A report from Westminster’s Work and Pensions Committee is calling on the UK Government to ‘act quickly and decisively’ to protect pension savers, more than five years on from the introduction of the pension freedoms, which have put people at risk of a much wider range of scams and fraud.
The report warns that commonly cited figures of the scale of pension scamming are likely to substantially underestimate the problem.
The situation is likely to be getting worse rather than better, with the covid-19 pandemic offering scammers new opportunities.
The Committee heard throughout its inquiry that pension scammers have moved online, with regulators powerless to hold search engines and social media to account for hosting scam adverts as they do traditional media.
Tech firms such as Google are accepting payment to advertise scams and then further payments from regulators to publish warnings – a practice the Committee describes as ‘immoral’.
The Government must now rethink its decision to exclude financial harms from the forthcoming Online Safety Bill and use it to legislate against online investment fraud.
In the same way as traditional media, online publishers should be required to ensure financial promotions are authorised.
The report also calls for the multi-agency task force set up to tackle pension fraud to be strengthened.
The existing Project Bloom should be renamed the Pension Scams Centre and given dedicated funding and staffing to manage an intelligence database and law enforcement.
Currently the fragmentation of reporting, investigation and enforcement has made tackling pension scams more difficult.
The Financial Conduct Authority must also ‘raise its game’ and publish information about its enforcement action, with the Committee hearing numerous criticisms that it is not effective in stopping scams, punishing scammers or retrieving scam proceeds.
Rt Hon Stephen Timms MP, Chair of the Work and Pensions Committee, said: “The pension freedoms brought more choice for savers on how to use their pension pots, but the reforms have also opened up a whole new world of opportunity for scammers and fraudsters.
“At the same time, a woeful lack of online regulation has helped them reach more people than ever before.
“The result is an online free for all, where scammers can advertise with impunity while the tech giants line their pockets from the proceeds of their crimes.
“With global firms such as Google being increasingly influential as providers of information, consumers looking for financial advice are being let down by not being afforded the same level of protection they receive from adverts which appear on television or in a newspaper.
“There must now be parity across the media to ensure all adverts are regulated and the Government should use its Online Safety Bill to act.
“Tighter online regulation must be just the first step in improving protections for savers. Stronger enforcement with a new Pensions Scams Centre, a more effective FCA and extra support for victims are also desperately needed.
“Pension scams can cause huge financial harm and psychological distress and any one of us saving for the future is at risk of falling prey to a scammer.
“The Government and the regulators have been left playing catch-up following the pension freedom reforms and must now act quickly to protect savers and their hard-earned money.”
Rocio Concha, Director of Policy and Advocacy at Which?, said:“This report is a damning indictment of the approach of tech giants like Google to tackling scams.
“These companies have some of the most sophisticated technology in the world, yet they are failing to utilise it to prevent scammers from abusing the platforms by using fake and fraudulent content on an industrial scale to target victims and devastate lives.
“The case for including scams in the Online Safety Bill is overwhelming. Online platforms must be given a legal responsibility to identify, prevent and remove fake and fraudulent content from appearing on their sites and give their users the protection they deserve. The government must not miss the opportunity to act now.”
“Unimaginable” cost of Test & Trace failed to deliver central promise of averting another lockdown
In May last year NHS Test and Trace (NHST&T) was set up with a budget of £22 billion. Since then it has been allocated £15 billion more: totalling £37 BILLION over two years.
The Department of Health & Social Care (DHSC) justified the scale of investment, in part, on the basis that an effective test and trace system would help avoid a second national lockdown – but since its creation we have had two more lockdowns.
In its report Westminster’s Public Accounts Committee says that while NHST&T clearly had to be set up and staffed at incredible speed, it must now “wean itself off its persistent reliance on consultants”; there is still no clear evidence of NHST&T’s overall effectiveness; and it’s not clear whether its contribution to reducing infection levels – as opposed to the other measures introduced to tackle the pandemic – can justify its “unimaginable” costs.
The scale of NHST&T’s activities is striking, particularly given its short life. Between May 2020 and January 2021, daily UK testing capacity for COVID-19 increased from around 100,000 to over 800,000 tests. NHST&T had also contacted over 2.5 million people testing positive for COVID-19 in England and advised more than 4.5 million of their associated contacts to self-isolate.
But the percentage of total laboratory testing capacity used in November and December 2020 remained under 65%, and even with the spare capacity, NHST&T has never met the target to turn around all tests in face-to-face settings in 24 hours. Low utilisation rates – well below the target of 50% – persisted into October last year.
