BBC Scotland Newsnight – Welfare Reform – 19th September 2012

 This programme is available to watch again until 26th September

What a disgrace Willie Bain (Lab Glasgow N.E.) is to a once proud labour movement! 

Presenter David Allison:

The Government is planning to take £10bn out of the welfare budget and 2/3rds of that is spending on pensioners – and they’re not being touched – so it’s the other third where the cuts will hit, and that includes those on incapacity benefit and disabled people. People like Henry Sherlock, registered blind and suffering from heart disease and depression who gave evidence to the Welfare Reform Committee yesterday.

“It’s like doing a crime. That’s what it feels like to me, I’m not a criminal. You know, I am a human being that needs additional support”

~ Henry Sherlock

If Scotland was independent, what would happen to welfare? 

The Work and Pensions Secretary in Scotland today for a welfare-to-work conference said that the present arrangement in the Union means that Scotland gets a good deal and independence would mean either higher taxes or welfare cuts. 

Iain Duncan Smith speaks at Glasgow Welfare to Work conference

Iain Duncan Smith:

“It’s a very simple question, he doesn’t need to get in a paddy about it, it’s a very simple question, because people need to know, a very simple question – there’s more welfare spending in Scotland than there is in some parts of England other parts of the United Kingdom the question is how you gonna cover that gap?”

Tell it to disabled Scots, says First Minister Alex Salmond

The First Minister, in London for a meeting with the Prime Minister, was quick to respond: 

“The number of people employed in Scotland is actually greater than in the U.K. as a whole, the number of people economically inactive in Scotland is lower than the U.K. average. I’m not sure if Iain Duncan Smith is aware of these facts but perhaps he should be when he comes to Scotland again and repeats such self-evident nonsense.”

The SNP insist an independent Scotland would be in a relatively good position regarding its ability to pay the welfare bill.

They say that across the U.K. social protection as a percentage of total revenues was 43% in 2010 and 42% in 2011 and in Scotland the social protection bill was 42% in 2010 and 40% in 2011.

But look at the figures from another angle and there are some potential concerns, especially when you look at the figures based of Scotland’s population as a percentage of the U.K. currently around 8.3% and in 2011 7.8% of Housing Benefit was spent in Scotland below population share, partly because of high rental costs in London.

But take Disability Living Allowance, Scots recipients account for 11% of that budget and it’s a similar story with Incapacity Benefit, 11.3% coming from North of the Border.

In March, Nicola Sturgeon told the SNP Conference that independence would allow a Scottish Government to combat poverty and maintain spending:

 

“Only a real independence will give us the tools to rid Scotland of the poverty and the deprivation that still stars our nation”

What could an independent Scotland afford? Well, it all depends on revenues, not least about what we get back from North Sea Oil and Gas. 

Professor Paul Spicker, Robert Gordon University:

“It’s think that it’s very difficult to avoid welfare cuts without one of two measures. Either it will be necessary to increase taxes or alternatively to raise more taxes through greater prosperity. It can be done. But if, as I’ve said, you begin with the idea that you’re having a constant level of benefit – the level of benefit we happen to have at the moment – is the right one and you want to try to protect a particular group or to improve the circumstances of a group the money then needs to come from somewher,e because you’ve capped the budget.”

This is a complex debate, but ultimately, it boils down to a political argument and who you believe, but one certainty is that, for places where for one reason or another welfare has become a way of life, things are set to get tougher.

Presenter

Well, we couldn’t persuade a Scottish Government Minister to come on the programme but we’re glad to say we have been joined by the SNP’s Dr. Eilidh Whiteford (MP for Banf and Buchan) who speaks on welfare matters at Westminster she’s agreed to speak to us, she’s in the Aberdeen studio. I’m also joined in the Glasgow Studio by the Labour MP Willie Bain (Glasgow N.E. Shadow Minister for Scotland).

Thank you very both much indeed for joining us.

Dr. Whiteford, we can begin with you. Iain Duncan Smith asked a question of the SNP which is  if you want to maintain welfare spending then you either have to put taxes up or cut other services. Which is it?

“I think the reality is, as has become very clear throughout today, that welfare would actually become more affordable in an independent Scotland, if you look at our spending on social protection over the past five years you see very clearly that we are actually spending a lower proportion of our revenues and a lower proportion of our GDP on social protection than the U.K. as a whole and I think this is a really distorted debate and, you know, I just wish we could be having a serious discussion about it.”

But, well, when you talk about social protection, that also includes things like pensions, of course which is a large, large chunk of that. Just look at benefits and look at David Allison’s report it comes to DLA and Incapacity and it’s 11% compared to a population share of about 8.3% it’s … some benefits are very expensive in Scotland, aren’t they?

“I think that’s true, and you know, we know that we’ve got long-term problems with health in Scotland, we’ve got lower life-expectancy in Scotland than, you know I don’t think there’s a quick solution to any of those problems. Interestingly, we’re already seeing that the smoking ban that was brought in just a few years ago is already having positive impacts on people’s health and I think it’s important to continue to try and help people get better health so that we’re not having to make unnecessary spending in those areas but, you know, at the end of the day, Scotland’s contributing 9.6% of the revenues to the U.K. Exchequer on the basis of an 8.3% population. We’re getting out of that 9.3% so we’re actually putting more in than we’re getting out.”

