Smith Report

Experts Warn The Elephant trap will be Sprung Once Holyrood Is Handed Some Welfare Powers

December 2014; Experts warn Scottish benefit claimants could end up worse off once Holyrood is handed welfare powers

The Scottish Parliament is expected to gain control over carer’s allowance, industrial injuries benefit and severe disablement allowance under the powers negotiated in the Smith Commission on Scottish devolution. This will allow MSPs to raise or cut these benefits in line with the specific needs of the Scottish people, and “top up” payments from the new universal credit (UC) which will remain the purview of the UK Government. However, some benefits will be treated as income when deciding how much UC should be awarded.

If the Scottish Parliament increases its devolved benefits then claimants will get a pound-for-pound reduction in their UC, the Scottish Parliament Information Centre (Spice) has warned. Holyrood could then top up claimants’ depleted UC from its own budget – but the SNP said this goes against Smith’s principle that additional income for the recipient should not result in money being offset from somewhere else. UC will replace job-seeker’s allowance, housing benefit, working tax credit, child tax credit, employment and support allowance and income support across the UK.

Scottish Secretary Alistair Carmichael pledged to investigate Spice’s research at Holyrood’s Devolution (Further Powers) Committee today, insisting “it does not make sense” and could be an “unintended consequence” of the Smith proposals. Spice said: “If a UC claimant is receiving any of the reserved benefits, and they have been increased by the Scottish Parliament, then they will get a reduction in their UC award pound-for-pound. “This could mean a UC recipient is worse off. “However, this eventually could be offset if the Scottish Parliament decided to increase the UC award as well.”

Committee convener Bruce Crawford, an SNP MSP, said: “The Smith Commission report actually says: ‘Any new benefits or discretionary payments introduced by the Scottish Parliament must provide additional income for the recipient and not result in automatic off-settings.’ “So it doesn’t actually talk about the top-up process or the devolved powers, so I think we need a bit of clarity around that area because otherwise what would be the point of having the powers to do that.”

Mr Carmichael said: “Exactly, without hearing the reasoning behind that conclusion I couldn’t really offer you any explanation for it. “It doesn’t make sense to me, but it may be that our old friend, the law of unintended consequences, is at play here and if that is the case then all the more reason that we have proper scrutiny of the draft clauses when they come forward.”

Giving evidence to the same committee, Deputy First Minister John Swinney said: “I think that would be a travesty if that was the case. “The purpose of section 55 was to put into the Smith Commission report a guarantee that if the Scottish Parliament was to decide to do anything in relation to welfare, then the individual who was to be the beneficiary of that should get that benefit.” He added: “To me it’s pretty clear that anything that we do within the Scottish Parliament should not see the benefit of that undermined or negated in any way as it affects the individual. “Without wishing to tread over the line of my participation in the Smith Commission, that was certainly my view of the purpose of paragraph 55.”

The Smith proposals could also contain a benefits “elephant trap” for the Scottish Government if it continues to pursue divergent policies on welfare from the UK Government, Conservative MSP Alex Johnstone warned. He said the UK Government is trying to reduce dependency on benefits, cut demand and limit cost, and accused the Scottish Government of doing the opposite. If the UK benefit bill goes down there will be less money for Scotland through the Barnett formula, but if Scotland increases benefit demand it could leave Holyrood underfunded, he said. Mr Carmichael said the Scottish Government would ultimately be held to account if such a situation emerged.

Mr Johnstone said: “Having spent three years on the Welfare Reform Committee, I have seen the process of divergence that has happened in relation to welfare already and the proposals under the Smith Commission open that up quite significantly. “Now there is a determination to cling to the Barnett formula, almost a white knuckle death grip in some cases. “But as we go towards the proposals contained in the Smith Commission, particularly in relation to working age benefits, there is a significant divergence in policy already where south of the border there is a policy of reducing dependency and demand reduction in order to limit costs. “Whereas there is a priority to do something different – rather the opposite – in Scotland.

“As we move forward with this are we not heading towards a Barnett formula elephant trap where the amount of money allocated in UK budgets for working age benefits in particular will fall away, while Scotland may simply pile on demand and find itself underfunded.” Mr Carmichael said: “Well, that’s the beauty of devolution isn’t it? “You make your spending decisions and now you’re going to have to account for that in your funding decisions as well. “You can only spend the money once, and if we have learned nothing else over the last 10 years we should have learned that.”

Social Security

The New Flat Rate Pension Benefits Scheme Starts in April 2016. Are You a Winner or a Loser?

