Holyrood could mitigate against Conservative austerity measures

Scotland would be able to mitigate Conservative cuts to tax credits or other welfare under Labour and SNP plans to give Holyrood the power to create new benefits and top up existing payments, the shadow Scottish secretary has said.

Ian Murray said Labour amendments to the Scotland Bill, some of which are backed by the SNP, would effectively give the Scottish Parliament the power to design its own welfare system.

If MPs pass the proposals in the Commons, Scotland would be able to therefore create additional benefits to lessen the effect of welfare cuts by the UK Government, for example reported Tory plans to cut tax credits, Mr Murray said.

Moving a series of amendments, the Labour frontbencher said: “New clause 31 (one of the amendments) is a provision that allows the Scottish Parliament to top up any reserved benefit in the United Kingdom and create any benefit in devolved areas.

“So there would be an ability to create a system that allowed you to mitigate the reduction in tax credits.

“Tax credits in terms of the system as I understand it isn’t a benefit, they are done through the income tax system.

“So in terms of topping up tax credits would be out of the scope of this particular arrangement but there’s no reason why an additional benefit couldn’t be put in place for people who are in work and have children as an example in terms of our new clause 31.”

Mr Murray said that Labour’s amendments would implement the recommendations of the cross-party Smith Commission in spirit and in substance while ensuring the welfare state remains UK-wide and allows the pooling and sharing of resources across the union.

He said: “I want to be clear that fundamentally our amendments will ensure that the Scottish Parliament has the unrestricted power to create any new benefits in areas that are devolved, in addition to the guarantees of the UK benefits and pensions system and the power to top up any benefits that remain reserved to this Parliament.

“This wide-ranging power effectively gives the Scottish Parliament the power to design their own welfare system in its entirety.

“However unlike others we are determined to ensure the welfare state remains an integrated UK-wide system of social security to allow for the continued pooling and sharing of risks and pooling and sharing of resources.”

Labour’s Graham Allen (Nottingham North) spoke in favour of his amendment to allow the Scottish Parliament to provide discretionary housing payments in cases which might be regarded as arising from non-payability of a reserved benefit.

He said: “But if your claim had been wrongly suspended… you would be put in a worse position as you would also lose discretionary housing payments. If the rhetoric about trying to get people back into work, about making work pay is meant, then clearly making people suffer a sort of double dis-benefit goes in the face of trying to help individuals back into work.

“It is a catch all, it is a broad brush, it is insensitive.”

Dr Eilidh Whiteford, SNP Westminster spokesperson on social justice, said her party’s series of amendments would “ultimately improve our social security system by making sure that the provisions are tailored to our needs and circumstances and fit with our policy objectives”.

The Smith Agreement she said recommended that powers should be devolved over benefits for carers, disabled people and those who are sick.

On the last day of the last Parliament she added the work and pensions select committee called for a root and branch review of the sanctions regime.

She said: “Now the reason they did that should be self-evident to every single member of this House because we’ve seen repeatedly how people, the most vulnerable people in our communities are falling foul of that sanctions regime.

“People with mental health problems are being disproportionately sanctioned, single parents are being disproportionately sanctioned, and members in this House who can turn up five minutes late to meetings all over this place don’t lose their pay because of that.

“So why should the most vulnerable, the disabled people in our communities be subject to that?”

Dr Whiteford added: “I absolutely think that in Scotland we could do so much better.”

Intervening, Conservative MP Julian Knight (Solihull) said the real agenda seemed to be to “turn back the clock” on benefit reform, ending accountability for those who claim benefits and allow a return to “rampant welfare-ism”.

Dr Whiteford said he had completely failed to understand her point, adding: “Carers are holding up our social care system. They are providers of care, not benefit recipients.

“They are the people who are stopping the state having to look after people who would otherwise require considerably more support from the NHS and community care services.

“Let’s not pretend that carers are somehow a drain on our resources, but a resource which we are hugely dependent on.

“The support we give to carers in no way compensates for the care that they actually provide for free.

“This Tory Government has shown time and time again that it can’t be trusted on social security and they do seem utterly determined to press ahead with eye watering further cuts of £12 billion.”

Labour’s Kate Green (Stretford and Urmston) urged the Government to distinguish between the different benefits.

She said: “I think the secretary of state should acknowledge that what we are talking about is a welfare state that acts as an enabler of people.

“Where benefits enable people’s full social participation, as for example carers’ benefits do, as for example benefits that enable disabled people to live decent and independent lives do.

“There is no case for decrying those benefits on the basis that they create a dependency culture. They create an approach of dignity and participation.”

But she insisted there was no wish on the part of Labour members to say there should be no conditionality at all.

She added: “You must have a backstop of sanctions where people wilfully refuse to comply. Of course the vast majority do not wilfully refuse to comply.

