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Chamber and committees

Meeting date: Tuesday, April 23, 2019

Meeting of the Parliament 23 April 2019

Agenda: Time for Reflection, Topical Question Time, Social Security and In-work Poverty, Committee Announcement, Business Motion, Parliamentary Bureau Motions, Decision Time, Open University at 50


Contents


Social Security and In-work Poverty

The next item of business is a Social Security Committee debate on motion S5M-16957, in the name of Bob Doris, on social security and in-work poverty.

14:21  

As the convener of the Parliament’s Social Security Committee, I am pleased to open the debate on the committee’s report “Social Security and In-Work Poverty”. I put on record my thanks to everyone who gave evidence to the committee or supported its visits, our clerking team, the Scottish Parliament Information Centre and our former convener, Clare Adamson, who helped to instigate the inquiry.

The committee embarked on the inquiry against the backdrop of the United Kingdom Government’s continued roll-out of universal credit, together with its plans to migrate to that benefit many thousands of people who are currently in work and in receipt of working tax credits. Alongside that, the committee was aware of the rising number of people, including working families, who are accessing food banks. Research shows a clear link between that rise and the roll-out of universal credit. We know that the rate of employment is at a record high, but research by the Joseph Rowntree Foundation has shown that the number of people who are in work but living in poverty is the highest on record. The committee heard that that trend disproportionately affects women, disabled people and black and minority ethnic individuals.

At the same time as the number of workless families has fallen, there has been weak growth in men’s earnings and the number of women who work has increased. In Scotland, 18 per cent of workers are paid less than the living wage, 6 per cent are on temporary contracts and around 63,000 are on zero-hours contracts. The number of workers who live in poverty is increasing at a faster rate than the number of people who are in employment. Put simply, that means that people who are in work are increasingly likely to find themselves in poverty, which is a very worrying trend indeed.

Of course, in-work poverty is not just about social security. I have already alluded to some of the other issues. Research shows that in-work poverty is a product of the economy more widely and that factors such as affordable childcare and housing and delineating the barriers and additional costs that are faced by disabled people are all key. Although such issues go beyond the remit of the Social Security Committee, their consideration is crucial to forming an overall picture.

The committee focused on the role of the social security system and, in particular, how universal credit might impact low-paid workers. The Scottish ministers have some social security powers, but, other than the flexibilities that are provided by Scottish choices, the policy and rules on universal credit remain firmly with UK ministers. In the main, responsibility for benefits for people of working age is reserved to the UK Government at Westminster.

In 2016, the Social Security Committee of the time undertook an inquiry into universal credit and made a series of recommendations. Despite there having been some welcome changes since then, some fundamental issues are still a problem today. The lack of progress is perhaps best captured in a conclusion that the current committee put on the record this year:

“it is unacceptable to make any claimant wait a minimum of five weeks before receiving the financial support they are entitled to under Universal Credit. We urge the UK Government to urgently reform this design feature to ensure payments are made within two weeks of an application being made, as was the case under legacy benefits such as Job Seekers Allowance.”

An obvious and clear mechanism by which in-work poverty can, in part, be tackled within the social security system is ending the benefits freeze. According to Scottish Government research, welfare spending in Scotland in 2020-21 will be £3.7 billion lower than it would have been had the welfare reform measures not been implemented. The biggest reduction is due to the UK Government’s benefits freeze, which disproportionately impacts the poorest and weakest in society. It is the view of the Social Security Committee that the UK Government’s freeze on benefits must be lifted. It is not realistic to expect a Scottish Government of any political colour to top up or mitigate every UK Government welfare policy to ensure that the incomes of Scottish claimants do not drop in real terms.

We were also disappointed that were not able to get a UK minister to accept our invitation to give evidence during, or since, our inquiry. We are still pressing for a UK Government minister to speak to the committee. I am sure that the Parliament agrees that that lack of engagement is unacceptable and disappointing.

During our inquiry, we visited Dundee and heard from people with lived experience of in-work poverty who receive universal credit. I encourage members to read their testimonies, which are in our committee report, but I will highlight one in particular. A man who was in work was encouraged to move on to universal credit and was advised—wrongly—that he would be better off. As he waited to receive his first UC payment, he applied for an advance. He managed the repayment of that advance and the change to how his rent was paid. His local jobcentre then told him to approach his boss about getting more hours, but no further hours were available. He was told that he should spend four hours a day looking for work, but all the sites listed the same limited number of jobs.

Our committee wants to secure improvements for that individual and for the more than 50,000 people in work in Scotland who are already receiving universal credit, as well as for the estimated 170,000 families in Scotland who receive working tax credit and will be migrated over to universal credit. From summer 2019, they will be migrated from the HM Revenue and Customs tax credits system to the Department for Work and Pensions universal credit regime, and they will be required to make a fresh application for universal credit.

Being moved on to universal credit represents a significant change for claimants. It is not just a significant cultural change, but a radical change of regime. The ethos of UC is very different from that of tax credits, and the relationship that people are required to have with the DWP is very different from the relationship that they currently have with HMRC.

The committee agrees that the managed migration should not proceed unless there is more clarity about what it will mean for those who are expected to move over. It is the committee’s view that priority should be given to addressing the existing concerns about universal credit before the UK Government seeks to move on to it up to 3 million people who are currently on legacy benefits.

Although it is not being applied at present, a policy intention is that someone who is in receipt of universal credit could be subject to conditionality and, potentially, sanctions, which could mean losing money despite working more than 16 hours a week. A claimant who is already in work will be required to take active steps to increase their earnings as an on-going condition of receiving UC. According to the Organisation for Economic Co-operation and Development, that is unprecedented internationally.

In-work conditionality was the second-most raised concern in the written submissions that we received. Russell Gunson of the Institute for Public Policy Research Scotland told us:

“Conditionality for universal credit includes in-work requirements, so the onus is on the claimant to increase their earnings or hours.”

He went on to say:

“The idea that it is the sole responsibility of the claimant to increase their hours or earnings to satisfy the universal credit system bears no relation to reality.”—[Official Report, Social Security Committee, 13 September 2018; c10.]

Pete Searle from the DWP acknowledged that there is no meaningful evidence of the efficacy of in-work conditionality. He told us:

“We do not have evidence at the moment about what could work and about the best way of interacting with people in work”.—[Official Report, Social Security Committee, 8 November 2018; c 6.]

Given that the DWP has no evidence to support the development of in-work conditionality and, more fundamentally, that the committee is opposed to the principle of imposing punitive conditions on those who are already in work, the committee does not support any extension of in-work conditionality.

Furthermore, as tax credits that are administered by HMRC are not subject to conditionality or sanction, there is a strong case not only for halting further migration of people in receipt of tax credits to universal credit but for considering the removal of tax credit support from universal credit altogether and continuing to use HMRC unless the threat of conditionality and sanctions is removed.

The committee heard the recurring theme that the relationship between the jobcentre work coach and claimants is crucial. That relationship can be extremely positive, but building it requires an important investment of time and the development of trust. The Public and Commercial Services Union, which represents many DWP front-line staff who deliver universal credit, has expressed serious concerns to DWP managers, including about in-work conditionality, and does not feel that those concerns are being listened to. The committee suggests that the DWP should pay much closer attention to the concerns that the PCS has raised.

The committee believes that the dramatic reduction in the number of jobcentres, at a time when universal credit is being rolled out across Scotland, was a serious error of judgment by the DWP. I know, from my experience of the closure of Maryhill jobcentre in my constituency, the impact that jobcentre closures have had on hard-fought relationships that had been built up between work coaches and claimants. In some places, those relationships have simply been terminated. The committee concluded that jobcentre closures have

“impacted on service and compounded the disconnect between many service users and the DWP. We believe there is a case to be made to review local access to DWP and other forms of employment support across Scotland to allow for more localised and community-focussed support, in place of an increasingly remote and digital by default support system.”

All of that is far preferable to the threat of sanctioning the working poor. Supporting career progression for those in work without the threat of penalty is not only right but is likely to be far more productive.

Universal credit is paid monthly in arrears on the basis of earnings during what is known as a monthly assessment period. Circumstances are assessed on the last day of that assessment period, and earnings within the monthly assessment period are taken into account in that month’s UC award. UC tops up earnings that are received during the assessment period. In that way it is intended to smooth out fluctuations in income. However, there are issues with that. For example, incomes fluctuating from month to month becomes a budgeting issue, and when pay cycles differ significantly from UC cycles—for example, when people are paid four-weekly or on the last Friday of the month—and UC assessment periods and the job pay cycle are out of sync, the UC award can end up taking two pay cheques into account in one month and none in the following month. The committee has significant concerns about universal credit assessment dates not aligning with paydays, although we acknowledge that the UK Government is said to be looking urgently at the matter. We agree that it must be urgently addressed, and we have requested an update from the UK Government ministers following their considerations.

When I sum up, I will raise a variety of other matters that are important in relation to the working poor and universal credit. For the time being, let me say that it is essential that the UK Government and the Scottish Government work together meaningfully and constructively while acknowledging their respective policy differences. On that point, the committee made a case for reviewing local access to DWP and other forms of support across Scotland to allow for more localised, community-focused support. The Scottish Government must be able to demonstrate how it is seeking to work meaningfully in a strategic way with the UK Government to offer community-focused employability support, and I ask the cabinet secretary for details of that.

The Scottish Government is introducing proposals for a new income supplement that must take account of in-work poverty. We await details of that supplement and the eligibility criteria. I invite the cabinet secretary to outline what progress has been made on what we expect will be a new social security benefit.

I look forward to hearing the contributions and suggestions of my parliamentary colleagues this afternoon, and I have the privilege of moving the motion.

I move,

That the Parliament notes the conclusions and recommendations contained in the Social Security Committee’s 2nd Report, 2019 (Session 5), Social Security and In-Work Poverty (SP Paper 466).

14:34  

I start by thanking the Social Security Committee for bringing this important matter to debate today and for its hard work during the inquiry. I welcomed the opportunity to give evidence to the committee last year and I am grateful to be able to contribute to the debate.

The committee’s report on in-work poverty makes for stark reading and shines a light on the urgency of the issue. The support provided by the UK Government to those in low-paying work is simply not enough for them to make ends meet.

Just last month, our poverty and income inequality statistics showed that, after housing costs are taken into account, 60 per cent of working-age adults and two thirds of children who are living in relative poverty in Scotland are in working households. Alongside record levels of employment in the UK, there are record levels of households entering in-work poverty. In its briefing, “Budget 2018: tackling the rising tide of in-work poverty”, the Joseph Rowntree Foundation rightly highlighted that

“Jobs that are low paid and insecure, offering only a dead-end and not a stepping stone to a better job, trap people in poverty.”

That is why the Government has committed to a fair work future by supporting the real living wage, opposing exploitative zero-hours contracts and helping families to work and earn more.

As the convener highlighted, the Scottish Government has estimated that the UK Government’s cuts will have reduced spending on welfare in Scotland by approximately £3.7 billion by 2020-21. The benefit freeze accounts for the biggest single reduction in social security spending—a reduction of about £370 million by 2021. The level of benefits has been frozen since 2016, which has led to the support that people desperately rely on falling further behind the cost of living. We have repeatedly pressed the UK Government to lift the benefit freeze and have called for benefits to be uprated in line with inflation, but our call has, to date, been refused.

It is impossible to speak about in-work poverty without discussing the impact of universal credit. Previously, people in low-paying work relied on working tax credits to help them manage, but the option of making a new claim for tax credits is now gone and people are forced to turn to universal credit. As many of us will have seen from our constituency mailbags, there is a growing mountain of evidence that universal credit pushes people further into poverty, rather than helping them out of it. The Social Security Committee’s report adds to that evidence.

The committee quite rightly highlights the five-week wait for the first UC payment as being “unacceptable”. The Scottish Government has made that point several times to the UK Government, as have many organisations. It is worth pointing out that the five-week wait is the minimum waiting time, with many people waiting much longer for payments. Unbelievably, the DWP told the National Audit Office that it is unreasonable to expect all UC claims to be paid on time. However, when someone is forced to rely on the DWP for financial support, I fail to see how the DWP can possibly justify that position.

The committee noted that there is a lack of information available on the DWP’s plans for managed migration—that is hardly surprising given that the DWP keeps delaying it. In the meantime, people who naturally migrate to universal credit through a change in their circumstances will do so without transitional protection, which means that their entitlements will be significantly reduced. I am deeply concerned that natural migration will hit households even harder than managed migration, and those households are already struggling to make ends meet. The longer the DWP takes to begin managed migration, the more people will find themselves moving to UC without protection. We have urged the UK Government on numerous occasions to halt managed migration until the universal credit system is made fit for purpose.

Universal credit was supposed to make work pay, and a key part of achieving that aim was the work allowance, which lets people keep more of their earnings before their benefit is reduced. However, the UK Government reduced the availability of work allowances so that they are now available only to people with responsibility for a child or to those with limited capability for work. For everyone else, as soon as they begin earning, their benefit is reduced. That means that more and more working people in Scotland are losing out as they move to universal credit. In its report, the committee recommended the complete reversal of the cuts to work allowances, and I fully agree with that recommendation.

I turn to what the Scottish Government is doing on those issues. Unfortunately, we are limited in what we can do in relation to universal credit, but we are using our limited powers to make the delivery of universal credit more flexible and better suited to the needs of those who claim it in Scotland.

