Social Security (Scotland) Act 2018 (Disability Assistance) (Consequential Modifications) Order 2024

Considered in Grand Committee

16:59:00

Moved by

That the Grand Committee do consider the Social Security (Scotland) Act 2018 (Disability Assistance) (Consequential Modifications) Order 2024. Relevant document: Not yet reported by the Joint Committee on Statutory Instruments

My Lords, this order, which was laid before the House on 26 July, is the result of collaborative working between the two Governments of Scotland and supports the Scottish Government’s decision to introduce pension age disability payments in Scotland later this month. As noble Lords will be aware, this is the first Scotland Act order that the House has brought in front of the Committee to approve since the election of our new Labour Government. My right honourable friend the Secretary of State for Scotland moved the order in the Delegated Legislation Committee in the other place last week; I am keen to reflect the points he made, especially as this order comes before us in the year of the 25th anniversary of the Scottish Parliament, which the last Labour Government delivered for the people of Scotland. Devolution happened because of the efforts of two of my political heroes, the late John Smith and Donald Dewar, who believed in a strong Scottish Parliament within the United Kingdom. They also believed in the values of co-operation over conflict and understood that we achieve more by working together than we ever do by standing apart. It is in that spirit that this Government have set out to reset relations with the Scottish Government to deliver for the Scottish people. That is what the majority of Scots want. The Scotland Act 2016 devolved significant powers, including responsibility for certain social security benefits and employment support, to the Scottish Parliament. The Scottish Government’s introduction of pension age disability payments under Section 31 of the Social Security (Scotland) Act 2018 exercises this responsibility. The Scottish Government will administer this new benefit in Scotland through their executive agency, Social Security Scotland. As, at introduction, the pension age disability payment is broadly in line with the attendance allowance, it is the intention of the UK Government that those individuals in receipt of pension age disability payments should also receive the same treatment in the reserved social security and tax systems as those on attendance allowance. Scottish recipients will transfer from the Department for Work and Pensions to Social Security Scotland. The order before us today is made under Section 104 of the Scotland Act 1998, which allows for necessary amendments to legislation in consequence of any provisions made by or under any Act of the Scottish Parliament. It is, therefore, the appropriate vehicle to make these technical but important changes to recognise pension age disability payments in reserved systems. Scotland Act orders are a demonstration of devolution in action; I am pleased to say that the Scotland Office has taken through more than 250 orders since devolution began. Bear with me as I explain the effect this order will have and the provision it will make. This order makes amendments to ensure that the pension age disability payment is recognised as a qualifying benefit in the same way as attendance allowance in the reserved social security system with regards to entitlements to additional reserved UK Government benefits and premiums; this includes the Christmas bonus and carer’s allowance. This means that recipients of pension age disability payments will be entitled to receive the annual £10 Christmas bonus payment if that has not already been paid via another benefit. Should all other eligibility criteria be met, it will also ensure that the reserved carer’s allowance can be paid to someone caring for a person in receipt of pension age disability payments in Scotland. It also amends the taxation of trusts with disabled beneficiaries to treat those with beneficiaries in receipt of pension age disability payments in the same way as those with beneficiaries who receive the attendance allowance. Once this order is in force, it will also prevent dual entitlement to benefits paid because of the same needs: individuals entitled to pension age disability payments cannot be entitled to receive the personal independence payment, attendance allowance or disability living allowance at the same time. This is in the same way that disability living allowance and personal independence payments are not payable to people in receipt of the attendance allowance. The order will also prevent overlapping entitlement for pension age disability payments and Armed Forces independence payments. Equivalent provision is being made in Northern Ireland in respect of pension age disability payments and to prevent dual entitlement to child disability payment and adult disability payment with equivalent Northern Ireland Social Security benefits—someone wanted me to say “payments” a lot in this SI. Child disability payment and adult disability payment are forms of disability assistance paid in Scotland, introduced by Scottish Ministers under Section 31 of the 2018 Act. In summary, the order makes amendments to UK legislation to support the introduction of pension age disability payments in Scotland. It ensures that the new Scottish benefit is able to operate effectively and that its recipients are treated equitably. Twenty-five years on from the establishment of the Scottish Parliament, this is devolution in action. The vast majority of Scots want to see their Governments work together to produce better results, and that is what we are getting on with doing. I beg to move.

