Scottish secretary hails “game changing” welfare devolution

12 Oct 15

Scottish Secretary David Mundell has promised that the new fiscal and welfare powers to be devolved under the 2015 Scotland Bill will be “a game-changer.”

But his pledge, made ahead of the latest round of talks today between the two governments on the detail of the powers to be transferred, met with a sceptical response from Scottish ministers. 

Finance minister John Swinney said that the Bill retained key vetoes for Westminster, and that the new powers would also be severely constrained by Westminster-driven budget cuts.

Mundell’s comments came amid wide disappointment in Scotland over the Bill, which aims to give form to the post-referendum Smith Commission on further devolution. Former prime minister Gordon Brown, whose cross-party “Vow” to deliver better devolution launched the commission, admitted last week that he did not think the Vow had been fully delivered.

Mundell, however, insisted that the reforms would usher in “a new era of devolution” by enabling Holyrood to top up existing benefits, introduce new ones and vary tax credits. He has also promised that the new powers would come into force in April 2017 – a year ahead of the original timetable.

“Scottish government ministers will be able to design a significant part of Scotland's welfare system and control income tax to pay for it,” Mundell said.

He challenged Holyrood ministers to spell out how they would use the new powers. “Powers in the Scotland Bill ensure the Scottish Parliament will have the means to pay for any changes, but it will have to justify them to the public, as under the new arrangements, income tax raised in Scotland will stay in Scotland and be spent in Scotland.”

Social justice secretary Alex Neil responded with a paper today setting out the main messages from an extensive public consultation on how the new powers should be used. He promised that the Scottish Government would publish its own consequent plans by the end of the year.

Neil said that the consensus from the consultation was for a fairer and less punitive benefits system that did not stigmatise recipients.

“This feedback is helping us develop our own social security system which we will ensure treats individuals with respect and removes the barriers that cause confusion and anxiety for some of the most vulnerable people in our society,” Neil said.

“The new system will have at its heart a set of principles and values. This will include ensuring people are treated with respect and dignity when applying for, being assessed for, and receiving disability-related benefits.”

Meanwhile, Swinney has made clear that the Scottish Parliament could yet refuse to implement the reforms unless the fiscal settlement underpinning them is fair to Scotland, and he warned again at the weekend that the spending cuts planned by Westminster would severely restrict Holyrood’s options for designing a more socially just benefits regime.

“We estimate that by 2019/20 the cuts in the benefit provision for Scotland will be about £6bn,” Swinney said.

“If you're asking me can we afford to find £6bn to replace all of those cuts, then at this stage it looks very unlikely that we would be able to do that.”

  • Keith Aitken
    Keith Aitken

    covers Scottish affairs for Public Finance from Edinburgh. He was formerly economics editor and chief leader writer on The Scotsman and now has a busy freelance career as a writer, broadcaster and event chair.

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