Clause 24 — Universal credit: costs of claimants who rent accommodation

Part of Scotland Bill – in the House of Commons at 3:15 pm on 30th June 2015.

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Photo of Edward Leigh Edward Leigh Conservative, Gainsborough 3:15 pm, 30th June 2015

I think we have to act responsibly and to remember that, unfortunately, only three Unionist MPs are left in Scotland. The SNP has won a notable victory in Scotland and needs to be listened to—we do not always have to agree, but we have to listen. Ultimately, I am as passionate a Unionist as anybody on these Benches, but I believe that there is a better route to maintaining the Union. If we dribble out these powers, we are making a grave mistake.

Let me deal with the point that if we have a single currency system we must have a common welfare system. That is a perfectly respectable point and I completely understand it. It was made by my hon. Friend Mr Rees-Mogg in the debates two weeks ago and has been made extremely well by my right hon. Friend John Redwood. I understand where they are coming from, and we are all very much aware of the Greek situation, but I would argue that the comparison is misplaced: the difference between Germany and Greece is infinitely greater than that between England and Scotland. In the United States, full fiscal autonomy for the states works because there is a common English language and full mobility of labour. When there are disparities in wealth, labour moves around the United States in a very vigorous way that is difficult to achieve in the European Union.

The comparison of Scotland and England with the Netherlands and Germany is much more apposite. We have a common language, a common border and very similar systems, albeit separate legal systems—although they are based on many of the same traditions. Members can understand the point that I am making. Of course, if the Scottish Parliament was to act completely irresponsibly and take control of its social security and just spend, spend, spend, the thing would break apart; I agree that the currency union would become unsustainable. But surely as parliamentarians, with confidence in our own Parliament and elected representatives, we should have the same confidence in our fellow countrymen and ladies who will be running the Scottish Parliament. I personally believe that if we gave them full responsibility, they would have to act responsibly if they wished to be re-elected.

My hon. Friend the Member for North East Somerset and my right hon. Friend the Member for Wokingham have made a perfectly respectable point and the Minister will want to deal with it. No doubt he will agree with them and make the point himself, but I think that if there are shared or similar traditions and there is a similarly incorrupt system, it is possible within a currency union to have different welfare systems.

Let us consider what has been given to Scotland. This is a bit of detail, but it is important. With its remit, the Scottish Parliament transformed social fund community care grants and crisis loans into the Scottish welfare fund, while council tax benefit was replaced with council tax reduction. There have already been some changes. In addition, Holyrood is in charge of discretionary housing payments within Scotland. My point is that all those benefits together amounted to just £422 million in 2013-14. That is less than 2.4% of all welfare spending in Scotland and, if my calculations are correct—I might be wrong—less than 0.21% of all welfare spending in Great Britain, such is the disparity between spending in Scotland and in the United Kingdom as a whole. It is inconceivable that decisions made in the Scottish Parliament would upset the balance of payments in the United Kingdom as a whole.

Of course, I welcome the Government’s move to expand Scotland’s control over its own benefits, as we all do. The debate now is about how much we should do it. I want to ask Ministers why we are not devolving the job lot of it. How can anyone effectively half-run welfare? It comes as a package. Is that not the point of universal credit? In fact, universal credit cannot stand alone, so we cannot start dribbling out powers and keep universal credit. I think we are making a mistake, but the point is arguable so the Minister might be able to knock down my arguments. I make them with a sense of humility.

One of the arguments for uniformity of benefits is that it supports a common social citizenship across the Union. That point was made by Ian Murray, and it is perfectly fair. He says that we believe in a common social citizenship, and I accept that, but I believe that the argument has been broken in such important regards as tuition fees and prescription charges. I am not entirely sure why it is important to have a common social citizenship for welfare, for which the hon. Gentleman argued very well, but not for tuition fees.

There is also the argument that the social security system is so immeasurably complex and interconnected, with decisions in one area having vast implications and repercussions elsewhere, that devolving it would be virtually impossible or unachievable. If anything, I would have thought that would bolster the case for universal credit, but is it not possible that Scotland, in charge of social security for more than 5 million people, might innovate in its system—simplify it or even provide models for the rest of the United Kingdom? Do we not believe in competing social security systems throughout Europe? Does not Holland believe that it can have a competing social security system with Germany while maintaining its independence?

The proposals are a step in the right direction, but I do not believe that they go far enough. In 2013-14, expenditure in Scotland on the benefits that the Smith commission proposed to devolve totalled less than £2.6 billion out of the £16 billion to £17 billion spent on welfare in Scotland. It is true that that is more than the current £422 million, so we are making progress, but the Scottish Government do not believe it is enough and I think they have a point. We should at least listen and argue about this and knock down their arguments if they are not sustainable. Given the very strong mandate the electorate have given to the SNP, we must listen to some of their arguments and deal with them in a constructive way.

Of course, as a Conservative I believe in evolution not revolution, but I also believe in learning from history and, as I have said before, we failed before because we were too afraid of taking the plunge and trusting people. Today 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. I hope Ministers—all good Unionists, just as I am—will explain their thinking in not going down the route I propose. It is the way to keep our family of nations happy together; that is what my amendment seeks to move closer to achieving.

I fear we are trying to counter nationalism with fear and fudge, and that never works; we will counter nationalism only with hope and aspiration. In the United Kingdom as a whole, 70% of people support benefit reform. Universal credit, which I support, will make a difference, but given the overwhelming importance of welfare in a modern parliamentary system, no self-respecting Parliament worth the name cannot take full accountability for welfare payments. I hope and expect that the Scottish Parliament will keep universal credit if given the chance, but that should be a matter for it to decide. It is in that spirit that I move my new clause.