A major focus for NHST&T in early 2021 was the mass roll-out of rapid testing in different community settings, but there have been particular setbacks for the roll-out to schools, after NHST&T had significantly underestimated the increase in demand for testing when schools and universities returned last September.
Meg Hillier MP, Chair of the Public Accounts Committee, said: “The £23 billion test and trace has cost us so far is about the annual budget of the Department for Transport.Test & Trace still continues to pay for consultants at £1000 a day.
“Yet despite the unimaginable resources thrown at this project Test and Trace cannot point to a measurable difference to the progress of the pandemic, and the promise on which this huge expense was justified – avoiding another lockdown – has been broken, TWICE.
“DHSC and NHST&T must rapidly turn around these fortunes and begin to demonstrate the worth and value of this staggering investment of taxpayers’ money. Not only is it essential it delivers an effective system as pupils return to school and more people return to their workplace, but for the £billions spent we need to see a top class legacy system.
“British taxpayers cannot be treated by Government like an ATM machine. We need to see a clear plan and costs better controlled.”
Test and Trace chief Baroness Dido Harding has defended the £37 billion service and said the committee report is ‘old news’.
Scotland’s ability to legislate in areas such as food, health and environmental standards is being undermined in a “systematic attack” on devolution, according to Constitution Secretary Michael Russell.
A report published yesterday by the Scottish Government shows the extent to which the Scottish Parliament’s devolved powers are being eroded by the UK Government following the 2016 Brexit vote.
AFTER BREXIT: The UK Internal Market Act & Devolution sets out how:
the Scottish Parliament’s views on Brexit have been ignored by the UK Government
terms of reference designed to agree Brexit negotiating objectives among the UK’s four governments were disregarded
the UK Government and Parliament now regularly legislate in devolved policy areas and adjust the powers of the Scottish Parliament without the consent of the Scottish Parliament
UK Government Ministers have taken powers to spend in devolved areas
Most notably, the recently passed UK Internal Market Act allows the UK Government to in effect impose standards in a large number of areas that are devolved.
It means the Scottish Parliament could have its hands tied if it wants to stop the sale of hormone injected beef, regulate food content to prevent obesity or ban single-use plastics to protect the environment, the report sets out
The report also details how the Act is being used by the UK Government to divert funding that would otherwise come to the Scottish Parliament to decide how it should be spent.
One example is the UK Government administered Levelling Up Fund for infrastructure projects, which is bypassing any Scottish Parliament involvement in around £400 million of expected consequential funding.
Additionally UK Government Ministers now have the power to extend to Scotland’s NHS the controversial market access principles that the Act introduces.
Mr Russell added: “Devolution has helped to move Scotland forward, building on the fundamental principle that the Parliament and Government elected by the Scottish people should make decisions for Scotland.
“But since the Brexit vote there has been a systematic attack on the Scottish Parliament’s powers, fundamentally undermining devolution.
“Bit by bit, the settlement that secured 74% support in the 1997 devolution referendum, is being unpicked under the cover of Brexit and without the consent of Scottish people.
“This is not a big bang abolition – it is instead the slow demise of devolution in the hope that no-one will notice.
“The UK Government has signalled its desire is to ‘undo’ devolution and it is now repeatedly using its majority at Westminster to impose laws in devolved policy areas.
“Most alarming of all, the Internal Market Act has substantially weakened the Scottish Parliament’s powers.
“The Act is going to have a very real impact on everyone in Scotland. The Scottish Parliament’s ability to ensure high levels of food standards and stop the sale of single-use plastics could be rendered obsolete – undoing devolution and undermining Scotland’s ability to directly shape its future.
“UK Government Ministers also now have the power, at a stroke of their pen, to subject Scotland’s NHS to the market access principles the Act introduces.
“That is why we will continue to resist the damaging effects of this Act in every way possible, and why we are bringing forward an independence referendum Bill – to keep Scottish powers in the hands of the Scottish people.”
Matthew Thornton, a post-doctoral researcher at the University of St Andrews, is presenting his research to politicians, Parliamentarians and a panel of expert judges as part of STEM for BRITAIN today (Thursday 4th March).
STEM for BRITAIN is an annual poster competition, usually held in the House of Commons, involving some 200 or so early career researchers. The Parliamentary and Scientific Committee runs the event in collaboration with the Institute of Physics, the Royal Society of Chemistry, the Royal Academy of Engineering, Royal Society of Biology, Physiological Society, Council for the Mathematical Sciences, and the Nutrition Society.
The aim of the competition is to give members of both Houses of Parliament an insight into the outstanding research work being undertaken in UK universities by early-career researchers.
