Meeting of the Parliament 23 April 2019
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.
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