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

Part of Scotland Bill – in the House of Commons at 4:15 pm on 30th June 2015.

Alert me about debates like this

Photo of Ian Murray Ian Murray Shadow Secretary of State for Scotland 4:15 pm, 30th June 2015

My hon. Friend must have brilliant eyesight. I am not sure whether it is the glasses, whether he is just insightful or whether he can read minds, but, believe it or not, I am about to come to that. Perhaps we are on the same wavelength.

I shall examine some of those issues now. I am a little confused, because I am not sure whether Dr Whiteford moved new clauses 39 and 40 on the devolution of national insurance contributions. [Interruption.] She might be moving them later. I know she spoke to them, but I am unaware that she moved them. For the record, we would oppose the devolution of national insurance contributions, for the very reason that my hon. Friend Andrew Gwynne just set out. The pooling of risks and resources is explicit in national insurance contributions. The UK national insurance system is the largest insurance scheme of all and secures benefits to all through the widest possible risk pool.

The SNP’s new clauses seek to devolve national insurance in a manner that betrays a basic lack of understanding about the highly integrated and interlocking nature of the social security system, and they would mean having to deal with a huge array of complex issues. Even if we went beyond the principle of the pooling and sharing of resources, there would have to be a separate Scottish national insurance fund to receive all future national insurance contributions from Scottish taxpayers; all existing contributory benefits accumulated up to the vested date would have to be honoured by the UK national insurance fund; and transfers from the Scottish to the UK national insurance fund would have to follow Scottish taxpayers moving elsewhere in the UK.

Some issues were mentioned by the hon. Member for Gainsborough in speaking to his new clause 3, which related to the first part of the Bill. In talking about full fiscal autonomy, he mentioned that there would have to be significant redress to the UK national insurance fund. He raised issues about survivors’ benefits and where the people affected were living. As well as the principle of not devolving national insurance, there is also the matter of how to deal with the complex issues that would be raised across the United Kingdom.

At this point, I would like to look at the supporting evidence and testimony of the Scottish Council for Voluntary Organisations, which has been superb in providing briefings on some amendments and commenting on aspects of the Bill. In a briefing, which I am sure Members have read, it made astute observations about why devolving national insurance is fundamentally not the best idea for either the UK or Scotland. It said:

“National insurance is used to calculate entitlements to the second state pension and entitlement to some of the old forms of JSA and ESA that are still reserved through Universal Credit. Indeed, many people will have topped-up their NI contributions in order to secure their pension. SCVO does not support the devolution of pensions, and therefore, due to the potential confusion and unintended consequences that may arise, we also do not support the devolution of National Insurance.”

A plethora of other organisations would warn against the matrix of national insurance being devolved—including the Institute for Fiscal Studies, which has been quoted positively on a number of occasions by SNP Members this afternoon only 12 hours or so after they completely trashed the organisation for its analysis of full fiscal autonomy. I am glad that there has been a conversion and they now support the impartial and independent Institute for Fiscal Studies—alternatively, if I may be so bold, it could be that it suits the SNP to quote it on some occasions, but not on others.

I have laid out the Labour party’s position on devolution. We will support the SNP’s amendments 118 and 119 if they wish to press them, and we will withdraw ours as we are not voting on the same principle of removing the vetoes. I hope that the Secretary of State will give us some positive news—that we might not have to vote at all. Would not that be a wonderful thing for this Committee? We could get away early this evening if the Secretary of State came to the Dispatch Box and spent 90 seconds saying, “Everyone is absolutely right, and I am wrong. I am going to accept all these amendments, so Scotland can flourish with the welfare state that it deserves and wants to design.”

I finish where I started—with the Labour party as the guardians of the welfare state across the United Kingdom. There is a significant difference between what we believe and what the SNP believes about breaking up that welfare state. These are broad principles; neither is right or wrong. We believe that there should be pooling and sharing across the UK—a principle that we have shared and that has provided a thread running through all our amendments. What we wish to see is a Bill that responds to the Smith agreement and goes further than it in allowing the Scottish Parliament and, indeed, the Scottish people, to design something in the best interests of a welfare state that fits not just Scotland, but Scotland’s communities.