Scottish Labour's 'new' welfare proposals?

Published: 2 February 2015
Author: Craig McAngus

Scottish Labour’s proposals over welfare may be somewhat radical, but as Craig McAngus discusses, they’re not new and they show how afraid Labour are of the SNP.

Labour have been busy over the last few days on the topic of Scottish devolution. Firstly, Ed Miliband pledged that a Labour government would implement a Home Rule bill within 100 days of him becoming Prime Minister followed by reports claim that Gordon Brown is being lined up as Labour’s ‘secret weapon’ against the SNP in the hope that he can have the impact on the General Election in Scotland that he is perceived to have had in the run-up to the independence referendum. And just todaty (2nd February), Scottish Labour leader Jim Murphy and former Prime Minister Gordon Brown are to announce that the Scottish Parliament should have the ability to top-up UK benefits such as pensions and child benefits. In a move already being dubbed the ‘Vow Plus’, Labour are presenting this idea as a radical extension to the further devolution already promised by the Smith Commission and the subsequent draft clauses published. Two questions need to be addressed here: are these proposals ‘new’ and ‘radical’, and are they being proposed because of the fact that the SNP continue to ride high in the polls?

The draft clauses (‘Scotland in the United Kingdom: An enduring settlement’ to give them their official title) set out in detail how welfare would be devolved and this has been covered in detail elsewhere.  In terms of the announcement by Murphy and Brown, paragraphs 54 and 55 on page 50 are worth quoting:

54: The Scottish Parliament will have new powers to create new benefits in areas of devolved responsibility, in line with the funding principles set out in paragraph 95. The Scottish Parliament will also have new powers to make discretionary payments in any area of welfare without the need to obtain prior permission from DWP. In addition it may seek agreement from DWP for the Department to deliver those discretionary payments on behalf of the Scottish Government. All administration and programme costs directly associated with the exercise of this power (either as a result of changes to existing systems or the introduction of new systems) will be met by the Scottish Government in line with the funding principles set out in paragraph 95.

55: Any new benefits or discretionary payments introduced by the Scottish Parliament must provide additional income for a recipient and not result in an automatic offsetting reduction in their entitlement to other benefits or post-tax earnings if in employment.

The two paragraphs are clear in that the Scottish Parliament would be able to create new benefits in areas that are to be devolved.  Murphy and Brown are referring to areas that will not be devolved, such as pensions.  Although the draft clauses do suggest that discretionary payments can be made on top of existing benefits, discretionary payments are normally short-term lump sums that recipients use to alleviate immediate hardship.  The UK Government’s own discretionary housing payments are a good example. So what Labour propose would go much further and potentially provide Scottish ‘boost’ to working tax credits, the state pension and job seekers’ allowance, for example, that would be consistent and permanent. In this sense the proposals are quite radical: a future Scottish Government would have the capacity to boost the income of some of the most vulnerable in our society and extend the powers recommended by the Smith Commission quite substantially. Of course, the money would have to come from somewhere. Savings in one area would have to be made or tax rises would need to be implemented, perhaps even a combination of both. 

However, are these ideas new?  Pages 16-17 of the Conservatives’ ‘Commission on the Future Governance of Scotland’ show that the Conservatives had similar ideas back in May 2014:

It may be that a better approach would be for the Scottish Parliament to have the power to supplement existing welfare benefits legislated for at the UK level. Everyone in the UK – wherever they live – should be entitled to at least the social security provided for in UK legislation at Westminster. But, if the Scottish Parliament were to take the view that, from its own resources, the UK entitlement should be supplemented in Scotland, it may be that Holyrood ought to be able to legislate accordingly.

These proposals are practically identical to what Labour are proposing today in that UK-wide benefit payments could then be treated with a Scottish top-up from existing resources.  Furthermore, if we look at Labour’s equivalent Devolution Commission which reported in March 2014, Labour did not entertain the idea of giving the Scottish Parliament the capacity to alter UK-wide benefits. Page 4 of the Commission’s executive summary states that ‘the core of the welfare state’ should remain reserved to the UK Parliament because this maintains the ‘social solidarity that helps bind the UK together’. Furthermore, page 7 states:

We strongly support the continuation of the comprehensive UK Welfare State, with pensions and cash benefits distributed largely on the same basis across the country, especially those benefits which people have contributed to through national insurance. We take this view because social union is central to the very idea of the sharing union, which is about how we pool resources to safeguard the common entitlements of citizenship enjoyed by everyone across the UK.

Today’s announcement goes some way towards undermining this commitment. If Labour can implement their ideas, the potential for pensioners, the unemployed and families relying on tax credits to get a better deal means that that Labour’s previous commitment to every UK citizen enjoying ‘the same basic economic and social rights’ (page 3) is now being jettisoned so that the party can more effectively combat the SNP in the General Election campaign. The party is undermining its own version of ‘Unionism’ that it laid out less than a year ago. Labour continues to play catch-up in order to capture the constitutional zeitgeist in Scotland.

This new announcement is therefore significant in two ways. Firstly, it has shown that Labour’s ‘Unionism’ is less a philosophically coherent set of principles and more of a pragmatic adaptation to circumstances that suit the electoral fortunes of the party at particular times. Secondly, Labour’s poor showing in recent polls shows that the party needs to act quickly, and ceding a lot of ground over how much should be devolved to Scotland is evidence that the party’s leadership are seriously worried about the SNP.  Close reading of subsequent polling will tell us whether or not the announcement makes any difference to Labour’s position in the polls. The majority of the Scottish public do believe that the Scottish Parliament ought to make the most important decisions on the level of welfare benefits. The question will be whether today’s proposals are perceived as giving Scotland the capacity to do just that.

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