Since October 2017, the Scottish Government’s universal credit Scottish choices programme has given people the choice of receiving their award twice monthly, and of having the housing costs element of their award paid directly to their landlord if they wish that to happen. The take-up rate of the choices has been high. From November 2017 to August 2018, more than 66,000 people were offered Scottish choices, with 32,000 people—almost half—taking up one or both of the choices. That tells us that people want more flexibility and adaptability in how they receive the support to which they are entitled, and it provides further evidence that changes to the DWP’s benefits system are needed.

We are also committed to introducing split payments of universal credit awards for couples. That will provide everyone claiming universal credit in Scotland with access to an independent income, and will promote our values of equality, dignity and respect in the social security system. We are currently working with the DWP to carry out an impact assessment of two policy options, allowing us to refine our policy proposals further.

Despite that work, there is no doubt that the impact of the UK Government’s cuts is staggering. As I have said, they amount to a lowering of social security spending in Scotland of £3.7 billion by 2020-21. We are already spending more than £125 million this year to mitigate some of the worst impacts of the UK Government’s cuts and to support those on low incomes. That includes more than £60 million to cover the cost of discretionary housing payments and to continue to mitigate the UK Government’s bedroom tax. Discretionary housing payments of £10.9 million have been distributed to local authorities to help address the impact of other cuts, including £8.1 million in recognition of the impact of the benefit cap.

Our spending also includes £38 million on the Scottish welfare fund, which provides a vital lifeline for people in need, providing support through crisis and community care grants. As of September last year, more than 316,000 households in Scotland have been helped with awards totalling £181.6 million. By the end of this financial year, the Scottish Government will also have provided more than £1.7 billion in funding for the council tax reduction scheme.

However, the Scottish Government is not here simply to paper over the cracks in the UK Government’s welfare cuts. We simply cannot afford to cover the billions of pounds that those cuts cost each year. I hear regular calls for us to cover the cost of further cuts, but no suggestions as to what we should scrap if we were to do so. To be clear, every pound that we spend in offsetting a UK Government cut means that we cannot spent that funding on other public services and priorities.

I want this Government to be able to invest funds in pulling people out of poverty. That is why we are working hard to develop our new income supplement, which will provide additional financial support for low-income families, who are the most at risk from the impact of UK Government cuts. However, we risk all of that if the extent of our ambitions is to mitigate the decisions of another Government—something that the UN special rapporteur on extreme poverty and human rights, Professor Philip Alston, last year described as “outrageous”.

I finish with some more words from Professor Alston, who said of the UK Government’s approach to welfare that

“compassion for those who are suffering has been replaced by a punitive, mean-spirited, and often callous approach”.

He continued:

“Successive governments”—

UK Governments—

“have presided over the systematic dismantling of the social safety net in the United Kingdom. The introduction of Universal Credit and significant reductions in the amount of and eligibility for important forms of support have undermined the capacity of benefits to loosen the grip of poverty.”

I welcome the Social Security Committee’s report. It is yet more damning evidence that the UK Government’s welfare system is simply no longer fit for purpose. I assure the Parliament that we in the Scottish Government will continue to press for the urgent changes that universal credit requires, and that we are committed to using the powers we have over welfare to build a system that is based on dignity, fairness and respect.

14:43  

I begin by thanking the committee clerks and all those who gave evidence to the inquiry.

Although I dissented from a number of points and conclusions during the finalisation of the committee’s report—for reasons that I will return to—I acknowledge that this was an important inquiry because recognising that in-work poverty is a problem and committing to tackling it is the first step towards ensuring that everyone who works can and should expect a better future.

Last year, in its report “UK Poverty: causes, costs and solutions”, the Joseph Rowntree Foundation stated:

“The processes that cause poverty are complex. Simplistic explanations may focus on one factor ... but solving poverty requires an approach that takes into account the impact of market and state structures—as well as of individual choice.”

It is important to acknowledge that the inquiry focused on one factor and, in doing so, has inherent weaknesses.

As part of its welfare reforms, the UK Government has committed to ensuring that work pays. The introduction of universal credit was at the centre of that reform, with the aim of simplifying the benefits system and ensuring that individuals and families were able to escape the legacy of benefits that trapped households into intergenerational worklessness. That legacy saw the breakdown of the social contract between taxpayers and those who needed support and the stigmatisation of those who were on benefits, which I hope we never see again.

We know from Scottish Government figures that, between 2015 and 2018, 60 per cent of working-age adults who were considered to be in relative poverty were in working households, with the figure rising to 65 per cent, or 160,000 individuals, in the case of children. We also know that projections suggest that overall poverty rates are likely to rise over the next few years.

What is the relationship between in-work poverty and universal credit? David Finch of the Resolution Foundation said:

“It is definitely too early to say that universal credit is having an impact on the poverty figures, especially because it was nowhere near being rolled out to everybody”

when the Foundation’s survey was done, and

“it still is nowhere near being rolled out to everybody—so it will take time before we see the impact.”

Russell Gunson of the Institute for Public Policy Research Scotland acknowledged that

“universal credit and social security more generally have a big role to play in reducing and tackling poverty and in-work poverty. The economy and the income structure in Scotland—and, of course, the United Kingdom—will be as much, if not more, of an issue when tackling in-work poverty.”

Nobody disputes that universal credit has had its problems, particularly in the early days following its introduction, but Robert Joyce from the Institute for Fiscal Studies reminded us in his evidence that

“The overall rise in the proportion of people who are in poverty and are in a working household has been going on for some time. In itself, it is not a phenomenon that is related to universal credit.”

More importantly, he stated:

“A significant group of working households will keep more benefits under universal credit than they would have kept under the old system. In that direct sense, universal credit will top up and increase their incomes, which would tend to reduce in-work poverty.”—[Official Report, Social Security Committee, 13 September 2018; c 7, 5, 6.]

Part of the challenge for the committee was the fact that the roll-out of universal credit full service was under way during the inquiry and was only completed in December 2018.

Michelle Ballantyne gave a really interesting quote about winners and losers, if you like, with regard to the new system. Does she agree that, in our report, the committee expresses concerns about oversimplification in relation to there being winners and losers under the new universal credit system, because those who lose tend to be the most vulnerable in society. Does she share those concerns?

The convener asks an interesting question and has an interesting use of language. I understood that the committee agreed that it would not use the term “winners and losers”—the convener called for that. There is no doubt that some people will benefit more from the introduction of universal credit and others will benefit less or may be slightly worse off. I go back to my original point that we have yet to see exactly what it will look like. I will touch on an important point later in my speech—

Will the member taken an intervention?

No; I need to make progress.

Part of the challenge was that there was an overlap as the committee held its inquiry, with a number of announcements and changes made during October and January that were designed to address some of the concerns.

Attempting to untangle the web of legacy benefits and tax credits, split as they are between the Treasury and the DWP, is a challenge, as Westminster’s Social Security Advisory Committee has made clear. A key part of the flexibility of universal credit is its test-and-learn approach. Previously, when the legacy system was not delivering something effectively, there was no ability to change it. Now, new changes are tested, problems can be identified and solutions found. That is a key factor, particularly with regard to the convener’s question.

Paul Gray, the former chair of Westminster’s Social Security Advisory Committee, said that the committee had welcomed the stated intention to test and learn, which on numerous occasions has lent UC a flexibility that is light years ahead of any process offered by the legacy benefits system. As I have visited jobcentres around the country, I have seen that approach in action and I know that it is highly thought of by DWP staff, who recognise that their input is listened to and acted on.

Much of the division about the report came down to a matter of words. For example, in itself, the use of “many” rather than “some” seems insignificant, but we believe that it changes the emphasis of a paragraph and the story that it tells. Unfortunately, the inquiry was often bogged down in political positioning, with colleagues clearly identifying their position on universal credit and seeking answers to support their belief.

I had hoped that we would all agree with the sentiments of Russell Gunson, who said:

“Bringing six means-tested benefits together in one on a single taper is a good and positive idea, but the funding levels that were originally promised have dropped significantly ... Whether universal credit will work or not has to relate to three factors: the structure, the funding and how it is implemented.”

Our report calls for those funding levels to be restored. The UK Government has shown that it is ahead of us, having already increased the levels of funding not once but twice in its past two budget statements.

On the role of work coaches and conditionality, I struggled with the evidence from PCS, as I found it to be politically motivated. I could not support the conclusions that the committee chose to include. Recommending that, unless conditionality and sanctions are removed, there should be a return to the discredited system of tax credits—based on no evidence received by the committee—showed a poor understanding of the system and of the evidence that we heard.

As in any inquiry, it is important that we identify problems and offer solutions, which many of our contributors did. In his evidence to the committee, Russell Gunson said:

“There is an argument about whether any conditionality is right, but we would say that conditionality—even a means test—is likely to be needed as part of any system.”—[Official Report, Social Security Committee, 13 September 2018; c 5-6, 10.]

Submissions from Oxfam and, ironically, PCS said that in-work progression could be positive, if developed in a supportive way. Oxfam wrote that:

“Progression is fundamental in ensuring that work acts as a route out of poverty, but Oxfam has concerns around how in-work progression policy has been conceptualised”.

Victoria Todd of the low incomes tax reform group said:

“Some people who are already working and who would have claimed tax credits but who, because of their area, are now on universal credit have had a positive experience of support from work coaches to increase the number of hours that they work, to look at other options or to get training. The stories that I have heard are not all negative in that respect.”

Kirsty McKechnie said:

“I will reiterate what Rob Gowans said about universal credit being”

a potential improvement

“for people who have fluctuating hours or perhaps have low hours”

because

“it used to be that there would be a cliff edge of 16 hours, where you would no longer be entitled to jobseeker’s allowance or employment and support allowance. There was a bit of a gap before you worked enough hours to get the working tax credit. That group of people will now be supported, but to apply sanctions to anybody will not improve their ability either to look for work or increase their hours”.—[Official Report, Social Security Committee, 27 September 2018; c 19, 26.]

It is a mixed report, some of which I totally agree with and some of which I have difficulty with. We need to keep monitoring the situation and, when we contribute to questions on universal credit and in-work poverty, we must do that constructively, because we have a test-and-learn approach that could improve the situation for everybody.

14:52  

Like my colleagues on the Social Security Committee, I am grateful to see our report come to the chamber. Once again, we are forced to consider the catastrophic impact of welfare reform, which is pushing working people into poverty.

Members do not have to read the report to know how miserable the situation has become. Right now, almost 400,000 adults in Scotland are going out to work but still living in poverty, while two thirds of kids who live in poverty are in a household that works. Those people are falling behind everyone else in society, make daily decisions about whether they can buy food or need to get a food parcel, and are no doubt thankful for the mild winter that we have just had because they have been terrified about the meter running out or a fuel bill landing on the mat. It is heart-breaking and it needs to be fixed.

Like the convener and other members, I thank the clerks for their work on the inquiry, and I thank the broad range of experts, including the Resolution Foundation, the IPPR, Citizens Advice Scotland and a number of food banks, for the excellent evidence that we received.

Although the report is important, I am doubtful that any of the mums or dads who are getting ready for a night shift or heading to their second job of the day care much for yet more discussion. What they want is action.

In preparation for the inquiry, the committee made its usual call for evidence. We had just one written submission from an individual with lived experience of being in work and in poverty. It was from Sara MacLean, who recently moved to full-time work and is on tax credits. She told us:

“While I love my job, it is something I am passionate about ... the recent changes to my working tax credits has highlighted that going to work full time does not pay ... I am bringing home only marginally more than when I was working part-time.”

She talked about the opportunity costs of that full-time work, which became harder than the financial hit. She said:

“I missed my daughter’s last day of primary school because it was my first day at work; I was unable to take my son to his first day of P2; overall I get less time to spend with my family”.

She asked quite simply:

“Are the extra few pounds a week worth going full-time?”

We all agree that the mantra that work is the best route out of poverty should be logically correct—of course it should—but it is a simple fact that the link between a person working hard and keeping their head above water is broken.

The report does not say this outright but, ultimately, the committee heard that universal credit is not fit for purpose. It is plunging people into poverty, arrears and destitution. The report lays out—CAS and others echo this in their briefings—how people have been dragged through a system that simply does not care for families’ wellbeing or stability. We were told that universal credit would mirror the world of work and make it pay, but leaving people without an income for at least five weeks or with salaries that fluctuate wildly every month is simply state-sponsored malpractice that decent employers throughout the country would reject.

It is a simple fact that universal credit systematically fosters poverty. Even if a person manages to get a regular payment, they are hit with a marginal tax rate of over 70 per cent. What is the point of a person trying to earn more when their tax rate is 70 per cent?

Philip Hammond’s £1,000 increase in the work allowance is welcome, but it goes nowhere near undoing the 2015 cuts, and the 2p reduction in the taper rate to 63p did not do that either. The Tories are well behind the curve on that. That is why the committee’s report restates the need to restore the funding that was taken away in 2015.

Will Mark Griffin say clearly whether he believes that the legacy benefits were better for working people who were trying to get back to work—whether or not the person is a single mum—than universal credit? Is that what he is saying?

I am about to come on to that. When Michelle Ballantyne was speaking, the committee convener made an intervention about how vulnerable people would be affected by universal credit. She claimed that we are not yet clear about who will be worse off, or not. However, we have figures for that, and I would have expected Michelle Ballantyne to know what the figures are. Lone parents and disabled households without housing costs will be £1,940 and £1,220 worse off every single year. I would have expected Tory members to know about the impact that universal credit is having and will continue to have on vulnerable working people.

