Bedroom Tax (Scotland)

Debate between Fiona O'Donnell and Ian Davidson

Thursday 8th May 2014 Westminster Hall

[Mr Davidson]

Absolutely. Substantial numbers of disabled people who require an additional bedroom due to their condition have been hit by the bedroom tax. We heard the absurd proposal that people should mitigate the effects of the tax by taking in lodgers, as well as the suggestion that people should earn more by working longer hours when, as most of us are well aware, that is not a realistic option available to many of those affected.

[Fiona O'Donnell (East Lothian) (Lab)]

My hon. Friend is being generous in giving way. I congratulate him and his Committee on the excellent work they did preparing the report. On the advice about taking a lodger, I visited a family with children aged two, three, four and five. Does he not think that it is not just stupid but highly risky to suggest that such a family should welcome a stranger into their home?

[Mr Davidson]

That is absolutely correct. In our hearings, we had a whole string of witnesses telling us how worried they would be about taking an unknown lodger into their home in circumstances where they would fear that their children might be at risk.

I also want to consider the issue in the context of devolution. I have been a long-time supporter of devolution; I was a member of the campaign for a Scottish Assembly before such things were fashionable. As well as the arguments for devolution because we wanted to move power closer to the people, there was also a strong argument that we wanted a devolved Scottish Parliament as a bulwark and protection against a Tory Government, to mitigate the worst effects of Tory economic and social policy. It is therefore doubly regrettable that right from the beginning, the present Scottish Government failed to use the whole range of their powers to mitigate the impact of the bedroom tax on the people of Scotland.

In our investigations and witness sessions, it became eminently clear to us that discretionary housing payments were inadequate and not an appropriate method of reaching everyone affected by the malignant impacts of the bedroom tax, who included those with mental health issues, learning difficulties and chaotic lives, as well as those too proud to apply for another benefit. It was clear that, despite the best efforts of local authorities of all political persuasions, they were unable to reach all those who were adversely affected by the bedroom tax.

In those circumstances, people who were unable to mitigate the effects themselves or with the assistance of the local authority were left with the alternatives of paying up and suffering, building up arrears and debt, or moving. We discovered that if people were able to move, they were often obliged to move into the private rented sector, which actually cost the public purse more in housing benefit than if they had remained in their existing home.

--- Later in debate ---

[Mr Davidson]

The information that we have from relatively brief discussions is that the Scottish Government may give money to social housing providers to allow them to write off debts. They could do that at any stage, so the debts built up under the bedroom tax could simply be written off.

[Fiona O’Donnell]

East Lothian council has done that.

[Mr Davidson]

I am glad to hear that. That could have been done throughout the whole of Scotland. The Scottish Government could have said to social housing providers, “Any arrears you have, you write them off, and we will refund you the money.” That is perfectly legal and could have been done, but they deliberately chose not to do so.

We had a Scottish Government resolutely seeking to make a political point by refusing to fund mitigation of the difficulties caused by the bedroom tax in any way other than by getting the cap on DHPs lifted, and a Conservative and Liberal Government who were, at that stage, resolute in saying that they would not move because the Scottish Government already had powers to deal with the issue if they so desired, and the people of Scotland were potentially caught between the two. In those circumstances, it is difficult for either side to find a way to change their position without appearing weak, or making it look as though they had the wrong solution in the first place, or suggesting that anything they say at any particular moment may be merely transitory and can be changed.

With the debates we are having at the moment about the referendum, I understand that it is much more difficult for anyone to change their adopted stance on any issue. In those circumstances, I think it is to the credit of the Secretary of State for Scotland and the Under-Secretary of State that they have persuaded their colleagues in the Westminster Government to change the line and to give powers to the Scottish Parliament to extend or to increase the amount of money spent on DHPs. We have to recognise that that has been a change in the Government’s policy, and one that I welcome. However, there are still difficulties with it.

First, there will be a delay in the transfer of powers. I hope that the Minister will tell us that every possible step will be taken to make that transfer as speedy as possible. Secondly, the Scottish Affairs Committee does not believe that DHPs are the best way to address the problem because an application is required, and in the categories of people I described earlier, we found many who were either unable or unwilling to make an application. We therefore want to discuss at some stage—I will recommend to the Committee that we explore these issues further—whether the methodologies that local authorities have at the moment are adequate.