Dr Thornton’s poster will be judged against dozens of other scientists’ research, in the only national competition of its kind.
His presentation will explain how he and his colleagues are expanding our knowledge of quantum systems, which will enable the design of new and remarkable sources of quantum light.
The most important inventions of the 20th century, including the transistor, the laser and the atomic clock, were built on a deep understanding of the quantum nature of materials and atoms. For example, quantum physics is required to explain how electrons move within semiconductors, and so helped to predict the underlying behaviour of transistors.
Matthew’s work will improve the stability of atomic clocks such as those used in GPS satellites, enable development of microscopes which can take higher resolution pictures of small objects with less intense light than normal, and help enable a secure, unhackable quantum internet.
He said: “This prestigious event is a great opportunity to display some key outcomes from my time in St Andrews, and to practice communicating the underlying principles.
“The foundational idea of my recent research is that effects which ordinarily destroy a quantum state can, in some contexts, actually create quantum light from a classical input. I find this both counterintuitive and beautiful.
“In the future I plan to move further into the quantum technologies arena in order to create devices which help people.”
Stephen Metcalfe MP, Chairman of the Parliamentary and Scientific Committee, said: “This annual competition is an important date in the parliamentary calendar because it gives MPs an opportunity to see the work of a wide range of the country’s best young researchers.
“These early career engineers, mathematicians and scientists are the architects of our future and STEM for BRITAIN is politicians’ best opportunity to meet them, virtually on this occasion, and understand their work.”
Matthew’s research has been entered into the physics session of the competition, which will end in a gold, silver and bronze prize-giving ceremony.
Judged by leading academics, the gold medalist receives £1000, while silver and bronze receive £750 and £500 respectively.
Due to COVID-19 the 2021 event is being held online, but will nevertheless still be supported by Parliamentarians, including those Members of Parliament whose constituents have been shortlisted to present their posters.
The winners will be announced virtually on Monday 8th March.
Westminster’s Women and Equalities Committee has published its report on coronavirus and the gendered economic impact. The report has found that the economic impact of coronavirus has affected men and women differently. This is because of existing gendered economic inequalities, the over-representation of women in certain types of work and the actions the Government has taken.
Conduct an Equality Impact Assessment of the Job Retention Scheme and the Self Employed Income Support Scheme. This should draw on existing inequalities and would better protect those already at a disadvantage in the labour market, including women. It could also inform more effective responses to future crises.
Assess the equality impact of the Industrial Strategy and the New Deal, and analyse who has benefited from the industrial strategy. Priorities for recovery are heavily gendered in nature, with investment plans skewing towards male dominated sectors.
Conduct an economic growth assessment of the care-led recovery proposals made by the Women’s Budget Group. (Treasury)
Maintain increases in support, including the £20 increase to the Universal Credit standard allowance. (Department for Work and Pensions)
Review the adequacy of and eligibility for Statutory Sick Pay. Women are over represented among those who are not eligible.
Legislate to extend redundancy protection to pregnant women and new mothers.
Review childcare provision to provide support for working parents and those who are job seeking or retraining.
Reinstate gender pay gap reporting and include parental leave policies, ethnicity and disability.
Provide better data to improve reporting and analysis on how gender, ethnicity, disability, age and socio-economic status interact to compound disadvantage.
Ensure that the Government Equalities Office and Minister for Women are more ambitious and proactive.
Committee Chair Caroline Nokes said: “As the pandemic struck, the Government had to act quickly to protect jobs and adapt welfare benefits. “These have provided a vital safety net for millions of people. But it overlooked the labour market and caring inequalities faced by women.
“These are not a mystery, they are specific and well understood. And yet the Government has repeatedly failed to consider them.
“This passive approach to gender equality is not enough. And for many women it has made existing equality problems worse: in the support to self-employed people, to pregnant women and new mothers, to the professional childcare sector, and for women claiming benefits. And it risks doing the same in its plans for economic recovery.
“We heard evidence from a wide range of organisations, including Maternity Action, the National Hair and Beauty Federation, the TUC, the Professional Association of Childcare and Early Years, the single parents campaign group Gingerbread, the Young Women’s Trust and the Women’s Budget Group. And written evidence from many more.
“The message from our evidence is clear: Government policies have repeatedly skewed towards men—and it keeps happening.
“We need to see more than good intentions and hoping for the best. The Government must start actively analysing and assessing the equality impact of every policy, or it risks turning the clock back.
“Our report sets out a package of twenty recommendations for change and a timescale. Taken together, these will go a long way towards tackling the problems and creating the more equal future that so many women—and men—want to see.
