly, I cannot see many rights of the policy—in my view it is not on for the UK Government to intervene on housing issues in the devolved context, which is making it more difficult for the Scottish Government to deliver on its housing responsibilities.

The reforms call into question the role of support for housing in a civilised country. Access to decent housing is a fundamental need and right. That should go without saying, but it needs to be said, because this UK Government is eroding our capacity to deliver.

As I have said many times, the Scottish Government is doing everything it can to help mitigate the impact of these changes, with £2.5 million being made available for social landlords to provide the advice and information that they will need to give tenants who are affected by the reforms. That is on top of the £5.4 million that the Government committed for advice and information in respect of welfare reform more broadly, part of which is an advice fund for providers in the third sector and local government and the rest of which is directly supporting key advice bodies such as Citizens Advice Scotland.

We have introduced council tax reductions to replace council tax benefit. With local government providing an extra £40 million to close the gap caused by the UK Government’s cut, we set up the Scottish welfare fund—another key strand of our activity to ensure that we are doing everything we can for the most vulnerable across Scotland.

We will continue to do everything we can to mitigate the impact of these changes that we do not support. The fact of the matter is that for as long as welfare powers remain in the hands of the Westminster Government, rather than in the hands of this Parliament, we will be at the mercy of policies that we do not support imposed by UK Governments that we do not vote for. That is the situation that we need to address. I say to members on the Tory and Liberal benches that we need power over welfare in this Parliament so that we have the option not only of looking to see where we can mitigate impacts, but of making the choices and decisions that allow us to have a welfare state that meets our needs and the values that we hold dear.

I am happy to support the motion. I look forward to the day when we no longer have to debate welfare policies imposed by another Government and when we have that responsibility here in our own Parliament.

14:43

I, too, very much welcome the opportunity to debate welfare reform and its impact in Scotland. I commend the Welfare Reform Committee for its work, particularly in highlighting the research from Sheffield Hallam University so that we begin to understand the scale of the challenge facing us.

The report estimates that £1.6 billion will be taken from the pockets of some of our poorest people and from the Scottish economy—equivalent to £480 a year for every working-age adult. The worst affected, however, are the disabled, with reforms to incapacity benefit resulting in cuts of something like £500 million per year, never mind the impact of the other benefit reforms that will affect the disabled, such as the bedroom tax. For the working poor, changes will result in cuts of £300 million a year from tax credits. The list goes on.

I have no problem with reforming the welfare system. It is overly complicated and bureaucratic. Many of us will recall the forms the size of telephone books that people are required to complete. However, what the Tories and the Lib Dems are doing is not deserving of the name “reform”. It is nothing more than a smokescreen for cuts—a 10 per cent cut in council tax benefit and a 20 per cent cut in incapacity benefit, to give just two examples.

For the Tories to suggest that the greatest burden for the country’s recovery will be borne by those with the broadest shoulders is clearly arrant nonsense. Let us not forget that this is the month in which the Tories awarded their 13,000 millionaire pals a tax break of £100,000 more each year, as 250,000 children across the country are pushed into poverty.

The changes have a disproportionate impact on women and children, as women make up the majority of those claiming benefits. I was surprised to note that 70 per cent of tax credits and 60 per cent of housing benefit are claimed by women.

Some members will view the challenge only in the context of the constitution, but Sheffield Hallam’s research has some interesting things to say on the matter. First, it concludes that Scotland has not been singled out in any way. The impact of the reforms here is broadly in line with the UK average. Indeed, the problem is worse in the north-east of England, the north-west of England, the midlands, Yorkshire, London and Wales. Nevertheless, the scale of the impact is still substantial. Perhaps the lesson for us in this Parliament is that we should make common cause with people in Newcastle, Manchester, Birmingham and Liverpool, rather than this being an issue about the constitution.

Secondly, the most deprived areas of Scotland are hit the hardest. Glasgow, Inverclyde, Dundee and West Dunbartonshire will face some of the biggest challenges in trying to protect their most vulnerable communities. I am interested to explore how we can assist local authorities in doing that.

The member spoke about not being opposed to reforms, but what kind of reforms would she envisage that she was not able to deliver in 13 years in government?

Not the reforms that attack the poorest and most vulnerable in our society by being a smokescreen for cuts.

This must not be an abstract debate. Willie Rennie is well aware that the consequences are already being felt. On 1 April, responsibility for council tax benefit was devolved, together with responsibility for community care grants and crisis grants. On council tax benefit, although there is an arrangement in place for this year to share the cost with local government, the Convention of Scottish Local Authorities is already saying that councils will not be able to fund that next year. Will the Scottish Government plug the gap fully?

Anecdotal evidence suggests that local authorities are worried about meeting the demand for community care and crisis grants. In areas such as West Dunbartonshire, councils are expecting 2,000 additional claims to be made, and their funds will be insufficient to meet all the demand. What happens when the money runs out before the end of the year? Does the Scottish Government have a plan B? While we are on the subject, why has the Scottish Government not put in place a social fund commissioner to deal with appeals? Surely that is against the principles of the European convention on human rights.

The much-reviled bedroom tax has been introduced. Despite the size of the discretionary housing pot increasing by the maximum amount allowed, it looks as though it will be insufficient, not just in West Dunbartonshire but in many local authority areas, to protect the most vulnerable people who are affected. When the Tories say that people should just move house, they display a total misunderstanding of the housing market. West Dunbartonshire alone is short by 1,000 one-bedroom houses. Where should people move to?

We recognise that blame lies with the Tories and Liberal Democrats, but people will look to the Scottish Government to mitigate the worst impact of welfare reform. The action on passported benefits and council tax benefit is welcome, but it is a drop in the ocean. Even now, at this late stage, legislation to protect tenants from eviction and funding to help housing associations and councils would provide a lifeline to those who are impacted by the bedroom tax. Even guidance would help local authorities.

The cabinet secretary must listen to the academics writing today in The Herald about the importance of intervention for stopping families and communities being broken up. They recognise that money is tight, and they point out that the council tax freeze is regressive. It helps the richest in our society the most. Their suggestion is to end the freeze, which would help to pay for the cuts to welfare. That would help some of the most vulnerable people in our society. It might be a radical suggestion, but it merits consideration, because the consequences of doing nothing will be devastating.

You must close, please.

It is times like these for which devolution was created. It is the very worst kind of politics to tell people simply to wait for some indeterminate time in the future when the power exists to help them now. The Scottish National Party must use the powers that it has—

And you must close, please.

The SNP must use those powers, because the poorest people cannot afford to wait.

14:49

I begin by saying a few words about the nature of the report. Just to clarify, it is in effect a piece of independent research and should not be confused with a report that has been approved by the Welfare Reform Committee. I am prepared to accept the report as independent research that has been published, but I will question some of the terms that it contains.

I question the notion that the welfare reform process and the benefit changes will somehow take £1.6 billion out of the Scottish economy. Perhaps that money will be taken out, but we must take account of the changes that have taken place in the round. In particular, the changes in the tax threshold—which will reach £10,000 in April next year—will mean that many of Scotland’s working poor are substantially lifted out of tax. The net effect will be that many of those in work who lose a little in benefits will gain substantially in tax that they are not paying, but the report fails to recognise that key balance.

However, I find one or two things in the report particularly valuable. It makes it clear, for anyone who might have thought rather differently, that there is in fact no difference between how the changes affect Scotland and how they affect England. Those who might have wished to argue that the reforms disadvantage Scotland will have that particular fox shot for them by the report, which states:

“the scale of the loss in Scotland, measured per adult of working age, is broadly on a par with the GB average. Overall, the welfare reforms hit Scotland less than northern England or Wales, but more than ... southern England.”

That indicates to me that anyone who uses the notion that I described to argue for Scottish independence is constructing an argument that is not viable.

It is also useful to us that the report indicates that the change will be much more noticeable within Scotland than between Scotland and the rest of the United Kingdom. It states:

“Within Scotland, however, the local authorities covering the poorest areas are hit hardest. As a general rule, the more deprived the local authority, the greater the financial hit.”

That indicates, as we all suspected, that the culture of welfare dependency that we have—unfortunately—to deal with in Scotland has a very strong geographical basis.

As we have listened to the debate progressing, several anomalies have arisen. The your say process in which the committee has engaged has, substantially, managed to find people who have had significant difficulties with the benefit system. However, the vast majority of those who have come forward are talking about issues that predate the introduction of the Government’s welfare reforms on 1 April this year. In fact, the irony is that many of the problems that those individuals have encountered have been a result of reforms in the benefits process that predate the current Conservative-Liberal Democrat Government altogether and were introduced by the previous Labour Government.

That brings us to the challenge. If we are to talk about welfare reform in the Scottish context, we cannot do so in a vacuum. We cannot have a situation in which those who oppose the progress in Scotland simply say, “We oppose change.” The fashion used to be to say that welfare reform is necessary but that it could be done differently, but in the debate so far—as in previous debates—no one has suggested how they might do it differently. Unless we are prepared to talk in those terms, we are making no progress in the debate.