The New Flat Rate Pension Benefits Scheme Starts In April 2016

The new flat rate state pension is a marked reduction over that which has been in place for many years. It is arrived at by combining the existing basic state pension and the State earnings related pension, (SERPS).

The new pension will be a maximum of £144 per week in total. On the existing scheme many would have expected their total state pensions, (including SERPS) would have been up to £265 weekly.

In April 2016 payment records will be translated into a single amount. This is called the “foundation amount”. If it’s more than £147, the state pension will be fixed at the higher amount.

At April 2016,  if NI contributions are lower than the new pension rate workers be able to build on the, “foundation amount” at the rate of £4.21 a week per year until the figure of £147 is achieved, (or whatever the figure is at that time). This includes Public Service workers who might also be contributing to an occupational final salary scheme.

At retiral, if the full, “foundation amount” has not been achieved pensioners will still be able to apply for a means tested pension, “top up” through pension credit, as at present.

Adding salt to the wounds the new pension arrangements are tied to an upward revision in the retirement age for women, increasing from age 60 to 67 and for men from age 65 to 67. Further increases are planned and it expected both sexes will be set a retirement age of 70y before 2020.

Someone in his/her late 50’s stands to lose around £75-100k over the life cycle of their pension due to the changes. This brutal reduction in the state pension will bring hardship to many in their later years and is a disgraceful betrayal of all those who have paid their national insurance contributions over their working life.

The official reasons driving the changes are increased life expectancy. But in reality it is all about a need to cut back on public expenditure, in order that the annual budget deficit and the National Debt can be reduced.

But not citizens are losers. Public Service workers and Civil Servants, (who opted out of SERPS) will continue to benefit from pensions accrued through their final salary occupational schemes,  contributions to which are funded by the government (the tax payer).

Projections are that there are approximately 20 million private sector workers contracted into SERPS. The majority are set to lose out at the time of their retiral as a direct consequence of the changes. Scrapping SERPS, “will mean many low and middle-income private-sector workers, particularly those several decades away from retirement, could be thousands of pounds a year worse off”.

Those who have contracted-in pension schemes will be more likely to be at, or near, the £147 limit in April 2016. They will be capped at that level but will have to pay NI for years for no extra benefit. Under the current rules, they could have earned a combined pension in excess of £200.

The SNP white paper promised a different route would be taken, (including the triple lock) avoiding much of the hardship, about to be visited upon pensioners. But Independence was rejected largely in favour of the staus quo so those who voted, “no” will be able to reap the benefits of that which they sowed.

Triple Lock Protection of State Pension Not Guaranteed.

Triple Lock Pension protection provides a safety mechanism that the state pension, (£144 weekly at April 2016) would increase annually by the highest of; average earnings, inflation or 2.5%. It is anticipated the government will not commit to applying the, “triple lock” safety mechanism and will limit any increase of pension to average earning. Assuming an average earnings of 1% this would result in pensioners losing approximately £600 – a – year. Over 15 years the total loss would exceed £9k. It is just possible the government might decide to impose no uprating of pensions on the basis that the Nation could not afford an increase in which case the annual and 15 year accrued total loss would rise further. The omens are not good for UK pensioners post 2016

Noteworthy is the undertaking in the, “referendum white paper” produced by the SNP, committing to payment of a flat rate pension payment of £160 weekly, fully triple locked providing the protection so much needed in the difficult times ahead. This would have provided, (in 2017/18) a £4 weekly pension increase taking the weekly state pension in Scotland to £164. In 15 years the pension would have been increased to approximately £200 weekly. But the, “no” vote put paid to the changes. Pensioners in Scotland preferred to remain, (to their financial detriment) with the UK pension arrangements.

2015 General Election

Austerity Measures-Child Benefit to be Frozen by a Labour Government

Austerity Measures-Child Benefit to be Frozen by a Labour Government
Under austerity measures introduced by the Conservative-Liberal Democrat coalition Government, child benefit has been frozen from 2010 to this year. Tory Chancellor George Osborne has already said it should increase by 1 per cent in 2015-16. But Mr Balls said the restraint should continue for another year. With inflation running at around 2 per cent, it means the value of child benefit is falling further in real terms.

Mr Balls said, “I want to see child benefit rising again in line with inflation in the next parliament. “But we will not spend money we cannot afford. So for the first two years of the next parliament we will cap the rise in child benefit at 1 per cent”. “It will save £400 million in the next parliament. And all the savings will go towards reducing the deficit.”

The Children’s Society, Chief Executive Matthew Reed said, “Labour’s announcement on plans to cap child benefit rises comes after repeated squeezes on this bedrock of the family budget. “It represents a major real-terms cut to 13 million children. “Policy is about making choices and the shadow chancellor has made a choice, to look for savings by cutting help for children.

