The Key Ideas

#71 Do not use welfare top-ups as a means of dealing with the failures of the UK benefits system but instead invest substantially in hardship funds

The overarching means to deal with povertyand the problems of anxiety and fear faced by those whose economic insecurity leaves them constantly close to povertyis to create a system which ensures a basic quality of life for all. This is called social security: the knowledge that you can feel secure and protected from destitution by being part of a society. The first way to do this is to create an economy, a housing system, and a strong set of universal public services which build the foundations of a good life for all. In the longer term, creating a Citizens' Income would mean every member of society knows they are secure and can live a decent life. Until then, we are left with a welfare system over which Scotland has next to no control.

The British welfare system is being converted from a safety net to a form of coercion, used to push people into low-paid work or face genuine destitution. It is the opposite of social securitya system of systematic insecurity. It would be very desirable indeed if Scotland could redesign the entire welfare system (and had the full range of tax powers to pay for it). But it doesn't. At best it looks like it will have only the powers to 'top up' existing benefits but have no control whatsoever over the policy.


Very great care must be taken here. The instinct to use these top-up powers will be strong. However, there are very good reasons for caution. The first of these is the cost. Even making pretty minor top-ups to existing payments quickly mounts up to many hundreds of millions of pounds. This comes at a time when the Scottish budget faces severe cuts, which will inevitably lead to cuts in public services. And as these public services are relied on most by the most vulnerable groups, redirecting money away from these services towards benefit top-ups risk doing little more than hitting these groups in different ways.

Of course Scotland canand shoulduse tax powers to try to mitigate the worst of the cuts and the worst impacts of austerity. But as was explored in chapter six, Scotland has limited tax powers and can have an influence over only a minority of the tax base. Nor does Scotland have the enormous corporate wealth of London nor its billionaires. Scotland has to raise tax based on its population and the ability of that population to pay more tax. The proposals outlined in chapter six would raise something approaching £750 million, and it was proposed that £500 million of that be used to lessen the impact of cuts. What remains would be insufficient to top up all benefits to a level which would create real social security.


There are also good policy reasons why using benefit top-ups should cause some concern. The inability to influence policy in any way is prime among them. For example, adding say £10 a week to a benefit will do nothing to help an individual if the UK policy control enables it to have that individual's entire benefits withdrawn through sanctions. This is a demand-led policythe more people face poverty, the more benefits are paid. But Scotland has a fixed budget and does not control the primary policy levers which would cause the increase in demand (for example, through more unemployment or because of in-work poverty). Once a top-up practice is in place it would be virtually impossible for Scotland to alter that practice in the future as Westminster would have forced Scotland to take responsibility for an entire area of social policy which is not Scotland's responsibility and over which Scotland has no control. If Westminster wishes Scotland to take control over welfare, it must devolve all the relevant powers (including the tax base) to Scotland. If it does not wish to devolve welfare then it alone must be held accountable for its decisions.


However, although Scotland should take great care about using benefit top-ups, it cannot shirk responsibility for the wellbeing of its citizens. The failure of the benefits regime does not lie on Scotland's shoulders, but poverty does. The most direct way to help the acute poverty of those who have faced sanctions or the harshest of the benefit cuts (disproportionately affecting women), is to invest in the many ways that are currently used to support people in the most need. This means everything from hardship funds to social work services. The £250 million identified should be used to create a 'social security' fund and that should be used to target support where it is most needed. Funding should be given to those already dealing with the sharp end of poverty to enable them to improve the financial support they can give in cases where people are facing real hunger, cold, or being made homeless. Women in particular are often trapped by a welfare system that does not enable their independence, a particularly serious threat to women affected by domestic abuse. This fund must emphasise the independence of women where it can.