Labour and the Scottish National Party are good at that approach, and they do it in different ways. Labour has one view in Scotland, but apparently it has a rather different view south of the border. I just happened to see Caroline Flint MP on “Question Time” last Thursday night. In an interesting discussion on benefits reform, she did not object to the benefits cap at all—in fact, her only objection was that it applied UK wide. She believed that the benefits cap should be much higher in London, where it is more expensive to live and consequently people need more money. That view is wholly inconsistent with the view alluded to by the Labour Party in Scotland. That is why we need the Labour Party in Scotland to tell us its view on such subjects and how that would apply.

Of course, it suits the Scottish National Party’s purpose to argue that benefit reform in Scotland is a bad thing and that the process would be different if Scotland was independent. We hear a lot of figures being bandied about. There is the cost of £1.6 billion that is mentioned in the committee’s report. The figure could be £2.5 billion or the £4.5 billion that the cabinet secretary mentioned in her opening speech. The report makes it very clear that, if Scotland was ever to put that amount of money into benefits, it would be as a function of redistribution in the Scottish economy.

If that £1.6 billion, £2.5 billion or £4.5 billion has to be found in Scotland, it must be found from areas of the economy that would do well to avoid that additional level of taxation. My challenge to the cabinet secretary is to explain to us, before the debate ends, exactly who will pay the tax to pay the benefits and exactly how much extra tax will have to be paid.

14:56

I am pleased to have been called to speak in the Welfare Reform Committee debate this afternoon. Although I am a member of the committee, it is important to say that I am not speaking on the committee’s behalf.

As we have heard, we are looking at the excellent report that the committee commissioned. It was prepared by Professor Steve Fothergill and Professor Christina Beatty of Sheffield Hallam University. The committee had the pleasure of speaking directly with Professor Fothergill at its evidence session last week and of making further inquiries about the report.

It is important to note at the outset that the report makes no comment on the merits or otherwise of the UK Government’s welfare reforms. Rather, as Professor Fothergill said:

“It is about tracking the impact of the reforms on Scotland as a whole and on each of the constituent local authorities in Scotland.”

Another important point to note is that the figures in the report

“are all rooted in official Government statistics.”

Alex Fergusson might not have been paying attention to that point at last week’s committee meeting. Yet another important point to note is the fact that the report does not cover the move from the RPI to the CPI for uprating, and Professor Fothergill explained his rationale by saying:

“that is a much wider public sector accounting reform that affects a wide range of public sector pensions, as well as benefits.”

The report’s key conclusion that the UK Government welfare reforms will take more than £1.6 billion a year out of the Scottish economy should be seen against the backdrop of the report’s parameters. However, it is clear that the figure does not simply represent the significant impact on individuals, which is estimated to be about £480 a year; it also represents the significant loss of spending power in our local communities, which is a point that the report recognises.

The impact will be felt not just by those who are not in work but by those who are working. Professor Fothergill referred to that expressly in his evidence to the committee last week, when he said:

“Let us not slip into the assumption that the welfare reforms all impact on claimants who are out of work.”—[Official Report, Welfare Reform Committee, 16 April 2013; c 690, 692, 706.]

What does all that mean for the people of Scotland? The report makes very grim reading for those who are out of work and those who are in work. For example, changes to tax credits and the 1 per cent uprate in the cap will have a particular impact on many households.

It is not just a case of one tax affecting a household or an individual.

Will the member take an intervention?

I will not take an intervention just now, thank you.

A household or an individual might be affected by the bedroom tax, the cuts to disability benefit and the cuts to child benefit, and the list goes on. As we know from the recent Scottish Government report, which refers to the cumulative impact of the reforms over the next period of years, the impact is expected to be £4.5 billion, which is a vast sum to take out of our economy in the coming years. It represents a hammer blow to the individuals concerned, among whom are some of the most vulnerable members of our society.

Will the member give way?

Not just now, thank you.

We have already heard from our convener, Michael McMahon, further to our session this morning in Glasgow, which I am afraid Mr Fergusson did not manage to make—I mean Mr Johnstone. I have done that twice; I am sorry—I have only just realised that.

We heard from some of the most vulnerable people this morning in a powerful your say evidence session. We heard, for example, from one lady—Anne Bradley—who, faced with the bedroom tax, was told, “Well, you can take in a lodger.” She then posed the question why should she—why should anyone—have to take a stranger into their home? That is a good question.

Another example was posed by a vulnerable adult who currently receives local authority support. Due to the vagaries of the UK system that has been introduced, they will not receive the supported accommodation exemption, because their support provider is not their landlord.

We also heard from a lady, Agnes Allan, who is worried about her disabled daughter’s future. Her daughter, who currently receives DLA, has been striving to lead as independent a life as possible and fears for her future. When I asked that lady whether she felt that UK Government ministers in any way walked in her shoes or in the shoes of people like her, she replied, “No, they do not walk in our shoes—they are stealing our shoes.”

It is simply unacceptable that we are witnessing the decimation of our welfare system and the removal of the safety net that is the mark of a civilised society. The only way in which we can change that path is by securing powers over the welfare system for this Parliament. I see Jackie Baillie smirking, but it is not an abstract issue, as she seemed to suggest in her remarks—it is quite the reverse. Surely politics, above all, is about power; it is about the power to change society for the better. If we do not have the power, we cannot do that.

Will the member give way?

I will not—I am sorry; I am in my last 30 seconds.

The only way to ensure that £4.5 billion is not taken out of our economy and that our most vulnerable people are not hammered by the UK Tory Government in London is to take control ourselves.

You must close, please.

It is a shame that Labour seems to prefer to gamble with the possibility of a Labour Government being elected in London one day, with welfare in the interim being controlled by a Tory Government, rather than see this Parliament do what we need to do to protect our citizens’ values.

15:02

The Welfare Reform Committee hears about the impact of the reforms every week. We hear about it from academics, notably in the Sheffield Hallam University research that many speakers have referred to. We hear about it from a wide variety of agencies with an interest, such as advice agencies that tell us that they are overwhelmed by the need for advice, and from advocates of those affected, such as people with disabilities, those who suffer mental health problems or those who are poor. They tell us that they are overwhelmed by the severity of the impact of the reforms that those whom they work with tell them is happening. We hear about the impact from service providers such as local authorities and housing associations—they too are overwhelmed by the impossibility of the position that they find themselves in.

However, the most powerful testimony is from the individuals and families who are affected, as we heard today in Glasgow—the convener described that. They are overwhelmed by the injustice of the reforms, by the fear that the reforms are provoking and by the cruelty that the reforms promise. It is not even a case of being cruel to be kind, because it is clear from the evidence that the committee has heard that the reforms will not have the effect that they are designed to have, whether that is moving people into work or moving them into smaller tenancies.

Of course, the committee does not just collect testimony; it also seeks to look at ways to mitigate the impact of the reforms and it scrutinises the Scottish Government’s actions to that end. We have considered the Scottish welfare fund, the new passporting regulations and the council tax reduction that is replacing council tax benefit.

None of those actions is perfect—Jackie Baillie mentioned the issue of appeals, for example—but in every case the Scottish Government has clearly and in good faith set out to try to create a system in which there is no significant loss to those who depend on those benefits. In two cases, the Scottish Government has identified additional resource, in that it has provided £9 million for the Scottish welfare fund and, along with councils, it has contributed to the £40 million for the council tax reduction scheme.

Much current attention has been focused on the bedroom tax—and rightly so—because that is a reform that really cannot work. When the committee took evidence from housing associations, Albyn Housing Society of the Highlands and Islands explained that 75 per cent of its properties have two or three bedrooms and that more than 30 per cent of its tenants would be affected by the changes. That housing association simply does not have single-bedroom houses in the small communities that it serves, so the bedroom tax cannot work as designed to move people into smaller tenancies and free up bigger houses for others.

In Glasgow this morning, we heard of the particularly pernicious effect of the tax on people with learning disabilities. Those are people whom we have worked hard to liberate from long-stay institutions so that they can live with support in their own tenancies, where they now find themselves punished by the bedroom tax.

My colleague and friend Andrew Burns of the City of Edinburgh Council has said that Labour and the SNP should be able to work together on fighting the bedroom tax, and I think that he is right. There is less division between us than some portray in, for example, council policies.

When the committee heard from Dundee City Council’s Councillor Black, who represents the SNP, and North Lanarkshire Council’s Councillor McCabe—a Labour councillor, of course—they talked about their attitude to eviction as a result of the bedroom tax. Councillor Black said that his council’s no-eviction policy meant that, if a tenant had arrears only because of the bedroom tax, had done everything possible to avoid that and had not been offered a smaller tenancy, the council would use all forms of debt recovery but not eviction for one year. Councillor McCabe said that his council would do everything possible short of eviction, but he could not promise that it would never come to that. I think that they were saying exactly the same thing, and to pretend otherwise is really to split hairs at the margin of the problem.

Of course, the trouble with a no-eviction policy is that, first, it provides no protection for housing association tenants. Secondly, it means that, even if tenants avoid eviction, they will still carry the debt of rent arrears into the future. Thirdly, it provides no help for those who find some way—God knows how—to pay the bedroom tax, perhaps by heating less, eating less or depriving their kids more. Those people deserve help and mitigation, too.