“Child benefit has already been frozen from 2010, and then increased by just 1% this year, falling well below rising prices. “Now this proposal will compound that loss, seeing average families facing a £400 cut in child benefit per year by 2017. “We urge the shadow chancellor to reconsider so that children and their already struggling families do not suffer even more unnecessary hardship.”
Families charity Gingerbread, (President J K Rowling) commented, “Child benefit helps to pay for essentials like food and clothes. For many parents, single parents especially, it can be a lifeline.” “Freezing child benefit will raise relatively little in terms of government savings, but means cutting vital support at a time when families are struggling to make ends meet and the number of children living in poverty is projected to rise rapidly over the next few years.” “This proposal would only make it harder for families to pay the bills.”

An independent Scotland would not have taken around £400 each year from families with children. A matter not given a deal of attention to by the President of Gingerbread. A bit late now.

Social Security

Robbing the Blind – This is the Great New World of the Union Better Together Have Signed Scotland Up to?

Robbing the Blind – This is the Great New World of the Union Better Together Have Signed Scotland Up to?
A woman blind since birth was asked by a benefits assessor, “how many fingers am I holding up?” It was just one of a series of humiliating questions fired at Natasha Pogson 28y to check if she was still entitled to state benefits.The Department of Work & Pensions interviewer also lifted her arms and asked Natasha to copy her and wanted to know how long she spent reading.

Natasha, of Billingham, Co Durham said, “they made me feel so small,almost suggesting I was making my disability up.” My dad was in the room and he had to repeatedly point out I couldn’t see. It was upsetting and humiliating and the way these things are assessed needs to be changed. Natasha – blind after being born prematurely then had her £163 a week benefit slashed to £72 because she can cross the road with the aid of a guide dog. She is appealing the decision.

Scottish Referendum

Child Poverty & Early Death in Scotland

Child Poverty in the UK

1. The Government has a statutory requirement, enshrined in the Child Poverty Act 2010 , to end child poverty by 2020. However, it is predicted that by 2020/21 ANOTHER 1 MILLION CHILDREN will be pushed into poverty as a result of the Coalition Government’s policies’. (Barnardo’s ).

2. In the UK the share of national wealth is;

a. The richest 10% own the 60% of the UK’s wealth

b. The poorest 50% own less than 10% of the UK’s wealth.

c. The have-nots numbering about 5% own nothing.

The statistics are little changed from 1914, (the start of World war 10), the rich get richer and the poor get poorer

3. In Scotland, 870 000 people still live in poverty (17% of the population). 200,000 children in Scotland still live in poverty (20% of all children). this is significantly higher that in many other comparable countries. Faced with another 5 years of harsh austerity measures projections are that the number of children living in poverty in Scotland will increase by a further 100,000.

Inequalities in Health and Well-being

4. Inequalities in health, between the most and least privileged people and communities, are clearly apparent in Scotland. WHOLE life expectancy, at birth for men is;

a. 69 years for the most deprived 10% of the population.

b. 82 years for the least deprived 10%.

(a difference of 13 years).

5. The difference in HEALTHY life expectancy was even more stark;

a. 47 years for men in the most deprived 10% of the population.

b. 70 years for least deprived 10%.

(a difference of 23 years).

6. In many constituencies of Glasgow age expectancy differences are even more marked. Significant numbers fail to reach 60 years before dying. Of note and worthy of mention is that Labour Party MP’s are routinely returned to Westminster in these areas. Clearly these representatives have failed the public. Voters need to give thought to changing their allegiances finding politicians and a political system that will deliver real improvements to Glasgow & Strathclyde. An independent Scotland presents as an ideal way forward allowing the desperate needs of the West of Scotland to be addressed speedily since they will be freed from the UK poverty chain.

7. The foregoing very worrying statistics demonstrate how social inequalities in a range of life chances (early life experiences, education, employment, family life, income and wealth, housing, environmental hazards, etc.) can become literally, “embodied” and shape people’s health and longevity. Such differences are clearly unacceptable by any standards of social justice.

The Relentless Rise of Food Poverty in Britain

8. The UK enjoys the seventh richest economy in the world. It is also a deeply divided and unequal society. In May 2014, the Office for National Statistics (ONS) reported that the richest 1% own the same amount of wealth as 54 percent of the population. It was also reported in the same month, (Sunday Times) that the 1,000 richest people in the country had DOUBLED their wealth in five years.