“The Government should seize this opportunity.”
Responding to today’s report by the Woman and Equalities Committee, which sets out how women have been disproportionately impacted by the pandemic, TUC General Secretary Frances O’Grady (above) said: “Women have been put in an impossible situation during the pandemic – often expected to work and look after children at the same time.
“Too many working mums are having to cut their hours or being forced to leave their jobs because they cannot manage.
“If ministers don’t act, women will be pushed out of the labour market. And that means women’s and children’s poverty will soar.
“Ministers must give all parents a temporary right to be furloughed now.
“And they must fix the UK’s lamentable support for working parents. That means giving all parents at least ten days’ paid parental leave each year, making real flexible working available to all, and funding childcare properly.
“Unless ministers strengthen rights and support for working parents, women’s equality risks being set back decades.”
On the committee’s recommendation to carry out and publish an equality impact assessment on how government policies have affected women, Frances O’Grady added: “The government must urgently carry out and publish equality impact assessments of all its policies during this pandemic.
“This crisis, and the government’s response to it, is deepening inequalities for women at work.”
A TUC survey of 52,000 working mums published earlier this month revealed that 9 in 10 had experienced higher levels of anxiety and stress levels during this latest lockdown.
Nearly three-quarters (71%) of those who had applied for furlough following the latest school closures have had their requests turned down.
The TUC says this situation results from the UK’s failure to help families balance paid work and childcare.
It is calling on the government to introduce:
A new temporary right to furlough for groups who cannot work because of coronavirus restrictions – both parents and those who are clinically extremely vulnerable and required to shield.
Ten days’ paid parental leave, from day one in a job, for all parents. Currently parents have no statutory right to paid leave to look after their children.
A right to flexible work for all parents. Flexible working can take lots of different forms, including having predictable or set hours, working from home, job-sharing, compressed hours and term-time working.
Give additional financial support to the childcare sector so that childcare providers can continue to offer support to working parents.
An increase in sick pay to at least the level of the real Living Wage, for everyone in work, to ensure workers can afford to self-isolate if they need to.
Newly self-employed parents to have access the self-employment income support scheme (SEISS).
The Chancellor must maintain for another year ‘at the very least’ the £20 per week increase in Universal Credit (UC) and Working Tax Credit introduced to support families during the coronavirus pandemic, MPs say today.
Work and Pensions Committee calls for year-long extension of increase ‘at the very least’
Removal in April while pandemic still being felt would plunge hundreds of thousands of families into poverty
Any plans to replace rise with one-off payments must be abandoned amid concerns over fraud and impact on vulnerable
The report from the Work and Pensions Committee notes that since March the number of people claiming UC has doubled to around six million, while job vacancies remain far below pre-pandemic levels.
It warns that removing the payment as planned in April, while the effects of the pandemic are still being felt, would ‘plunge hundreds of thousands of households, including children into poverty’ while dragging those already in poverty ‘down into destitution’.
While the Committee recognises that continuing with the increase would come at a ‘substantial cost’, the Committee argues that this should be seen in the context of the Treasury’s own £280bn figure for total spending on coronavirus support measures this year. The Joseph Rowntree Foundation has estimated that keeping the £20 rise would cost around £6.4bn in the next financial year.
The report also calls on the Government to abandon any plans for one-off payments to replace the weekly rise. The Secretary of State confirmed to the Committee last week that the DWP had been asked to investigate such an option but said it was not ‘one of the Department’s preferred approaches to providing that financial support’.
Rt Hon Stephen Timms MP, Chair of the Work and Pensions Committee, said: “Removing the extra payment in March would represent a failure by Government – failure to recognise the reality of people struggling.
“Without regular support, hundreds of thousands of families will be swept into poverty or even destitution. Government must end the uncertainty and commit to extending this lifeline.
“The Chancellor faces difficult decisions about the public finances. He may find it hard at present to make the increase permanent. But the pandemic’s impact on the economy and livelihoods will, sadly, be with us for some time. An extension for a year should be the bare minimum.
“We must also hope that Rishi Sunak will listen to the groundswell of arguments against one-off payments as an alternative, including from his cabinet colleague at our Committee last week. There is broad agreement that a steady income is necessary to support people.”
Report findings and recommendations
Impact of removing the £20 per week increase (Chapter 2)
Analysis by the Joseph Rowntree Foundation (JRF) has concluded that withdrawing the temporary increase ‘will risk sweeping 700,000 more people, including 300,000 more children, into poverty’
One-off payments (Chapter 3)
The Committee shares the Secretary of State’s view that a steady income is the best way to support people and is concerned that one-off payments could increase the risk of fraud and about the risks to vulnerable people.