The only way to mitigate the effect of this iniquitous tax is to find some or all of the resource to offset the housing benefit reduction not just through providing advice but directly—through discretionary housing payments, payments under section 12 of the Social Work (Scotland) Act 1968 or otherwise. We should be nothing other than clear that the UK Government is responsible for the iniquitous bedroom tax. It is not fair that we should have to try to find additional resources from within our budgets, but then it is not fair that some of our most vulnerable citizens have to meet the bedroom tax from within their resources, too. Solidarity, rather than sympathy, demands that we do not just point a finger at the guilty but stretch out a helping hand to the victims, too.

I know that something will need to be cut to do that, but that is the consensus that we must reach, and we must find a budget adjustment, which might be less than ideal, that most members of this Parliament can support.

You must close, please.

Otherwise, we are not doing all that we can. The truth is that we must share some of the pain here in order to avoid sharing some of the guilt.

15:08

I thank the members of the Welfare Reform Committee for the on-going scrutiny that they provide. I was a member of the Health and Sport Committee when we first scrutinised welfare reform and I recall that it was clear that our committee believed that, such was the tidal wave of negative impacts that would hit Scotland as a result of welfare reform, the Parliament needed a stand-alone committee on the issue. I think that history will show that, irrespective of whether the Parliament gets more powers, we will need that committee for the long term to analyse and scrutinise welfare benefits in this country. I thank all the members of that committee for their hard work.

The Sheffield Hallam University report on the impact of welfare reform makes sobering reading. As we have heard, it estimates that £1.6 billion will be lost to many of the most vulnerable Scots each year as a result of the reforms. People in every local authority area will suffer, but my constituents in Glasgow will suffer more than most. In absolute terms and in per capita terms, Glasgow will be hit more than any other area. The reforms are a brutal attack by the UK Government on the very people whom all Governments have a duty to support where they can.

My constituents ask me how the Scottish Government and Parliament can protect them from that attack and what we can do to help. The bedroom tax features prominently in my constituents’ list of concerns, but they mention a variety of other changes, including the abolition of disability living allowance and move to personal independence payments and the reform to incapacity benefit. Those two actions alone will affect about 200,000 households and will, if combined, take up to £6,500 away from individual households across Scotland. Again, those changes will impact more on my constituents than on people anywhere else in Scotland.

Last night, I attended an initial meeting to establish the greater Maryhill food bank in the north of Glasgow, which aims to provide support for families who are in financial and food crisis and who have only three days’ worth of non-perishable food provisions in their home and no way to get additional food. That is a response to current real hunger in Maryhill. The initiative was inspired by local police as the key stakeholders. They do not want to spend their time seeking to prosecute vulnerable individuals who commit crime because of poverty; they want to chase real criminals.

Last night, I heard a story about a police van driving round Maryhill with a number of police officers inside. They saw a young guy running out of the Lidl supermarket being chased by a security officer. They were heading to an unrelated incident, but they pulled up and cornered the guy, who ran into a garden and was found under a bush. He had stolen a bar of chocolate. That was not petty pilfering—he had not eaten for a number of days. The local community police shared that story with us at the greater Maryhill food bank meeting last night.

That cannot be right, but the situation will get a lot worse as the reform continues. I fully accept that such cases are a tiny minority at present, but they will not remain so for long if we do not do something about the issue. I am therefore delighted that housing associations, churches, charities, community councils, youth groups and others are coming together to address the situation. They should not have to address it, because that is up to the state but, because of their community spirit and solidarity, they are compelled to do what they can to provide support.

I have constituents who, right now, are being asked to move out of their homes and communities so that their housing benefit will meet their rent. Local links are being destroyed, support networks are being broken, childcare provision is being wrecked and lives are being placed in turmoil. Of course, they can move only if another property is available and, often, it is not. In many cases, even when a property is available, families do not for understandable reasons feel able to move.

In Glasgow, the SNP opposition group is seeking to get the Labour-run council to increase the housing benefit discretionary fund by the maximum permitted under the legislation, which is by two and a half times. The shortfall in housing benefit in Glasgow will be about £10 million per annum, while the discretionary fund from the UK is less than £3 million. I hope that the council will listen to those constructive representations from the SNP and I urge the council to increase the discretionary fund by the maximum allowed, if it can do so.

That would be a form of mitigation. We have heard about a number of other forms of mitigation by the Scottish Government, such as the £9 million for the welfare fund; the £40 million, with our local authority partners, to deal with the council tax benefit cut; and the funding for money advice services. However, the changes to council tax benefit are a £50 million per annum cut from Scotland’s most vulnerable people, out of a total cut to those people of £1.6 billion.

Can we get real? Those who call for us to plug every gap from the UK Government’s attacks on our most vulnerable people are deceiving themselves and the people of Scotland. Only giving this Parliament powers over tax and benefits with full independence will ever protect Scotland’s most vulnerable people.

15:15

I try not to make a habit of it—and I advise members not to make a habit of it—but I happened to read a press statement from Jamie Hepburn this morning. He said:

“Labour is terrified of saying anything substantial on welfare”.

My colleagues in the Conservative Party and I have asked members numerous times to give their own ideas about welfare reform. Although they all say that they are in favour of reform and not opposed to it, not one idea has been given.

Will Mr Rennie give way? I will give him an idea.

I will be happy to take an intervention from Mr Stewart in a second. I am quite happy to give up all of my six minutes for members to tell me what reforms they will make and how much they will save. We can start with Kevin Stewart.

To cut out the bureaucracy and the amount of money that is going to Atos to carry out work capability assessments, the Secretary of State for Work and Pensions or Lord Freud could designate vulnerable people who should not have to go through constant assessments. That would be one way of saving Mr Rennie’s Government some money and saving some of those folk from going through constant pain.

That sounds as if it would cost more money, not less.

Would Willie Rennie like another idea?

Yes.

I will give him an idea that we heard this morning. It concerns people who are in supported accommodation who have to pay the bedroom tax. Perhaps people for whom councils administer care packages should be exempt.

Well, an exemption sounds as if it would cost money.

Mr Rennie assumes that welfare reform exists within a bubble. Is he aware of the tax avoidance bill that the UK Government faces? Does he agree that diverting more effort towards catching the people who avoid tax, rather than punishing those who are on benefits, might help to pay for some of the extra costs that he claims are being identified?

That is very commendable. In fact, Danny Alexander has invested more in trying to close those loopholes and catch those people. However, what Mark McDonald has suggested is not a welfare reform.

Three members intervened and gave not one single idea that would save money. They live in a bubble and do not understand the consequences.

Will Willie Rennie give way?

Yes. Let us see whether Drew Smith has anything.

Does Mr Rennie not understand that the UK Government’s welfare reforms will actually cost more money, particularly the bedroom tax, although that is just one example? If the UK Government is going to evict people from their homes, where does he think they will be rehoused? Who will pick up the tab for those evictions and for finding new homes for those individuals? His savings are not savings at all.

We have had four interventions and no suggestions for savings.

Would Willie Rennie like a suggestion for a saving?

In a second. I ask Mr Harvie to let me answer Mr Smith’s intervention before I come to him. [Interruption.] It will take up to six minutes.

Mr Smith has not identified a saving. He has identified something that he would like to change in our welfare reform programme. If members can come up with any ideas—

I will give Willie Rennie an idea.

In a second.

Members have highlighted that the impact of welfare reform on Scotland would be £1.6 billion. That implies that they would reverse all £1.6 billion-worth of savings. The bedroom tax represents £50 million out of that £1.6 billion. Therefore, even if we acceded to what Mr Smith alludes to, we would save only a fraction of what the UK Government plans to save.

Will Willie Rennie give way now?

Yes. Let us see whether Mr Harvie can come up with something.

I am grateful for all Mr Rennie’s willingness to listen to suggestions. He opposes the criticisms of the bedroom tax on the basis that they will not save money. Will he at least acknowledge that rent controls in the private rented sector would be a much more effective way of reducing the housing benefit bill in areas where private rents have spiralled out of control and where a small proportion of exploitative landlords are milking the system? Will he also acknowledge that that would not hurt the tenants?

That is certainly worthy of consideration, but the member needs to be aware of the balance between encouraging people to invest in the private rented sector, which is trying to improve its standards, and rent controls. Those things are not a one-way street; they need to be considered in the round.

Five members have made interventions, but there has not been one single suggestion. I believe in welfare reform, in making work pay and in trying to get the budget under control, but I also believe—this is an important principle—that the welfare system is a safety net for those who are in need. Members constantly complaining in the chamber about the changes does not help. They have come up with not one single change that will save money.

I just did.

As I said, they have come up with not one single change that will save money. If they cannot commit to reforms, their complaints are just spineless and do not reflect the needs of people who are in need.

I have been working to deal with issues such as the bedroom tax, which Mr Smith mentioned; indeed, I have probably had more discussions about the bedroom tax than almost anybody in the Parliament. I am therefore fully aware of the issues. I have met many people who are anxious about the reforms, but politicians cannot run away from their responsibilities to the welfare state and people who are in need.

15:21

I welcome the work of the Welfare Reform Committee and commend it for bringing the debate to the chamber. I am not a member of that committee, but I am keen on the work that it is doing and its scrutiny of the important issue of welfare reform.