In my Central Scotland region, 28,000 people have moved on to universal credit since the roll-out started in October 2017. They are suffering rent arrears, which have quadrupled; they are having to pay back £11 million in advances at a rate of 40 per cent; and they are facing a brutal conditionality system that forces them to find more work.

Constituents who have been in touch with my office recently have talked about just how aggressive and pernicious UC really is. One constituent saw their tax rebate—for income that they earned last year, on which they were unfairly taxed—swallowed up as “income”, and their UC payments were cut. Another constituent had their UC payments cut and money clawed back because the DWP had failed to take account of their student loan payments. The person had informed their work coach and put the information on their log—as they are advised to do—six months ago.

Our report looks specifically at the social security system, but it is hard to ignore the fact that Brexit—which is another mess of the Tories’ making—will have a devastating effect on those on low incomes. We might have stepped back from a devastating no-deal Brexit, but the risks of price rises, falls in wages, lower employment and lower tax revenues will do nothing to stop pushing working people below the breadline. When we took evidence in the autumn, universal credit was one of the few things that cut through the Brexit fog.

The report rightly recognises that the budget made much-needed changes, but the 2015 cuts must be reversed in full. The Tory committee members agreed to that, but littered throughout the report is a trail of dissent and opposition that shows how unwilling the Tories are to accept the impact that universal credit is having on people across the country.

An important conclusion in the report is that social security is becoming a shared responsibility. It is almost a year to the day since the Parliament agreed to pass the Social Security (Scotland) Bill.

I have told members before that I was one of four children. My parents worked hard—my father as a welder and my mother as a bank clerk—to support the family that they chose to have. My dad was diagnosed with a serious heart condition at the age of 37 and could not carry on doing the work that he had done for 20 years. Who plans for such a situation when they start a family? Who plans for redundancy, career-ending illness or even death at 47? Where is the support network? Where is the state support that children depend on day in, day out when circumstances change beyond anyone’s comprehension?

We accept that we cannot mitigate the effect of every cut, but the refusal to act on the two-child limit and the rape clause is shameful. What is done can be called mitigation, but people must be assured that Holyrood will act and is better than the callous Tory Government. To be frank, Scots do not care what colour of Government provides the support.

The report is a starting point, but we now need change. Where we can, MSPs must act, too.

15:01  

I, too, thank all who gave evidence in writing and in person to the committee and I thank the clerks and advisers who helped to prepare the report.

Poverty statistics that were released just a few weeks ago make for truly sobering reading. As we have heard, nearly two thirds of Scots children who are in poverty are from families in which at least one adult is in employment—that figure has increased by almost 20 per cent over two decades. That is why it is vital to have a social security system that allows people to live free from poverty when they cannot work and supports them into well-paid work with prospects when they can.

The committee’s investigation focused on universal credit, which was designed to tackle in-work poverty but too often makes life more difficult for people in such a situation. Universal credit has become too easy a target for Governments that are trying to find savings. As Michelle Ballantyne noted, the committee heard from IPPR Scotland’s Russell Gunson that

“funding levels that were originally promised have dropped significantly”.—[Official Report, Social Security Committee, 13 September 2018; c 5.]

Work allowances, which allow recipients of universal credit to earn more before having their entitlement reduced, were slashed in the 2015 budget. Some—but not all—of what was cut will be restored as a result of the most recent budget. Some people will face worse—less appealing and less attractive—work incentives than before the cuts and, despite promises that

“no-one will experience a reduction in the benefit they receive as a result of the introduction of Universal Credit”,

some people will still be worse off. That is without taking into account the range of other cuts that people are subject to—not least the four-year freeze on benefits and tax credits that arbitrarily freezes incomes at 2016 levels, which means that real incomes reduce.

It is no wonder that many witnesses from food banks said that universal credit, along with other cuts, is a significant driver of food bank use. After years of denying that, even the DWP is beginning to admit that that might be the case.

An overwhelming message from the evidence was that many elements of the design of universal credit have not taken into account the realities of what it is like to be in low-paid work and—even worse—have flown in the face of advice that has been given. As far back as 2012, before UC was introduced, the Women’s Budget Group warned that the monthly assessment period would mean that many recipients

“would have difficulty in anticipating in advance the effect of changes of circumstances on their entitlement for the coming month. This”

would be

“a particular issue for claimants on low incomes, who tended to have very frequent changes of circumstances.”

If we fast forward seven years, those warnings have—unfortunately—come to pass. The committee heard that the monthly assessment period is causing myriad problems.

The Child Poverty Action Group and others have told us that, where the universal credit assessment period and wages do not line up, two monthly wages could be paid in the same period, meaning that a person’s UC entitlement would be reduced or withdrawn entirely. In such cases, the recipient would have to reapply, and in doing so they could lose passported benefits such as crucial support for school meals.

Incomes from universal credit can fluctuate hugely. The Child Poverty Action Group’s report, “Rough Justice: Problems with monthly assessment of pay and circumstances in universal credit, and what can be done about them”, cites an example of a couple whose UC income over a six-month period ranged between zero and £1,200. Those affected said:

“We don’t know if we’re coming or going from month to month! It makes budgeting so, so difficult because you just do not know what you’ll get.”

That is one of a huge number of examples in which the UK Government has not taken heed of evidence that was staring it in the face.

On the issue of the monthly assessment period, the committee notes:

“The UK Government has repeatedly said there are no plans to change it, despite the problems created by fluctuating UC awards.”

Even when the UK Government has listened—I accept that some positive changes to universal credit have been made—the changes are often made many years after concerns were first raised and the damage has been done.

There is a lesson here for the Scottish Government in setting up the new devolved benefits. Changes to social security need to be based on expert advice, which more often than not can predict problems ahead of time. That expertise should come from specialist organisations such as the Child Poverty Action, the Women’s Budget Group and trade unions representing the staff who run the system; the unique expertise that is held by people who have personal, lived experience of the social security system and low-paid work should also be considered.

Women and children are being hit hardest. As Engender tells us, women are twice as likely as men to be reliant on social security.

The Scottish Government has made a good start when it comes to listening to people. The social security experience panels are an excellent example, as are the many ways in which the Social Security (Scotland) Bill was changed as a result of consultation. It is important that that approach continues, even when it is more difficult for the Government. It has repeatedly refused calls to introduce a £5 top-up to child benefit, despite a huge swathe of civic Scotland, under the give me five campaign banner, saying that that is a really reliable way of getting money to the poorest families right now. I look forward to the Government’s forthcoming statement on the proposed income supplement, but that will take years to come in and introducing a top-up would be feasible much sooner.

Too many families are living on far below an acceptable minimum income. Despite being assured that work is the way out of poverty, a shocking proportion of people, including 160,000 Scots children, experience poverty in working households.

Despite promises to the contrary, universal credit is making the situation for some people worse, not better. We need to reclaim the idea that, when everyone has a decent amount to live on and, crucially, that income is stable and predictable, everyone benefits. That might be through social security, work or a combination of both. Our reserved and devolved social security systems—particularly universal credit—have a long way to go before we can realise that vision. The Greens will keep up the pressure for that.

15:08  

I, too, commend the committee’s work on this really important subject.

When I was growing up and learning about economics, I always thought that there was a correlation between employment rates and poverty and that giving more people better jobs would lift people out of poverty. However, over the past 10 to 20 years, we have seen the spectre of in-work poverty rise. It is insidious; it belies the fact that employment statistics cannot be a barometer for a nation’s poverty or its affluence any more.

I will say a word in support of this Government’s work. I have said many times that the Liberal Democrats’ approach to the issue is very much in step with the Government’s approach, and I thank it again for its conciliatory and consensual approach to social security issues. I also offer the support of the Liberal Democrats with regard to the committee’s conclusions on the need to immediately end the four-year benefits freeze, the need to recast how universal credit is administered and is still being rolled out, and the need for a reversal of the Westminster cuts since 2015.

My party’s approach to social security has always been about poverty reduction, social mobility and making work pay. A lot has been said about my party’s role in coalition Government, but there are two things from that time of which I am very proud. The first is the lifting of the income tax threshold, which, according to The Guardian, at a stroke, did more to address poverty than had been done in the previous 14 years. The second is how my party acted as a sea anchor against the Tory cuts. That fact immediately became manifest when we left the coalition in 2015, and it was picked up by the committee in its report, which recognised what happened to in-work allowance cuts in 2015 when the Liberal Democrats left Government. We visit that reality in all of our surgeries and case work every day of the week when we are back in our constituencies. It is up to us to address in-work poverty.

We need a three-fold approach that involves providing an adequate safety net for when people are out of work, fostering social mobility and making work pay. The imperatives have been laid out in many excellent speeches in the debate already: supporting the 240,000 children in this country who are still in poverty; ensuring that the safety net is adequate when people are out of work or need a work supplement; and tackling the inexorable link between financial worries and mental ill health. In that regard, I point out that 86 per cent of people with mental health issues cite financial concerns as a principal part of their anxiety and distress and indeed, that rates of suicide in Scotland are three times higher in deprived communities than they are in other communities.

As I said, my views and those of my party are largely in step with the approach of the Government in terms of where it wants social security to be deployed in Scotland, and in relation to the need to redress and recast the roll-out of universal credit. That roll-out took place in my constituency—as it did in many members’ constituencies—in November 2018, just before Christmas. Indeed, the consequences of what in many cases was a five-week minimum wait for people to transfer over to universal credit affected them right around Christmas time. That manifested in a huge uptick in the need for food banks in my constituency and in the case work that came through my door and that of Christine Jardine, our local MP.

Such was the range of legacy benefits and so rapid the changeover, that many were left confused, stranded and unsure of their recourse. That is reflected in the committee’s recommendations and conclusions, which recognise that there is still no adequate online or telephone support for people who are struggling with the vagaries of the bureaucracy surrounding the roll-out of universal credit. That includes the digital-by-default phenomenon in which most people are being bounced into the transfer through digital platforms, when one third of benefit recipients are unlikely to have adequate connection to the internet at home or through a place that is accessible to them.

Several times in this chamber, we have rightly raised the issue of the link between universal credit and domestic abuse, which is an unforeseen consequence of the roll-out of UC. We learned about that in discussions around the issue of payment to a single claimant in households in which spousal abuse might be an issue. The committee also raised the issues perfectly in its comments around transitional protections, where, once again, abusive relationships have clearly not been factored into the permutations and the considerations of the roll-out of universal credit by the Westminster Government.

My party and I agree wholeheartedly that we must end the freeze on benefits immediately. We must completely reverse the cuts to in-work benefits that were made in 2015, following our departure from the coalition Government, and we must drive up the take-up of entitlements, because people are still unaware of the benefits to which they are entitled. We also need to dramatically change the way in which we are giving people the money, because the five-week waiting time is leading to irreparable damage, evictions and destitution.

If universal credit was originally designed to make work pay and to make the benefit strata more simple, then it has wholly failed in that regard, and there is an obligation on the Government, and every party in the chamber to address that.

We now move to the open debate. Speeches should be six minutes. However, I have a bit of time in hand and I am happy to give extra time for interventions and responses.

15:14  

I am grateful for the opportunity to speak today about in-work poverty, an issue that is of particular importance to many of our constituents, and also about the findings of the social security committee, of which I am a member, on the impact of universal credit on in-work poverty.

Like many members, I have met many constituents whose migration across to universal credit has been fraught with difficulties and has resulted in significant and extreme hardship. People have been left with prolonged rent arrears, they have fallen behind on bills and they have been unable to clothe their children. I have dealt with so many such cases that, some months ago, I held a summit on the impact of the roll-out of universal credit in my area. It is unfortunate that neither of the two Tory MPs in my area was able to come along to the summit. They would have heard absolutely harrowing tales of the impact on people of universal credit’s roll-out.

The committee has collated, in one damning document, experiences of people who are suffering under that toxic Tory policy and testimonies of organisations that are struggling to support claimants. Although the points that it makes about the impact on families and children are very true, I understand that the impacts are even worse in England and Wales, where mitigating policies that I will mention later are not available.

The report makes for grim reading, and I am not at all surprised that the Tories do not want to agree with it. Members on the Tory benches can usually be expected to stand up and attempt to defend universal credit and its roll-out, sometimes with the caveat, “despite universal credit’s many flaws”. So far, Tory members have not even offered that caveat. It appears that Scottish Tories are even more blindly loyal to flawed Tory policies than their counterparts south of the border.

The IPPR noted in its evidence that in-work poverty cannot be divorced from the economy. The member is a former economy secretary; does he take any responsibility for that?

Indeed I did, and one of the things that we did to alleviate in-work poverty was to support the national minimum wage, which the member’s party has never supported. That would have a major impact on in-work poverty, but there has been no mention of the policy by the Tories so far today.

No one who has met and spoken with constituents or read the report can arrive at any conclusion other than that universal credit has resulted in the rolling out of misery and undue hardship, forcing people who are most in need of our support into poverty. Every day, the case for halting and reforming universal credit grows stronger, as we just heard from Alex Cole-Hamilton. Universal credit roll-out should be halted and rethought, as many people have said, including the organisations that work most closely with the new benefit.

Given the evidence that is gathered in the committee’s report, we would be forgiven for wondering whether the results that we are seeing are the intended outcome. From what we have heard from the cabinet secretary, it is abundantly clear that the Scottish Government and UK Government approaches to social security differ fundamentally. The Tory party is the party that talks of “welfare scroungers” and distorts terms such as “fairness” to defend the two-child cap and the rape clause. It is the party that denies the existence of the bedroom tax.

