Meeting of the Parliament (Hybrid)

Meeting date: Tuesday, December 22, 2020

Official Report 1260KB pdf

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Universal Credit £20 Increase

The final item of business is a members’ business debate on motion S5M-23242, in the name of Keith Brown, on the £20 universal credit increase. The debate will be concluded without any question being put.

Motion debated,

That the Parliament welcomes the decision that was made at the start of the COVID-19 pandemic to temporarily uplift universal credit payments by £20 per week; believes that this has been a lifeline for many people and families over the last few months, including in the Clackmannanshire and Dunblane constituency; understands that more than 50 charities and organisations have signed a letter, co-ordinated by the Joseph Rowntree Foundation, asking for the Chancellor to make the increase permanent; notes the view that the increase should also be extended to legacy benefits, and further notes the calls for the UK Government to extend what it sees as this vital safety net for half a million people in Scotland.

19:38  

I welcome the opportunity to have this debate, even at this inauspicious time, after a long day. I am particularly grateful to those members who have stayed behind to debate what is an extremely important matter for so many people in my constituency, across Scotland and across the United Kingdom.

I record my thanks to members who supported the motion to allow the debate to take place. That would be members of the Scottish National Party, the Labour Party and the Greens, and Mark McDonald. One has to wonder about the lack of support from the Lib Dems or indeed the Tories, considering that the last line of the motion, which states that universal credit has been a

“vital safety net for nearly half a million people across Scotland”,

is a direct quote from the Tories’ leader, Douglas Ross. That is another example of the empty words of their Westminster-based leader meaning nothing to the Tories in this chamber.

It would appear that even the House of Lords supports the terms of my motion. Just last week, the Economic Affairs Committee recommended that the UK Government commit to making permanent the £1,040 per year increase to the standard allowance, which is set to end in spring 2021. Furthermore, the committee said:

“The Government should ensure that those on legacy benefits receive an uplift comparable to that of Universal Credit.”

It is worth noting that there is widespread public support for making the uplift permanent. New polling from the Health Foundation and Ipsos MORI shows that the move is supported by 59 per cent of the public, whereas only 20 per cent oppose it. That builds on the strong public support for the uplift as part of the response to the pandemic, which 74 per cent of people supported.

The £20 per week increase to universal credit, introduced in response to the coronavirus pandemic, has been hailed as a lifeline by a coalition of more than 50 organisations and charities, including the Joseph Rowntree Foundation, Shelter, Oxfam, MacMillan Cancer Support and Barnardo’s, which have all urged the chancellor to make the increase permanent.

The increase is a lifeline to more than 470,000 people in Scotland, which includes 5,379 people in Clackmannanshire and 6,850 people in Stirling who are currently claiming universal credit. There has been a staggering 80 per cent increase in the number of claimants since March.

When the increase was announced, the Chancellor of the Exchequer said that he wanted to “strengthen the safety net”. To withdraw it in March 2021, when, it can be argued, the economic impact of the pandemic will be hitting many people hard, would be a cruel and terrible thing that would inflict suffering on the number of people that we have talked about—according to the Joseph Rowntree Foundation, the number is around 16 million across the UK. Those people are all from households who are struggling to keep their heads above water in these difficult times.

New modelling from the Joseph Rowntree Foundation shows that 6.2 million families will see an overnight loss of £1,040 next year, and around half a million more people, including 200,000 children, will be pulled into poverty. That will happen at a time when UNICEF has launched a domestic emergency response in the UK for the first time in its more than 70-year history, to help feed children hit by the Covid-19 crisis. It is clear that now is the time to strengthen the welfare safety net and not to weaken it.

Despite repeated calls to expand the £20 weekly increase, it remains unavailable to claimants of legacy benefits, which has in effect created a two-tier social security system that is affecting around 2 million people. Of course, those on legacy benefits are often carers, disabled or suffering from ill health. The Joseph Rowntree Foundation’s recent report “The financial impact of COVID-19 on disabled people and their carers” is a sobering reminder of the additional costs that disabled people face. For example, of the people who said in September 2020 that their finances had been affected by the pandemic, 24.6 per cent of disabled people reported having less money available to spend on food, compared to 12.2 per cent of non-disabled people.