The proposed way forward (Chapter 4)
The Committee has previously called on the Government to make the £20 per week increase permanent with annual inflation-based increases. The report acknowledges however that ‘in the short term, the Chancellor faces some very difficult decisions about the public finances amid a great deal of uncertainty about the future.’
If the Chancellor cannot yet commit to making the increase permanent, he should at the very least extend it for a further 12 months. The Government should then announce its future plans for the rate of Universal Credit no later than the Autumn Statement 2021, to give claimants enough time to plan and budget.
Alister Jack calls on all Scottish MPs to back UK-EU trade deal
Secretary of State for Scotland, Alister Jack, has called on all Scottish MPs to support the UK’s historic Free Trade Agreement with the EU when Parliament votes on it this week.
He said: “We have secured a historic Free Trade deal with the EU that delivers for Scotland and the whole of the UK. This is a deep and wide-ranging deal, covering trade, security, travel, transport, energy, health and social security.
“As Parliament prepares to vote on the deal this week, I urge all Scottish MPs to give it their wholehearted support.
“Outside the EU, the UK can sign our own trade deals around the world, bringing new opportunities for exporters and some of Scotland’s most iconic products.
“For our farmers, the deal avoids tariffs on their world-beating Scotch lamb and beef.
“For our fishermen and coastal communities, the deal delivers what we promised.
“We are regaining control of our waters, we are restoring our status as an independent coastal state and, even during the five year adjustment period, there will be a big overall increase in our share of the catch in our waters.
“As we leave the Common Fisheries Policy, our fishermen will also enjoy near-exclusive access to inshore waters up to the historic 12 mile limit.
“The deal is good news for Scotland and I believe it is now time to move on from the Brexit debate and join forces in embracing our exciting future. Whether Leaver or Remainer in 2016 we need to come to together to make the most of our new opportunities.
“The people of Scotland will expect their MPs to do the right thing on Wednesday and vote for the deal. They will not easily forgive those who reject this Free Trade Agreement or throw their weight behind a no deal Brexit.”
As the Scottish Secretary is well aware, SNP MPs will vote against the deal this week. The Tories have a big majority at Westminster, however: the deal will go through – Ed.
Chancellor Rishi Sunak has unveiled a Spending Review ‘for the whole of the UK’ as he laid out plans to help every corner of Scotland to build back better and fight coronavirus.
The Chancellor announced that Scotland will receive £2.4bn of new funding from the UK Government in 2021/22 through the Barnett formula for devolved areas such as health and social care, education and housing.
This is double the £1.2bn new funding provided for 2020/21 at the 2019 Spending Round.
It is also in addition to the £8.2bn guaranteed to the Scottish Government in 2020/21, above the funding allocated at the Spring Budget earlier this year, in the face of the coronavirus and its impact on the economy.
Scotland will also receive a significant boost from more than £100bn of capital investment across the UK in 2021/22, improving connectivity and productivity.
Chancellor of the Exchequer Rishi Sunak said: This Spending Review will help people in every corner of Scotland. It will provide billions of pounds to fight coronavirus, deliver the peoples’ priorities and drive the UK’s recovery.
“The Treasury is, has been, and will always be the Treasury for the whole of the United Kingdom. And this is a Spending Review for the whole of the United Kingdom”.
Speaking after the Chancellor delivered the UK Government’s Spending Review, Scottish Secretary Alister Jack said: “The UK Government’s Spending Review delivers for all parts of the UK at this challenging time. Never before has the strength of the Union, and the role of the UK Treasury, been more important.
“The UK Government pledged to bring funding decisions back from Brussels, and our plans for a new UK Shared Prosperity Fund will deliver on this promise. Communities across the UK have been hit hard by Covid, so I welcome the Chancellor’s announcement today of £220 million in additional funding in the coming financial year. This will be delivered by the UK Government across the UK, working in partnership with local authorities and communities.
“We made a commitment to maintain funding for our vital rural and coastal communities and are fulfilling that through £570 million to support farmers and our rural economy, and £14 million to support Scottish fisheries. Additional funding for broadband will help boost the economies of some of Scotland’s most remote communities.
“Accelerating the Tay, Moray, Borderlands and Islands growth deals is great news. It will help support jobs and drive economic recovery across swathes of Scotland.
“The new UK Infrastructure Bank will help support our post-covid economic recovery. A billion pounds for our net zero climate change target will ensure the UK remains a world leader in climate action, ahead of us bringing the world to Glasgow for COP26 next year. And the new counter-terrorism operations centre will help keep people in all parts of the UK safe from global threats.