Nine months ago, the Tories promised more than 7,000 claimants that vital severe disability payments would be back-paid to them. This week, those people have found out that they might have to wait a further six months for payments on which they rely and to which they are entitled. That is an absolute disgrace.

The Scottish Conservatives today said:

“you can’t trust the SNP with the pound in your pocket.”

That is rich, coming from a party that has spent billions on aircraft carriers overspend, on high speed 2, on Brexit, on crossrail and on fake ferry contracts. However, it is where the Tories have not spent money that represents the most egregious negligence. They have not paid money that is due to many profoundly disabled people, who are profoundly in need. It is clear that we cannot trust the Tories, when a profoundly disabled person finds that their pound is in the Tories’ pockets.

The Scottish Government is using its new social security powers to create a system that is based on dignity and respect and that ensures that there is support for those who need it most. Since last year, the carers allowance supplement has given more than 77,000 carers an extra £442 in recognition of the incredible contributions that carers make.

Through the best start grant, more than 7,000 low-income households have received the pregnancy and baby payment, to ensure that the children of Scotland have the best possible start in life. By the end of this year, the Scottish Government will have introduced the best start grant early learning payment of £250 for families when a child starts nursery and the best start grant school-age payment of £250 for families when a child starts school. It will have introduced funeral expense assistance, to help families with contributions towards a funeral, and the young carer grant, which will be awarded to young carers aged 16 to 18 who do at least 16 hours of care a week but do not qualify for carers allowance.

I again give all Tory members an opportunity to intervene and say that, beyond 2021, the Tories would continue to support those benefits—I see that not a single Tory MSP will give that commitment. We can all read into that that if the Tories ever had control over the levers of power they would prioritise tax cuts and they would cut benefits from working people and people in poverty in order to pay for their tax cuts. Each of those benefits will make a substantively positive difference to individuals and families across Scotland and will result in their being treated with compassion. That is what a social security system looks like when it is created by a Government that recognises its responsibility to tackle enduring inequalities and to reduce poverty. As we all know, politics is a question of power and how the use of that power is prioritised.

We often hear the bad joke that the Tories will win in 2021, but the Scottish Government has made the decision to substantively change the lives of the people of Scotland for the better and has committed significant funding to tackling in-work poverty. The question for the Tories is whether they will go into the next election supporting the continuation of those benefits. What kind of party will the Tory party be come 2021? My guess is that it will be the same old Tory party, offering tax cuts for the richest, looking after the wealthy and punishing the poor. Maybe the Conservatives would appreciate some new campaign slogans, such as “Scottish Tories—the party of in-work poverty”.

This much is clear: it is only the SNP that can be trusted on social security, and full social security powers should be devolved to the Scottish Parliament. The Tories do not represent the best of what Scotland can achieve. They must change their policy, otherwise they will continue to be met with universal and justified discredit.

15:21  

I welcome the opportunity to discuss the Social Security Committee’s report on in-work poverty. Last week, the Office for National Statistics released figures that show that Scotland is following trends across the UK, with employment at record highs and unemployment at record lows. That is undoubtedly to be welcomed, but many people in work still find themselves in low-income employment and without the opportunities and rewards that, we all hope, work should provide.

Wage growth, of course, is an important metric. As we emerged from the most recent recession, the period of exceptional growth in employment was not matched by similarly positive levels of wage growth, although that trend shows signs of reversing. Across the UK, the gains in employment are being consolidated and there are real-terms increases in wages that appear to be sustainable. As the independent Office for Budget Responsibility reported at the time of this year’s spring statement, wage growth has been revised up to 3 per cent or higher in each year of its forecasts. However, those in the chamber need little reminding that as wages increasingly grow ahead of inflation, it is productivity growth that will make a real impact on the incomes of working people in this country and establish a strong economy. In that regard, although there is more work to do across the UK, productivity remains a more acute problem in Scotland than it is on average in the UK, despite the Scottish Government’s pledge to put such issues front and centre in its economic policy.

As the committee heard, no one factor of itself can address poverty. In-work poverty is heavily concentrated in a relatively small number of sectors, which nevertheless can be large employers, so we should look at the particular issues that arise in those sectors and at what support the Government could offer. We should also bear in mind the fact that relative income poverty is a necessarily narrow measure and that analysis of one metric alone is likely to ignore particular problems in our economy. In remote and island communities, for example, the higher cost of living has a considerable impact on how people can spend their incomes.

The current statistics measure income poverty before and after housing costs. That is certainly important, as increasing housing costs are a major drain on household incomes, particularly for young people, who are less likely to own their own home and more likely to find themselves in the rental sector and exposed to changes in the property market. However, that analysis ignores a whole suite of additional expenses, including energy costs and transport costs, that reduce disposable incomes for families, particularly in my region.

I have mentioned not only employment and wages but opportunities in the workplace. In discussions about the levers that are necessary to address low pay, the Scottish Government has often brushed over the most obvious and most important area, which has been within its control since the advent of devolution; that of education and skills. Building good-quality and high-paying work will require effort to be targeted at ensuring that people have the skills to succeed in the labour market. That is not just an issue for young people who are entering employment for the first time; it is about providing opportunities for people who are established in their careers to reskill and develop in line with their aspirations. Increasingly, a skilled workforce will be essential in our rapidly changing economy.

Although it is tempting to see the issue from the point of view of investment in our future productivity, there is also an individual angle, which is about creating a society in which people have choices and can grasp opportunities without being held back. Employability is one part of that, and the committee has welcomed the Scottish Government’s commitment to providing employment support for people who move into work. Although we have seen early figures from the newly devolved employability programmes, there has been a troubling lack of detail, which has hampered any real examination of their performance so far.

The committee noted the positive impact of Jobcentre Plus work coaches in supporting people who are moving into work or looking to progress in their careers. Clearly, there is a need for services to work together in a positive way to achieve the best outcomes. Public services are at their best when support is personalised and reflects individual needs.

The report does not examine personal debt despite debt being a consideration in relation to a number of the outcomes for households with low incomes. For those on the lowest incomes or those whose incomes are made up largely of income-assessed benefits, sizeable debt repayments will always have the effect of pushing incomes below tolerable levels.

The member—quite rightly—mentions the problems associated with debt. Does he feel that people waiting five weeks for the initial payment of a benefit to which they are entitled might be a factor in their being pushed into debt?

As I have mentioned and as I will come on to again, a number of areas cause problems and that is one that has been looked at.

For those on the lowest incomes or those whose incomes are made up largely of income-assessed benefits, sizeable debt repayments will always have the effect of pushing incomes below tolerable levels. We know that a large proportion of people who face real financial difficulty have debt problems and we should be looking at not only tackling those issues when they become a problem but equipping people with the tools to manage spending.

It is clear, as the committee heard, that in-work poverty has a range of causes but few simple solutions. Although there are many positive signs of improvement, with growing wages and the number of people in work at historic highs, issues remain that, undoubtedly, have a deep impact on people’s lives.

There have been several successful interventions. The increase in minimum wage levels following the announcement of the national living wage has been a major change for the lowest earners in our society, as has taking an increasing number of the lowest earners out of paying income tax altogether.

Within the mix—

Will the member take an intervention?

I am afraid that I do not have time.

Within the mix, this Parliament has a great many levers that can have a positive impact on in-work poverty. Unfortunately, too often, this Scottish Government has been more inclined to point the finger of blame elsewhere and ignore areas in which it has clearly failed to make progress. In many cases—in relation to education, for example—the Government’s policies have built up problems for the future.

It is imperative on all of us to look towards building a society where work pays, where opportunities are within people’s reach and where higher pay is underpinned by a strong economy.

15:27  

I thank the Social Security Committee for its work on this important report. I was a member of the Welfare Reform Committee in the previous session of Parliament and I am a former convener of the Social Security Committee, so I am familiar with much of the work that has been done. I am, therefore, surprised to hear members on the Tory benches in particular say that they are waiting to see what the impact and outcome of universal credit will be, because universal credit has been a failing benefit since its introduction. Indeed, the Highlands and Islands was one of the pilot areas for the roll-out of universal credit in Scotland and when I visited there, only months into the pilot, we were being told about the increase in rent arrears and the increased use of food banks in the area, so we know that universal credit has been failing from day 1.

Significant work was done by Sheffield Hallam University on the impact of welfare reform, which showed that the most affected would be single-parent families, young men aged under 25 and disabled people, so we have known about the impacts for a long, long time. It is, therefore, disappointing to hear some people say that they are still waiting to see what the outcome will be.

Did the member, like me, receive the briefing from Citizens Advice Scotland, which works every day with clients who are detrimentally affected by universal credit? If so, perhaps she would recommend it to our Conservative colleagues to read?

I would certainly encourage them to read the briefing and to listen to the people who are affected by the appalling legislative decisions of the Conservative Government.

I want to talk about what we call social security. Michelle Ballantyne mentioned the idea of it being a social contract between the citizens of a country and their Government. The impetus of a social security system should be to champion the vulnerable and protect those most in need—that is intrinsic to the social contract; yet we see the othering of disabled people and of those who are in need or on zero-hours contracts. That social contract has been broken for the WASPI—women against state pension inequality—women. It has also been broken for those who have lost out on severe disability payments—for which, as Mr Brown said, they are yet to be recompensed, despite that being promised more than a year ago—and for those affected by the botched roll-out of universal credit.

The statistics are shameful and, astonishingly, there is little sign of the UK Government listening. By 2020-21, social security spending in Scotland is expected to have been reduced by about £3.7 billion. That is more than £3 billion stripped from those who need it the most as a result of austerity from Westminster. The “2018 Annual Report on Welfare Reform” found that the UK Government’s benefit freeze would lead to reductions of about £190 million in 2018-19, rising to about £370 million by 2020-21. However, the current UK Administration seems content with its legacy. It has no understanding or empathy and little understanding of how precarious the financial position is for those who are most in need, or how easily any delay in payment or mix-up with monthly universal credit payments can force a family into financial crisis.

There is denial on universal credit. The figures are abhorrent and, importantly, they represent an on-going problem, yet we see little from the UK Government to show that it is addressing the gross level of inequality that the roll-out has caused.

Food bank use is the most striking example. The operators and volunteers of food banks are dedicated and compassionate people who are doing what they can to mitigate a systemic imbalance, but they should not be needed. It is a damning indictment of the current social security system that food banks exist in the first place. The Trussell Trust has told us that in areas where universal credit has been fully rolled out for 12 months or more, food bank use has increased by 52 per cent. That is staggering. Thousands of Scots are being driven into poverty by UK Government policy. They face the ignominy of relying on charity food parcels and then the same UK Government has the temerity to pillory them, with the othering of the most vulnerable.

Last year, the UK Government spent more than £120 million fighting appeals by claimants who were denied their benefits, yet 70 per cent of those appeals were won by claimants who were entitled to the support. That is a 70 per cent failure rate in the decision making of the Department for Work and Pensions. In any other walk of life, that would be seen as a failed system, and it should long since have been fixed by the Tory Government.

Last year, I hosted a reception for the menu for change project. A play, written by a volunteer at a London food bank, told the stories of the people who attended the food bank and of one of the volunteers, who themselves was in in-work poverty. It brought home to me just how incredibly divisive it is to use charity in a social security system; it should not be needed or acceptable. I was pleased that, during the reception, the panel praised the work of the Scottish Government in providing access to the Scottish welfare fund to ensure that people in crisis can access support from the Government with dignity.

I do not have time to say much more, but the committee’s report is hugely important, and I welcome it.

15:33  

I am not a member of the Social Security Committee, but I thank it for its work in preparing the report. Despite what the Tories claim, there is no doubt that the impact of the changes to the benefit system and in particular the roll-out of universal credit has brought hardship to a number of households in the country. The UN special rapporteur on extreme poverty and human rights has advised that the roll-out has had a bigger impact on women.

As we have heard, in-work poverty is on the increase, which is just not acceptable. Nearly 60 per cent of those who use food banks came from households with at least one person in work. The StepChange Debt Charity, which recently held an information event in Parliament, has reported that, UK wide, in 2018, 55 per cent of new clients were in employment. Its report entitled “Scotland in the Red: The latest debt statistics from StepChange Debt Charity Scotland” gives us more information about what is happening, and estimates that more than 700,000 people in this country are in, or at risk of, problem debt. Such debt is primarily a symptom of poverty, poor housing conditions, welfare cuts, ill health and insecure work and cannot be addressed by simply advising that people should learn how to budget. No matter how skilful they might be, it is not possible for them to create a budget out of nothing—which is often what they have left at the end of the week.

As the Child Poverty Action Group pointed out in its very helpful briefing paper for the debate, 65 per cent of children who were assessed as living in poverty over the past three years did so in households where at least one adult was in work—a point that was also made by Mark Griffin in his speech. That is taken from the Scottish Government’s own analysis of poverty and income inequality, and it really is shameful.

Tory austerity is certainly to blame for much of the poverty in this country, but if we are to be serious about developing policies and interventions that reverse that trend, the Scottish Parliament must also take some responsibility. It is not good enough to pass it all on to the UK Parliament or to place the blame solely on the aspects of the social security system that are reserved to Westminster. The committee’s report draws attention to a number of steps that the Scottish Government could take to improve people’s lives here and now. I would like to focus on those.

