Westminster – Page 65 – The NEN

Government set to act on pay day lenders

The Westminster government is to introduce legislation to cap the cost of payday loans. In a move that’s likely to be welcomed by campaigners, the Treasury says there is “growing evidence” in support of the move.

The cap will be included in the Banking Reform Bill, which is currently going through Parliament, and the level of the cap will be decided by the new regulator the Financial Conduct Authority (FCA).

Chancellor George Osborne told the BBC there will be controls on charges – things like arrangement and penalty fees – as well as on interest rates. “It will not just be an interest rate cap, you’ve got to cap the overall cost of credit,” he said.

Although the level of the cap is yet to be determined, the announcement will be welcomed by opposition and campaign groups who have been urging the government to take action against some pay-day lenders’ practices: eye-watering interest rates and hidden charges which hit the poorest hardest and drive desperate people deeper into debt.

Just last week, Citizens Advice Scotland claimed that many payday lenders in Scotland are breaking the promises they made last year to clean up their act. According to CAS research, lenders continued to break ‘most of the pledges in their own code.’

The main points were:

less than half of payday lenders in Scotland are telling people that loans should not be used for long-term financial problems;
only 1 in 3 are checking peoples’ financial background before giving them a loan;
only 14% of customers felt the lender was sympathetic when they got into difficulties repaying the loan; and
only a third of lenders are warning their customers about the dangers of roll-over loans.

CAS Chief Executive Margaret Lynch said: “When the payday lenders published this voluntary code last year we made clear we would be watching them like a hawk to make sure they kept to their word. Because there’s no point making promises if you don’t live up to them.

“Our survey results – together with the experience of other clients we see every day in the CAB – show very clearly that this Code of Conduct Is being ignored repeatedly.

“Across Scotland, CAB advisers are currently seeing over 100 cases every week of people who are in crisis debt to a payday lender. That’s a third higher than this time last year. Our evidence is that many lenders are operating in ways that result in people getting into debts they can’t handle.

“So the Payday Lenders have had their chance to clean up the industry, and they have failed. It’s time now for the regulators to step in and do it properly.”

Local MP backs Living Wage

This is Living Wage Week and Mark Lazarowicz MP has backed Labour’s plans to raise wages for thousands of low-paid workers in Edinburgh.

If the party wins power at the next General Election, Labour says it will introduce new tax breaks for employers that commit to paying the living wage – currently set at £7.65 in Scotland. As well as making sure work really pays, it will also help cut benefit bills through savings in lower tax credits and benefit payments.

The North and Leith MP (pictured below) said: “In-work poverty has risen sharply so that many families that are being forced to turn to food banks or take out pay-day loans actually have a wage coming in. It is simply wrong that almost 60% of children in poverty in the UK come from households where at least one person is working.

“I know there are already councils like the City Council here in Edinburgh and private employers as well who are doing the right thing by their staff and paying the living wage. I strongly support Ed Miliband’s plans to encourage more employers to do the same so that hard-working staff are treated decently and paid a fair wage.”

As well as the City of Edinburgh Council, Fife, East Lothian, Falkirk and Scottish Borders Councils have also committed to paying the living wage.

Under Labour’s plans, firms that commit to paying their employees the living wage in the first year of the next Parliament will be offered a 12 month tax rebate of up to £1,000 for each individual worker that receives a pay rise. The money would be funded directly from increased income tax and National Insurance revenues.

Scotland and the UK: safer together?

Threats to Scotland and the UK from organised crime gangs, cyber criminals and global terrorism are best confronted with Scotland inside the UK, Home Secretary Theresa May claimed today. However ‘Yes’ campaigners have been quick to challenge the Home Secretary’s analysis and say that Scotland will continue to work closely with international partners on security issues.

The Home Secretary (pictured below) was in Edinburgh to launch ‘Scotland analysis: Security’, the seventh in a series of UK government papers to inform the debate ahead of next year’s independence referendum.

The paper examines how the UK and Scotland derive mutual benefit from an integrated approach to security, cyber, justice and policing, as well as from security exports and our international alliances and relationships.

The possible consequences for both Scotland and the continuing UK of a vote for independence are subject to analysis in the paper. It stresses that while the UK does work with other countries, such as the Republic of Ireland, to improve security and fight organised crime, there is a significant difference between these relationships and Scotland’s current position as a privileged and influential part of the UK.

The analysis concludes that independence could disturb the united protection provided to Scotland by the UK’s security and intelligence architecture. The report suggests:

Scotland facing a technically complex and expensive requirement to establish its security infrastructure. In the meantime, there would be a risk to both Scotland and the continuing UK of diminished security.
Scotland no longer being covered by the UK’s National Cyber Security Programme, which strengthens the services the public rely on and makes the UK a safer place for businesses to operate.
Co-operation between Police Scotland and other UK forces may not be as straightforward as it is now. Long established UK-wide laws make it easier to pursue justice across borders despite different legal systems and police jurisdictions.
A limit to the amount of information the continuing UK would be able to share with Scotland. Under the “Control Principle”, the UK could not share the kind of information used to fight and counter terrorism with Scotland, passed to it by another country, unless the UK had that country’s consent.