“The Scottish Government will receive an additional £2.4 billion in Barnett Consequentials. This is over and above the £8.2 billion they have already been allocated since March this year. This additional funding will help support jobs and public services in Scotland while we fight the pandemic.
“The UK Government will continue to do all it can to support people in all parts of the United Kingdom.”
The Chancellor used the Spending Review to reaffirm his commitment to growth across Scotland – announcing an £11m acceleration of City and Growth Deal funding over each year remaining in four Scotland Deals.
Tay Cities, Borderlands (Scotland), Moray and the Scottish Islands will be funded over 10 years, rather than 15 years, releasing funding more quickly to enable projects to come online sooner.
By bringing forward the investment, Tay Cities will receive an additional £6.3m each year, Borderlands (Scotland) an extra £2.1m, Moray an extra £1.1m and the Scottish Islands an additional £1.7m.
Projects announced today include the Gigabit and Shared Rural Network programmes for better mobile coverage.
The Gigabit programme subsidises the rollout of gigabit-capable broadband in the most difficult to reach 20% of the UK, while the Shared Rural Network programme is a partnership with industry that will deliver high-quality 4G mobile coverage across 95% of the UK by 2025.
Investment in new green industries will support green growth clusters, offshore wind capacity, port infrastructure, Carbon Capture and Storage and low carbon hydrogen.
The global underwater hub, funded by £1.3m announced at today’s Spending Review, will eventually comprise of physical presences in the existing underwater engineering cluster in North East Scotland.
Separately, institutions and companies in Scotland will also be able to access a £14.6bn UK-wide research and development fund.
The Government today confirmed funding for the next stage of the Plan for Jobs – including £1.6bn for the landmark Kickstart scheme in 2021/22, which will see the creation of up to 250,000 government-subsidised jobs for young people.
The apprenticeship hiring incentive that launched in August will also be extended to 31 March 2021, offering employers up to £2,000 for every new apprentice they hire.
Investment from EU Structural Funds is increasing in each of England, Scotland, Wales and Northern Ireland in 21-22 compared to this financial year.
The Spending Review provides additional UK funding to help local areas prepare over 2021-22 for the introduction of the UK Shared Prosperity Fund.
Further details will be published in the New Year.
The UK Government has delivered on its manifesto commitment to maintain funding by providing £570m to support farmers, land managers and the rural economy, and £14m to support fisheries in Scotland.
The Government committed to boost local economies by establishing at least one Freeport in each of Scotland, Wales and Northern Ireland, with locations to be jointly decided by the UK Government and the devolved administrations.
And on the cultural front the Government announced £29.1m for Festival UK with projects expected across Scotland, Wales and Northern Ireland.
The UK Government’s recent announcement of record spending on defence will also directly benefit Scotland as it finances the UK’s order of 8 Type 26 and 5 Type 31 frigates, which are currently being constructed on the Clyde, creating thousands of jobs.
At this Spending Review Scotland, Wales and Northern Ireland will benefit from UK-wide coronavirus support in health, including £15bn for Test and Trace with Barnett funding provided for England-only elements of the programme.
RESPONSES
Responding to Rishi Sunak’s Spending Review, Roz Foyer, STUC General Secretary, said: “This Spending Review is a kick in the teeth to those very same workers Rishi Sunak was clapping months ago.
“Despite thousands of workers in the private sector surviving on furlough pay at 80%, Rishi Sunak choose to attack public sector pay. This is a levelling down agenda, not a levelling up one.
“Very few people will be fooled by his attempts to pit care workers against shop workers or low paid council workers against low paid cleaners. All need a decent pay increase, and they all need it now. If the Chancellor wants to equalise public sector and private sector pay, he should have ensured that workers cannot be furloughed on less than the minimum wage and increased the minimum wage to at least £10 per hour. 18 pence on the minimum wage is pennies, when we need pounds.
“£250 for lower paid public sector workers is the exact same policy introduced by George Osborne in 2010 and still amounts to a pay cut for many.”
Ms Foyer also criticised other funding announcements: “This was the moment to announce a massive fiscal stimulus to drive a green recovery and the Chancellor totally missed it.
“While we await details for the new National Infrastructure Bank and funding for the devolved administrations, the figures announced come nowhere near the amount needed.
“Moreover, instead of devolving funding and power to local communities, the Levelling Up Fund centralises control in Whitehall and enables the Treasury to pick and choose which pet projects it will support.