In May, the Secretary of State for Work and Pensions, Thérèse Coffey, told MPs that

“it is far more straightforward and ... quick”

to implement the uplift for universal credit and tax credit claimants, because those systems are digital. She claimed:

“It would take quite some time to change the legacy benefits system—I am talking about several months—with the process we have.”—[Official Report, House of Commons, 4 May 2020; Vol 675, c 425.]

It has now been nine months, and in Scotland we have seen our local authorities adapt and develop their systems within weeks to pay millions of pounds in new and additional grants and support. There is no reasonable excuse for the Government not to extend the additional £20 payment to those on legacy benefits. It should do so immediately, and it should backdate those payments. It is unthinkable not to cast the strengthened safety net to cover that group too.

In times of crisis, it is the job of Government to support and protect those who need it. Throughout the pandemic, millions of people have found themselves caught up in its economic fall-out, which will last way beyond March next year. In fact, I would go as far as to say that those of us who can remember the 1980s will recognise that the uplift is a real investment. For a large number of people, the effect of this relatively small increase will be paid back many times if we can avoid repeating the problem of too many people experiencing the excruciating poverty that was a legacy of the 1980s.

Evidence tells us that increasing the income of people on low incomes stimulates spending in the economy, as they spend it on household necessities and bills and are far less likely to have the ability to save than those on higher incomes. They will buy food, pay rent and pay for their energy costs; they will not buy a yacht in the Caribbean. All that helps the economy: it goes straight back into the economy. The uplift provides a double boost. It enables families to keep their heads above water, and it puts money into the economy at the time when it is needed most.

The Tories have spent 10 years systematically and brutally dismantling the safety net of the welfare system, with their austerity agenda. It is time for them to start rebuilding that safety net, so that it can help people when they need it, now and in future. We can start by making the universal credit increase permanent and extending it to legacy benefits.

19:45  

I thank Keith Brown for bringing this important debate to the Parliament.

We are living in extraordinary times and through one of the most difficult periods that this country has encountered in recent years. The virus has delivered a profound shock to all of us. People have had to deal with illness and the tragic loss of loved ones, and measures to control the spread of the virus have taken away all the normal decision making that we do daily. Covid-19 has reached deep into our lives, affecting people’s incomes, jobs and security.

I am therefore very pleased that, during the pandemic, United Kingdom ministers have taken unprecedented measures to protect the most vulnerable and put in place a strong package of financial support to help families and children. The UK Government is spending an estimated £19 billion to support Scotland through the pandemic, protecting nearly a million Scottish jobs and livelihoods through the recently extended job retention scheme and self-employed income support scheme.

I welcomed the decision that the chancellor took swiftly in April to provide a temporary 12-month uplift of £20 per week for people who were eligible for universal credit. That means that claimants have been up to £1,040 better off during the year.

Universal credit is playing a large part in the economic response to the on-going pandemic. The most recent figures from the Department for Work and Pensions show that 500,000 people in Scotland were on universal credit in September 2020. Since March, an additional 213,000 people in Scotland have received support through universal credit.

No one is immune from the impact of the pandemic. Analysis by the Scottish Parliament information centre in May showed that, between March and April, the most deprived were hardest hit, in the context of the unprecedented increase in people claiming unemployment-related benefits. A survey that the Child Poverty Action Group carried out and published last week showed that three quarters of low-income families are finding it difficult or very difficult to manage financially. CPAG found that there is no sign of improvement, as employment loss, the rise in living costs and additional caring responsibilities cause financial strain.

The Secretary of State for Work and Pensions has said that the UK Government is not ruling out continuing the universal credit uplift after March. The Scottish Conservatives welcome that comment.

I agree with much of what Jeremy Balfour has said so far, the inescapable logic of which is that he should support the extension of the benefit uplift beyond March, when I presume that the pandemic will be having an even greater effect on people.

