Meeting of the Parliament 23 April 2019
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.