Many MSPs will be only too aware of the worry and potential financial hardships that so-called welfare reform will bring to families throughout the constituencies and regions that we represent. As the cabinet secretary said, when the welfare reforms are in full effect, they will take £1.6 billion a year out of the Scottish economy. That will have a dramatic effect in high streets in towns and villages throughout our country. It tends to be the old, the infirm and the unemployed who still shop and spend money in our local areas, and we have to take that into account.

The member talked about the old. The restrictions and changes do not apply to those of pensionable age.

I mentioned the old and said that they are a demographic who still shop in our high streets.

Next week will be multiple sclerosis awareness week. I admit that I have a bit of emotional baggage when it comes to that issue: it is very close to my heart. I am a member of the Paisley and district branch of the Multiple Sclerosis Society Scotland and know many of the individuals who will be affected by the so-called reforms.

As members will be aware, MS is the most common disabling neurological condition that affects young adults. More than 10,500 people in Scotland have it. The majority of people who are diagnosed with MS are between the ages of 20 and 40, so the targeted changes to welfare will be felt almost exclusively by people of working age. People with MS in Scotland are already concerned about their ability to make ends meet, and many will face losing substantial amounts of benefit under the welfare reforms.

The changes to the disability living allowance are, of course, what the Multiple Sclerosis Society Scotland fears most. The Welfare Reform Committee’s report states that 55,000 individuals will be affected by those changes, with an estimated loss to the economy of £165 million per annum. The report states that, in my county of Renfrewshire, 2,100 people will be affected, with a loss to the economy will be £6 million a year.

MS is a condition that can fluctuate. It is different in different individuals. That is part of the concern when it comes to the disability living allowance and the potential PIP changes. As a result of the condition’s fluctuations, people can be okay one week and have difficulty the next. Many of the so-called independent experts involved do not understand such long-term conditions. PIPs will be assessed very soon, with the key changes designed to focus on those with the greatest needs. A new, objective, points-based assessment will be brought in that is likely to involve a face-to-face meeting with an independent healthcare professional. Again, the Multiple Sclerosis Society Scotland has concerns that those individuals may not have the expertise to deal with such situations.

More than 7,000 people with MS in Scotland currently receive disability living allowance, and every single one of them will be affected. People with MS rely on those benefits to manage a wide range of costs, including those for aids and adaptations, and to pay for care and support.

At this stage, I want to let members hear some of the voices of people with MS, because some interesting facts will come out of that.

One person said:

“For a person like me, DLA means the difference between surviving and living. It’s the difference between having a life and not having a life.”

That is quite a strong statement in itself.

Another person said:

“DLA is spent on ready meals, pre-chopped vegetables and fruit and salad, sandwiches, hair and nail appointments”

and “waxing”. That sounds like a benefit is being used for something that it should not be used for, but that individual with MS states:

“I can no longer dry my hair, cut my nails or shave my legs, I wish I could”.

That individual has stated that she cannot do those things and that she needs the benefit money to get them done.

Another individual said:

“My needs change not just weekly or daily but often hourly. DLA gives me the freedom to pay for help as and when I need it, in a much more cost efficient, flexible and responsive way.”

For every one of those individuals, the situation will get slowly but surely worse.

Losing one form of benefit can have far-reaching consequences. For example, one lady with MS knows that she could be moved on to a lower rate of mobility payment that will not only involve a reduction in her benefit but remove her right to a disabled parking badge, which will cause her difficulty in getting around in her daily life.

As I have said, the assessments fail to take into account the full range of barriers and costs that people with MS face, and they particularly fail to take into account properly the fluctuations in the condition. The current approach assesses whether individuals can undertake activities on the majority of days, but the position changes daily for the majority of people with MS. The criteria mean that those who can walk only slightly further than 20m, even using sticks, will not qualify for the enhanced rate of mobility payment, although the current distance criterion is 50m. Again, that will have an effect on someone with MS.

Those with MS are only one group among many that the welfare reforms will affect. The 7,000 people with MS who receive DLA and the 10,500 Scots and their families who are already dealing with MS are asking us what future we are looking for and what we can offer. For me, the way forward is to have the full levers of independence to ensure that we can give those people and their families a future in Scotland.

15:27

I am pleased to have the opportunity to contribute to this hugely important debate. Given the widespread impact of the benefit cuts on some of the most vulnerable people in our communities, I will focus on the effects of welfare reform on women.

Since long before the 2008 recession and the election of our coalition Government in 2010, women have been paid less than men, are more likely to be unemployed than men and are more often employed in a part-time, temporary role than their male counterparts are. The economic crisis and the policies of our Governments have caused that inequality to increase, and it is women once again who are suffering disproportionately from the disgraceful welfare reforms inspired by both Governments.

At this time of hardship and struggle for Scottish families, the removal of key financial assistance is a disaster both for those who are in work and for those who are out of work, and it has proved to be especially damaging for women and the wider pursuit of economic equality. The abolition of the health in pregnancy grant means that since January 2011 expectant mothers are £190 worse off and receive no direct financial support towards the costs of starting a family. If a pregnant woman already has a child under 16, she will no longer receive the £500 sure start maternity grant that was available to unemployed parents and those in low-paid jobs. Child benefit, which is often paid directly to mothers, will be capped for three years, resulting in a loss of more than £1,000 for a family with two children. Even the statutory maternity payment has been cut in real terms and is likely to be reduced by nearly £300 a year by 2015.

At a time when family budgets are increasingly squeezed, the removal of such assistance has a huge impact on efforts to achieve economic equality between the sexes, and it will increase the dependency of women on other sources of income—often the salary of a male partner. That is unsustainable and does nothing to realise the ambition for a society in which women are valued equally to men and empowered to take control over their own financial affairs.

I very much agree that the cuts will particularly target women. Does Anne McTaggart agree that lone parents, the majority of whom are women, will be particularly affected? Of course, it is not just lone parents who will be affected. The bedroom tax means that former partners who wish to have an active part in their children’s lives will not often have a room for their child to stay in, which will make it difficult to keep that relationship going.

Absolutely. That was not a point that I was going to cover in my speech, so I thank Bob Doris for raising it.

All across Scotland, workers are being paid less, businesses are closing down and employees are being made redundant. Families are being forced out of their homes, first-time buyers are priced out of the market and graduates are taught to forget the aspirations that took them to university in the first place.

Devolution was made for such a situation. It falls to the Scottish Government to use the powers that it has and to do all that it can to protect the unemployed and those in low-paid jobs. The draconian cuts to local government budgets mean that the last line of defence against the welfare reforms are outrageously underfunded.

I urge the Scottish Government to reconsider its short-sighted approach to tackling the coalition Government’s welfare reforms, and to reflect on the need for proactive responses to benefit cuts that deliver real solutions for ordinary Scottish families.

15:32

I do not want to get hung up on the bedroom tax and spend the entirety of my speech on that topic, but I want to mention it briefly at the beginning; it will also come up in one of the case studies to which I will refer.

I received a report from the charity Crisis entitled “The homelessness monitor: Scotland 2012”, which was published in December 2012. The report was put together by Crisis, Heriot-Watt University and the University of York. It highlights two other changes that are being made in the housing sphere that will impact on homelessness in Scotland beyond the bedroom tax.

The first change mentioned in the report is the

“extension of the ‘Shared Accommodation Rate’ of Local Housing Allowance to 25-34 year-olds living in the private rented sector, which will increase pressure on a limited supply of shared accommodation and possibly force vulnerable people into inappropriate shared settings (even with the concession for those who have lived in hostels for at least three months)”.

The other change is the

“increased conditionality and sanctions associated with the Work Programme, coupled with the transferring of many vulnerable complaints from sickness benefits into Jobseeker’s Allowance, implying the possibility of stringent sanctions applied to vulnerable single homeless people and others with chaotic lifestyles.”

Therefore, it would be wrong to say that only the bedroom tax will have an impact on the homelessness agenda.

An interesting thing about the bedroom tax is that because we have ended priority need in Scotland, 64 per cent of homeless applications come from single people, as opposed to 25 per cent south of the border. However, one-bedroom properties make up 26 per cent of social housing, which means that people who are homeless will be housed in properties in which they will find themselves subjected to the bedroom tax.

We should not single out the bedroom tax for mitigation, because there are other benefits that people might wish us to mitigate. We therefore must make the case for why we can mitigate one but not another. We can do that for council tax benefit because power has been passed in its entirety to this Parliament’s control. However, the bedroom tax remains a reserved imposition on Scotland, rather than something that has been transferred to our control.

Drew Smith was correct when he said to Willie Rennie that if the policy is about saving money it can work only if people do not relocate—in effect, the bedroom tax can work only if it does not work. The stated aim of the policy, according to UK ministers, is to encourage people to relocate to a smaller property, but it will not save money, as Mr Rennie alleges that it will; it will simply be ineffective.

Mr Rennie accused members of being spineless. I know that I am not, because if I lacked a spine I would be getting annual invitations to see Atos, to find out whether it had grown back and I was capable of work. That is the process that disabled people are having to go through, as though a miracle can have somehow occurred in the previous 12 months. I have heard tales of people who are, in effect, in a childlike state because of brain injuries but who are constantly invited back, as if the brain injury will have gone away in the 12 months since they were last assessed. Such bureaucracy will clearly cost money to administer, as well as being utterly degrading for the people who go through it.