In our view, it is legally possible for local authorities to abandon the system of application and simply ask someone whether they want a DHP. If the principle is that everyone who applies for one gets one, presumably the sort of 95-page forms that some local authorities are using are not needed. If the payment is going to be automatic, the equivalent of the Chinese general baptising his troops with a hose could be adopted and anyone who was simply asked whether they wanted DHP could be given one, but that approach has yet to be tested.

We also want to clarify what the position will be regarding last year. If the bedroom tax is evil, malignant, cruel and unfair this year, and the Scottish Government are prepared to make money available to mitigate its effects this year, what are they prepared to do about last year’s effects? Something that is wrong this year was surely equally wrong last year. There are people with arrears of the bedroom tax as a result of non-payment last year. The Committee’s view is clear: those debts should be written off. We believe that the Scottish Government should take steps to write off the arrears of bedroom tax accumulated by Scots last year. They have the power and they have the money; what they possibly lack is the will, but we will no doubt hear about that later on.

Constitutional Law

Debate between Fiona O'Donnell and Ian Davidson

Tuesday 15th January 2013 Commons Chamber

[Mr Davidson]

Yes. The amount that the Electoral Commission is proposing is similar to the cash amount that was allowed in the 1997 referendum, but as a result of inflation, its real value has halved. Our belief is that, for a regulated period of 16 weeks, the spending limits should be bigger. As I understand it, £750,000 works out at 1p per voter per week of the campaign period, and I genuinely believe that that is insufficient. The Scottish Government are suggesting that the figure should be even lower.

This is a good example of how those of us who are active in Scottish politics are free to disagree with the Electoral Commission’s initial proposals. We can campaign for it to change its mind, but, at the end of the day, everyone involved should say that they would commit themselves to accepting the commission’s decision if it does not change its mind. The Scottish Government are unwilling to do that, however. They have reserved unto themselves the right to impose their view—which is presumably what suits them best—on top of, or instead of, the Electoral Commission’s view.

[Fiona O’Donnell]

The order also transfers to the Scottish Government the power to decide who can make donations to the campaign. What is the view of my hon. Friend’s Committee on foreign donations being made to the campaign?

[Mr Davidson]

I will come to that in a second.

The Better Together campaign was unequivocal in saying that it would accept the ruling of the Electoral Commission. The yes campaign would not do so, however. It said that it would commit itself on whether to support the Electoral Commission only when it had heard what the commission’s judgment was. That also implies that it might not accept the judgment. Presumably, that position is based on self-interest.

My hon. Friend mentioned donations a moment ago. The clear issue is whether foreign donations should be accepted. Again, there is a difference between the campaigns and again I think that is based on perceived self-interest. The Better Together campaign has said that this is about the United Kingdom and that only people and organisations in the United Kingdom should be able to play a meaningful role by providing financial support. The yes campaign has said that it is prepared, in principle, to accept unlimited amounts of money in bundles of £500 or less from foreign sources. It has set up a front organisation in the United States that is designed to generate organisational support for the yes campaign and for separation. Some of those involved in that have made it perfectly clear, on websites and the like, that part of their function is to raise money for the SNP and its separation campaign.

Some people might have doubts about how much impact small amounts of up to £500 could have. When we took evidence from the True Wales campaign, which took the “no” side in the recent Welsh referendum, it said that virtually all its money had come from small donations. It was able to run an entire campaign almost entirely on small donations. Many of us will remember the publicity that was given to the Obama campaign and others in the United States—most notably, that of Howard Dean—which received a substantial amount of their money from a multiplicity of small donations. So even though the £500 limit might not appear to be a great deal, those donations could be significant when aggregated.

