Social Justice and Social Security Committee

Meeting date: Thursday, March 31, 2022

Official Report 594KB pdf

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Subordinate Legislation

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Social Security (Up-rating) (Miscellaneous Amendment) (Scotland) Regulations 2022 [Draft]

Agenda item 2 is the draft Social Security (Up-rating) (Miscellaneous Amendment) (Scotland) Regulations 2022. The draft regulations were laid on 16 March, replacing the draft that was laid on 28 January. At our meeting on 17 March, the minister told the committee that the original draft regulations had been withdrawn, following the Scottish Government’s decision to uprate some benefits by 6 per cent this year.

I welcome to the meeting Ben Macpherson, the Minister for Social Security and Local Government. The minister is joined remotely by Scottish Government officials. Simon Coote is the head of the cross-cutting policy unit, Camilo Arredondo is a solicitor and Dominic Mellan is an economic adviser for social security analysis. I invite the minister to make an opening statement.

Thank you, convener, and good morning to colleagues here and online. I welcome this opportunity to assist the committee in its consideration of the draft Social Security (Up-rating) (Miscellaneous Amendment) (Scotland) Regulations 2022. Once again, I register my sincere gratitude to the committee for accommodating the last-minute changes to the scrutiny process for the draft regulations.

When I attended the committee two weeks ago, I took the opportunity to update members on the changes that we have made to the regulations in order to urgently provide additional support to people in response to cost of living pressures. The relaid regulations now provide that additional support by further increasing several forms of devolved social security benefits and assistance, from the previously proposed 3.1 per cent increase up to a 6 per cent increase. The 6 per cent uprate will apply to the young carer grant, the funeral support payment, the three best start grants and the job start payment, and we will make future regulations that will also effect the increase to the carers allowance supplement. We will also now increase child winter heating assistance by 6 per cent, which is greater than the 5 per cent increase that was previously proposed, supporting more than 19,000 families of severely disabled children with their heating costs.

As the committee is aware, we had already taken the decision to double the Scottish child payment from £10 to £20 per week, a 100 per cent increase, which will immediately benefit around 111,000 children. Last week, the Cabinet Secretary for Social Justice, Housing and Local Government announced a further increase to the Scottish child payment, increasing it to £25 per week per child by the end of 2022, when we will extend the payment to under-16s. That is a 150 per cent increase on the current rate. Scottish Government analysis estimates that that will lift 50,000 children out of relative poverty in 2023-24, reducing the relative child poverty rate by five percentage points.

Moreover, we increased best start foods in August 2021 from £4.25 to £4.50 a week, a 5.88 per cent rise, which exceeds the September consumer prices index rate of inflation and is close to the 6 per cent uprate for other benefits.

On child disability payment and adult disability payment, it was necessary to match the Department for Work and Pensions and keep the uprate at 3.1 per cent. As I stated to Parliament recently, that is in order to meet the terms of the agency agreement that we have in place with the DWP, but also, and importantly, it was to avoid creating a two-tier system during case transfer. We must not create a system in which individuals who are paid by Social Security Scotland are paid more than clients whose cases have not yet transferred to the Scottish system, which would clearly not be fair.

I hope that that has been a helpful summary for members. Subject to parliamentary approval, the new rates that I have described and that are set out in the draft regulations will come into force tomorrow.

We have worked at pace to change the regulations to directly help families and carers. We wanted to ensure that we were using the powers that we have to help those who are most in need, who are facing rising costs—and we know that some other benefits that they may be receiving are not keeping up with the cost of living pressures, unfortunately.

I thank the committee again for its scrutiny of the uprating regulations and its co-operation around the need for urgent changes. I also thank my Scottish Government officials and those at Social Security Scotland, who have worked to implement the proposals that are before you. I trust that colleagues will welcome and support the regulations.

Thank you very much, minister. We will now move to questions from members. We have two themes: the first is on uprating for inflation, and the second is on increases not related to uprating.