I will focus on a couple of cases to do with autism, which is an issue that is close to my heart. I mentioned one of them in last Thursday’s debate. Tracy Mahoney is a Castlehill Housing Association tenant in Sheddocksley, in Aberdeen. She has two sons: Bradley, who is 14 and has additional support needs; and Jason, who is 11 and has autism. They live in a three-bedroom house, which was given to them because the paediatric consultant said that Jason required a bedroom to himself because of his behavioural and sleeping issues. Tracy is now losing £50 a month as a result of the housing benefit underoccupancy rule, although she needs a bedroom for Jason as a result of his autism.

Today in the Daily Record, we read about Sandy Miklinski, a 27-year-old with autism, and his experience of assessments for DLA and for work capability. The people who assessed him admitted to having little understanding of autism and what it entails, but he has been put into work situations that are clearly not suitable for individuals with autism. Welfare reform might be necessary, but what is also necessary is an understanding of the conditions with which people present, so that people can be treated as humanely as possible. Autism is a difficult disability to recognise, because it does not present through physical symptoms, but it is crucial that people understand it before they consider putting a person into a workplace that might prove stressful and counterproductive for them.

Vulnerable people are not asking for much. UK ministers appear to be putting forward the view that the welfare state is a comfort blanket. It is not a comfort blanket; it is a safety net. As Michael McMahon said, the UK Government is widening the holes in the safety net, so that more people fall through it. The poor are hit by welfare cuts at the same time as the rich get tax cuts. I could sum up the UK Government’s logic as, “The rich will work harder if we give them more money and the poor will work harder if we give them less money.” The approach is ridiculous and inhumane and attacks the most vulnerable people in society. The UK Government ought to be ashamed of itself.

15:38

I welcome the opportunity to contribute to the debate.

The report from Sheffield Hallam University lays out the impact of welfare reform in stark terms. I was struck by a line on page 7:

“A focus on adults of working age (16-64) is appropriate because the welfare reforms impact almost exclusively on this group.”

We know that the full force of the changes will be felt by families, and in particular by the children in those families.

I therefore welcome the report, “In the Eye of the Storm: Britain’s Forgotten Children and Families”, which was published last June for the National Society for the Prevention of Cruelty to Children, the Children’s Society and Action for Children. The report’s authors looked at vulnerable families, meaning those affected by one of seven factors: worklessness; housing; lack of qualifications; mental health; illness and disability; low income; and material deprivation.

According to that report, the impact on families of the tax and benefit changes, combined with cuts to public services for vulnerable families, is the equivalent of £3,000 per family per year. Moreover, the negative impact on family income increases the more vulnerable the family is.

I want to concentrate on the impact of such reduced income, whether we are talking about the average loss of £480 per adult of working age or the £3,000 loss for the most vulnerable families. There is a growing gap between what people need to survive and the income that they get, and the question is how they will fill it.

That brings me on to the issue of payday loans, which last year were worth £2.2 billion to the UK economy, or the equivalent of 8 million £500 loans. What do we know about the people who take them out? Citizens Advice Scotland has said that 75 per cent of those people are in work; perhaps they are among the 372,000 Scots affected by cuts to tax credits or the 621,000 Scots affected by the child benefit cuts whom the Sheffield Hallam University report identified. We also know that they are most likely to spend payday loan money on bills and food.

To get a payday loan, a person must have a bank account and evidence of income. In many ways, therefore, those who are out of work are largely protected from the impact of those loans. However, we know that that situation will change come October, when universal credit is introduced and the 125,000 Scots who are currently unbanked will have to get an account to access the benefit. That is a brand-new market of extremely vulnerable people who will be exposed to the practices of predatory payday lenders.

Will the member give way?

I would rather not, if that is okay.

Those benefit cuts combined with the move from benefits being paid two weeks in advance to four weeks behind will create a perfect storm that those companies can exploit.

At this point, I should mention a couple of constituents’ stories. A woman who lives in the east end of Edinburgh recently applied for a community care grant to buy an orthopaedic bed for her disabled child at a cost of several hundred pounds. She got £100 and was told by the DWP to take out a payday loan to cover the difference. That is absolutely shocking. We know that community care grants and crisis loans are going to become the Scottish welfare fund, which will be managed by local authorities, but are we really sure that people in local authorities and money advice shops across the country will not tell constituents to do the same thing?

I recently visited a couple of food banks in Edinburgh and spoke to a number of people at risk of homelessness. When they get their first home, the council gives them some money that allows them to get something to sleep on, something to sit on and something to eat with. They do not get white goods; instead, they are told that they can get cheap white goods from companies such as BrightHouse, which charge extortionate interest rates.

Other constituents of mine with severe learning disabilities have also been exposed to payday loans. They walk into the Money Shop or Cheque Centre and apply for loans and, because the people on the other side of the counter do not understand their vulnerabilities, they end up in thousands of pounds of debt.

The Scottish Government says that it is doing everything that it can to mitigate the impacts of welfare reform but is it really looking at the debt that families are getting themselves into as a consequence? Mitigation is not just about filling the gap between what people used to have and what they are getting now; we need to think about the extra risks that they take to fund their families, put food on the table and ensure that their kids can buy the books, clothes and other things that they need. Is the Government doing enough to ensure that people do not turn to payday lenders, illegal or otherwise, and can protect themselves from such things?

I pay tribute to Kezia Dugdale for her work in this area and do not want to have a disagreement with her. I absolutely agree about the often hidden scale and impact of the cuts, but I have never said that we can mitigate all the impacts. In fact, that is the problem. My question to her is whether there are specific areas of our current budget that she thinks we should reduce to put more money into mitigating welfare reform. I am happy to have that discussion, but it is incumbent on members to come forward with options. Ultimately, when we do not have the power, this is a robbing-Peter-to-pay-Paul scenario.

You have less than a minute, Ms Dugdale.

I absolutely understand the cabinet secretary’s point. In a way, I am asking her not for more money but to think more creatively about how we provide public services to help people who are affected by the situation. She could, for example, get money advice services working together with credit unions in one place on the high street. Such moves do not necessarily cost a huge amount of money and I want to work with her to make them happen.

To hide from the problem, families will turn to their credit cards and payday loan companies and will put bills in drawers. However, that will come back to the cabinet secretary years down the line in the form of a debt problem from which she will not be able to escape. Let us work together now to see what we can do creatively to address some of the problems.

15:44

Margaret Lynch of Citizens Advice Scotland has called the reforms “the perfect storm”, and at today’s meeting of Welfare Reform Committee in Glasgow, Robin Tennant of the Poverty Alliance called them a “tsunami”. Natural disasters have been used to describe what is going on, but what we are facing is not natural but very much a man-made disaster that has been created by the Tory-Liberal coalition at Westminster.

Mary Scanlon has talked about the impact of the reforms on people with mental health problems; over the years, she has done a great deal to try to make life better for folk who suffer from mental health conditions. What I am seeing at my surgeries—I know that many other members see the same—is that the folk who are affected most by the reforms are those who have mental health conditions. People who have severe depression or who are bipolar are often put through the work capability assessment and given zero points, which means that they are considered to be fit for work. They then have to go through the appeals process, after which they get the maximum number of points and are deemed to be not fit for work. During that period, their mental health conditions worsen because of the nonsense of that system.

After today and after the many hearings that the committee has held, I feel angry and uneasy but impotent about dealing with some of the things that we face. Today, we heard from a number of people including Agnes Allan—who has already been mentioned—whose daughter Sarah Jane has cerebral palsy and a number of other conditions. The family believed that they had DLA for life for Sarah Jane—that was their safety net—but they are now worried that, if it is withdrawn, she will suffer a loss of independence. I can well understand why they are so worried about that situation.

According to the Sheffield Hallam University report, 55,000 folk in Scotland will be affected by the changes and are likely to lose on average £3,000 a year. Many of those folk work and use their DLA to transport them to work, which gives them their independence. Without DLA, it might not be possible for them to do that.

What I cannot understand about the situation in which we find ourselves is that, on numerous occasions in response to letters from me, Lord Freud has refused to designate certain vulnerable groups and to take them out of the process. We all know that there are folk out there who are never going to work—Mark McDonald gave some examples. Why must those people thole the assessment process again and again? It is cruel, it is heartless and it is nonsense.

Today, we also heard from Lynda Hutchison—for the folk from the official report, that is Lynda with a Y; she was most insistent about that—from the Glasgow stronger together group, for people with learning difficulties. I have also talked to the Aberdeen stronger together group. Those folk have told me about their independence and what they really need from life. People are scared about what is happening. They have talked about the effect of the reforms not only on themselves, but—in Aberdeen, in particular—on others. They show compassion towards other people, but we have a Government at Westminster that shows compassion to no one.

The stronger together groups in Aberdeen and Glasgow have more gumption about what is going on than most of the Government ministers whom we have met to discuss the issue. They are too feart to come before the committee formally and would be far too feart to meet some of the individuals whom we have met to discuss their lives and the changes to their lives that will happen because of the reforms.