The major question of principle that needs to be addressed is whether the referendum in Scotland can be bought and sold with foreign gold—[Interruption.] I know that some people have heard that term before, but it is true none the less. Should the referendum be bought and sold with foreign gold? The SNP seems to have no scruples about that. However, those of us who are committed to the United Kingdom and to fair elections say that we should abide by the principle of PPERA and the guidance from the Electoral Commission. It is clear from the guidance and the spirit of PPERA, although perhaps not from the letter of it, that foreign money should not be involved in such referendums. Even at this late date, I hope that the Scottish Parliament and the SNP show confidence in their ability to raise money from Scots in Scotland and desist from taking foreign money.

Banking in Scotland

Debate between Fiona O'Donnell and Ian Davidson

Thursday 14th October 2010 Westminster Hall

[Mr Davidson]

I express my gratitude to all those who have contributed, not only to the debate, but to the report. That includes our witnesses and those who provided written evidence. Some of the contributions have been excellent. I hope that the Government Whips have taken note of the expressions of undying loyalty that were made by some of the newer Members. Nevertheless, I am sure that they will develop out of that in due course. I also thank the staff of the Scottish Affairs Committee for all their work in preparing for the debate and the report.

When I was much younger, there used to be various cartoon characters who could rub a brass lamp and say, “Abracadabra”, so that a genie appeared. Earlier, I mentioned the arc of prosperity and a nationalist appeared. In some mysterious way, he disappeared thereafter. I have mentioned the arc of prosperity again, so I am waiting to see whether he will pop in again.

The wider matters to which the Minister referred—I understand entirely why he did so—are more the responsibility of the Treasury Committee than of our Committee. We have tended—rightly, I believe—to restrict ourselves to those aspects that impact on Scotland. However, I was heartened by what he said about encouraging the mutual sector. Several of my colleagues, particularly my hon. Friend the Member for Kilmarnock and Loudoun (Cathy Jamieson), will be looking at ways in which we can have a discussion about the mutual sector in Scotland. I hope that in due course we will have some dialogue with the Minister on that. As we have done elsewhere, we hope to have some informal sessions with witnesses before moving to formal hearings and visits, which will be helpful.

We are likely to support some of the changes that the Minister outlined that seem to be moving in the right direction, but there are areas on which we would like ongoing dialogue and input from his staff when we prepare documents. It is not immediately clear, for example, how overdraft charges will be handled. It seems to me that there is a need for ongoing discussion on how those proposals will be implemented and what their impact will be.

I welcome the fact, which the report made clear, that Scotland remains a good place to do financial services business. The question now is how the Committee adds value to that whole exercise. In our discussions, we have identified several areas where the system seems to be breaking down. [Interruption.] I thought that that was a nationalist returning, having mentioned the arc of prosperity, but it is not.

The construction, road haulage and video games industries—the three industrial groups that we met—all said that the banks did not understand them properly. We ought to turn our attention to various steps that we can take to improve those relationships.

[Fiona O'Donnell (East Lothian) (Lab)]

Perhaps I could provide more recent information than the Minister did. The Bank of England’s Agents’ summary of business conditions in September reported:

“Smaller businesses, and those operating in the construction and property sectors, continued to report difficulty in accessing affordable finance. For these businesses, fees and spreads remained significantly higher than pre-crisis levels”.

Does my hon. Friend agree that there is further work to be done in those areas?

[Mr Davidson]

That is a helpful contribution—there clearly is further work to be done in those areas—which runs along the lines of not only our report but, to be fair, the Minister’s contribution. The Government recognise that more work needs to be done.

We need to continue to focus on the two elements of lending—mortgage lending and lending to businesses—and also on how the banking industry deals with its customers. The Minister has advanced general principles and rules, but the question is whether they will be implemented in practice, and we will want to follow through on that.

The interventions by the Government in several areas are very much to be welcomed, and I have no hesitation in welcoming something that is said by the Government. New Members will no doubt recognise that no thunderbolt has arrived and, therefore, that it is entirely possible for people from one party to recognise that something done by a different party is good. I hope that the new Members who are here will undertake to pass that on to colleagues who have left the Chamber.

In conclusion, this has been an excellent exercise. We have heard witnesses, drawn up the report, held this debate today and come to a general consensus on the importance of the banking industry to Scotland and the need to go forward working together to improve the economy of Scotland. I hope that we continue to work together for the next couple of years or so.

Question put and agreed to.