Scottish Government: Social Security Benefits

Baroness Davidson of Lundin Links Excerpts

Wednesday 24th June 2026 Lords Chamber

[Lord Livermore (Lab)]

I worked for Gordon Brown for quite some years. I did not always agree with him and I am not sure I do on this occasion. The noble Baroness knows that the fiscal framework sets a funding floor to ensure that the Welsh Government receive a fair level of relative funding. A review of the framework is triggered when relative funding falls to 115%. The Government remain committed to working with the Welsh Government to ensure the smooth delivery of their funding settlement, and there are ongoing discussions about funding flexibilities and their fiscal framework as part of this.

[Baroness Davidson of Lundin Links (Con)]

My Lords, the Scottish Fiscal Commission has forecast that over a million Scottish adults will be in receipt of disability payments by 2031 under the new Scottish social security system—that is over a fifth of the projected population. The divergence from Barnett consequentials in just this area is forecasted to be £1.2 billion, which will come, as the Minister says, either from spending cuts or rises in taxation—taxation rates already being the highest in the UK, reaching 48%. To help the Scottish Government balance the books and to give some relief to the Scottish taxpayer, I ask the Minister: what, if any, analysis has been done to assess the varying disability rates across the different parts of the UK, and what health interventions have proven successful in lowering those rates?

[Lord Livermore (Lab)]

As the noble Baroness knows far better than I do, the fiscal framework is designed to ensure that funding is fair and fiscally neutral at the point of devolution. It provides the Scottish Government with funding that reflects UK Government spending, while also giving them full responsibility for policy decisions in devolved areas. So, as I have said, any additional spending on benefits is a choice for the Scottish Government and must come from within their own budget.

The noble Baroness alludes to wider welfare reform. She will be well aware that spending on welfare increased by £88 billion in the last five years of the previous Government. I do not think anyone believes that the system that we inherited is working. It abandoned too many people to a life on benefits, it wrote off too many people as too sick to work, and it condemned too many children to be too poor to eat, which is exactly why we are reforming the system. She will know that we have launched the Milburn review, focusing on the causes of youth unemployment in particular, and he will come back with specific recommendations later this year.