As I said in the chamber before the Easter recess—and as Alison Johnstone said in her speech today—the refusal to consider an immediate uplift in child benefit while more and more families struggle to put food on the table seems to be indefensible. We still do not seem to have clear progress on the proposed income supplement, other than a letter to the committee that assures it that a report will come in June. I ask the minister, when responding to the debate, to let members know how the income supplement will take account of the reality of today’s flexible labour market. We need to have answers to such questions.

Payment of the living wage is not a requirement for recipients of many public sector contracts, but it should be. The Scottish Government’s national standard for early learning and childcare providers requires that the staff who deliver the childcare receive the living wage. However, as was highlighted by Audit Scotland and by a Scottish Parliament research paper this month, that applies only to the hours that a staff member works on ELC funded places. Therefore, the same staff member could have two rates of pay for different times of day. Furthermore, the requirement does not apply to all staff in a nursery or day care facility. There is nothing in a publicly funded contract that provides for the living wage as a minimum for cleaning staff, janitors or other support workers. That is only one example—there are many more.

In today’s Scotland, we can do something about wage levels and contracts. Decent, well-paid and secure employment is needed to ensure that standards of living rise and that in-work poverty falls. Employment statistics deserve far closer examination if we are to understand fully the reality of what is happening in people’s lives.

I turn to the Scottish welfare fund, which was mentioned by Clare Adamson in the speech prior to mine, and which is another resource over which the Scottish Government has control. Community care grants and crisis grants are administered at local authority level. However, in some areas they are difficult to apply for because of lengthy and intrusive forms and questions, which I urge the Government to look at. The committee has asked that such grants be increased. I certainly support that call, but I must also ask what is being done to ensure that there is no underspend in the fund, and that payments from it reach all those who need them. Last year, there was an underspend of £2.3 million in the Scottish welfare fund, and we know that, during that time, food bank use continued to rise.

Eligibility criteria for payments from the fund include the requirement that households have low incomes, whether or not they receive benefits or include children. In fact, 54 per cent of the households that were assisted by the Scottish welfare fund over the past five years were single-person households, which might indicate a level of need that requires specific policy intervention. The Scottish Government might want to pick up on that point.

The most common Scottish welfare fund crisis grant expenditure, as reported up to September 2018, was for food, essential heating expenses and other living expenses. There are crisis grants for recipients who are in work. We should all have a basic right to food, yet paying for it accounts for 60 per cent of crisis grant expenditure. Basically, we are a society that is failing to feed everyone, and that has got to change.

I commend the committee’s recommendations to the Parliament and I again thank the committee, everyone who gave evidence and the clerks for the report, but I also urge the Government and the Parliament to do far more with the powers that are at our disposal, to change direction and to reverse the growing gap between rich and poor in our society. We really cannot afford not to address child poverty right now.

15:40  

I am grateful for the opportunity to contribute to this debate. I commend the Social Security Committee on what is a worthwhile, considered and timely report, and I think that that has been reflected in the speeches that we have heard from across the chamber this afternoon.

One theme that has run through many speeches—at least those from members on the SNP, Labour, Liberal Democrat and Green benches—is the relationship between what we are discussing in the abstract and the lived experience of our constituents. In debating matters such as social security, given the complexity of policy and the huge sums of money that are involved, it can often be rather easy to slip into the abstract.

One of the most effective elements of the committee’s report is to be found on page 14, where there are some first-hand accounts of those lived experiences. I will share some of them with members.

“Case 1. A woman living with her partner and young child. Since moving to UC, she owes more than £7,000 on her credit card.”

“Case 2. A single parent sanctioned for volunteering in a community project instead of spending that time looking for paid work.”

“Case 3. Children caught stealing food from a community garden. Their mother had no money for food, as her UC claim had been delayed by a week.”

We are living in 21st century Scotland, yet those things are happening around us—not because of the policy actions of the Scottish Government, which the Scottish Parliament is elected to hold to account, but because of those of the UK Government at Westminster, which has been rejected in Scotland at successive elections.

That raises a question about what the role of the Scottish Parliament is. I know that there is a debate regarding what our responsibilities are in responding, but I think it is worth while to note and reiterate the cabinet secretary’s point that we are now spending over £120 million every year to mitigate welfare cuts from the UK Government. That is the amount that we spend on the pupil equity fund, which is having a transformative impact on young people—particularly those from rather challenging backgrounds—in my constituency. I ask members to think about what we could do with that £120 million if we did not have to spend it to mitigate cuts that we did not make and from which we do not receive the savings.

As many members have said, the debate about in-work poverty is incredibly complex, and social security is but one aspect of it. As I have said, the report highlights where the challenges are within reserved benefits, and the cabinet secretary and some of my colleagues have highlighted in their speeches the work that the Scottish Government is doing to mitigate that, but broader work is being undertaken under the Scottish Government’s commitment to fair work. Also important is the Scottish Government’s commitment on public sector pay, because we do, of course, understand that there is a relationship between public sector pay and private sector pay. Salaries can become more competitive when we increase public sector pay. Again, however, those are tangential measures and attempts to mitigate. We are not dealing with the problem at source.

When I think about where we will be in two, four and 10 years’ time, with the challenges that are coming down the track in the labour market, I have a grave concern. If we are unable to address the issues at source, we will be unable to mitigate the catastrophic damage that will be inflicted on the livelihoods of our constituents and on our communities—communities that are being disadvantaged because some people are being sanctioned for seeking to go and do community work, as the report highlights.

What is the solution? I think that, ultimately, instead of the current piecemeal approach, it is for this Parliament to be responsible for all powers over social security. I understand the arguments for pragmatism, and for focusing on the powers that we have, but we are limited in what we can do. As has been highlighted, 230,000 children—one in 10—are in poverty. The cuts that have been made—which, cumulatively, will be £3.7 billion—are not a saving for the UK Government, though. Instead, the Government is just storing up problems for the future, because every one of those children is at more risk of adverse childhood experiences and a challenging upbringing that will result in reduced opportunities and limited potential. It means that, in the future, those children could need more support from the state.

The policies that the UK Government is pursuing do not have the long-term wellbeing of our constituents at heart. They are not policies that will build up our communities, strengthen our people and genuinely help them to get in to work; rather, they are an expression, couched in the language of “work pays”, of very old and sadly indelible Tory values of the deserving and the undeserving. I do not want that for my constituents and I do not want it for my country, and that is why this Parliament needs full powers over social security.

15:46  

I thank everyone for their work on this important report. We are debating the issue of in-work poverty at the same time as we are seeing record-breaking employment levels in Scotland and, indeed, across the UK. In January, we learned that the UK employment rate has risen to more than 75 per cent—the highest rate since comparable estimates began—while, for the first time in decades, we have a record low unemployment rate in Scotland. It has been referred to as the jobs miracle, and it is evidence of the attractiveness that the UK market continues to hold for business.

Creating jobs and ensuring that people are in employment are the basis of making work pay. Other policies and principles that have been adopted by the UK Conservative Government are equally important. The commitment to increase the personal allowance to £12,500 a year earlier than expected builds on the progress that has already been made, whereby 1.74 million of the lowest-paid workers have been taken out of paying income tax altogether. The national living wage, which has continually increased over the years, had helped some 300,000 workers out of low pay by 2017. Those policies should be welcomed across the chamber, as they provide longer-term solutions that allow people to keep more of their hard-earned money while developing skills and experience that can lead to happier and more fulfilled lives.

However, when people who are in work are still experiencing poverty, we must recognise that as a problem that needs to be tackled. Human lives, in which money can play an important part, are naturally complicated, so we should be careful about blaming any single set of circumstances or Government policy for in-work poverty. Relative income depends greatly on a list of factors including education, the performance of the economy and high living costs such as for housing and utilities. The powers to tackle those issues fall within both reserved and devolved responsibilities and require action from both the UK and Scottish Governments.

Universal credit is, of course, one policy that is scrutinised in detail throughout the report. Its intention, which is to simplify the welfare system and to design it around trying to help recipients to budget in the same way as they would with a monthly salary, should be welcomed. The UK Government is taking the time to correct things and has made a number of improvements, including raising work allowances by £1,000 a year and offering a more generous taper rate. Improving the welfare system in those ways will ensure that it fulfils the role that it was designed for, which is to support progression into work.

The sort of scrutiny that the committee carries out into social security, including its report on in-work poverty, is needed at this critical time for welfare reform to ensure that we get it right at Westminster and in Scotland as we take on greater powers. However, in understanding in-work poverty, we cannot simply pay lip service to certain factors. In tackling the problems, we need to adopt a holistic approach. Responding to in-work poverty requires us to think about why less money is coming into households and more is going out and about how that situation can change.

In this session of Parliament, the Economy, Energy and Fair Work Committee has looked at the performance of the Scottish economy—in which levels of gross domestic product growth are marginal, productivity is low and wages are stagnant. Our productivity performance has been stagnating for a number of years, and we are 20 per cent below our target levels of productivity. In a report into in-work poverty, the Institute for Fiscal Studies has said that the key to sustaining higher hourly wages is higher productivity, which could address the problem of in-work poverty. However, there is much work to do if we are to reach the levels of productivity that are achieved by other OECD countries, which bring higher wages.

I am listening to the member’s remarks with interest. Does he recognise the argument that increased wages can drive up productivity by necessitating that firms invest in adaptations, developments and new technologies that contribute to increased productivity?

All these things are, of course, interlinked. It is not a simple matter of one leading to the other; there is a complex interplay between such factors, which, I think, we all recognise.

The levels of expenditure that households now have to put up with continue to increase. With local authorities struggling to make ends meet, given the ring fencing of much of their budgets, the SNP Government has increased the council tax limit. However, families are already struggling to pay, with council tax costs being a major factor in nearly 700,000 people in Scotland having debt problems.

In-work poverty is deeply regrettable, but there are numerous reasons for it. The committee’s report has considered the role of social security in in-work poverty, but we cannot ignore the pressures that are put on families who have dwindling incomes relative to their outgoings, which are increasing all the time. If we are to truly tackle the complex problem of in-work poverty, we need to take an all-encompassing approach that pursues policies that tackle those pressures and shows that work really does pay.

15:53  

Like other members of the committee, I thank the clerks and all those who gave evidence to the inquiry.

The Social Security Committee received overwhelming evidence that, first, poverty is a clear reality for many Scots who are in work and, secondly, the UK Government’s shambolic roll-out of universal credit has actively contributed to worsening in-work poverty. I acknowledge that two Conservative members of the committee largely dissented from that assessment, but the evidence that was presented to us speaks for itself and allowed the committee to come to a very clear view.

As Bob Doris mentioned, it is disappointing that neither the UK Secretary of State for Work and Pensions nor the Minister of State for Employment were able to accept the committee’s invitation to give evidence to our inquiry, despite universal credit and much else in the benefits system being matters that are still largely reserved to Westminster.

I will focus briefly on a couple of related areas of the committee’s findings: the wait that individuals are experiencing to receive their initial universal credit payment and the fact that assessment dates do not always align with people’s pay days. Both of those things have real human costs, as the committee heard from many witnesses.

We agree with the UK Government about the importance of encouraging a culture in which people manage their incomes responsibly. However, as Russell Gunson of IPPR Scotland pointed out to the committee,

“it is not good enough to suggest that people on the lowest fluctuating incomes—potentially they are people in insecure work, whether self-employed or otherwise—just need to budget better.”—[Official Report, Social Security Committee, 13 September 2018; c 21.]

In particular, budgeting is easier said than done if a person’s job pays every four weeks but universal credit is assessed once a calendar month. The very significant peaks and troughs that that can create in family incomes—particularly when a person finds that they have, in essence, been penalised for receiving two wages in one calendar month—are by no means easy to manage. The UK Government has acknowledged the problem but has given little indication of whether it is going to do anything about it, as Alison Johnstone pointed out. The committee therefore strongly recommended that the UK Government at least maintain the flexibility that is allowed by the current rate of the higher earnings threshold before income is carried over. Any attempt to reduce that will have major consequences for many people in work who are trying to manage their incomes at something like a steady level.

The committee’s report also concluded that it is unacceptable for anyone to have to wait five weeks for benefits to which they are entitled, yet that is exactly what happens to people who are awaiting their first universal credit payment, as Mark Griffin and other members have pointed out. I know that I am not the only member who has had to deal with constituents who have had to live off a combination of charity, debt and fresh air during that five-week period. In some cases, there is also evidence of administrative delays having prolonged the waiting period further or having resulted in elements being missed from clients’ universal credit payments. The committee concluded that it is unacceptable to make anyone wait for that length of time and recommended that the UK Government urgently redesign the system to ensure that payments are made within two weeks.

As I said, there are human consequences to policy failures of that kind, one of which—the committee was left in little doubt—is hunger. Nonetheless, the Conservative social security spokesperson, Michelle Ballantyne, speaking about food poverty on 12 February, said:

“What we haven’t got is hard evidence about what the real causes are ... I haven’t yet seen the concrete evidence of where that’s”—

meaning food poverty—

“coming from.”

I am afraid that, like the Trussell Trust, the Church of Scotland and the UN special rapporteur on extreme poverty, the committee felt little of Ms Ballantyne’s sense of mystery about at least one of the reasons why food poverty might exist in the UK. Indeed, only the day before Ms Ballantyne’s remarks, the work and pensions secretary, Amber Rudd MP, herself admitted:

“It is absolutely clear that there were challenges with the initial roll-out of universal credit and the main issue that led to an increase in food bank use could have been the fact that people had difficulty accessing their money early enough.”

The committee was left in no doubt that food poverty and the failures in how universal credit has been rolled out are very closely connected.