I thank the Minister for her introduction and the spirit in which she delivered it. I agree that this is a classic example of co-operation between the UK Government and the Scottish Government. It is part of the continuing transition of social security delivery from the DWP to Social Security Scotland, which is all to be welcomed, given that it allows differences to be respected. However, it also means that there can be conflicts or contradictions, and the Minister has indicated—as is always the case with DWP benefits—the difficulties of not claiming one benefit because you are entitled to another, or vice versa. That is understood and explained. It was good, although slightly pressured, for a Scottish Minister to say that the delivery of social security is a joint enterprise between the two Governments. It takes something to get that out of a Scottish Minister these days, partly because there are hiccups in the process that mean that blame needs to be apportioned occasionally. So I take that at face value, but I am glad it was said, because it is actually true. I have one or two questions. First, on the basis of the transfer of benefits from, effectively, the DWP to Social Security Scotland, the allocation to the Scottish block grant is based on forecasts. Given that those are forecasts, what is the potential for either an underspend or an overspend? If that happens accidentally rather than deliberately, what is the scope for a review either way? In other words, if the Scottish Government find that they are overspent for legitimate reasons, will the UK Government compensate, but if they underspend for similar reasons, will the UK Government adjust it accordingly? As I understand it, the forecast, or the block grant adjustment, is based on the estimate of the saving that the UK Government have made in the process of transferring the benefit to the Scottish Government—it can only be an estimate, because the take-up will follow. The other problem is really a political one. The Scottish Government did not have social security powers 25 years ago, although they campaigned strongly for them and the Smith review recommended them. However, there is a problem of politics, because what is actually happening is that most of these benefits were originally UK, they are transferred in similar format to the Scottish Government and funded accordingly into the block grant. The Scottish Government can then, if they wish, cut them or top them up from their own resource. For example, the Scottish child benefit is £26.70 per child, on top only of UK-funded tax credit—that is, it is only those in receipt of tax credit who qualify for it, which is fair enough. However, the impression given by politicians north of the border is that the combination of the tax credit and the £26.70 has all been delivered by the Scottish Government, so there is a lack of transparency about who is paying for what. That is important because the people of Scotland need to know what the Scottish Government are genuinely doing on their own merit and what the UK Government are doing for the people of Scotland out of central UK resources. For those of us who, as in my case, are federalists, home rulers and believers in devolution, it is nevertheless important that we understand that Scotland has two Governments and both are contributing to the benefit of the people of Scotland. We need to know which Government provide what benefit, and the presentation in Scotland does not always reflect that. This raises a final concern. I am not sure whether the Minister can say anything about it, but we will have an election in Scotland in the next 18 months and I worry that these powers could be misused. It might suit a Government—particularly one who feel that they are on the back foot—to introduce a whole load of social security sweeties, knowing that the bill will come after the election. There is nothing to stop that happening other than, possibly, the UK Government pointing it out, but it is entirely within the discretion of the Scottish Government. I accept entirely the spirit in which the Minister presented the order and I support the principle of what is going on. Nevertheless, I ask her to acknowledge that there is a political tension here that could lead to abuse. That is not a reason for reversing it but may be a reason for doing what I have just done, which is to highlight the fact that the two Governments are doing complementary but different things.