I challenge Iain Duncan Smith and Lord Freud to listen to the evidence that we have gathered thus far and to have the guts to appear in front of our committee so that we can relate to them what we have heard on numerous occasions about the effects of the welfare changes on people’s lives.

You must come to a close.

Sometimes we talk far too much about statistics. I wish that Mr Duncan Smith and Lord Freud would go face to face with the people involved and hear how their lives are being affected.

15:50

I, too, extend my thanks to the Welfare Reform Committee for commissioning the Sheffield Hallam University research and for bringing it to the chamber for debate.

In any debate about welfare reform, we must begin by asking fundamental questions about what the welfare state is for—about what its purpose is. Very often, the language that is used includes phrases like “safety net”. I am not terribly keen on the image of a safety net, because it implies that only the people who might hit that safety net need to be part of the debate. In reality, a welfare state is about the relationships that exist between all of us in society, and it is about the idea that we all contribute and we all receive benefit, whether in monetary or social terms. In living together in a society, the relationships between us are more than just transactional.

The language of such debates is often extremely divisive. I do not believe that the UK Government would have found it politically possible to achieve the fundamental attack on the principles of the welfare state that it is engaged in had it not been for years and years of divisive language. Mr McMahon mentioned the “apparently feckless”. We hear that kind of language used—not in the way in which he used it, I hasten to add—all too often. That language includes phrases such as “strivers and skivers” and that other old favourite, “hard-working families”. Such phrases are intended to undermine the empathy and compassion that people feel for one another.

Does Mr Harvie agree that the constant overreporting of the number of people who claim benefit fraudulently—who account for a tiny proportion of the benefit spend—which gives the impression that such behaviour is far more widespread than it is, also contributes to the use of such rhetoric?

I completely agree. We should attach a far higher social stigma to the people who avoid paying their share of taxation than is attached to the much smaller number of people who are involved in the activity that Mark McDonald describes.

In last Thursday’s debate, some Conservative members told the horror story of the 1970s. Regardless of the problems with the economy and the state of industrial relations in the 1970s, it is clear that if we look at human wellbeing rather than gross domestic product, 1976 was the high point; 30 years of the post-war settlement and the operation of a welfare state resulted in that historical high point. However. after 30 years of centre-right economics, there is now a growing gap between the rich and the poor—or between the rich and the rest. We have never since approached that level of human wellbeing.

I agree with Ed Miliband, who told the Labour Party conference that a new settlement is needed. I believe that we are more likely to achieve that new settlement if we bring to Scotland the powers on welfare, taxation and everything else, but across the divide we should agree that the principle of reform must be about restoring, rather than about dismantling, the ethos of the welfare state, and it should be about winning again, from first principles, the argument for it—which has, sadly, been lost in recent years.

Simplicity, less bureaucracy and less stigma are all good things to aim for, but to implement reform at the same time as making vast cuts to the scale of the welfare state is to pursue a wrecking agenda.

On alternatives, my party will continue to argue for an idea that had a degree of support at the time but which, sadly, the Beveridge report dismissed: the citizen’s income, which is a universal benefit that would remove at a stroke the poverty trap and the benefits trap that so many people are in. As well as being a dramatically simpler system to administer, it is redistributive—it would leave many people in the middle on roughly the same income, but people higher up the income scale would pay more. It would close the gap between rich and poor.

There is also the question of mitigation in the shorter term. Annabelle Ewing said that that question was all about power, but that is only half right. It is partly about power—absolutely—but it is also about the will. There is complete agreement between Annabelle Ewing and me about bringing those powers to Scotland, but we also have to have the will to exercise them right now. I was disappointed that in respect of the problems of the bedroom tax, which I think were most clearly articulated by Iain Gray, there has not been willingness to take mitigation measures, such as using a higher band of council tax for the most expensive properties. That has been described by the Scottish Government as robbing Peter to pay Paul. Well, that is what tax and benefits are all about; they are about deciding who is going to contribute and who is going to receive.

Alex Johnstone asked us who will pay more. I will put up my hand—I should be paying more. Every member in this chamber is in the top 2 per cent of incomes. We should be paying more—to be frank, a lot more—tax than we do at the moment. Tax honesty is also crucial to the future of this debate. There should be willingness to raise the taxes to pay for the benefits and services that we say we want to protect.

15:56

I was not a member of the Welfare Reform Committee when the report by Professor Steve Fothergill and Professor Christina Beatty was commissioned, but I am so glad that the committee did commission it, because it is such an interesting report. It was well presented last week by Professor Fothergill and has been encapsulated today by Michael McMahon, the convener of the committee. There is really interesting stuff in it about the £1.6 billion a year—or £480 a year for every adult of working age—that is being taken out of the Scottish economy.

The report is very stark. It finds a clear and unambiguous relationship between the level of deprivation in a community and the financial hit from welfare cuts. It questions whether employment will be any higher as a result of the reforms, although that is the intention of the UK Government, and concludes that the cuts will add a further twist to the downward spiral. The reform is further entrenching the UK’s already deep income inequalities.

The report is excellent. It does what the title says: it shows what the impact of welfare reform in Scotland is likely to be. Behind the economic and financial impacts, there are people. There are single people, couples, single parents and two-parent families, some of whom we met in Glasgow this morning. I say to Willie Rennie that none of those people was a “spineless” complainer. I do not believe that anyone who is complaining about the welfare reforms is a “spineless” complainer.

Will Linda Fabiani give way?

No, thank you. We heard enough earlier.

George Osborne was in Glasgow this morning, too, but he did not come near our informal committee meeting. Rather than scaremongering about independence, he would have done better to have come to the city hall to try to justify why his Government is intent on shafting the most vulnerable people in Scotland.

This morning we heard from Agnes, who has already been mentioned. A phrase that she used was repeated by Michael McMahon and Patrick Harvie. Agnes said how upset she was when she heard the language “skivers and strivers” being used. As she said, David Cameron, Iain Duncan Smith and Lord Freud have absolutely no idea what striving is. Striving is what many people do day in day, day out—folk whose children were born with, or who have acquired, physical and mental disabilities; folk who have become ill; folk who have hit hard times and do not have the cushion of wealth to land on; folk who are poorly paid; and folk who have worked hard and work as best they can.

The majority of benefits claimants are decent ordinary people. We have heard from them at formal and informal committee meetings, and I am sure that MSPs in the chamber today have heard from them in their offices, in their surgeries and by phone, email and letter. I am sure that some of us have family and friends who are directly affected by the welfare reforms. I know that I do; I have a pal with learning difficulties who suffers from regular panic attacks and depression in relation to work assessments. He will never be in a position to hold down a full-time job, so why is he being forced regularly to go through all that stress and strain?

I have a very close friend who is practically housebound due to serious illness. She had worked full time for many years before she hit hard times. Her greatest pleasure is having her son and his family come to stay over for a few days from their home some 200 miles away. She has her first grandchild, and she loves that. A two-bedroom flat has been her home for more than 20 years. She has now been served with a notice of bedroom tax due, of course. She cannot afford it. Will she lose her home?

Much more could be said and much has already been said in the chamber this afternoon. I am sure that if Parliament had power over the welfare system, much of the rhetoric would be unnecessary. It is clear to me that there is no stomach for any of the reforms—except among the Conservatives and Liberal Democrats.

Will Linda Fabiani take an intervention?

No.

During the deliberations on the most recent Scotland Bill, we had the chance to send a cross-party demand to Westminster about devolving welfare to this Parliament. As the Scottish Council for Voluntary Organisations said at the time, and as it reiterates now, “devolving welfare” is

“a policy which would enable a Scottish Government to more effectively protect and help the most vulnerable in our society.”

Will Linda Fabiani give way?

No, thank you.

Our Government here is doing what it can, but more could be done if welfare was devolved. Even now, we could work together and we could send that message, from one side of the chamber at least—I include Patrick Harvie, Alison Johnstone and the other members at the back in that.

I will end with some words that we heard at the Welfare Reform Committee this morning. I asked witnesses what they would like to say to members of Parliament who represent Scotland but who were not represented at the committee meeting this morning. To the Lib Dems and the Conservatives, the message was quite clear: help us to get it stopped. Another witness posed a question to all of us. She said that, if people voted for independence, some would surely be exempted. I believe so; I believe that an integrated tax and benefit system in an independent Scotland would be fairer and sustainable.

As per the terms of the motion, I note the Sheffield Hallam University report. I also note that independence is the only way forward for Scotland, as far as I am concerned.

We come to closing speeches, for which members who have participated in the debate should be in the chamber.

16:02

I, too, thank the Welfare Reform Committee for its second report on welfare reform, which I read with interest. I look forward to the recommendations that Michael McMahon said are coming. They will be helpful—especially to those of us who are not members of the committee and who have not heard all the evidence.

The main headline in the report is that the welfare reforms will eventually take £1.6 billion a year out of the Scottish economy. With Alex Johnstone, I found no analysis of how much would be brought back into the economy by people being supported into work.

The outcry from Labour and the SNP about capping benefits at £26,000 is certainly not joined by people across Scotland, given the YouGov poll that shows 72 per cent support for capping benefits, which is 3 per cent higher than the figure for England. I remind members that the benefits cap of £26,000 in income is equivalent to a gross salary of £35,000.