“Cutting international development funding to 0.5% of GDP shows that for all its talk of global Britain, this Government doesn’t really care for world’s most vulnerable.
“The Chancellor’s statement also did nothing to address the gaping holes in our social safety net. With unemployment likely to rise to 7.6% next year, the Government must commit, as a minimum, to continuing the £20 uplift in Universal Credit so people can weather that storm while they look for work.
“Workers in Scotland know that key workers deserve a pay rise. They will see through Rishi Sunak’s con trick.”
Jonathan Carr-West, Chief Executive of Local Government Information Unit Scotland,said: “Scotland now knows the amount of the block grant that it will receive. Those parts of the Spending Review that apply to Scotland show that the UK Government is not learning the lessons of the pandemic and that they remain wedded to an over-centralised approach.
“Many will be struck by what was absent from Mr Sunak’s statement. For Scottish local government, it’s the big picture that matters as they wait to hear what Scottish Government allocations will be as each council decides on their budget priorities. How will the Shared Prosperity Fund be allocated? How will the impact of Brexit on local economies be mitigated? On these issues we have learnt nothing.
“When it comes to infrastructure, the centralising tendency of the British state was on full display today. The £4 bn levelling up fund is to be administered by the Treasury, MHCLG and Department for Transport. Local areas will bid against each other and Whitehall will pick the winners. Proposals must have the support of their MP, but local government once again doesn’t seem to be part of the picture.”
Unite assistant general secretary Gail Cartmail said: “The chancellor Rishi Sunak has delivered a body blow to the public sector workers he has targeted to bear the brunt of the costs of the pandemic with a pay freeze – his so-called ‘pause’.
“It is doubly disappointing that the chancellor has adopted ‘divide and rule’ tactics over public sector pay with an award for NHS staff, but a freeze on pay for millions of others, such as teaching assistants, who are already low paid.
“The sop of £250 to the two million public sector workers earning under £24,000-a-year is insulting and compares badly with the inflated sums that the government has wasted on PPE contracts for those with links to the Tory establishment.
“This mainly female workforce already juggle work commitments, childcare responsibilities and care for elderly relatives yet kept vital services running throughout the pandemic, at times due to government failures in PPE provision, risking their own health in the service of others.
“It is also a blow to local economies and high streets where public sector workers spend a large proportion of their wages.
“The prime minister’s ‘levelling up’ agenda is in tatters as a result of the chancellor’s divisive pay announcement which does nothing to restore the ‘lost’ pay in real terms from a decade of austerity.”
Andrew Carter, Chief Executive of Centre for Cities said:“The Chancellor’s ambition to level up the country is welcome, as is the clarity on infrastructure in the national strategy.
“But for levelling up to succeed, it needs to be about more than infrastructure and one-off funds. We need to see sustained, multi-year investment and decisions like those announced by the Chancellor today – on skills, transport and housing – devolved and joined up at a local level.”
The House of Commons Environment, Food and Rural Affairs Select Committee has urged the UK Government to provide £5 million in extra funding to support those struggling to afford sufficient food this winter.
This echoes a call made earlier this year by the Committee in its report on Covid-19 and Food Supply. In a letter from the Committee’s Chair to the Secretary of State, the cross-party group of MPs show support for a FareShare scheme which redistributes surplus food from the supply chain to food charities.
FareShare estimates that the scheme would provide 47 million meals per year to the most vulnerable in society.
Chair of the EFRA Select Committee, Neil Parish MP, said: “We face a tough winter with many businesses closing and incomes reducing or disappearing, pushing people into food poverty.
“The Government must make sure that the most vulnerable members of society have access to enough healthy food. To waste food in the supply chain at such a time would be abhorrent, and this grant would provide a huge boost to the invaluable work of charities redistributing surplus food to those who most need it.”
A starter payment should be made to people claiming Universal Credit (UC) for the first time to ensure that everyone has enough money for basics such as food and heating during the wait for their initial monthly payment, the Work and Pensions Committee says.
The Committee’s report on Universal Credit: the wait for a first payment finds that the current wait of at least five weeks causes difficulties for some households. While the existing system of Advance pay-ments for those in need can provide a valuable financial lifeline, the Committee is concerned that some people are unable to afford the required repayments.
The Committee warns that this leaves people with a difficult choice: five weeks with no income, or the risk of debt and hardship later.
The report concludes that the introduction of a new payment – equivalent to three weeks of the standard allowance – would be a simple way of ensuring that new claimants had the money they needed for basic living essentials. For people moving from existing benefits, DWP should make the move seamless wherever possible—and pay a starter payment in other cases.