Home Secretary Theresa May said:

“This report sets out in plain terms the security consequences of independence, not just for Scotland but for the UK as a whole. Undoubtedly we are stronger and safer together.

“The national security risks the UK faces are complex and changing. Terrorists and organised criminals will seek new ways to exploit any weakness in our justice and policing capabilities, and the scale of emerging threats, such as cyber crime, demands a comprehensively resourced response.

Now is the time to work more closely together for the security of all citizens of the UK.”

The UK government believes that Scotland is better off as part of the UK, and that the UK is stronger, safer and more secure with Scotland as part of it.

In the event of a vote in favour of leaving the UK, Scotland would become an entirely new state and would have to establish its own security arrangements.

However, supporters of independence have been quick to refute the Home Secretary’s claims. The Scottish government said that, in the event of independence, Scotland would work closely with the rest of the UK and international partners on security and intelligence matters.

Justice Secretary Kenny MacAskill (pictured above) told the BBC: “These claims are wrong – not least because Scotland is already an independent jurisdiction when it comes to policing and justice issues, and current cross-border cooperation shows how well that can work to combat terrorism and other threats.

“An independent Scotland will have first-rate security arrangements to counter any threats we may face. And we will continue to work in very close collaboration with the rest of the UK and international partners on security and intelligence matters, which is in everyone’s interests.”

Westminster congratulations for Professor Peter Higgs

Mark Lazarowicz MP put down a Parliamentary motion, an ‘Early Day Motion’, last week to congratulate Edinburgh’s Professor Peter Higgs on the award of this year’s Nobel Prize for Physics. Among those supporting the North and Leith MP’s motion were fellow Edinburgh MPs Alistair Darling and Mike Crockart.

Professor Peter Higgs, who is now Emeritus Professor of Theoretical Physics at the University of Edinburgh, was awarded the prize in recognition of his theoretical discovery of the origins of mass of the fundamental particles that make up the world. His theoretical work first published in 1964 was confirmed in July 2012 – almost half a century later – by the Hadron Collider based in Switzerland showing just how groundbreaking his work was.

A shy and modest man, Professor Higgs shares the prize with a Belgian physicist,François Englert, who also published on the same subject in the summer of 1964.

Mark Lazarowicz said: “Professor Higgs’ achievement has at last received the long awaited recognition of the award of the Nobel Prize, and as the MP for the constituency where Professor Higgs lives I wanted to make sure that achievement and award was marked by Parliament also.”

Professor Higgs has announced that he will formally retire next year, when he is 85.

Prime Minister sends warm wishes to Muslims for Eid

Prime Minister David Cameron said:

“I send my warmest wishes to Muslims in the UK and overseas as they celebrate the festival of Eid-al-Fitr. After a month of longer summer days fasting, praying and putting aside many of the things that we can take for granted, Muslims will come together with friends and family to celebrate this joyous occasion. I wish you all Eid Mubarak.”

The Prime Minister yesterday visited the Jamia Mosque in Manchester as Muslims in the UK prepare for Eid 2013. He met senior members of the mosque, as well as members of the local community who use it.

Mr Cameron wished ‘Eid Mubarak’ to them and the wider UK Muslim community, heard views on a range of issues and discussed the challenges and opportunities ahead.

It was also an opportunity to recognise the positive response by the overwhelming majority of the Muslim community to the tragic death of Drummer Lee Rigby.

Unfairly sacked? That’ll be £160, please!

Westminster Government introduces fees for employment tribunals

Bringing a claim or an appeal to the employment tribunal is currently free of charge with the full cost being met by the taxpayer, but the government has now introduced fees, claiming that by doing this people using employment tribunals will meet ‘a significant proportion’ of the £84m cost of running the system. Their aim, they say, is to reduce the taxpayer subsidy of these tribunals by transferring some of the cost to those who use the service, while protecting access to justice for all.

The Advisory, Conciliation and Arbitration Service (ACAS) – a taxpayer-funded service to help workers and businesses settle disputes without the need to go to a tribunal – will remain free, but if agreement cannot be reached at that stage and the claim is taken further significant costs will now be incurred.

Workers will have to pay £160 or £250 to lodge a claim and a charge of either £230 or £950 if their case goes ahead.

Minister Jonathan Djanogly said: “It’s not fair on the taxpayer to foot the entire £84m bill for people to escalate workplace disputes to a tribunal. We want people, where they can, to pay a fair contribution for the system they are using, which will encourage them to look for alternatives.

“It is in everyone’s interest to avoid drawn out disputes which emotionally damage workers and financially damage businesses. That’s why we are encouraging quicker, simpler and cheaper alternatives like mediation.”