My Lords, I thank the noble Baroness for her remarks in introducing this statutory instrument and I note her comments on the 25th anniversary of the Scottish Parliament. Having spent eight years of my life as a Member of that Parliament, I echo my obvious support for the devolution settlement and a Parliament that, as she said, is 25 years old this year. This instrument is made, as the noble Baroness said, under Section 104 of the Scotland Act, which allows for legislative amendments to UK legislation that are considered necessary or expedient in consequence of an Act of the Scottish Parliament. As she also said, this statutory instrument is made under that section and as a consequence of Section 31 of the 2018 Act passed by the Scottish Parliament introducing the pension age disability payment, which replaces the attendance allowance in Scotland. As currently constituted, the attendance allowance interacts with other benefits in a number of ways, including with reserved benefits. It gives rise, for instance, to additional amounts payable in reserved income-related benefits, such as pension credits. I think the DWP has said that while PADP—if I can use that acronym—is broadly equivalent to attendance allowance, it should therefore interact with reserved benefits in the same way as attendance allowance. For that reason, receipt of PADP will passport a person to an additional amount in pension credit in the same way that attendance allowance does. I welcome the fact that the UK and Scottish Governments are working together to deliver these changes. I think the noble Baroness said this, but while these changes are complex and technical in nature they are of fundamental, practical importance for those in receipt of social security payments. Their complexity also points to the hard work of the various officials involved in formulating them. Having served briefly as a Minister in the Scotland Office, I am well aware of how intricate issues of welfare can be, given that some aspects of social security are reserved and some are devolved. I put on record my thanks to all the officials involved in creating this order. We will support this instrument but I have one issue to raise with the noble Baroness. There are questions about how PADP might interact with reserved matters in the future, should there be divergence in the rules for those entitled to attendance allowance. For instance, it is possible that eligibility for pension age disability payment might diverge from rules around attendance allowance, and there could be a scenario where eligibility in Scotland is not mirrored by eligibility in the rest of the UK. Is the noble Baroness able to inform the Committee whether the UK Government have considered this? What implications would there be in terms of additional claims resulting from divergence, especially in terms of staffing, administration and resources? If she could deal with that I would be most grateful but, as it stands, I welcome the order and am happy to confirm my party’s support for it.

My Lords, I thank both noble Lords for their contributions this afternoon and for their tone—given that this is my first outing as Scottish spokesperson, I am very grateful for it. Before I move on, to reassure both noble Lords, I was born in Scotland, so although I do not sound like it I am very much invested in our relationship with Scotland and as part of the union.

17:15:00

There are a few things to highlight in response to the questions that have been asked. The noble Lord, Lord Bruce, asked how this measure would be funded—and really wanted to draw me into some political debate in the run-up to the elections. I think that he and I agree about the need to ensure that there is an honest level of debate and openness about having two Governments in Scotland, in the run-up to the next election, and what that means. We are clear that being part of the union ensures that there are benefits to that—we are talking about benefits, but there are benefits—and funding comes from the people of Scotland and wider UK sources. We will have to ensure transparency, and I look forward to ensuring that in this Room in the months ahead, as we look at more of these but also in the inevitable debates in the run-up to the elections.

On how this will be funded, it is for the Scottish Government to fund the pension age disability payment from their own overall resources, as with any other Scottish Government policy. The block grant adjustments are based on spending on attendance allowance in Scotland before it was devolved and updated to reflect changes in spending on the benefit in England and Wales. We will monitor it, but the funding is secure.

For your Lordships’ information, in 2021-22, the block grant adjustment for all social security benefits resulted in an increase of £3.3 billion to the Scottish Government’s Barnett-based block grant. Funding will continue to be reviewed and we will ensure that the adjustments are accurate. I do not have an answer about underspend, but I shall now explore it and get back to noble Lords.

It is a joy to follow the noble Lord, Lord Cameron, and I look forward to working with him in the months ahead as we deal with many of these orders. I could not agree more about thanking the officials; they have been incredibly supportive on such a technical order. They have put in a huge amount of work to make this work; it is far from straightforward to ensure that a new social security system works properly. I have not been asked, but some of the contingencies that have been put in place to make sure that people do not fall through the gaps as we transition are to be applauded.

On likely divergence, it is up to the Scottish Government whether the provisions of the entitlement for the PADP change in future, once case transfer is complete. We are very aware of what the impact of that may look like and we will keep it under review to make sure that divergence does not have an impact on reserved benefits. We will report back to the House if that is the case.

This instrument demonstrates the continued commitment that the UK Government have to working with the Scottish Government on delivery. I assure noble Lords that ongoing conversations for the joint committee on benefits will continue; the next meeting is due in the next six weeks. We will continue to work with everybody to deliver a new voice for Scotland and a reset in our approach to our relationship with the Scottish Government, given our new Government in Westminster.

Motion agreed.

Committee adjourned at 5.19 pm.