“They get caught up in a completely baffling and increasingly unjust system.”

Employment minister Priti Patel said the Bill met both the substance and the spirit of the Smith Commission, handing “extensive new powers” to the Scottish Government.

The welfare clauses represented a “tremendous opportunity” for the Scottish Government to bring in change and should not be under-estimated, she added.

SNP MP Pete Wishart (Perth and North Perthshire) intervened to point out it was day three of the committee stage and so far the Government had accepted no amendments.

He said the Government had “better not” be thinking of trying to bring in changes in the “undemocratic” House of Lords.

Ms Patel asked the SNP to give the Government the “benefit of the doubt”.

Labour’s amendment that the current definition of disability benefit used in the Bill is restrictive and could place unnecessary limits on the kind of replacement benefit the Scottish Government has the power to introduce was defeated by 312 votes to 252, a majority 60.

An amendment supported by both the SNP and Labour to remove the definition of a “relevant carer” as someone who is 16 or over, not in full-time education and not “gainfully employed” from the Bill also failed. It was beaten by 314 votes to 258, majority 56.

Tory John Redwood (Wokingham) said one of the characteristics of successful currency unions is that “you normally have” a common welfare system.

He said: “I think this debate would be richer and fuller if they (SNP) would share with us how much extra they would like to spend.”

He added: “When you start to unpick the political union you have to ask yourself at what point does that unpicking of the political union or the welfare transfer union become damaging, because you would reach the point where it does become damaging, because then one part of the country would be too attractive or too unattractive compared with another part of the country.

“The only way in which a single currency area as big as the UK can possibly work is if there are fair systems for raising money from the rich wherever they are in that big area and giving enough money to the poor wherever they are.”

SDLP Mark Durkan (Foyle) said nothing scandalised the public more than when they believed that issues as fundamental as welfare had become a “political football”.

He said: “Let’s get this devolution right and let then the Scottish Parliament have the chance to get welfare right in their terms, that will be no risk, no threat to this Parliament and it would certainly be an example to the rest of us.”

Tory Sir Edward Leigh (Gainsborough) spoke on his new clause which would remove from the list of reserved matters in the 1998 Act and so transfer to the Scottish Parliament all social security schemes, including national insurance and housing benefit, as well as child support, occupational and personal pensions and war pensions.

He said that by transferring certain powers, “we are giving, I think, the SNP a crowbar to blast the union apart”.

He added: “Just enough purchase on that crowbar, just enough powers given away by this Parliament to feed a sense of grievance. I think if we were to give the Scottish Parliament full responsibility for social security it would be very difficult for them to feed on that grievance, they would have to be a responsible parliament taking responsible decisions and I am confident that they would do so.”

Sir Edward said it was “inconceivable” decisions made by the Scottish Parliament on welfare spending would upset the balance of payments in the UK as a whole.

He asked: “Why aren’t we devolving the job lot of it?

“How can you effectively half run welfare? It comes as a package. Is that not actually the point of the Universal Credit? But actually Universal Credit can’t stand alone. You can’t start dribbling out powers but keep Universal Credit.

“I think we are making a mistake.”

He insisted the SNP had a mandate and said the Government must listen.

The Tory backbencher went on: “We have failed before because we were too afraid of taking the plunge and trusting people.

“Today I do think we need to think of grand gestures, not just this benefit and that welfare payment.

“The way to secure Scotland’s place in the union is to grant her full fiscal autonomy, full fiscal responsibility and full Home Rule in a modern sense.

“This I believe is a way to keep our family of nations happy together.

“I fear that we are trying to counter nationalism with fear and fudge and that never works. We will only counter-nationalism with hope and aspiration.”

Ian Blackford, the SNP’s Westminster spokesman on pensions, said the Scottish Government needed the full set of powers to deliver a new “Scottish enlightenment”.

He said his party viewed next week’s emergency budget with a sense of dread, emphasising the alternative to austerity.

He also spoke about the disparity in life expectancy between Scotland and England, highlighting it as another reason why a different approach is required.

The SNP’s Patricia Gibson (North Ayrshire and Arran) described Scottish Secretary David Mundell as a “colossal governor-general” who presides over the Scottish people with “no shame”.

Her colleague Tommy Sheppard (Edinburgh East) said the SNP saw welfare as a means of social insurance, in contrast to the Tories’ view based on “prejudice and parsimony”.

He insisted the welfare cuts would not be cost free as they would have consequences within wider society.

SNP MP Tommy Sheppard (Edinburgh East) said a power in the Bill offering the Secretary of State in Westminster a veto was “absolutely ridiculous”.