We hear a lot from the Conservatives about any measure that they think might infringe on the rights of hard-working families. Let me remind them that people on the upper rates of income tax, such as politicians—hard working though we all are—do not have a monopoly on hard work. As we have heard from the committee’s convener, 18 per cent of hard-working people in Scotland are paid less than the real living wage. As the committee’s report finds, the way in which universal credit has been implemented by the UK Government makes those families’ lives even more difficult.

15:58  

Like many other speakers, I welcome the report and congratulate the committee on its publication.

I note that the report has very clear and well-argued recommendations and I hope that the Parliament will get behind those recommendations and fight for the change that we need, particularly in the welfare system. The report is clear that the benefits freeze has impacted the poorest disproportionately; that universal credit is not working for many claimants; that the digital first requirement gives cause for concern; that the committee was “surprised and disappointed” about managed migration, for which there had been “little or no planning”; that transitional protection under managed migration can be lost should the individual be a victim of domestic abuse, as universal credit does not provide an exception in such a circumstance to protect someone from the losses that they would incur; and that it is counter-productive to close jobcentres at a time when demand for their services is scheduled to increase.

Ahead of the autumn budget, UK Labour launched 10 emergency demands for the budget to help to repair the damage that had been caused by the roll-out of universal credit. They included cutting the five-week wait; removing the insistence that claims be made and managed online; ending counter-productive sanctions; allowing split payments, as is the case in Scotland; allowing direct landlord payments, which have been introduced in Scotland; reversing the cuts to disabled people; reversing the cuts to children by reinstating the family element and getting rid of the two-child limit; supporting people who are on fluctuating incomes; restoring work allowances; and ending the freeze on social security. All those actions would certainly have a positive impact on the roll-out of universal credit if they were to be carried out.

In Scotland, we have said that we would reduce in-work poverty and tackle the cost-of-living crisis by topping up child benefit by £5 a week, fixing our broken energy market, cutting private sector rent increases and making public transport more affordable. We would introduce a £10-an-hour living wage and establish sectoral collective bargaining along with sectoral industrial and economic planning as part of a long-overdue industrial strategy for Scotland. We would make the real living wage and labour standards, including trade union rights, a condition in public procurement. All those measures would help to address the unacceptable levels of poverty in our country.

As the Resolution Foundation recently warned, things are not going in the right direction. It said that 23 per cent of Scottish children—around 230,000—lived in households that were below the UK relative poverty line in 2016-17. The Child Poverty (Scotland) Act 2017 requires the Scottish Government to reduce that to below 18 per cent by 2023-24 and to below 10 per cent by 2030-31. However, the foundation’s projection, which combines an economic forecast with planned tax and benefits policies, suggests that the Scottish child poverty rate is likely to be higher in 2023-24 than it was in 2016-17—at 29 per cent, the projected rate would be the highest in more than 20 years. Although such an outcome is uncertain, it could leave more than 100,000 additional children living in poverty than if the interim target was met and demonstrates that we need action.

The Resolution Foundation also said that

“UK-wide benefit policy is the key cause of this, with the benefit freeze, two-child limit and other welfare cuts taking substantial amounts of money from lower income parents”.

It added:

“the Scottish government also has the power to reduce child poverty, and much will depend on the generosity, design and funding of the promised ‘Income Supplement’.”

John Dickie, director of the Child Poverty Action Group in Scotland, said that families are struggling now and cannot wait years for the introduction of the Scottish Government’s promised income supplement. He believes that a £5 top-up to child benefit would be a simple way of lifting thousands of children out of poverty. He said:

“These aren't just statistics. These are children going hungry, missing out on school trips, unable to enjoy the activities and opportunities their better-off peers take for granted. These are parents going without meals, juggling debt and seeing their own health suffer to protect their children from the poverty they face.”

Douglas Hamilton of the Poverty and Inequality Commission said that it was time for “meaningful action” and that:

“Poverty has a firm grip on Scotland ... Behind these statistics, there is the reality that over 1 million people are locked in a daily struggle to make ends meet. If the Scottish Government is serious about addressing this, it should be making full use of”

its

“powers to reduce housing costs, improve earnings and enhance social security.”

Shelter Scotland has also welcomed the fact that the report recognises that in-work poverty is driven by many factors, including the cost of housing.

As the report points out, there is much to be done. We must move beyond talking about addressing poverty—we need action, and we need it now.

16:05  

I was a member of the Social Security Committee when it took most of the evidence for its inquiry into in-work poverty; I left the committee just as it started to work on the report.

I have listened to the debate and all the information that I heard when I was on the committee, but I find some of the things that we are hearing from the Conservative Party quite strange. Jamie Halcro Johnston spoke about helping people to manage their money. That is all well and good and highly commendable, but that is only possible if they have money to manage. The problem is that, after five weeks, if someone ends up with rent arrears they are in a crisis situation at that point, and beyond just needing a wee helping hand with how to deal with their finances. I find the tone of the Tories in the debate quite disgusting.

During Bob Doris’s speech, I was disappointed to hear that the committee did not manage to secure a meeting with a UK minister. We have constantly been told that there is a respect agenda between both Parliaments, and that we should all work together to make sure that we can make things better.

The reason that was cited for Alok Sharma MP’s most recent refusal to attend the committee was Brexit.

I am sorry, Mr Doris, but I cannot hear you when you turn away from the microphone. Could you repeat that?

The latest reason why a UK minister could not attend a Social Security Committee meeting was Brexit.

That is all well and good but, at the end of the day, if we cannot have a meeting with a minister of the UK Government so that we can scrutinise the policies that it is using to destroy communities and attack families in our constituencies, there is something far wrong.

As I said, I have been listening carefully to what everyone has said. We heard from Michelle Ballantyne that universal credit is a test-and-learn policy. That depends on what the test is. If the test is whether someone lives in abject poverty, the UK Government is probably succeeding, because it is making sure that members of our communities are living in poverty. All we seem to be learning from the policy is that we can never trust the Conservatives with any form of policy that relates to people in our communities. There is no test and learn—all that we are learning is that the same old callous Tories are continuing with their devastation of our communities.

We have heard from countless Tories, including one who said that the debate is bogged down in political posturing. Excuse me if I stand up for people in my constituency who are struggling through this Tory-designed financial mire—and that is exactly what it is.

Most of the Tory involvement in the debate has been pure fantasy. During Michelle Ballantyne’s speech, I half expected the late, great Ricardo Montalbán to don his famous white suit, go down to the front of the chamber and say, “Welcome to Fantasy Island”. The only difference between that great 1970’s show and the Conservatives is that the show finished every week with a happy ending, but there ain’t no happy ending with the Conservative Party in Scotland.

That brings me back to what the report says. The Social Security Committee made it clear that the Scottish Government could not be expected to mitigate the impact of

“every UK Government welfare policy”.

We constantly hear that from the Conservatives in particular.

The committee said:

“It is the view of the Committee that the UK Government’s freeze on benefits must be lifted. It is not realistic to expect any Scottish Government to top up or mitigate every UK Government welfare policy to ensure the income of Scottish claimants does not drop in real terms.”

That is true. With our limited budget in the Scottish Parliament, we cannot constantly try to save the people of Scotland from the Westminster Government’s constant attacks.

The UN special rapporteur, Professor Philip Alston, said the same. He, too, said that it was not sustainable to do that. He stated:

“Devolved administrations have tried to mitigate the worst impacts of austerity, despite experiencing significant reductions in block grant funding and constitutional limits on their ability to raise revenue ... But mitigation comes at a price and is not sustainable.”

That is part of the problem. The Tories can say what they like in the chamber, but everything that they have put forward is not sustainable. They know that, from its inception, universal credit has been a callous policy that has caused poverty throughout our communities. [Interruption.] Michelle Ballantyne can say something if she wants to instead of shouting from the sidelines, because the issue is important. We cannot have people shouting from the sidelines when my constituents are suffering. I wonder what she has to say.

George Adam is keen to have an intervention, so does he recognise that 80 per cent of people on universal credit are satisfied and happy with their treatment?

I can say only that I diligently serve constituents from whom I hear horror stories that have resulted from the Conservative Party’s policies as it continues to attack our communities. I, for one, will no longer listen to the Conservatives’ nonsense, because I am sick of their posturing. This is about my constituents—the people whom I represent—and the people of Scotland. The Tories need to be called out continually for the chaos that they are causing in our communities.

I call Alexander Stewart, who is the penultimate speaker in the open debate. Other members who are not here have been warned.

16:12  

I am pleased to be able to take part in this debate on the Social Security Committee’s report “Social Security and In-Work Poverty”. I am not a member of that committee, but I commend its work and the report that it has produced.

Although we have made significant progress on employment in recent years—for the first time in decades, fewer than 100,000 people in Scotland are unemployed—we all understand that in-work poverty is a real concern for many individuals and families across Scotland, and it needs to be addressed as a matter of urgency.

One of the major problems that we have is that the debate can be framed in the wrong way, with a narrow focus on incomes and welfare in particular, although the real roots of the problem of in-work poverty go much further and deeper. The problem has various drivers, from education to housing, and from childcare to transport. All of those may play a part in in-work poverty. I am glad that the committee has listened to organisations such as the Joseph Rowntree Foundation and has recognised that important fact in its report. Childcare costs, for example, are a significant problem for those on low incomes. As the report outlines, when parents weigh up the benefits of work and getting themselves into a job versus the costs of childcare, that can be a real situation for them.

The cost of housing is another abundantly clear problem. The Joseph Rowntree Foundation has estimated that the number of households with children that receive benefits has doubled since the mid-1990s, and the rate of relative poverty increases when housing costs are taken into account.

We must not forget that the responsibility for those drivers and many other drivers of in-work poverty is devolved to the Scottish Parliament and that the Scottish Government has the opportunity to react. Rather than tackle the problem head on, the Scottish National Party has broken a manifesto commitment on the council tax. The freeze for local government was removed. We are well aware that, with general local government funding down and the 3 per cent cap removed, many local authorities have raised their council tax by 4 per cent or even more, and that has a continual impact on individuals. StepChange Debt Charity Scotland has warned that hundreds of thousands of people will have a problem with debt as a result of council tax arrears.

I understand what Alexander Stewart says, but does he accept that welfare reforms have been the greatest cause of increasing poverty in Scotland?

Welfare reforms have evolved and continue to evolve. As I said, the employment rate is up and the unemployment rate is down. We want people to have opportunities so that, when they require benefits, they make the best of that. We know that there have been issues with universal credit, but we are tackling them to ensure that people who require support get it.

Unless it is urgently addressed, the Scottish Government’s mismanagement of local government will only worsen the problem of in-work poverty. Welfare is not the sole cause of in-work poverty, but it is a factor that needs to be considered. We need a welfare system that supports people into the workplace and helps those who are struggling, while being fair for the taxpayer.

Under Labour in the past, the welfare system was complicated and complex; sometimes, it resulted in the ludicrous situation where people who wanted to earn more or had the opportunity to get a job were left worse off. Universal credit seeks to change that. The principle is simple—work should always pay. We in the Scottish Conservatives certainly believe in that principle, and I hope that others also believe in it.

We recognise that there have been flaws in the implementation of universal credit. The recently appointed Secretary of State for Work and Pensions, Amber Rudd, has acknowledged that there have been and continue to be issues that require to be addressed, which have been and are being addressed. She has already halted the transfer of 3 million cases from legacy benefits to universal credit, exempted families from the two-child benefit cap and ensured that payments will in many cases go directly to the woman in a household. In addition, a fund for advance payments has been set up to plug the gap between applying for universal credit and receiving the first payment. We heard from many members today about that difficulty, which has been acknowledged and which an attempt is being made to address.

Generally, the UK is committed to making work pay and to supporting the lowest paid in our society. That is what we want in a strong economy in which wages grow and the employment rate goes up.

The UK Government has supported hundreds of thousands of the lowest-paid people by introducing the national living wage, which sits at £8.21 an hour, in comparison with the national minimum wage, which was £6.70. In addition, the UK Government has continued to increase the tax-free personal allowance, which has cut tax for millions of people. Since 2010-11, that reform has taken 1.74 million of the lowest paid in the UK out of paying income tax entirely. That must be a good thing for the families involved and must offer them the opportunity to develop and expand their potential.

Those are important changes that we should take forward. Despite all that, universal credit, the UK Government and the welfare reforms have been subject to criticism after criticism, as we have heard today. However, we must look back to consider what those criticisms say. Let us not forget that the Scottish Government has the power to reverse or adapt any of the policies but has chosen not to do so. On welfare, it has failed to deliver on its manifesto—there has been delay after delay for the 11 benefits that are coming to Scotland. It is rather ironic that a party that claimed that Scotland could become an independent country within 18 months has talked about taking nine years to manage some of the devolved responsibilities that are coming.

This is still work in progress, but much has been achieved. The UK Government is committed to ensuring that work pays. To play its part, the Scottish Government must work holistically to put its existing devolved powers to better use in order to support individuals and families to overcome the problems of in-work poverty by tackling the cost of living.

You took a little longer than I should have allowed you, but I am in a good mood.

I call Emma Harper.

16:19  

Thank you, Presiding Officer. I hope that you are in a good mood for me this afternoon, too.

I am pleased to speak in today’s debate. I thank committee members, clerks and those who gave evidence that led to the creation of the report. I am not a member of the Social Security Committee, but welfare is an important issue for many of my South Scotland constituents, including those in the south-west.