If the member can be patient for a minute, I will clarify my position.

We are concerned that, as the Joseph Rowntree Foundation reports, 700,000 people in the UK could be “pulled into poverty” after April 2021 if the £20 uplift is removed. The JRT said:

“The withdrawal of the uplift will risk sweeping 700,000 more people, including 300,000 more children, into poverty; 500,000 more people could end up in deep poverty”.

There were disappointing developments over the weekend. The pandemic is generating a pace of change that is unprecedented. That is why I and the Scottish Conservatives call on the UK Government to extend the temporary increase in universal credit for the foreseeable future, as Mr Brown asks. Throughout the pandemic, universal credit has been a vital safety net for nearly half a million people in Scotland. It would not be fair to take support away from people while the pandemic continues to damage our way of life so keenly.

Douglas Ross, the leader of the Scottish Conservatives, has encouraged the UK Government to make the commitment to extend the uplift as soon as possible, to provide the reassurance that many people are looking for. A £20 uplift may not seem to be a vast sum of money, but it will make a huge difference to a family that receives that support.

My understanding is that it would not be operationally viable to make changes to the legacy benefit systems, whereas digital systems can be changed more simply and quickly. Furthermore, the UK Government’s approach has been to target support at those who face the greatest financial disruption. However, claimants of legacy benefits can make a claim for universal credit if they believe that they would then be better off, and there are special arrangements for those in receipt of the severe disability premium, who will be able to make a new claim for universal credit from January next year.

I think that we would all want to thank the DWP and the UK Government for their clear commitment to supporting people through this challenging time, with unprecedented packages of support rolled out for businesses and individuals alike. The universal credit uplift should continue, and the Scottish Conservatives will continue to urge the UK Government to make that commitment.

Pauline McNeill wanted to take part in the debate, but it appears that we have had a technical problem somewhere along the line. Therefore, I call Bob Doris.

19:51  

I thank Keith Brown for lodging the motion for debate.

At the heart of the motion is an impassioned appeal to the UK Government, urging it to make permanent the temporary uplift of £20 a week for universal credit and to extend that increase to those on legacy benefits.

For many months, I have joined others in urging the UK Government to do the right thing and make the uplift permanent. Like others, I have welcomed the £20 temporary uplift, but have acknowledged that many people moving into the benefit system during the Covid-19 pandemic and facing the additional expenses and hardship that Covid-19 has caused have needed additional funds.

However, let us be clear: the levels of universal credit and legacy benefits were woefully inadequate before Covid-19. Long before Covid-19 hit and afflicted Scotland and the UK, those who were in poverty desperately needed the uplift, and those who may, unfortunately, remain on benefits for some time once—God willing—Covid-19 has passed and been banished will also still desperately need the uplift.

There is simply no argument for removing the £20 uplift. Removing it would push 60,000 people in Scotland into poverty, including 20,000 children. Hundreds of thousands of Scotland’s lowest-income households would lose more than £1,000 a year. Those households simply cannot afford that. Removing the uplift would also push up child poverty rates in Scotland by 2 per cent. The poorest 10 per cent of the population, who are already struggling, would lose 6 per cent of their average income.

We should contrast that with the Scottish Government’s approach. The Scottish child payment is being rolled out, for under-sixes in the first instance, from February next year. The first phase will benefit 194,000 children in Scotland by ensuring that they receive £10 a week. That is an investment of £77 million in our lowest-income households. When fully rolled out, the investment will be £184 million, and half a million children will benefit.

The Scottish Government is directing our resources, as it should, at tackling child poverty. If the UK Government does not retain and extend the £20 universal credit uplift, that would be a direct assault on low-income households during these most challenging times.

In the time that I have left, I will say a little about food need and connect that back to the £20 uplift. Food bank usage has rocketed in recent years. I thank the individuals and groups that have addressed food need directly during the Covid-19 pandemic. They include Young People’s Futures, North United Communities, Love Milton, Royston Youth Action, the G20 youth festival, Lambhill Stables, the Partick Thistle foundation, several local churches and housing associations, and many more. They directly meet food need rather than ask for referrals.