Will Mrs Scanlon give way?

No. I am sorry, Kevin.

Currently, the average salary in Scotland is less than £23,000—in the Highlands, it is just over £20,000. If Labour and the SNP do not support the cap on benefits, they need to tell that to people across Scotland.

I watched “Question Time” last week. Caroline Flint, a Labour member of the Westminster Parliament, clearly said that she supports the cap, and that she wants it to be increased for some areas, in particular, London. Labour has to be honest. Is there a Scottish policy or a policy for this Parliament? Is there a separate policy at the Westminster Parliament?

We have heard bitter complaints from Labour and the SNP about the UK coalition Government’s welfare reforms. Alex Johnstone and I welcomed Patrick Harvie’s contribution, because at least he was honest about what he would put in place instead.

Will Mary Scanlon give way?

I will finish my point. What would Labour and the SNP say if they were ever in a position to implement reforms? We do not know, but we can assume from everything that has been said that we would have higher taxes and higher benefits in Scotland. People would spend a lifetime parked on benefits—I will come back to mental health—with no review of their abilities or needs and no support to get them into work. We would have housing benefit of up to £2,000 a week, and child benefit for millionaires.

Will the member give way?

Will the member give way?

Where?

You have never said where. You have never said anything.

I ask Mary Scanlon to speak through the chair.

It is all very well to criticise, but you cannot be against everything and for nothing.

Will the member give way?

I remind members that, since 2010, 224,000 people in Scotland have been taken out of paying any tax at all, and that number will rise again next year as the personal allowance increases to £10,000.

Will the member give way?

Was that significant increase in disposable income taken into account in the report from Sheffield Hallam University and the committee, which arrived at the figure of £1.6 billion?

Will the member give way?

As an economist, I know that it is important to include that additional disposable income, given that the marginal propensity to consume is higher for lower incomes, which would lead to a significant increase in the multiplier effect.

Will the member give way?

I have less than two minutes left. I am sorry.

Another point that is made on page 5 of the report—I tried to intervene regarding this—refers to the Labour Party. The report states:

“Some of the incapacity benefit reforms, however, are Labour measures that pre-date the 2010 general election but are only now taking full effect.”

Which reforms are you for? Are they the ones that you have already implemented? I am referring to the Labour Party. Which ones are you against?

Will the member take a very brief intervention?

I think that you have to be absolutely honest on that point.

The report states that:

“the figures ... do not assume that loss of income from benefits will wholly or”

even partly

“be replaced by additional income”.

The member is in her final minute.

What we know about welfare reform is that already many changes have been made, and I welcome them. I am sorry that others have not done so. Professor Harrington has already made changes in respect of fluctuating conditions such as ME, MS, Parkinson’s disease and mental health problems.

Other members—I think Kevin Stewart was one of them—have been in touch with the UK minister, and I have likewise written to him regarding motor neurone disease, because I feel that there are instances in which that should be included because people’s condition can deteriorate rapidly.

My final point is on mental health services: 45 per cent of people on benefit—

The member really needs to conclude.

We can look at the cuts, but what we need to look at is early diagnosis, early intervention, less stigma and a commitment to helping people to stay in their jobs.

16:08

The Welfare Reform Committee was established following Parliament’s agreement to reject a motion that would have given legislative consent to the UK Government on aspects of welfare reform, and today’s debate has again underlined that we were right to push for that approach.

We on the Labour side of the chamber have said that we recognise that the welfare system was in need of further change. We supported, for example, the principle of universal credit to ensure that we have a fairer and simpler welfare state—secured by enhanced public support for assistance—that provides for us all in times and circumstances of need, and we made changes when we were in Government.

However, our view remains that, in addition to reforming the welfare system itself, our primary aim should be to ensure that, for those of us who are able to work, there is decent work for us to do. The exposition that we have heard on the impact of the changes that the Tory-led Government is making reinforces our view that the UK Government has failed to get that balance correct. It has, in fact, made a number of changes that are unfair and unlikely to work in and of themselves. Such is the bedroom tax, which Mark MacDonald quite rightly highlighted.

They collectively represent real and significant reductions in the incomes of many people, including many of the working poor. They are also a serious threat to local economies in many of the most deprived areas of the country.

In short, the report justifies the stance that we have taken alongside the Scottish Government to reject the UK Government’s approach and, where possible, to seek to minimise the impact that negative changes will have on the people whom we represent, and to use the substantial powers of the Scottish Parliament to assist those who are most in need.

Excuse me, Mr Smith. Mr Rennie, would you mind turning to face the chair and retaking your seat, instead of conducting conversations?

That last issue—powers—is an area of disagreement between Labour and the SNP. We have heard about some of that today, but it has also been good to hear the arguments of the Tories and the Lib Dems. It has been a bit of a change for those of us who are used to the debate to hear such boisterous support, other than from Mr Johnstone, who is always with us. It is good to see the Lib Dems taking part and defending their policy. That has not been the case in every one of these debates.

As a Glasgow MSP, I thank the convener and many other members for highlighting Glasgow’s circumstances. According to the report, it will see a loss of £270 million in spending power as a result of the welfare reforms. Bob Doris was right to say that, in absolute terms, that figure is second only to what Birmingham will lose.

The figure of a £1.6 billion loss to Scotland, which the committee has obtained, is larger than some of the figures that we have been working from, such as that in the Scottish local government forum against poverty report. It is lower than Citizens Advice Scotland believed it might be, and is substantially lower than the figure that the Scottish Government publicised. It is useful to have independent figures in the public domain, so the report is a significant staging post on the journey towards understanding the likely consequences of and, therefore, what our priorities should be for mitigation of Tory policy and the better prioritisation of spending that is being made by the current Scottish Government. Jackie Baillie was right to highlight the information that was published in The Herald today on that subject.

We have heard that Scotland is in the middle of the table in terms of the potential impact of the reforms. We are not as badly affected as the north of England, Wales or London, but we are worse off than southern England, excluding London. We sit between the west midlands, which are above us, and the east midlands, which is suffering less of an impact.

Alex Johnstone was right on one point when he said that the impact in Scotland is also differentiated. The number of people who will be affected in the north-east, excluding Dundee, is much smaller than the number in places such as Glasgow, Renfrewshire, Inverclyde, Lanarkshire, and West Dunbartonshire. In other words, the impact will be hardest in areas that are already the most deprived and where services are already the most stretched. When it comes to local authorities putting money in to support council tax benefits, these are the areas in which least money is available. The impact will be felt more by the people for whom life is already more difficult than that of their neighbours.

Mike Holmes of Enable Scotland gave evidence to the committee and highlighted that point when he talked about a “perfect storm”. The point was also highlighted by the SCVO’s briefing for today’s debate, although it has not been picked up on. Mike Holmes talked about

“changes to services, tightening eligibility criteria, fewer college places and a much harder jobs market”—[Official Report, Welfare Reform Committee, 24 April 2012; c 138.]

and the already “shockingly low” levels of employment that exist among disabled people.

The changes to uprating, to incapacity benefit and to working tax credit add up to the biggest overall losses in the benefits system across Scotland. The situation on tax credits is particularly disappointing, especially given the role that tax credits played in part of our success in substantially reducing levels of poverty when we were in government.

Finally, I want to touch on the bedroom tax. In its briefing for the debate, Barnardo’s called on us to move our debate beyond the bedroom tax, but it has been highlighted by a number of members this afternoon, and it was most clearly set out by Iain Gray. There is disagreement between Labour and the SNP about how we should respond to the bedroom tax. It is important because significant numbers of people are being affected by it, and because it is an example of a change that is unfair and can readily be understood to be unfair. It therefore presents us with an opportunity to convince the large numbers of people who support punitive welfare changes that the Tory approach is not the right one.

You must close, Mr Smith.

Thank you, Presiding Officer.

16:15

I thank the Welfare Reform Committee for commissioning the report from Sheffield Hallam University and for bringing this debate to the chamber, because every opportunity that the Parliament has to make its voice heard on such an important issue is valuable.

We have heard a lot of passionate views and stories. The heartbreaking stories that Michael McMahon mentioned at the start sum things up for me, because they are not isolated stories; such cases are to be found throughout Scotland—in every constituency. I know that there are cases in other parts of the UK as well, but we are here to talk about the impact of the reforms in Scotland. Anyone who thinks that there are just a few cases really needs to think again.

Linda Fabiani made the point that we all know people who are affected by the benefit changes and welfare reforms. It is not the case that they are all people who are skiving from work, and it is not right to suggest that the people we know are in an unfortunate situation but that everyone else is skiving. We all know that such people are not in a position of their making and that they deserve to be protected by the state.

The bedroom tax has been talked about a lot. There is not a great deal of disagreement between us and the Labour Party on the bedroom tax, but I say to Labour that within Scotland there will be a £65 million cost from the bedroom tax alone, with a one-off estimated negative impact of £87 million. Where does the Labour Party think that the £55 million shortfall can come from? Even if it were to suggest that we should top up the £10 million of discretionary housing payment, there has been no suggestion of where the money has to come from.