From the outset, I put on record that this SNP Government will continue to challenge the UK Government’s punitive, unfair and unjust welfare reforms that take money out of the pockets of the most vulnerable people in our society and those who are barely managing to get by.

I completely agree with Clare Adamson’s sentiment that social security is about support for people during the times when they need it most. We are trying to support those who are most vulnerable in our society, and the associated stigma must be addressed.

The remit of the Social Security Committee’s inquiry was

“To explore the potential impact of Universal Credit on in-work poverty.”

We have heard examples of casework about that from across the chamber.

The inquiry included consideration of recent research on trends in low wages and in-work poverty and indications of increasing financial need in working households, such as increased use of food banks. We have seen a marked increase in the use of food banks in Dumfries and Galloway in my South Scotland region. Last year, the Trussell Trust released figures revealing that the use of its food banks in Dumfries and Galloway between April and September had risen by 44 per cent over the same period in the previous year. That is the second highest rise across Scotland’s 32 local authorities. Mark Frankland at the First Base Agency food bank in Dumfries says that his figures are similar to those of the Trussell Trust.

I will touch on the key findings of the committee report that I think are the most important and worth reaffirming. The work allowance levels were reduced substantially—they were almost abolished—in April 2016. Before 2016, every claimant had a work allowance, but since then only those with a disability or a child get a work allowance and the rate is based on whether someone’s universal credit includes amounts for housing costs.

The committee welcomes the increases to the work allowance in universal credit, but notes that the full work allowances should be restored to pre-2016 levels. That is an extremely important point, because that would encourage people into the workplace by allowing families and single people who are just getting by additional money every month to help with household costs.

Another universal credit design issue is that of the UK Government’s policy intention to extend in-work conditionality. Bob Doris spoke about that. Unlike working tax credits, there is no requirement in universal credit for someone to work 16 hours before being entitled to claim. Although that is not being applied unless someone is on very low wages, the policy intention is that someone who is in receipt of universal credit could be subject to conditionality—and even sanctions—despite working more than 16 hours a week, as reaffirmed in paragraph 112 of the committee’s report. That means that families across my region who are just managing to get by with support from universal credit—£338 a month for single people and £541 for couples under the administrative earnings threshold—could lose out on those vital funds should they not earn more money than was the case when they started their UC claim.

The committee was concerned about the plans for managed migration, particularly as many people who are in receipt of working tax credits may not consider themselves to be benefit recipients. The committee considered that existing concerns with universal credit should be addressed before a move to managed migration.

All those issues are a direct result of an out-of-touch UK Government determined to press on with welfare reforms that will affect people across Scotland. I ask the Scottish Government to continue to do all that it can to press for Scotland to lead the way and to have control over all welfare powers as soon as practicable.

Thousands of individuals and families across Scotland are being forced into poverty because of devastating UK Government welfare cuts. Because of those cuts, it is expected that, in 2020-21, social security spending in Scotland will have fallen by £3.7 billion since 2010.

The “2018 annual report on welfare reform” found that the UK Government’s benefit freeze has led to huge reductions in spending—about £190 million in the current year, 2018-19, which will rise to about £370 million by 2020-21, which is equivalent to three times the annual police budget. That is staggering. The report also found that universal credit claimants are more than six times as likely to be sanctioned as claimants of any other legacy benefit and that young men are the most likely to be sanctioned.

Local authorities and third sector agencies are being left to pick up the pieces of a broken system, and are investing their own money to support people on universal credit. I want to put on record my thanks to a number of third sector and charity agencies across Dumfries and Galloway that work to mitigate the impacts of Tory welfare cuts, including First Base Agency and Mark Frankland in Dumfries, who came to the committee to provide evidence.

In conclusion, I add my support for the Social Security Committee's report. I call on the UK Government to halt the roll-out of that flawed system, and to take seriously the concerns from across the third sector, and even from international organisations such as the UN.

I welcome and commend the report.

Before we move to closing speeches, I note that one member who spoke in the debate is not present. I expect the SNP whips to tell that member that I expect a note of apology and an explanation.

We move to closing speeches, with a little time in hand. Ms Grant, I can give you seven minutes.

16:25  

Thank you, Presiding Officer. Like others, I welcome the committee’s report. We have all known for a long time about the big issues with in-work poverty and universal credit and to have those issues laid bare by the committee makes stark reading. To know that 60 per cent of working-age adults in Scotland who are in relative poverty are in working households is absolutely stark. The Fraser of Allander institute’s “From the Fraser Commentary” said:

“despite record levels of employment, for many being in work is no longer providing the security and prosperity it once did.”

That is absolutely unacceptable.

The committee’s report focuses on universal credit, which takes over from working tax credits. Emma Harper made the point that, for many, getting a tax credit did not feel like receiving a benefit and that changing to universal credit changes the ethos.

The committee highlighted concerns about universal credit that we all hear from constituents, including the length of time people wait for payments, which is unacceptable. Most people who claim universal credit do not have savings that will last five weeks.

There are also concerns about what payments are taken into account as earnings. Mark Griffin laid bare the worst excesses of the scheme. He told us that someone’s tax rebate was being treated as income and that their universal credit was being reduced.

Alex Rowley said that the benefit freeze had also made universal credit unacceptable.

In response to some of those criticisms, Michelle Ballantyne said that the UK Government has a test and learn approach. That is callous; people are living in poverty and living out of food banks, they are not guinea pigs for Tory policy. Surely the Government has learned that that is unacceptable.

Clare Adamson told us that where universal credit has been rolled out, the use of food banks has increased by 52 per cent. That is a test and it clearly shows failure. Will the UK Government learn from that?

Just as worrying were Elaine Smith’s comments about the welfare fund being underspent in areas where food bank use was still increasing. Again, that is unacceptable.

The Tories implemented the terrible policy of the two-children cap, but the SNP will do nothing to mitigate it. I fought for a Scottish Parliament to defend us from the worst excesses of a Tory Government, and yet the SNP Government does not use the powers that it has to do that. I will join the SNP Government in criticising the UK Government, but I cannot stand by quietly while the SNP Government refuses to act.

Many speakers talked about the digital first policy of universal credit. That is a huge problem in the Highlands and Islands, the area that I represent. There is a lack of connectivity, both digitally and in public transport that does not allow people to travel to where they could fill in a digital claim. That makes it almost impossible to apply.

Bob Doris and others talked about the closure of job centres, which, because people need to travel, make it much more difficult to apply digitally and cuts down engagement with advisers.

Elaine Smith and Alex Rowley spoke about the latest Scottish Labour Party policy of a child benefit top-up of £5 a week to lift children out of poverty. Again, the SNP has refused to implement that, despite presiding over an increase in child poverty.

As Alison Johnstone pointed out, organisations that work with children have said that an increase in child benefit offers an easy way to tackle child poverty—it is not the only thing that we can do, but it could be a quick fix until we can find a better solution. Even if the Scottish Government thinks that increasing child benefit is not the way forward, surely it could implement an increase quickly while it worked on its alternative. It should use the powers that it has to make a difference.

Alexander Stewart talked about childcare costs. Such costs make a big difference to working families—indeed, sometimes they make the difference between being able to work and not being able to work at all. A £5 per week increase in child benefit would help many families to pay for childcare.

Elaine Smith talked about how people are in debt due to poverty and rightly challenged Jamie Halcro Johnston, who suggested that help with budgeting is required. A person cannot budget on nothing, as George Adam said. Alasdair Allan quoted the evidence that the committee heard from Russell Gunson, who made the point that it is impossible to budget on a low income. Help with budgeting is fine, but people need something to budget with.

In her speech, the cabinet secretary talked about Scottish choices. We welcome the Scottish Government’s offer to make twice-monthly payments and to make housing payments directly to landlords. However, people should surely be able to have a weekly payment, if that is what they want. It is hard to make a small amount of money stretch over seven days, far less 14 days, or worse, a month.

The cabinet secretary said that there will be the option to have split payments. Universal credit is currently paid in one payment, normally to the man in the family. I suggest to the cabinet secretary that split payment should be the norm. A person who is suffering from coercive control cannot request a split payment; the abusive partner would never allow it. Unless split payment is the norm, we can do nothing to fight the control over finance that is part of domestic abuse and about which this Parliament legislated.

Further, a default payment to a man enhances inequality and promotes the view that the man should be in charge of the household finances. Surely all members find that unacceptable.

We would do things differently. We would remove the two-children cap and thereby remove the rape clause. We would top up child benefit by £5 per week and we would pay a £10 an hour living wage. That would lift people out of poverty and enable them to benefit from work, with the confidence that there was a safety net below them.

16:32  

It is my pleasure to sum up this afternoon’s debate on behalf of the Conservatives. I welcome the debate.

In-work poverty is defined as

“individuals living in households where the household income is below the poverty threshold despite one member of the household working either full or part time.”

The Scottish level of in-work poverty is a critical problem—that, at least, is something on which I think that all members agree.

The Scottish Conservatives want a welfare system that helps people into work and supports people who need our assistance. The previous system was complicated and often resulted in people losing money. When Mark Griffin spoke, it was not clear to me whether he wants to go back to the old system, which was failing so many people who were working. Having people stuck on benefits ultimately costs the taxpayer more money.

That is why it is essential to implement universal credit. We must improve on the previous system, which was failing, and ensure that people who are in work benefit from a much more effective and supportive system, to save hard-earned taxpayers’ money.

I say this again: tackling poverty requires a sustained and strategic approach. It will not happen overnight and problems will not be solved purely by the benefits system, as is evidenced in the Social Security Committee’s report. We must take a bird’s-eye, all-encompassing view of the factors that contribute to poverty if we are to make genuine improvements. Many policy areas require attention, such as the lack of opportunity for skills development in low-paid and part-time jobs, and the barriers that people with disabilities or caring responsibilities face in gaining employment.

However, the benefits system and universal credit undoubtedly have a significant part to play, and I believe that some of the changes that have been made to universal credit are a step in the right direction in bringing about the reduction in in-work poverty that is needed.

Too often—this is true in the chamber and of what has happened in the committee’s report—evidence is ignored and simple political spin is put in its place. That is a danger when we are discussing this area. If we are to come to a balanced, correct view, we must look at all the evidence that was given to us, rather than just selecting the evidence that we like.

On the subject of evidence, I was not aware of there being any food banks in Scotland in 2010. Now, we have food banks in most communities. Does that not show that something has gone seriously wrong in social and economic policy?

I challenge the assertion that there were no food banks in Scotland in 2010, but Mr Rowley is right to say that something has gone wrong. There are many reasons other than universal credit for the existence of food banks in Scotland. Economic and other policies that are pursued by the Scottish Government often lead to people having to seek universal credit. I agree with Mr Rowley that food banks are on the increase, but to lay the blame for that solely at the door of universal credit is to misunderstand the situation.

As Michelle Ballantyne pointed out, a major change that has been brought in is the fact that benefits are now received under one umbrella benefit—that of universal credit. Previously, six benefits were received separately. Now, they have been rolled into a single payment that is paid directly into the claimant’s bank account. That supports the development of a much simpler, more efficient and streamlined benefits system that helps people to keep track of their money and manage their finances more effectively. A constituent came to me whose child is severely disabled. She said that having to fill in only one form rather than six forms had made a massive difference to her life. In addition, providing the option of having universal credit paid directly to a landlord is a welcome move, as it provides added security in housing and allows for a smoother renting experience for the tenant and the landlord.

We must make it clear that we are moving towards a digital first approach—I understand that the Scottish Government, too, is to roll out such an approach in the new Scottish social security system—which is welcome. However, there is help available for people who do not have the necessary information technology skills, whether through—

I make it absolutely clear that the digital policy of Social Security Scotland bears no resemblance to that of the DWP, because we recognise that there are concerns about a digital-only approach. I am pleased that the DWP is making further improvements, but I put on record the fact that we will not run our system in the way that the DWP does.

I thank the cabinet secretary for that intervention, but I must make it clear that the DWP’s approach is not a digital-only approach. People can telephone or text the DWP, or can have face-to-face interviews with its staff. I would be interested to know whether Ms Somerville is telling us that, if and when the Scottish Government gets round to rolling out the personal independence payment and disability living allowance, a digital approach will not be the first port of call, because that is not my understanding.

I make it absolutely clear that the applicant will be able to use whatever method of application they want to use, whether that involves applying by digital means, by telephone or by paper, because that is what people with lived experience have told us that they want to happen.

I will let you make up your time, Mr Balfour.

I suspect that paper and pen might be out of use by the time the Scottish Government gets round to implementing its new system. As I have said, I believe that it is important that a mixed approach is maintained that makes people comfortable and gives them a personalised experience.

As other members have pointed out, in practice, universal credit has not been rolled out for a significant period of time, so we cannot know for sure the full extent of the impacts that it has had. As with all new systems, there will be initial teething problems. I am interested in the fact that Labour’s approach is that, if something is not working, we should never change it. Under universal credit, if things go wrong, we can change the system without having to introduce new legislation, which seems to be the correct way to proceed.

The new benefit roll-out is also working well in many areas. As Michelle Ballantyne pointed out earlier, it is working for 80 per cent of people—that is from evidence that was given to the committee. I appreciate that we need to look at what is happening with the other 20 per cent and do it better, but to say that the whole system is failing is simply not correct.

I believe that universal credit is working to create what is needed and that, in the long term, it will be effective in reducing the number of those who are experiencing in-work poverty. I welcome the committee’s inquiry. I am disappointed that the report did not always follow the evidence and I think that we need to continue to monitor the situation to see what is happening—not just what we think is happening but what is happening in reality.