Pam Duncan-Glancy, who is joining us remotely, will start us off on theme 1, and she will be followed by Marie McNair, who is also joining us remotely.

Thank you, and good morning, convener. Thank you, minister, for joining us this morning and for setting things out. Thanks to the officials, too.

First, although Scottish Labour will vote for the measures—because not doing so would mean no increase for anyone—I again put on record my disappointment that we are not doing anything to uprate disability and carers’ benefits. People with disabilities and carers are facing cost of living pressures, too, and we should be using all the powers of the Parliament to address that.

Last week, the Institute for Fiscal Studies told the committee that the uprating by 6 per cent was well meaning but badly designed, and I have to say that I agree. It all feels very ad hoc, and I do not believe that that is the way to manage public funds. One Scottish statutory instrument said that some things will be uprated that would not be uprated at all. Then, literally overnight, that was removed. On the Monday, the Government still thought that 3.1 per cent was fine. On the Wednesday, it thought better of that and came to the right decision to uprate by 6 per cent. In addition, some benefits are being uprated by amounts that do not align with inflation. It feels as though the measures are very much grace and favour, but families cannot reflect that.

Will the minister commit to automatically uprating Scottish benefits in line with inflation in the coming years? Will the Government commit to uprating the adult disability payment and child disability payment in line with the rest of the benefits when the transfer process is complete?

We have, of course, seen a significant increase in inflation and cost of living pressures from the September CPI—which was not anticipated at that time—because of various events. Using the flexibilities that we have in our system and under the regulations, we sought urgently to make the changes, utilising the Social Security (Scotland) Act 2018 as we could. As Pam Duncan-Glancy knows, the position as to why we use the September CPI is set out in the 2018 act, as was agreed by Parliament during scrutiny of the Social Security (Scotland) Bill.

We have increased the Scottish child payment at a higher rate because of an election commitment to double the Scottish child payment, and the cabinet secretary took action last week, with the further increase to £25 that will take place. That is based on our child poverty delivery plan, and it ensures that we are doing what we need to do to meet the binding targets in the Child Poverty (Scotland) Act 2017.

Members will be aware that the Scottish child payment, as well as being a new benefit, is an innovation from the Scottish Government. Much of the determination to increase as we have—which is a collective determination across the parties—is because of the reduction in universal credit. There was therefore an even more significant determination from MSPs across the Parliament to make that increase to the Scottish child payment to help households at this time.

Thank you, minister. Have you completed your questioning, Pam?

Would it be okay to consider the uprating of the Scottish child payment and other benefits not related to inflation now, or do you want me to wait until after Marie McNair has come in, when I can come back in on theme 2? Which would you prefer?

If you could just go for it now, Pam, as we are so tight for time, that would be very helpful.

That is much appreciated. Thank you, convener.

I thank the minister for that answer. I appreciate and understand the mechanisms in the 2018 act that are available to him. I was concerned more about the sudden change, which took place in a matter of days.

Moving on to the uprating that does not relate to inflation, minister, will you explain why there is no uprating at all to the carers allowance supplement? You said in your opening statement that you will do something about that in the future. When will that be? I am sure that that will be very helpful for unpaid carers.

I also ask what the Government intends to do for the 150,000 children who are on bridging payments and the 177,000 children who are getting no Scottish child payment at all just now because the roll-out has not happened. Will you explain to the committee and others what the Government will do for them before December this year?

I will take the question on bridging payments first and the others thereafter.

As the committee will be aware, the Scottish child payment bridging payments are an interim measure that provides immediate support to around 144,000 school-aged children from low-income households ahead of our roll-out in full to those under 16 of the Scottish child payment by the end of 2022, which will be delivered following receipt of the necessary data from the DWP. We have discussed that previously.

The bridging payments make use of existing data that is available to local authorities, and over £76 million was awarded to eligible families in 2021. A further £520 per child will be paid in 2022, with £130 being paid for eligible children ahead of the Easter holidays that are coming up. By the end of 2022, school-aged children will benefit from the increased value of the Scottish child payment that I set out, at which point around 430,000 children and young people will be eligible for the benefit. So, part of the bridging payment will happen in the coming weeks and we have set out how we will roll out the full extension of the Scottish child payment over the rest of the year.