9. Yet at the same time, millions of families across the UK are living below the breadline. Oxfam and Church Action on Poverty have calculated that 20,247,042 meals were given to people in food poverty in 2013/14 by the three main food aid providers. This is a 54% increase on 2012/13.

10. Despite their best efforts, many people cannot earn enough to live on. UK food prices have increased by 43.5% in the eight years to July 2013 and food expenditure as a proportion of total household expenditure has continued to rise.

11. The UK has one of the highest levels of housing costs in Europe, while between 2010 and 2013 energy prices for households rose by 37 per cent. At the same time, low and stagnant wages, insecure and zero-hours contracts mean that for many low-income households, the money they are bringing home is less every month than their essential outgoings.

12. Tackling inequality and food poverty means paying people fairly for their work. Despite their best efforts, many people cannot earn enough to live on. A , “No” vote in the referendum would bring with it ever more misery and early death for Scot’s. A, “Yes” vote will ensure election of a Scottish government with a mandate to address the needs and aspirations of all Scot’s. Full article and references; Dr Anne Mullin, a GP in Glasgow.

Scottish Referendum

Work or Want – The Impact of Welfare Changes

Work or Want – The Impact of Welfare Changes

A recent court case in Dundee highlighted the brutality of Ian Duncan Smith’s changes to Social Security systems, in place to protect those in need of assistance. A young mother fled her abusive husband. She asked for assistance at her local social services office only to be told any financial benefits which she might be afforded would not be paid to her for at least 6 weeks. Desperate and needing to feed her children she went to a local supermarket and stole food sufficient for her needs. She was caught and ended up in court. The Sheriff, trying the case, contacted Social Services and was assured no-one would be required to go without food as a result of benefits changes. In summary he said, “this case however was an example of that not having worked. As such there were significant mitigating circumstances allowing the young mother to be admonished”. Increasing use of sanctions against claimants is becoming commonplace, even for the most minor of misdemeanors, (late for an appointment due to a late bus. Is this the Scotland for our families. I think not. We need to care for those less fortunate. Vote, “Yes” in the referendum move Scotland away from the harsh right wing policies that have done so much damage to our society.

Scottish Referendum

Unfair Share of the Wealth Within the UK

Unfair Share of the Wealth Within the UK

Wealth is also unevenly spread across the UK. An average household in the South East has almost twice (182.63%) the amount of wealth of an average household in Scotland.

Scottish Referendum

Universal Credit Fiasco

The Universal Credit debacle- Robert Devereux- United Kingdom Permanent Secretary of the Department for Work and Pensions

Robert Devereux is the Permanent Secretary of the Department for Work and Pensions. A government organisation with 100,000 staff, operating from nearly 1000 sites, with some 22 million customers, and an annual budget – in terms of money spent on pensions and other benefits – of £160 billion. He believes there are four crucial qualities in public servants namely, Confidence, Openness, Resilience and Leadership.

The Con/Dem Coalition Government decided upon a radical reform of the UK’s welfare system, aiming to reduce worklessness, and make work pay, and at the same time improving the support available for both disabled people and pensioners. Delivering these reforms, would be an enormous leadership challenge.

There’s history here. The Labour government led by Tony Blair & Gordon Brown wasted many millions of taxpayers money presiding over the introduction of the, “tax credit” system. Blame for the disastrous out of control project had been placed with the, “civil service” . One government minister likened, “Whitehall” to the set of a disaster movie.

With the foregoing in mind one wonders what, “bright spark” ever thought the department could successfully introduce a fundamental change in the benefits system titled, “Universal Credit”. Well we have his name, “Ian Duncan Smith”. Having assessed the tools to hand, namely Robert Devereux and his management team Ian was persuaded the project, whilst complex could be implemented within the timescales and other parameters outlined. So off they went, with a pot-load of taxpayers money, (anyone minded of the 7 dwarfs at this point). Well a couple of years later, way beyond the completion date, with nothing in the pipeline the National Audit Office, (NAO) decided to have a wee gander, just to guide Westminster that satisfactory progress was being made and financial expenditure was within prescribed limits.

“Shock and Horror”. The adverse report on, “Universal Credit” made for difficult reading with a focus more on the day-to-day operations of the department than on the decision-making at the top. It described a “fortress” mentality within the team and a “good news” culture, where officials avoided telling ministers about problems. It said the department used unfamiliar methods to implement the reform, and that there was a “lack of a detailed plan”.

All fingers pointed to Robert Devereux, the Department’s Permanent Secretary, as the bad tool. A government minister said, “You have a permanent secretary who seemed not to know what he was doing and was not willing to admit it and appallingly badly negotiated contracts with suppliers, which you would not expect”.

