Hansard

Mark Griffin spoke of some of the organisations that have briefed us for this debate, and I think that the notable amount of briefings that we have received demonstrates the level of interest and concern that exists around universal credit.

In passing the Child Poverty (Scotland) Act 2017, Parliament took an important step in saying that it is unacceptable to have hundreds of thousands of Scottish children growing up without access to the basics of life, such as a good diet, a warm and safe home, and toys and activities that allow them to grow and develop.

As the motion notes, we have already made some progress towards reducing poverty by setting up the new Scottish social security system. The new best start grant, which will launch shortly, will more than double the income that is available to low income families. The changes to the devolved disability benefit assessment process, made by the Green Party and supported by the Scottish Parliament, intend to ensure that people get the support that they need in as non-intrusive and dignified a way as possible.

There is positive change, but the cuts—let us call them that, not reforms or changes—risk undermining that ambition and the progress that we are making. In March, Landman Economics projected that relative child poverty will soar to 38 per cent by the late 2020s. It said:

“the forecast increase in poverty is driven by the substantial cuts to social security for families with children legislated for in the previous UK Government’s July 2015 Budget—in particular the four-year freeze on social security uprating and the two-child limit for Housing Benefit, tax credit and Universal Credit claims.”

Let us be clear. Cuts to our social security system, including to universal credit, are taking money out of the pockets and wallets of some of the poorest households in Scotland. Yes, last week’s budget reversed some of the 2015 work allowance cuts, which should never have been made in the first place, and that is welcome. However, the reversal does not apply to all universal credit recipients. For those who do not have children or who do not have disabled people in their household, the cuts remain.

That represents only £1.7 billion of the £3 billion work allowance cuts that were made by the 2015 budget. As Paul Johnson of the Institute for Fiscal Studies notes, universal credit is

“quite deliberately creating millions of winners and millions of losers.”

A third will be £1,000 a year worse off under universal credit, and that is not taking into account other cuts. We still have the benefit cap and the two-child limit. We still have the benefit freeze. Taking those into account, some families will lose many thousands of pounds a year. The IFS projects that, in the long-term, the poorest 10 per cent of households with children will lose £3,000 annually, as a result of tax and benefit changes. In the worst case, for a family unfortunate enough not to have parents in work, the long-term impact of tax and benefit changes is a loss of more than £4,000.

I turn to the gendered nature of the cuts, which is mentioned in the Green Party amendment. Cutting social security reduces the incomes of women disproportionately. Over the decade of austerity from 2010 to 2020, 86 per cent of net savings raised through cuts to social security will come from women’s income, placing women at a greater risk of deeper and sustained poverty. IFS figures show that, by 2022, lone-parent families, which are overwhelmingly female, will lose more than £3,000.

To take just one example, the benefit cap, in effect, targets women and their children for cuts. The latest figures, for August this year, show that almost 90 per cent of single and 91 per cent of capped households have at least one child.

Policy in Practice’s research shows that for every claimant who managed to move off the cap, more than one household is stuck on the cap for six months or more. For six months, that is a cut of £360. The average shortfall between rent and housing support for those trapped by the cap is £3,750 per year. The research shows that

“The majority of capped households showed no change in their circumstances other than a significant worsening of their living standards following the introduction of the benefit cap ... It is unlikely that the benefits of this policy, both in terms of the savings generated and the positive impacts on employment outcomes, have offset the financial costs, or crucially, the human and social costs associated with rising levels of economic destitution.”

The design of paying universal credit to only one person in a household is deeply problematic. Close the Gap argues that the single household payment of universal credit has left many women with no independent access to an income. The Women’s Budget Group is concerned that the reduction of women’s financial autonomy could result in main carers—in practice, they are usually mothers—losing clearly labelled child payments, which currently are often paid separately and can provide a lifeline to survivors of domestic abuse.

Poverty is a tragedy, because it means that hundreds of thousands of Scots, including more than 200,000 children, are growing up without access to the resources, opportunities and life chances that everyone else takes for granted. I accept that some improvements have been and are being made to universal credit, and those are welcome, but some families will still be very much worse off as a result of benefit cuts. I agree with Mark Griffin that the Parliament has a strong role to play, and I look forward to addressing that further in my closing speech.

I move amendment S5M-14621.3, to insert after first “benefit freeze”:

“; believes that these cuts are highly gendered, impacting the income of women disproportionately, and that, contrary to assurances given by the UK Government that Universal Credit would not cut incomes, some low-income families are expected to lose an average of £200 per month”.