He said: “If there was one thing, one indication you could give that you were listening to Scotland in this debate, it would be to accept that, to say fair enough, the Scottish Government takes a decision and we will let them get on with it because we have transferred the authority, we don’t have to keep looking over their shoulders, we don’t have to keep checking their homework.

“The crux of this whole argument is about political authority. We are now in day four of the debate on this Bill, half way through day four, and we have yet to see the Government and the Secretary of State suggest they would make any substantive change to the proposed legislation whatsoever.”

As drafted, the Bill requires the Scottish Government to obtain consent from a UK Secretary of State in relation to Universal Credit and the costs of claimants who rent accommodation.

An SNP amendment would strip the measure from the Bill. It was endorsed by shadow Scotland secretary Ian Murray.

Mr Mundell said he did trust the Scottish Parliament and wanted Holyrood to be making significant decisions in relation to welfare, unimpeded by the views of the UK Government.

He added: “There is no restriction on the policy decisions of the Scottish Government and Parliament in relation to those provisions. It is an issue about timing.”

He also made the point that the UK and Scottish Governments are not always at odds with each other, adding: “On 90% of issues they work very, very closely together for the benefit of the people of Scotland.”

To him, he said, the spirit of the Smith Commission meant creating a new mindset and working together in a shared space.

Asked by Mr Murray to give a practical example to show the plans in the Bill don’t constitute an effective veto, Mr Mundell said he did not know what the Scottish Government would be bringing forward.

He added: “I want them to be accountable. I don’t want to be in a situation as we are in this Parliament where people stand up and make grand statements, but are not accountable for them, don’t tell anybody where the money is going to come from or how the systems are going to work in practice.

“A lot of us who live in Scotland see that all the things that the Scottish Government says, sometimes don’t actually happen in reality – shock, horror.”

Turning to Sir Edward’s proposal, Mr Mundell described him as the 57th member of the SNP group at Westminster.

He went on: “Today he proves the case by bringing forward an even stronger amendment yet again on a matter that the SNP have said was their policy.

“No Scottish MP has tabled an amendment to devolve UK pensions and I think that speaks volumes.

“It tells us even the supporters of independence accept there are parts of welfare where it makes sense to share resources and risk with the rest of the UK.

“It’s clear that pensions are safer and more affordable if we work with everyone else in the UK and that would be wrong to devolve.”

Mr Mundell did not concede any of the amendments proposed, but insisted he was reflecting on the points made throughout the debates.

An SNP amendment, supported by Mr Murray, to remove the requirement for the Scottish Government to obtain consent from a UK secretary of state in relation to Universal Credit and the costs of claimants who rent accommodation, was defeated.

It was rejected by 313 votes to 261, majority 52.

SNP MP Hannah Bardell said the current provisions on employment schemes did not live up to the Smith Commission proposals.

Moving fresh amendments, she said: “It is vital these employment powers give Scotland the power to give Scottish solutions to Scottish challenges.

“It is simply not good enough to promise one thing in the Smith Commission and then come to this House with a Bill that does not live up to the promises made.

“Furthermore, the overwhelming mandate that the Scottish people have given the SNP indicates they expect this Parliament to deliver beyond Smith – Smith is not the ceiling but the floor of our aspirations for the people of Scotland.”

The SNP amendments would create powers for the Scottish Parliament to legislate for employment support programmes.

Ms Patel said giving Scotland more powers to create employment support programmes would lead to a “confusing” and “disjointed” structure within the welfare system and so the Government opposed it.

She said: “The UK Government would retain the executive competence under existing legislation and could continue to operate employment programmes and Jobcentre Plus.

“This would create a confusing, disjointed and misaligned landscape of support that actually could hinder as much as it could help to move people back to work.

“So the Government’s clause 26 manages this risk by creating clear lines of accountability between those claimants that Scottish ministers are able to create employment programmes for and those claimants that will continue to be supported through the Jobcentre Plus structure.

“In particular it makes it clear that the Scottish Parliament can only provide employment support for claimants who are at risk of long-term unemployment, where the assistance lasts at least a year for those with disabilities that are likely to need greater support, thereby drawing a distinction, drawing a line between such schemes and the core functions of Jobcentre Plus.”

The SNP amendment on employment support programmes, supported by Mr Murray, was defeated by 316 to 260, majority 56.

Labour’s amendment providing for full devolution of housing benefit, enabling Scottish ministers to abolish the so-called bedroom tax in Scotland, was defeated by 317 votes to 259, majority 58.

Labour’s amendment to broaden the circumstances under which the Scottish Parliament can create new benefits, supported by the SNP, was defeated by 317 votes to 258, majority 59.

The SNP’s amendment to provide for the devolution of National Insurance to the Scottish Parliament was defeated by 515 votes to 58, majority 457.

The committee stage of the Bill will resume on Monday, July 6.

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