16:40  

Like others, I thank all the members who contributed to this considered, thoughtful and often reflective debate. In particular, I thank the Social Security Committee, which has created the space today for us to think about what further actions this Parliament and this Government need to take to create the fairer Scotland that I think that most of us seek to create.

I thank the committee for its thorough inquiry. It gathered opinions from a wide range of sources, including academics and think tanks. Perhaps more importantly, it captured the voices and the stories of those with lived experience—those people who are having to cope daily with the harsh realities of living in poverty and who know the harsh consequences of decisions that have been taken by a UK Government that does not understand what it is like to live in poverty or with low pay and whose decisions have not been routinely guided by the principles of dignity or respect.

It is those harsh realities that Alex Cole-Hamilton spoke about that go beyond employment statistics or other facts and figures—the realities of the trauma and stress that are associated with poverty, the increased pressure on mental health and the associated connections with domestic abuse through universal credit being paid to a single claimant that he described. Similarly, Keith Brown described some of his constituents not being able to clothe their children and Alasdair Allan spoke about constituents having to survive on charity, debt and fresh air while they wait for help.

There was an incredibly moving personal account from Mark Griffin, who described how his parents worked hard to provide for their family, only to be rocked by the untimely passing of his father. In describing his own family, Mark Griffin showed how families can be vulnerable to significant changes of circumstance such as bereavements, relationship breakdowns or job losses, which destabilise family security and income and mean that they need the support that the social security system should be there to offer.

That is where Clare Adamson’s contribution was so important, because the unfortunate narrative that has developed around benefit payments, with language such as skivers, scroungers and the like, has hidden what social security should be—not a transaction or an inconvenient budget line to be cut but a safety net to help the most vulnerable and to protect all of us if we ever need to use it. It is that safety net that is being dismantled by the UK Government, and today’s contributions further and firmly assert that to be the case.

It is right that the committee examined in-work poverty, because it cannot be right that people who are doing all that society asks of them—working hard and doing their best—should continue to have to work damn hard but never get out of living in poverty.

The committee and members are right to highlight the impact of universal credit and the problems that are caused by it, because the UK Government’s assault on welfare benefits has played a significant role in increasing poverty levels for people in and out of work. The UK Government’s cuts, which it is estimated will reduce social security spending in Scotland by £3.7 billion by 2021, have removed many of the financial measures that previously supported families, locking them in poverty. To put that £3.7 billion in context, that is the equivalent of three times our annual police budget or the entire annual budget of the Glasgow and Lothian health boards, yet the UK Government refuses to fix the problems that have been caused by its welfare reforms, which have been articulated today. To coin a phrase, it refuses to test and learn from the failings of its own policies. The continued assault on welfare and the continued benefit cuts make it feel as though we are continually fighting poverty with one hand tied behind our backs.

However, as I have said in previous debates, we are not sitting blithely by and letting welfare reforms hit the poorest the hardest or hiding behind constitutional divisions. We are taking action. That action has included significant decisions and concerted effort across Government, not limited to particular portfolios but instead responsive to the wide-ranging ways in which poverty has an impact.

If the Scottish Government is willing to take action, why has it not taken action on the two-child cap?

I am about to talk about the actions that we have taken and continue to take. The Labour Party would do well to reflect on what we are doing to protect those who are being hit the hardest by the significant welfare decisions of another Government, which have been described as “outrageous” and that are recognised as such by Rhoda Grant’s party leader.

In 2018-19, we invested more than £125 million to mitigate the worst impacts of austerity, to protect those on low incomes and to help soften the blows landed on the most vulnerable by another Government with differing priorities. There was £64 million for discretionary housing payments and £38 million for the Scottish welfare fund, and we know that 13 per cent of that fund is used to deal with benefit delays. We are investing in financial health checks to provide tailored advice for families on low incomes. We are spending £3.5 million on our fair food fund to support dignified responses to food insecurity. Moreover, we are spending £6 million to deliver increased levels of school clothing grants, investing £25 million in the education maintenance allowance and providing £750 million to the attainment Scotland fund in the current parliamentary session to help to close the poverty-related attainment gap.

Our work will not stop there. Instead, we will seek to pursue policies that are designed to respond to the needs of the people of Scotland. The Child Poverty (Scotland) Act 2017, which enshrines our ambition to tackle unacceptable levels of child poverty and to build a better future, is backed by £50 million in the tackling child poverty fund. In the delivery plan, we set out a broad range of action to assist parents to increase their income from work and earnings. In April last year, we launched our newly devolved employability service, fair start Scotland. To complement that, we have committed to invest an additional £12 million in intensive employment support for parents and up to an additional £6 million to support disabled parents into employment.

Alongside that support, we are taking action to tackle low pay, even though the main levers to do so are at UK Government level, rather than here. Nevertheless, as a result of action that we have taken without those levers, Scotland already has the highest rate in the UK of employees who are paid the real living wage, at 80.6 per cent. We are working to lift a further 25,000 individuals on to that rate by 2021. In the first year of a three-year strategy, we have already succeeded in securing increases for 5,000 individuals, thereby making a real difference to their income. We are also investing nearly £1 billion in the expansion of early learning and childcare provision—we will have doubled funded provision to 1,140 hours by 2020.

Members have mentioned the income supplement, which was raised during the committee’s inquiry. The important role that it will play in tackling poverty has been recognised. As social security is clearly one of the key drivers in reducing poverty, we committed to developing the income supplement to provide additional financial support to low-income families. In that, we will be guided by two key tests. The first is that it should target the families who need it the most and help to lift the maximum number of children out of poverty. The second is that there should be a robust and viable delivery route to get help to families.

The income supplement is a significant commitment, but it is not without its complexities. Members should recognise that it is not a quick or easy fix. My officials are undertaking analysis of the feasibility of potential policy and delivery options for the income supplement, and I will provide an update to Parliament in June on the outcomes of that work. Shirley-Anne Somerville and I will discuss the issue in more detail with Opposition spokespeople in the coming weeks.

Will the cabinet secretary take an intervention?

The cabinet secretary is just closing.

I am in my last few seconds.

In-work poverty and poverty more generally are unacceptable in a rich country such as Scotland. A country in which folk rely on food banks and struggle with the basics is not the kind of country that I want. I, as cabinet secretary, along with my colleagues in the Government in Scotland, will do all that we can to create the type of country that we want—a fairer and more equal country with opportunities for all. We will continue to mitigate where we can and to soften the blows of the UK Government. When even the UN recognises that devolved Governments having to mitigate UK welfare policies is “outrageous”, we cannot let the Tory Government off the hook. In the 20th year of this Parliament, we should not seek simply to be a Parliament or Government of mitigation; instead, we should pursue policies to meet the needs of the people who put us here. In the meantime, we will continue to do all that we can to support those who need our help the most.

I call Bob Doris to close the debate on behalf of the committee. You have nine minutes, Mr Doris.

16:49  

I thank all members who have contributed to the debate. First, I would like to mop up a couple of matters that I did not have the opportunity of raising in my opening remarks. The committee asked the UK Government urgently to reconsider how universal credit impacts claimants who are self-employed. Under UC, self-employed people are subject to a “gainful self-employment” test and require to attend a jobcentre for such an assessment to be made. A minimum income floor is applied whereby, after 12 months, the claimant is assumed to have a certain level of earnings, even if their actual earnings are less. Self-employed people who claim universal credit are also required to report their earnings monthly, rather than annually, as was the case in applications for working tax credits. That is a significant issue, and it would be remiss of me not to put it on the record in my closing contribution.

I highlight the committee’s recommendation that the 2015 cut to the work allowance should be reversed—not just by a bit, by increasing it by £1,000, but reversed in its entirety. Mark Griffin also mentioned that in his speech.

I thank Alison Johnstone for reinforcing the committee’s concerns about the monthly assessment period for universal credit, which is creating significant issues. I therefore take the opportunity to put on record what the committee said about the related aspect of surplus earnings thresholds, more information on which can be found in the report. Crucially, there is a temporary £2,500 threshold until April 2020, at which point it will disappear. That threshold could make a real difference, and the committee believes that it should endure, because it benefits people.

I will reflect on some of the other speeches that we have heard. Elaine Smith and others mentioned the Scottish welfare fund, the give me five campaign, and ways in which the Scottish Government might seek to mitigate the worst aspects of welfare reform. It is not for me, as convener of the committee, to take a specific view on those, but I guarantee that the committee will scrutinise such approaches in its day-to-day work.

I thank Tom Arthur for highlighting the lived experience of people who gave evidence to the committee, which is crucial. I also thank Gordon Lindhurst for looking more widely at in-work poverty issues. I say to him gently that I do not think that he engaged with the realities of universal credit, although I acknowledge that he painted some of the wider picture.

I would like to comment in detail on the contributions of Clare Adamson and Keith Brown, but I would not be able to do so without digressing from the committee’s report. However, their passionate speeches are now on the record. I also thank Alex Rowley, who, rightly, identified that we should not close jobcentres at a time when we are about to put additional burdens and duties on their staff and on people who are in in-work poverty. That is an important point, which should be reinforced.

I turn to transitional protections, by which I mean measures that are designed to protect those who would otherwise be on tax credits but who are being moved on to universal credit through a managed migration process. To put it simply, if someone would be worse off by moving on to universal credit, their income will be protected and they will be sustained until universal credit provision catches up with their current income. Shirley-Anne Somerville mentioned that, as did Alex Cole-Hamilton and Alex Rowley. Such protections apply only until there is a change in circumstances, in which case they will be lost without exception. Such an outcome would also apply to someone who had been the victim of domestic abuse. They might be forced to choose between leaving an abusive partner or losing money—there are no exceptions. Our committee tried to reach a consensual conclusion on that, across all party-political boundaries. A lot has been made of party politics in relation to the report, but I say to members that the other members of the committee could not get our Conservative colleagues to sign up simply to say that the lack of protections in that regard was disappointing. I will leave it to others to judge where the party politics sat, but I direct members to the comments on that point that George Adam placed on the record.

At the start of the debate, there was an interesting exchange between me and Michelle Ballantyne, in which she mentioned evidence that suggested that the majority of people would be better off on universal credit. I restate the committee’s recommendation on that:

“The Committee observes, when talking about social security support, that language referring to ‘winners and losers’ can cause offence. Our social security systems must be designed to ensure everyone in need receives all the support they are entitled to.”

In other words, the approach should not be about winners and losers; it should be about supporting our most vulnerable people.

I do not think that it does the Parliament any favours for the Conservatives somehow to use Russell Gunson as cover for their position, given that he told the committee that the changes to tax credits and the move to universal credit with conditionality

“bears no relation to reality.”—[Official Report, Social Security Committee, 13 September 2018; c 10.]

I return to the elephant in the room, which is the 50,000 people in work who are in receipt of universal credit and the 170,000 who are on tax credits, who are facing a managed migration to universal credit. As things stand, that will mean light-touch conditionality, which will at some point, I assume, mean that there will simply be conditionality on all of those hundreds of thousands of people. That will impact on all of our constituents who are in work and in receipt of working tax credits, who really do not consider themselves to be part of the benefits system but need the support of tax credits to go out to work in order to make ends meet.

I suggest to members that we go to those constituents, say to them, “We think you should just increase your pay—you should increase your hours of work or take a second job”, and tell them that, if we do not think that they are trying hard enough to do what we have asked, we will sanction them. In effect, we will dock their wages—we will dock the wages of the working poor, if you like. In effect, that is what moving the tax credits system to the universal credit system under conditionality means, and that is what the committee rejected, with the exception of its Conservative members.

It is little surprise, then, that the committee firmly rejects a move to universal credit if in-work conditionality remains. It is little surprise that the PCS union, which most work coaches are represented by, also rejects such sanctions, and it is little surprise that our committee shares PCS’s concerns regarding Jobcentre Plus and DWP job losses and the lack of resources.

I should mention the UN special rapporteur, who does not have a party-political case to argue. We were alarmed by Professor Alston’s findings, which included:

“British compassion for those who are suffering has been replaced by a punitive, mean-spirited, and often callous approach”.

He said:

“through it all, one actor has stubbornly resisted seeing the situation for what it is. The Government”—

that is, the UK Government—

“has remained determinedly in a state of denial.”

He added:

“devolved authorities in Scotland and Northern Ireland are frantically trying to devise ways to ‘mitigate’, or in other words counteract, at least the worst features of the Government’s benefits policy”.

Our committee has written to Professor Alston with a view to holding an evidence session with him when his final report is available. However, there is a lived reality of welfare reform that we already know, and it impacts negatively on our most vulnerable constituents. This Parliament knows that, and our committee knows it.

Be it sanctions, the minimum five-week wait for entitlement to benefits, the £3.7 billion reduction in income, which is mainly due to the benefits freeze, or the reforms to the tax credits system and the move to universal credit, with all the dangers that I have outlined this afternoon, our committee has looked at the evidence and we have concluded that, as things stand, universal credit is simply not fit for purpose in relation to protecting the working poor.

We were almost able to unite as a committee. Unfortunately, we could not get our Conservative members on board, but we will continue and will endeavour to stand up for the working poor where we can. We will stand up to not just the UK Government but, on certain calls, the Scottish Government, including on the idea of an income supplement and on the responsibilities that it has in relation to tackling in-work poverty.

I thank members for contributing to this afternoon’s debate.