Tory benefit cuts provide reason for devolving welfare to Scotland

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By a Newsnet reporter

SNP Work and Pensions spokesperson Dr Eilidh Whiteford MP has said that there is increasing evidence that the welfare system should be devolved to Scotland.

The SNP MP’s comments come as the Scottish Local Government Forum Against Poverty and Rights Advice Scotland warned that UK welfare reforms will remove a safety net for hardworking taxpayers and their families.

By a Newsnet reporter

SNP Work and Pensions spokesperson Dr Eilidh Whiteford MP has said that there is increasing evidence that the welfare system should be devolved to Scotland.

The SNP MP’s comments come as the Scottish Local Government Forum Against Poverty and Rights Advice Scotland warned that UK welfare reforms will remove a safety net for hardworking taxpayers and their families.

The report warned that thousands of Scots on long-term Incapacity Benefit and others who get payments based on Employment Support Allowances will lose over £40 million if the Coalition Government gets its way and introduces its planned cuts to the financial safety net for the poorest in society.

The report comes as Peers challenged proposals for a benefits cap, and follows wider criticisms by SCVO that the reforms could leave Scottish local government, the Scottish Government and Scotland’s third sector picking up the pieces.

The Coalition Government intends to introduce an annual cap of £26,000 on the amount of benefits a single household can receive, including child benefit and housing benefit.   The Government estimates that around 67,000 families across the UK will be affected by the benefits cut, with some of the poorest households facing a loss in income of up to £83 per week.  In total, the UK government aims to make annual savings of £270 million.

Critics claim that the proposed cap will seriously damage the welfare of large families and those who live in rented homes in areas of high property prices and could result in some people having to live on as little as 62p a day.  More than half of those affected live in London, where property rental prices are high.  It is feared that many families containing children or vulnerable people will find themselves forced out of their homes and will have to be rehoused by their local authority, creating additional costs to the public purse.

However last night the Conservative/Lib Dem plans received a set back when the House of Lords voted to exempt child benefit from the proposed cap.  By 252 to 237, peers backed an amendment introduced by the Rt Rev John Packer, Anglican Bishop of Ripon and Leeds, that child benefit should not be included in the cap.  The bishop argued that children in the poorest families would be put at risk by the financial squeeze.

Bishop Packer argued that the cap “failed to differentiate between households with children and those without”, and added: “This cap is not simply targeted at wealthy families living in large houses. It will damage those who have to pay high rents because often that rent has increased substantially in the course of their occupancy of that house.”

Speaking later to the BBC, the bishop said: “Child benefit is a universal benefit.  I believe that it’s wrong to see it as being a welfare benefit.  It’s a benefit which is there for all children, for the bringing up of all children and to say that the only people who cannot have child benefit are those whose welfare benefits have been capped seems to me to be a quite extraordinary argument.”

Iain Duncan Smith, the Work and Pensions Secretary, has rejected suggestions children could be pushed into poverty by the cap or that some families would be left homeless.  He said it was “pointless” to exclude child benefit from the cap – as it would raise the amount families could receive to an average of about £50,000 a year.  Mr Duncan Smith said that cap would be “fair” to low paid wage earners who see families on benefit with a greater income.

The Government has said that it will seek to overturn the Lords’ vote to exempt child benefit.  Earlier in the debate, Peers had narrowly rejected a Labour amendment which would have removed families at risk of homelessness from the cap.

Labour’s Ed Miliband has said that Labour supports a cap on benefits in principle, but the party objects to certain of the details in the Conservative proposals.

Mr Duncan Smith accused Labour of tabling a ‘wrecking amendment’, saying:  “They can’t weasle their way out of it and say they are in favour on the one hand and against on the other.”

The annual cap is due to come into force for working age families in England, Scotland and Wales from 2013.  

Commenting on the developments, the SNP’s Dr Whiteford said:

“It is increasingly clear that the only way we will get a welfare policy that suits Scotland’s needs is by having the powers to set that policy in Scotland.

“The Local Government Forum Against Poverty and Rights Advice Scotland report adds substantially to the mounting concerns about the UK Government’s reforms, and shows the wider impact that these reforms will have, not only on individuals, but on the wider economy.

“From time limiting contributory Employment and Support Allowance to cuts in the availability and level of crisis loans, it is the most disadvantaged in our communities that are paying the price of the Tories’ reforms.

“Reform of the benefits system is necessary but the Tory/LibDem Coalition Government’s plan looks increasingly like an assault on the most disadvantaged. We must not have cuts for the sake of cuts.  Not only would that risk forcing the most vulnerable in society into a perilous position, it also takes vital capital out of the economy without consideration of the impact.

“While reform is necessary, it must be done carefully and decisions on entitlements based on medical need – not government spin.

“The welfare system should maximise the potential for all people to work and live free from poverty, however, this cannot be achieved through cuts in support for disadvantaged people.

“This issue shows yet again the different stance Scotland would take if we had the power to legislate on this issue and it is our clear view that it is the Scottish Parliament, not the UK Parliament, that should decide on welfare policy for Scotland – as would be the case if Scotland was independent.”