So would welfare spending go up then, in an independent Scotland, if the SNP were in charge?

“Well, if the SNP were in charge, I think that you can be very sure that we wouldn’t be asking disabled people to pay for a recession that wasn’t of their own making. I think that’s been the most appalling thing. I think the other thing you wouldn’t see is massive cuts to the benefits facing disabled people and working families while you’re making tax cuts for millionaires. I think though, that whatever political complexion a government was in Scotland, I don’t think you’d be seeing the kind of welfare cuts, and the assault on very disadvantaged people that we’ve seen over the last few months in the U.K. Government.”

Willie Bain, this is obviously a little hypothetical, this entire discussion, so let’s just start off with some basics. Would there, first of all, be a Scottish Labour Party in an independent Scotland?

“Well, we’re hoping to win the referendum, so uh …”

This is talking about what would happen if Scotland were independent …

“We’re hoping to win the referendum and be a strong Scottish Labour Party and playing a vital role hopefully in the Scottish Government in 2016 and part of the next Labour administration at Westminster in 2015. But i think the crucial point here….”

We’re against independence, make arguments on what would happen if Scotland were independent so that’s what this discussion is about this evening, so far ….. Do you agree with Iain Duncan Smith, first of all, that benefits would have to be cut or taxes would have to increase if Scotland were independent and wanted to maintain welfare?

“Let’s talk money. In Scotland we have £1,122 extra spending per head of population than the rest of the U.K. That is right, because we’re part of a fiscal and welfare union, and that’s delivered since 1999 and 2008. Fiscal transfers of £75.8 billion, now that wouldn’t have happened if we’d been a separate State and, that is the benefit of actually being part of a fiscal union. If we separated off, if we had the economic model that Eilidh wants us to follow, taking decisions on taxing, on borrowing, on spending in a different place from decisions on interest rates, unfortunately, as March and Wolf and the National Institute for Economic and Social Research have found, it means higher government borrowing costs, that means lower spending or higher taxes.”

Well, wouldn’t that also mean that your constituents, who, if they feel they’re going to suffer as a result of the Coalition’s reforms, are finding that a government they did not vote for is taking decisions they did not approve of, and therefore, as their representative doesn’t it make sense that you would rather those decisions were taken closer to those constituents rather than London by a government they don’t vote for?

“I think what they’re saying to me is: trying to bring in a system of running an economy – and this would be for keeps – not just for one parliament or for two parliaments – this would be for keeps, that brings in the worst elements of what went wrong in the Eurozone, would be a disaster! A disaster for disabled people who rely on government for welfare, a disaster for unemployment.”

So you agree with Iain Duncan Smith on this. 

Eilidh, just respond to that, if you would, if you wouldn’t mind. 

“I’m really disappointed actually, especially from Willie who comes from a constituency with one of the highest unemployment rates in the whole of the U.K. , you know the best way to get people off benefits is to create job opportunities and you can’t do that if you’ve got a stagnating economy and you’re failing to invest and stimulate that economy to create jobs. Now, Alex Salmond was in London today. he was trying to get money for shovel-ready projects the Scottish Government has ready to go to stimulate the economy and create jobs. That’s the fundamental way to get people off unemployment benefit.”

You say that you disapprove of Iain Duncan Smith’s reforms then. Would the SNP reform welfare in any way whatsoever?

“Oh, I think there’s lots of things that need reformed in welfare.”

Go on then, give us an example.

“Well, for a start, I think the biggest problem with the welfare system up’til now has been the disincentives for people who want to go back to work …”

And Iain Duncan Smith would agree with you.

“And that’s where Iain Duncan Smith and I agree, but I think that what we’ve seen over the past few months, and I don’t know if Willie’s also having this experience, certainly I’m having it in my constituency surgeries, is people who are, very manifestly not able to work have been categorised as fit-for-work and who have absolutely no realistic prospect of getting a job in the current economic climate.”

I take your point. Absolutely fair point but, so somebody has to make a decision at some point, don’t they? Eilidh Whiteford, I don’t know if you can still hear me?

“Sorry, I’ve lost you. I’ve lost you.”

I’ll tell you what I’ll just let you put your earpiece back in … Willie, do you agree with that point that Eilidh Whiteford is making at the moment that reform needs to happen, so what would you do differently?

“Well, firstly, I think we need to get people into work and unfortunately under this First Minister there are 21,000 more children being brought up in households where no one is working at all, including some in my constiuency, than before Alex Salmond became First Minister in 2007. He might have been in London today but unfortunately SNP Members of Parliament were not doing their job in the House of Commons as I was, calling, calling …”

And Labour would have cut benefits by £4 1/2 Billion …..

“…..Calling for capital spending to be brought forward.”

Eilidh Whiteford, very briefly, we’ve very little time. Give us one tough decision the SNP would make on welfare.

“I think the toughest decision is actually to vote for parties that will actually acknowledge that people need support and, you know, there’s no quick and easy way to do it, but you know unless we take those decisions we’re not going to get anywhere.”

We will be back to this subject. Thank you both very much indeed for joining us.

 Newsnight Scotland