Does the minister acknowledge that this is what is wrong with the debate? We agree that we have to rob Peter to pay Paul, which is less than ideal, but it is the Scottish Government that has the budget. Let us sit down and make suggestions about where that money might be found. We have to agree that we will support painful cuts elsewhere for the greater good. That is how to move things forward—not by demanding suggestions from those of us who do not have access to the books.

The debate, in the main, has been quite consensual, but issues have been raised that we have to take on. Iain Gray is saying, “Let us sit down and see the books.” We have heard so much from the Labour Party in this Parliament about what we need to do to sort out problems—for colleges, for everything—but there has not been one concrete suggestion about where the money is coming from.

We have also heard about the difference between what is happening here in Scotland and what is happening with the Labour Party in England. [Interruption.]

Order.

There have been comments that we want to rewrite on childcare and we want to rewrite on benefits—[Interruption.]

Order on the front benches, please.

We have to look at that, and what we are saying is that, where we can help to lessen the impact of the UK Government welfare reforms, we will. We will listen to others’ suggestions of ways of doing that.

The issue is not about the Labour Party or the SNP; it is about what we can all do collectively. The suggestion about using an additional higher band of the council tax to meet this shortfall has been dismissed by the Scottish Government as robbing Peter to pay Paul. If Peter can afford to pay more and Paul cannot afford to live, is the moral basis for redistribution not inescapable?

Patrick Harvie has been honest in making a point.

On council tax, we have given a commitment to the people of Scotland that is helping many households throughout the country. In England, people have seen an increase of 10 per cent in their council tax since 2007, whereas in Scotland council tax has been frozen. We will continue with that commitment.

Will the member give way?

No, I will not give way at the moment, because I have hardly moved on in my speech.

What I am saying is that we are now hearing the reality about what is happening. Patrick Harvie is right that the issue is not simply between Labour and the SNP, but that is what it is boiling down to at the moment. Labour is not being honest on the issue and we are hearing different stories at different times from Labour members in this Parliament, in local authorities and at UK level.

On discretionary housing payments, the UK Government is not telling the truth. The UK Government claims that discretionary housing payments will be sufficient to deal with the hard cases, but that is ridiculous when we know that as many people will be affected by the bedroom tax in Scotland as in London and yet we are getting a lot less money—we are getting £10 million whereas London is getting £56 million. In anybody’s books, that is not fair. Nor is it our problem, yet we are paying the price to solve a problem that exists in the rest of the UK.

As well as the impact of the bedroom tax reform, there is more to come because we still have significant concerns about universal credit. Some of the problems that we foresee will compound the harms that are already being caused by other reforms, but there are still more problems that we have not yet faced.

Local authority-led pilots and demonstration projects in Scotland, including additional pilots funded by the Scottish Government, are looking at specific areas of concern to try to bottom out the issues.

You are in your final minute, minister.

I am pleased to confirm to Parliament that, as the Deputy First Minister announced this morning, the Scottish Government will award £170,000 to Glasgow City Council for an additional two-year pilot to help people across the city to use the library network’s public access computers to make benefit claims. The pilot will build skills and capacity in advance of the introduction of universal credit. We all know that Glasgow will suffer from the welfare reforms and we know that Glasgow has a higher than average percentage of people who lack access to online facilities.

I would like to say much more about the damaging cuts that will come alongside PIP, but I must also mention the legislation that we have introduced. I am pleased that the Welfare Reform Committee has welcomed what we have done on passported benefits and what we are trying to do with the Scottish welfare fund, which came into force this month.

You must finish.

As I have said before in the chamber, I honestly believe that we cannot get the welfare system that we want if we start by saying just that we want to save money. We need to look at what is required and build it up from there while protecting the most vulnerable. I believe that we can do that properly only with an independent Scotland in charge of our own economy.

I call Jamie Hepburn to wind up the debate. You have eight minutes.

16:22

I thank those members who have taken part in today’s debate. At the outset, let me say to Willie Rennie that he should not be ashamed of reading one of my press statements—he should always be happy to do so—but, as I am speaking on behalf of the committee, I might be less strident in my defence of the aforementioned statement than I would usually be.

Today’s debate was never likely to lead to unanimity across the chamber, but it has been no less productive for that. Members have identified a number of important issues, which will help the committee as we take forward our work.

I thank the various bodies and agencies that have provided briefing material for today’s debate. That demonstrates the great level of interest in the report before us and in the issue of welfare reform more generally. I also echo the convener’s thanks to Steve Fothergill and Christina Beatty of the centre for regional, economic and social research at Sheffield Hallam University for their work in pulling together the excellent report, “The Impact of Welfare Reform on Scotland”, which the committee commissioned.

I will pick up on as many as I can of the points that members raised—I apologise if I am unable to respond to every point—but I begin by reiterating some of the report’s headline figures, which have been mentioned already but are worth re-emphasising.

First, as Jackie Baillie and others pointed out, although the financial losses are large, the scale of the loss in Scotland as measured per adult of working age is broadly on a par with the GB average. Indeed, table 3 in the report sets out that the figures are broadly in line, with the impact in Scotland being only marginally higher than the GB average. However, the report makes the important point, which is worth putting on record, that

“the gap between Scotland and the GB average would have been somewhat wider – around £20 per adult of working age – if the Scottish Government had chosen to pass on the cut in Council Tax Benefit to local authorities and thence to claimants.”

The absolute headline figure that attracted most attention when the report was released and which has been cited today, including by the convener in his opening remarks, is that, when the present welfare reforms have come into full effect, they will take more than £1.6 billion a year out of the Scottish economy, which is equivalent to about £480 a year for every adult of working age.

Will the member give way on that point?

Briefly.

Is the real cost not the emotional and psychological impact and the fear of the reforms that are yet to come rather than just the financial cost?

Of course, beyond the headline figures, the reforms affect real people. That has been remarked on during the debate and, if time allows, I will say a little about it, too.

The headline figure is £1.6 billion, but the impact is greater in some areas than in others. Bob Doris and Drew Smith correctly identified that, in absolute terms, Glasgow is the most heavily affected area and will lose about £269 million per annum, which is second only to Birmingham of the local authorities throughout Great Britain. In Scotland, Glasgow is followed by Edinburgh on £135 million and my local authority area of North Lanarkshire on £123 million. The loss per working-age adult is also highest in Glasgow at about £650, which is followed by Inverclyde, where the figure is £630 per annum.

That indicates that, probably unsurprisingly, the most deprived areas are hardest hit by the reforms. That is demonstrated clearly in figure 1 in the report. There has been some contention about the figure of £1.6 billion per annum, with Mary Scanlon and Alex Johnstone questioning the idea that it is money being removed from the economy. That line of inquiry was pursued with Professor Fothergill when he came to the Welfare Reform Committee to present his figures. I understand the point that Mary Scanlon was attempting to make, but I want to be clear that the report that the committee commissioned was not intended to be an assessment of the UK Government’s overall economic policy; rather, it was meant to be an in-depth look at the impact of welfare reform in Scotland.

Does the member agree that, if the research had addressed that wider question, it is likely that it would have found clearly that the money coming out of the economy through welfare cuts and reforms will hit hardest on the poorest, whereas money coming back in through changes to the tax threshold will be spread much more widely, so the changes increase social inequality?

That might be a fair point. I pursued that line of inquiry with Professor Fothergill when he came to the committee. In essence, the point is that we could argue that £1.6 billion is not being withdrawn from the economy only if an equivalent £1.6 billion were being handed back to the people of Scotland, but there is no evidence to suggest that that is the case.

We must also consider the impact on local economies, which George Adam talked about. Professor Fothergill said:

“I am aware that plenty of research demonstrates that welfare benefit claimants actually spend most of, if not all, their income, whereas more affluent groups can afford to put some away for a rainy day. You would therefore expect most of that loss of income to feed through fairly directly to a loss of spending.”—[Official Report, Welfare Reform Committee, 16 April 2013; c 701.]

Therefore, there could be an impact on local economies and economic recovery.

I turn to specific areas of loss. Within the figure of £1.6 billion, the biggest financial losses arise from reforms to incapacity benefit, which account for about £500 million a year, and the changes to tax credits, which account for about £300 million a year. Combined, those make up half the reduction. The changes in incapacity benefit affect 144,000 households and involve a reduction of £500 million per annum.

Will the member give way?

The member is coming into his final minute and we are very tight for time.

Do I have time, Presiding Officer?

There is no time.

Okay. I apologise to Mr Rennie, because I would have been happy to take an intervention.

The estimated loss per annum from the changes in incapacity benefit is £500 million, with an average loss per affected household of £3,480. On the move from DLA to PIP, the report identifies an average loss per affected household per annum of £3,000. As the convener mentioned, some households will be affected by the loss of both and may lose more than £6,000. What household could sustain that level of loss?

There was much discussion about the changes to housing benefit—the bedroom tax. I do not have time to go into those changes in great detail, but we took some important evidence from a variety of individuals today in Glasgow. It was quite emotive evidence, which demonstrates the point that Dennis Robertson made in his intervention. Behind all the figures that are detailed in the report that we debate today are individual stories and individuals who are being impacted. I reassure those individuals that the committee will focus on them as it takes its work further forward.