Thank you, convener. I thank the committee for the opportunity to be here today. The committee’s inquiry is extremely timely, and I have been following your evidence sessions with great interest. Only last week, the United Nations special rapporteur on extreme poverty and human rights highlighted significant concerns about levels of poverty in the United Kingdom.
The Scottish Government shares those concerns, including concerns about the devastating impact that UK Government welfare cuts are having on Scotland’s people and communities. Where we can do so, we are taking decisive action across a wide range of areas, to lift people out of poverty in Scotland.
I will say a few words about that. For most people, work remains the only viable path out of poverty, but simply being in employment is no guarantee. As the committee has no doubt heard, the majority of children and working-age adults who are in poverty live in working households. Between 2014 and 2017, 66 per cent of children in relative poverty after housing costs, and 59 per cent of working-age adults in poverty, were living in working households.
When Department for Work and Pensions officials gave evidence to the inquiry recently, an official said:
“full-time work virtually eliminates in-work poverty”.—[Official Report, Social Security Committee, 8 November 2018; c 3.]
DWP officials explained that that is the rationale that underpins universal credit. However, our evidence suggests something very different. For example, more than a third of children in poverty in Scotland—that is 100,000 children—live in families in which at least one adult is in full-time work.
It is unacceptable, in the fifth richest country in the world, that people are struggling to put food on the table, that food bank use is on the rise and that working families are having to choose between heating their homes and eating.
The Scottish Government is using our full range of devolved powers to provide additional support where we can, to mitigate the impacts of welfare reform and to support people who are on low incomes. In other ministerial portfolios, we are providing £750 million in an attainment Scotland fund, to help to close the poverty-related attainment gap in our schools, and delivering free school meals for children from primary 1 to primary 3, which is saving families about £380 per child annually.
We are delivering a school clothing grant, whereby eligible families receive at least £100 to cover the cost of school uniforms, and we are increasing our fair food fund to £3.5 million in 2019-20 to support dignified responses to food poverty and security.
We are also focusing £2 million on support for families during school holidays, extending access to free sanitary products to low-income women and girls, and providing £3.3 million over the period 2018 to 2020 to provide financial health checks to low-income families and older people, in order to help to reduce costs and maximise income. Since August 2017, we have been providing every newborn baby in Scotland with a baby box.
Scotland is the only country in the UK that has statutory targets ultimately to eradicate child poverty. “Tackling child poverty delivery plan: forecasting child poverty in Scotland”, which was published in March, was backed by a multimillion pound package of investment, including a £50 million fund for tackling child poverty.
Sustainable and fair work is a long-term route out of poverty for families, so we are taking action to support parents to work and earn more. Over the next three years, we will work to lift at least 25,000 more people on to the living wage, through our work to build a living-wage nation.
Likewise, we are using our limited employment support powers. We launched fair start Scotland, which is our new employability service, in April 2018. It is estimated that it will have a positive impact on about 7,000 children who are living in poverty, by placing their parents in fair work. We will also invest £12 million to help unemployed parents to move into work, and to help parents who are in work to build skills, to progress and to earn more.
The committee’s inquiry is rightly focusing on universal credit and the damage that it is causing. It is impossible to speak about in-work poverty without mentioning the impact of UK Government welfare reform and the introduction of universal credit. There is a mountain of evidence that universal credit is pushing people into poverty rather than helping them out of it. The UK Government has consistently ignored calls from the Scottish Government, from charities, and from third sector organisations to halt the roll-out of universal credit until improvements are made. It has also ignored the findings of the National Audit Office. It remains to be seen whether it will now ignore the damning findings of the UN special rapporteur, who said that
“Although in its initial conception it represented a potentially major improvement in the system, it is fast falling into Universal Discredit.”
I know that the Trussell Trust provided evidence to the committee on the 52 per cent increase in food bank use in areas where universal credit has been rolled out for 12 months or more. The Trussell Trust also predicts that as managed migration rolls out, demand on food banks will increase. Additionally, the Joseph Rowntree Foundation is clear that the single biggest cause of the rise in child poverty across the UK is the UK Government’s welfare policies.
The Scottish Government’s “2018 Annual Report on Welfare Reform” highlighted that it is estimated that, as a result of UK Government cuts, in 2020-21 the annual social security spend in Scotland will be around £3.7 billion lower than it otherwise would have been. The report also states that since the benefit cap was lowered in 2016, approximately 3,500 Scottish households have been capped each month. The policy has disproportionately affected families with children. Of households that have been capped, 89 per cent include children, and 64 per cent are lone-parent households.
In the face of that massive reduction in spending, the Scottish Government expects to spend more than £125 million in 2018-19 on welfare reform mitigation measures and measures to protect people who are on low incomes. That is more than £20 million more than in the previous year, and £40 million more than the year before that. Since October 2017, the Scottish Government has been using its powers to give people in Scotland the choice to receive the universal credit award monthly or twice monthly, and to have the housing costs in their universal credit award paid direct to the landlord. That is helping people on low incomes to manage their budget better.
However, the Scottish Government is not here to paper over the cracks of the UK Government’s welfare reforms. We simply cannot afford to cover the costs of welfare cuts, which amount to billions of pounds per year in Scotland. It is the equivalent of three times our annual police budget or the combined annual budgets of NHS Greater Glasgow and Clyde and NHS Lothian.
At the end of the statement on his visit to the UK, the UN special rapporteur on extreme poverty and human rights said that
“it is outrageous that devolved administrations need to spend resources to shield people from government policies.”
While the majority of social security is still reserved to the UK Government, it has a duty to ensure that the system operates as a safety-net that protects those who need it most and prevents people from being pushed into poverty and destitution. Amber Rudd has said this week that she wants a fair, compassionate and efficient benefits system, so I have written to her about the issues that we currently face. I hope that that commitment will lead to a change in course from the UK Government.
Thank you for your time. I will be delighted to take questions.