When it comes to Scottish carers assistance, as I have alluded both in my opening statement today and at committee two weeks ago, there is a different process for implementing the uprate to the carers allowance supplement. We will also use the 6 per cent figure to update the carers allowance supplement, as I emphasised in my opening statement. We are currently exploring options for implementing that, including how we might apply inflation-setting powers, as provided for in section 81 of the Social Security (Scotland) Act 2018. That will ensure that the increase is reflected in the summer payment. We are currently in the process of determining how we will implement that 6 per cent uprate to the supplement, and we will keep the committee informed, as appropriate, as we progress that work.

Thank you very much, minister.

Marie McNair joins us remotely. She will be followed by Emma Roddick, who joins us in the room.

Good morning, minister. I want to follow up on the carers allowance supplement. As you know, in Scotland, we have introduced the supplement because of the failure over the past 45 years by successive Westminster Governments to align carers allowance to other income replacement benefits. In your continued conversations with Westminster DWP ministers, have you received any indication that they are minded to right that wrong? If they did that, could it free up Scottish Social Security resources to be invested in other areas of our social security budget?

That is an important question for a number of reasons. When we went through the process of the bill that became the 2018 act, the supplement was brought in so that carers allowance would match jobseekers allowance. I continue to urge United Kingdom ministers to give that sense of equity across the UK. That would provide support to people not only in Scotland but in other places. That emphasises another important point that is under consideration across all the evaluation of what we are doing on uprating. Of course, if there had been uprating and appropriate support for reserved benefits from the Chancellor of the Exchequer in the spring statement last week, that would have provided important additional support to families in Scotland and across the rest of the United Kingdom. I think that it is extraordinary that the chancellor did not, through his spring statement, provide any support to those on benefits. In my view, that was significantly wrong and a mistake.

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Do you believe that that was a missed opportunity to help those in the greatest need?

It absolutely was a significant missed opportunity to do the right thing. I urge all UK ministers to impress on the chancellor the need for the UK Government to use its significant taxation, fiscal and monetary powers to do more for those who are on benefits, especially at this time.

Given the increased prices and cost of living, we all welcome the higher uprating of those benefits. What else has been done to assist with the pressures on families?

We are acutely aware of the many pressures that families face, in particular, due to higher energy bills, as well as the increases to the cost of the weekly shop, to interest rates and to the national insurance contributions that people pay to the UK Government. Our £290 million cost of living package builds on our existing support—£150 is going to families who receive a council tax reduction, irrespective of their property band, and £150 is going to other households in properties in bands A to D. Last week, the Cabinet Secretary for Social Justice, Housing and Local Government announced a number of measures in the tackling child poverty delivery plan, including—very significantly in my view and that of many others—the action to mitigate the benefit cap. That comes on top of actions that the Scottish Government has taken for a number of years to mitigate the bedroom tax. With the resources and powers that we have, we are doing what we can to help.

Good morning, minister. You touched on the need for increases to disability and carers benefits to be linked to the UK rate. Do you believe that the UK Government should be uprating those benefits, which would, in turn, allow the Scottish Government to do the same?

For clarity, we are going to uprate the carers allowance supplement by 6 per cent. We are still just a number of months into the full roll-out of child disability payment and we successfully launched the adult disability payment in our first pilot area on Monday 21 March.

I know that we will shortly be discussing case transfer, but, as we undertake the twin tasks of launching our new benefits and undertaking case transfer, we have to make sure that people are receiving the same amounts, whether they are a Scottish recipient of a UK disability benefit or a Scottish recipient of a Social Security Scotland benefit. We have uprated the child disability payment and the adult disability payment only by the September CPI of 3.1 per cent because that is what is happening with the personal independence payment and disability living allowance for working age adults at the UK level. Should the UK Government have done more for those who are on those benefits at a UK level? Yes, and that would have allowed us to raise the child disability payment and the adult disability payment by higher rates, to match what the UK Government had done. I continue to urge the UK Government to consider doing that.