Before Covid-19, my office was open to the public—unfortunately, it cannot be open currently. Individuals used to come to my office to seek a referral to a food bank that ran a referral process. They would often talk about the five-week wait being the reason why they needed a referral—or sanctions, some other delay, being short of income or some other reason.

The main reason why folk came to me in need of food was the low level of benefit payments. They simply did not have enough money to live on. The UK Government should think about that and should make the £20 increase permanent.

Mims Davies, the UK Government minister who is responsible for some for this, came to the Social Security Committee, which I chair, and said that she was keeping that under review. That is welcome, but the reality is that the UK Government is embarrassed by the state that the welfare system is in. Hundreds of thousands—in fact, millions—of people who have never before used the welfare system or relied on benefits are now engaging with it. The UK Government is embarrassed by the state that that system is in for new claimants, but it should also be embarrassed about that for everyone else who has been stuck for too long on benefits.

The £20 per week increase should be made permanent. I thank Keith Brown for lodging the motion.

19:56  

I welcome the debate that Keith Brown has brought to the chamber. Like people in every other constituency and region, those in Central Scotland have seen the social security safety net that was created by the Labour Government ripped from beneath them by the Tories. That is what the Tories do: through welfare reform, austerity and Brexit, the Tories have set out to erode the protections secured by Labour Governments to support people throughout the country.

Let us look at what the Tories have achieved in office: the rights of disabled people have been systematically violated; pensioners shiver in their homes; women have seen their pensions cancelled as they approached retirement; parents rely on food banks to feed their kids; and workers do not know whether they will have jobs after Brexit and the pandemic.

The universal credit system is a national catastrophe. It is set up to treat our neighbours, families and colleagues as skivers and scroungers, and it has pushed people to the brink. The system is set up to cut and to harm.

Members should not take my word for that; the Tories have acknowledged it through their actions. The £20 universal credit top-up is an acknowledgement that the level was never enough for people to survive on, although it was deemed enough to punish those who were already on benefits. Yet, somehow, those who became unemployed during the pandemic were seen as worth more by the Tories—although only £20 more. That is a desperate state of affairs.

At its heart, universal credit is a cruel system that is designed to harm and penalise people. It swallows up tax rebates, and people wait weeks for payments. Students are sent demands for thousands of pounds because the Department for Work and Pensions has not processed the information that they have given it. Powers to write off bills that were caused by Government ineptitude have been scrapped. Anyone who works and is on universal credit suffers an effective tax rate that is higher than that paid by millionaires.

The tax credits system, despite its failings, was far better than that. People could keep a pay increase and their award; if they had savings, they could keep them, too. That system lifted hundreds of thousands of kids and their parents out of poverty. When the Government made mistakes with claims, it was the Government that paid, not struggling families. Pension credit lifted 110,000 Scottish pensioners out of poverty.

When Labour was in government, it created a safety net to support people from cradle to grave. Universal credit does not support people from cradle to grave. The third baby in a family—the third baby in that “cradle”—gets no support unless the mother goes through a humiliating process to apply for support under the rape clause. I cannot think of a worse policy than the two-child cap.

I have three siblings—a brother and two sisters. My dad was a welder and had to give up his job because he was diagnosed with heart disease in his 30s. If it was not for child benefit, how would my parents have coped? My family never planned for my dad to become too sick to do his job, just as families today have not planned for mass unemployment caused by a global pandemic.

The two-child cap is an appalling policy that pushes children into poverty just because they have more than one sibling. It must be ditched, along with any decision to reverse the £20 uplift in universal credit. I ask members to support that vital campaign.

I call Shirley-Anne Somerville to respond to the debate. You have around seven minutes, cabinet secretary. [Interruption.] The cabinet secretary appears to be muted; we will try and sort that out. I wonder whether anyone would like to give us a song or a poem. [Laughter.]

We are checking with the technical team to see what the best course of action is. Cabinet secretary, if you make some noise, we will know whether we have you. [Interruption.] I am afraid that we do not.