The project was halted so that the NAO, Ian Duncan Smith and the project team would be able to take stock before deciding the way forward, if indeed the project could be salvaged. After a deal of discussion, and appointment of a team of highly paid external experts. It was decided the project would be RESET and started again.(RESET: write off all before and start again). Reset costs projected at £2.5billion but not yet confirmed. Could be much higher.

Poor Ian Duncan Smith. He had to report the fiasco back to the commons. In his statement he suggested that he had lost faith in the ability of civil servants to deliver the behemoth project adding bitterly, “When I arrived, I expected [to find] the professionalism to be able to do the job properly.”

Scottish Referendum

The Impact Of Welfare Changes

Scottish Health & Welfare Staff in Lanarkshire to be Trained to Spot Health Impacts of Benefits Changes

Both North and South Lanarkshire councils are taking the lead in dealing with the changes. Janice Scouller, health improvement lead for the North West Unit, who is overseeing the welfare reform work in NHS Lanarkshire, said: “The welfare benefits system is undergoing the most significant reform since its establishment. “It is resulting in unprecedented numbers of individuals having their benefit entitlement reviewed, which is resulting in many being financially worse off.

The changes will disproportionately affect vulnerable individuals, many of whom suffer ill health and disability and who rely on benefits as their main source of financial income. We know from previous experience that this will impact on health services as poverty associated illnesses, such as stress, increase. “We not only want staff to be aware of this but to also look out for the signs of deteriorating health in patients.” It is estimated the welfare changes will result in:

disabled people in Scotland losing over £1 billion in benefit payments

100,000 claimants losing entitlement to sickness benefit

50,000 losing entitlement to disability payments

83,000 disabled households affected by the ‘bedroom tax’.

Janice continued: “Patients are also likely to turn to some of our staff for advice and support and we want staff to signpost people to the correct place.
“GPs and other health care professionals may also be asked to give support in the appeals process of some claimants whose benefit has changed. “All this will have an impact on the NHS and we want to prepare staff for this.

The brutal treatment of those least able to cope and in need of help and understanding must surely sway any still, “undecided” Scot to vote, “yes” in the referendum. Scotland is better than this.

Click to access Pulse-January-February-2014.pdf

Scottish Referendum

The Elderly & Benefits

Francis Maude-Cabinet Office Minister Tells Elderly to Go on-Line or Lose Your Benefits

1. The elderly will soon have to have to go on online or risk losing access to key government services.
2. Refuseniks, who do not want to use computers will be able to apply for a one-off lesson to help them get on to the internet.
3. In future the Government will only make services available over the internet, in the same way an airline sells tickets.
4. Ministers are migrating dozens of public services onto the internet, including the carers’ allowance, (used by 3.2million carers a year), the small claims service, and Lasting Powers of Attorney, (which allow families to take control of a loved one’s financial affairs).

The comments were greeted with dismay by groups representing the estimated five million pensioners in their 80s and 90s who have never been on the internet.

Mr Maude was unveiling figures to an audience of civil servants at the Treasury showing the billions saved by the Government by moving Government services online. Asked by the Telegraph if all Government services would be online at some stage, he said: “Our point is that everything that can be delivered online, should be delivered online and only online.” He added: “There are some things that are physical and can’t be online. The key point is that like airlines, airlines do everything that is not physical, is not about actually flying the aeroplanes online, which is better for them and better for the passenger.”

1. Dot Gibson, general secretary of the, “National Pensioners’ Convention”, said: “The move towards largely digital only services could pose a huge problem for millions of older people. Over five million of today’s pensioners have never been online, and this is particularly true for those who are at the upper end of the pensioner age group, in their 80s or 90s. “It’s also a problem for poorer pensioners who may not be able to afford a computer and the other equipment needed. Fundamentally there’s an information gap that the government are creating. “Just because someone uses the computer now, doesn’t mean they will want to when they are 85. The idea that we all have to be digital citizens or else we end up as second-class citizens is wrong.”

2. Lisa Harris, Saga’s communications manager, said: “It is somewhat disingenuous to assume that everybody wants to be online. Recent research shows that the vast majority of those that are not online have made a conscious choice not to be. “To say that all ‘old’ people should be online and all they need is a little mollycoddling is somewhat patronising. “Government needs ensure that people have proper protection online, such as ensuring banks and financial institutions treat those who make genuine mistakes fairly, but also provide help and advice for those that want it. “It is essential that people are able to deal with public services in a way that suits them. The digital tide is certainly turning, but Government need to ensure we can all ride the technology wave and not leave some left to drown unaided because they don’t choose to ‘conform’.”