Advances should still be available for people who need further support to get by, but they should be renamed ‘new claim loans’ to make clear that they will need to be repaid. The DWP should also recognise that a request for a loan is a clear indication that someone is struggling and offer support as early as possible.
Reflecting evidence from Sir Iain Duncan Smith, among others, the Committee has also called for changes to the way that historic tax credit is clawed back from people when they move to Universal Credit—and for DWP’s debt collection to follow best practice in the private sector.
In addition, the Committee calls on the Government to make permanent the £20 per week increase in the standard UC allowance announced in response to the coronavirus pandemic.
Rt Hon Stephen Timms, Chair of the Work and Pensions Committee, said: “There is a growing body of evidence that moving to Universal Credit leaves many reliant on food banks, falling seriously behind with their rent, and even experiencing increased levels of psychological distress.
“The Government’s response is that there is no proof that Universal Credit—and in particular the wait for a first payment—is the direct cause of those difficulties. So DWP needs to commission research, and quickly, to find out what lies behind these deeply worrying findings.
“Our social security system should not be leaving people without the money they need for food and heating.
“In the meantime, the Government must face up to the fact that its current system of Advance loans simply isn’t working. They leave people facing the toughest of choices: go without income for at least five weeks, or have repayments subtracted from their future UC payments—which are already barely enough to get by on.
“We cannot understand why people who are already claiming benefits need to wait for at least five weeks when they move to Universal Credit—especially when nothing in their lives has changed. Their move should be seamless.
“For people claiming benefits for the first time, or people who’ve faced a significant change in their circumstances, the Government should provide starter payments. Doing so would both cut down on the need for Advance loans and ensure that nobody is forced into debt just to be able to afford to eat and keep a roof over their heads.
“UC is a highly automated system. That has been a real strength over the last few months, with the huge influx of new claims caused by the coronavirus pandemic. But it can also be a major weakness, leaving people without the tailored support they need, and Ministers unable to make the changes they want to see.
“There is much the Government can do without completely dismantling the UC system: we hope that our proposals, taken together, offer practical solutions for making Universal Credit work for everyone who needs it.”
Key report findings and recommendations
Starter payments
All first-time claimants of UC should receive a starter payment equivalent to three weeks of the Standard Allowance.
The payment should be made two weeks after the initial claim and only once the claimant’s identity has been verified, to guard against fraud.
People claiming legacy benefits should be moved seamlessly to UC, but where they cannot be they should receive a starter payment instead.
The impact of the wait
The Committee received evidence from both organisations and individuals which suggested that a significant proportion of people face financial difficulties during the wait for a first UC payment.
Citizens Advice said that half the people it helps during the wait period are ‘unable to keep up with bills, rent or are forced to go without the essentials such as food and heating’.
The National Audit Office said that the wait for a first payment can exacerbate claimants’ debt and financial difficulties.
DWP must carry out research to develop its understanding of the possible impact of UC, particularly the wait for the first payment, on the use of food banks; on claimants’ levels of rent arrears; and on levels of psychological distress.
Advance payments
Even with starter payments, the Committee anticipates some people claiming will still need to ask for an Advance (a loan to tide them over during the wait).
The DWP risks misleading claimants, and damaging its own credibility, if it insists on denying the obvious fact that these Advances are interest free loans.
Advances should be renamed ‘new claim loans’ so it is clear that they need to be repaid.
The Department should offer support to anyone requesting a substantial Advance, as it would be a clear indication that someone is struggling with the transition to UC.
Tax credit debt
Repayments of tax credit overpayments can compound hardship for people who may already be struggling.
The Committee recommends that recovery of tax credit debt from people claiming UC should begin only when the claimant has repaid their Advance (if they have taken one out).
Repayments of remaining debts should be capped at 10% of UC standard allowance and written off entirely if they have not been pursued for more than six years.
Universal Support and Help to Claim
The DWP must invest in expanding and developing its Help to Claim service so it is closer to its original plans for Universal Support.
The service must go beyond assisting with an initial claim and should include debt advice, support for people struggling with repaying Advances and support for people with complex needs.
The Work Capability Assessment and support for disabled people
The Committee finds it troubling that, because of the time taken to complete a Work Capability Assessment, some disabled people and people with health conditions must wait much longer than five weeks to receive their full UC entitlement.
Four months, on average, is too long to wait and the DWP must work to speed up the process.
Coronavirus measures
In its report DWP’s response to the coronavirus outbreak, the Committee welcomed the decision to increase the standard allowance in UC and the basic element in Working Tax Credit by £20 per week.
The Government should now extend the increase past April 2021 and make the rise permanent.