Good morning to the minister and his team. I have a couple of questions. First, when David Phillips, from the Institute for Fiscal Studies, gave evidence to the committee, he talked about a “cliff edge” for some families, who fear losing out on their eligibility for SCP if they take on extra hours of work. I presume that now is the right time to go into it. What work are you and your team doing on that? What mitigation is there around that and what thinking is being done?

Secondly, I go back to Pam Duncan-Glancy’s question, to which I do not think that I heard an answer. Once ADP is fully transferred and is being run by Social Security Scotland, do you intend to increase that benefit as you have increased the other benefits that are now being run by the agency? Once all the transfers have taken place, do you see a further increase happening, or do you see the amount staying aligned with the UK figure?

Thank you for those two questions. I will start with your first question, on the evidence from the IFS that a high value for the Scottish child payment could create a “cliff edge” and make it more difficult for families to increase their working hours in relation to universal credit. We recognise that a higher value for the Scottish child payment could potentially, in some circumstances, from an analytical perspective—although we need to remember that people are motivated to work—reduce work incentives for some claimants in respect of the margin for exceeding the universal credit earnings limit. By increasing their working hours, they could be at risk of losing universal credit and, therefore, their Scottish child payment entitlement.

In analysing universal credit award data, we have observed no evidence of that in Scotland’s economy to date. Nonetheless, as you would expect, we continue to monitor that potential issue, because it is important. The Scottish child payment is paid as a top-up of reserved benefits, using powers available to us under section 79 of the Social Security (Scotland) Act 2018. That means that, when someone drops off their qualifying benefit—for example, universal credit—we have no legal means to continue paying the Scottish child payment. That is why it is an important issue.

We have committed to reviewing the legislative footing on which the Scottish child payment is based once the payment is rolled out fully, later in the year, to those who are responsible for children under 16. More broadly—this is important—the Scottish child payment can positively impact on work incentives for claimants by reducing financial labour market barriers—for example, through helping to fund childcare costs to enable an increase in working hours. We therefore need to emphasise that it also has a very positive effect.

In the 2018 act, we committed to uprating. I remember discussing that with Jeremy Balfour when I sat on the Social Security Committee not so long ago. As we move into the position of delivering the adult disability payment and the child disability payment nationally, we will have to think seriously about how we ensure that our payment levels are appropriate to meet the cost of living for individuals.

I want to follow up on that. It is very helpful to hear that you will be carrying out a review. Roughly when will that review take place? Perhaps you can write to the committee once it has started, as I am sure that we would want to look at how the child payment is working once it has been rolled out. Do you have a rough date for when the review might happen?

Are you referring to a review of the legislative footing?

Yes.

I can get back to you on a review of the legislative footing on which the Scottish child payment is based. I think that that would be the best course of action.

Thank you.

Thank you, minister. That would be very helpful for us.

Good morning, minister. I have a couple of questions. What can the Scottish Government do to clarify the definition of kinship care? Will legislative change be considered?

You are getting ahead of yourself—that is a question for the last panel.

I am sorry, convener—I came in late.

That is okay.

As we have no more questions from members on this part of proceedings, we move to the formal debate on the motion. I remind the committee that only members and the minister may take part in the formal debate. I invite the minister to move the motion.

Motion moved,

That the Social Justice and Social Security Committee recommends that the Social Security (Up-rating) (Miscellaneous Amendment) (Scotland) Regulations 2022 be approved.—[Ben Macpherson]

Motion agreed to.

I invite the committee to agree that the clerks and I will produce a short factual report of the committee’s decision and arrange to have it published later today. Are we agreed?

Members indicated agreement.

I suspend the meeting briefly to allow a changeover of officials.

09:25 Meeting suspended.  

09:26 On resuming—