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

Part of Scotland Bill – in the House of Commons at 4:00 pm on 30th June 2015.

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Photo of Ian Murray Ian Murray Shadow Secretary of State for Scotland 4:00 pm, 30th June 2015

I pay tribute to Tommy Sheppard, and he was right to point out that we need a welfare system that shows compassion to those who have fallen on hard times, whether through illness, disability, economic circumstances or old age. He told the story of a 62-year-old constituent who was affected by the bedroom tax, and I am sure that all Members can recall similar stories from their surgeries of the most vulnerable being hit the hardest by what is probably the most pernicious tax that any Government have ever bestowed on people. It is right that the Scottish Government have been able to mitigate the bedroom tax in Scotland, and this evening we will vote on new clause 31 that would give the Scottish Parliament the power to consider such matters. The hon. Gentleman is right to have given that description of the social security system. That is the fourth time we have agreed today and I hope we will continue in that spirit.

I will speak to amendments 5, 6, 7 and new clauses 28 and 53 in my name and those of my hon. Friends. Amendments 5, 6 and 7 are different from the SNP’s amendments 118 and 119, but if the SNP presses its amendments to the vote we will support it and withdraw our amendments. Clause 24 gives Scottish Ministers regulation-making powers on the housing costs element of universal credit for claimants who rent their homes. The Secretary of State would also retain regulation-making powers, meaning that both the Scottish and UK Governments would have powers in that area and be able to exercise them independently.

Clause 25 gives Scottish Ministers regulation-making powers in Scotland to provide for alternative payment arrangements for universal credit, including

“the person to whom, or the time when, universal credit is to be paid”.

That will allow universal credit payments to be split between household members, and for payments to be made more frequently than under the UK Government’s current monthly plan. Although I am sure that we all welcome the devolution of those powers, that part of the Bill has caused considerable controversy by affording UK Ministers what some have interpreted as a veto over the Scottish Government’s regulation-making powers. That relates to the requirement in clauses 24 and 25 that, before exercising their regulation-making powers, Scottish Ministers consult the Secretary of State on the practicability of implementing proposed changes to universal credit, and obtain his agreement on when those changes are to happen. It is worth examining whether that amounts to an effective veto.

The Deputy First Minister John Swinney—he has just been mentioned by the hon. Member for Edinburgh East—has detected in what he calls those “pretty innocuous requirements” a sinister intent on behalf of the UK Government to exercise “a blocking power” that would act to

“prevent the Scottish Government from doing something”.

What does the UK Government seek to do with these provisions? I do not believe that the current provision is intended as a veto, but it could be more clearly worded to remove any ambiguity.

As I said on Second Reading, the Government have an opportunity to clear up any ambiguity, and if they are intent on saying that there is no effective veto in the Bill, they should remove that ambiguity once and for all. Amendments 5, 6 and 7 seek to allay the concerns of the Deputy First Minister and the charitable organisations that have been mentioned, by clarifying that Scottish Ministers need only “consult” the Secretary of State about the timing and—crucially—the delivery mechanisms of any new regulations.

I understand and fully appreciate that if a discretionary housing payment is made by the Scottish Government to those liable for the bedroom tax, if I may use that particular example, they have a delivery mechanism. A pot of money can be given to local authorities so that they can distribute that discretionary payment. If there is an addition to universal credit and the Scottish Government have the power to alter universal credit, the implications for the delivery mechanism are crucial, because the Scottish Government may have to use the Department for Work and Pensions or another reserved delivery mechanism that is part of the UK Government. If the veto is a veto in the sense that the Secretary of State needs to approve the delivery mechanism, he must consider redrafting the clauses to make that clear. If a discretionary payment were to be made on a reserved benefit or a top-up benefit that is currently paid through the complicated system of the DWP, we would need some discussion of how that would operate. I would appreciate it if the Secretary of State—or the new governor-general of Scotland, as he has been termed this afternoon—responded to those points about the veto.

New clause 28 proposes the full devolution of housing benefit to the Scottish Parliament. This is another new clause, on a serious issue, that has attracted significant support from across the third sector, including from the Scottish Council for Voluntary Organisations. There are a number of compelling reasons why we believe housing benefit should be devolved, including the joint report today to the UN by the four UK Children’s Commissioners, which warns that child poverty levels in the UK are unacceptably high and rising—their main concern being the housing element.