I will suspend for a short time until the cabinet secretary logs out and back in again—we will see whether we can pick her up.

20:01 Meeting suspended.  

20:04 On resuming—  

Order. We will recommence. I call Shirley-Anne Somerville to respond to the debate.

Thank you, Presiding Officer. It is a relief that the technology is working. I appreciate that everyone has had a long day.

I begin by thanking Keith Brown for bringing the debate to the chamber. It is an important debate because it will make a real difference to the lives of many people across Scotland, whether or not the campaign to ensure that the £20 uplift is made permanent.

We are all too familiar by now with the long list of failings of universal credit. Even before the pandemic, its punitive policies, including the five-week wait, the benefit cap, the bedroom tax, the two-child limit and, as Mark Griffin so eloquently stated, the rape clause meant that universal credit was clearly failing the people who it was designed to support and was driving more people into poverty. Combine that with a decade of cuts to the United Kingdom Government’s welfare system that have left key benefits at subsistence level, and there is no denying that the uplift was needed long before the crisis that we face happened, as Bob Doris said in his speech.

It is clear that the majority of members understand the senseless harm that would result if the UK Government cut this vital support at this time of crisis, which is why the change needs to be permanent. There is overwhelming evidence that failing to retain the uplift will deepen existing inequalities and push more people into destitution.

As a few members have stated, a devastating impact will be felt far and wide here in Scotland. A report published by the Scottish Government last month showed that, if the UK Government continues with its plans to withdraw this support in April 2021, it will plunge more than 60,000 people in Scotland, including 20,000 children, into poverty. The same analysis also showed that, although a failure of the UK Government to maintain the uplift would be felt by all groups who need that vital support, it would disproportionately affect single parents, most of whom are women, families with children, and families not in employment. It is simply not right that people have to go without essentials such as food and electricity during this crisis. That would wreak havoc on individuals and hinder Scotland’s recovery.

That is not just a view of the Scottish Government but, as Keith Brown said in his opening remarks, it is also the view of the Joseph Rowntree Foundation and many others. They have come to the same conclusion: that the removal of the uplift is wrong.

Given those sobering warnings, it is perhaps no wonder that calls for the UK Government to permanently retain the uplift are increasing, including from across the political spectrum, the Work and Pensions Committee, the Treasury Committee, and the House of Lords Economic Affairs Committee.

To be blunt, Presiding Officer, there is no conceivable scenario in which this uplift will not continue to be necessary. The pandemic has exposed and exacerbated existing shortcomings with the UK Government’s welfare system. I have written to the Secretary of State for Work and Pensions on no fewer than five occasions since March, calling upon the UK Government to make a range of urgent fixes to its benefits, including retaining the £20 per week uplift and extending it to legacy benefits.

I have also repeatedly urged the UK Government to address the other well-known issues with universal credit that I mentioned in my earlier remarks. Here in Scotland, we do not have the powers to make those changes ourselves, otherwise we would. Despite having only 15 per cent of social security spending, the Scottish Government has introduced an unprecedented level of support through the pandemic, making sure that we targeted new assistance to get help to where it was needed the most. We have committed more than £500 million of investment to social protection, and have strengthened local resilience with more than £200 million of consequential funding. More than that, we have worked tirelessly to maintain our commitment to delivering the Scottish child payment.

That is why it makes it all the more galling to know that a family with two children, receiving Scottish child payment totalling £1,040 per year, will not feel the benefit of it if their annual universal credit award is reduced by the same amount a month later.

This demonstrates the core challenge of the current devolution settlement and how it hampers our ability to effectively and genuinely support people in need through social security. The UK Government must therefore show the same commitment by making universal credit into the system that it was meant to be—one that supports people instead of holding them back. It can start by doing the right thing, as set out in the motion in Keith Brown’s name, and committing to making that £20 uplift to universal credit and working tax credits permanent and extending the same support to those who are on legacy benefits.

I am delighted that, in our Scottish Parliament tonight, Keith Brown has once again shone a light on an issue that is important for people right across Scotland.

Meeting closed at 20:09.