Critics of the charges argue that the new charges will dissuade many employees from making legitimate claims about workplace discrimination and there is concern that, once again, it is the poorest and most vulnerable that will suffer.

TUC General Secretary Brendan Barber said: “It is vital that working people have fair access to justice, but introducing fees for tribunals will deter many – particularly those on low wages – from taking valid claims to court. Many of the UK’s most vulnerable workers will simply be priced out of justice.

“The government’s remission scheme to protect low-paid employees is woefully inadequate, and workers will be more likely to be mistreated at work as rogue bosses will be able to flout the law without fear of sanction.”

Responding to a consultation on the controversial proposals, Citizens Advice Scotland’s Kevin Dryburgh said: “Employment tribunals are an essential service for all workers and employers in the UK. It is not just successful claimants who benefit – all employers and workers benefit from a service that protects workers, discourages rogue and exploitative employers, and ensures a level playing field for good employers.

“Far from being a costly burden on employers and tax payers, employment tribunals play a key role for all those in work. Placing barriers to accessing Employment Tribunals will affect the effectiveness of the service in providing this role.”

Trade union UNISON is fighting the fees and has been given permission to seek a judicial review. The hearing will take place in October.

Edinburgh to act against impact of welfare reforms

Plans to mitigate the impact of national welfare reform measures on the capital have been announced by the City of Edinburgh Council. The plans, which will see an additional investment of £350,000 in advice and support services, will be discussed by the Corporate Policy and Strategy Committee on Tuesday (16 April).

The introduction of policies such as the Housing Benefit Under-occupancy Restrictions (or ‘bedroom tax’), which are expected to affect 3,800 Council tenants, and around 2,500 Housing Association tenants, combined with national reductions in benefits will have a significant impact on some Edinburgh residents and the city’s economy as a whole.

The Council has taken steps to minimise these repercussions where possible and is considering further actions to offer support. Residents affected by the under-occupancy restrictions have been contacted to provide advice about options such as moving to a smaller home, taking in lodgers or budgeting on a lower income.

Health, Wellbeing and Housing Convener, Councillor Ricky Henderson, (pictured below)said: “The new changes to the national welfare system will have a significant impact on the city and particularly those receiving benefits. It is also expected that the introduction of the under-occupancy changes will lead to increasing rent arrears, which may have an adverse impact on the Council’s ability to deliver services and capital investment in its homes.

“We have taken steps to bolster Council and voluntary sector advice services to make sure that residents are aware of these changes and the help that is available to them. It is vital that we support our most vulnerable citizens and do what we can to minimise these repercussions where possible.”

The committee will be asked to approve an investment of £350,000 to provide additional advice services. Of this sum, £100,000 will be provided to Citizens Advice Edinburgh, £22,000 to the Community Ability Network, £15,000 to The Action Group, £15,000 to FAIR and £7,000 to COSS. Some of the extra funds will also be invested in the Council’s own Advice Shop service and Contact Centre.

An additional £67,000 has already been agreed for the Welfare Rights and Health Project, CHAI Advice Service and Granton Information Centre.

Recent Scottish Local Government Forum Against Poverty figures suggest that changes to the national welfare system will lead to a loss of income of £223 million by 2015/2016 for people in Edinburgh. These changes mainly affect individuals and families living on low wages, those seeking work and disabled people who are unable to work. This will result in a greater need for advice about benefits, debt and budgeting, as well as an increased demand on social work, housing and homelessness services.

The administration of Crisis Grants and Community Care Grants is now the responsibility of the Council, after being transferred from the Department for Work and Pensions on 1 April. Crisis Grants are available as emergency payments where there is an immediate threat to health or safety and are now paid out from Council Neighbourhood and City Centre Offices with an out of hours service also available. A new team has been recruited to deal with the assessment and processing of claims, which can be made by phone, online, on paper and in person. Community Care grants will help to enable or continue independent living by providing furniture, carpets and white goods.

Further measures will be discussed by the Health, Wellbeing and Housing Policy Development and Review Sub Committee on Tuesday 23 April 2013.

The city council’s announcement comes as new independent research by Sheffield Hallam University has shown that welfare cuts will take more than £1.6bn a year out of the Scottish economy and hit the poorest parts hardest – the equivalent to about £480 a year for every adult of working age. The biggest losses are from reforms to incapacity benefits at about £500m a year.

The report states: “The financial losses arising from the reforms will hit the most deprived parts of Scotland hardest. Glasgow in particular, but also a number of other older industrial areas, will feel the impact most. The loss of benefit income, which is often large, will have knock-on consequences for local spending and thus for local employment, which will in turn add a further twist to the downward spiral.”

The report added: “A key effect of welfare reform will therefore be to widen the gaps in prosperity between the best and worst local economies across Scotland.” Researchers note that the scale of financial loss in Scotland would have been greater if the Scottish government had chosen to pass on the cut to council tax benefit.

The report was commissioned by the Holyrood’s welfare reform committee, and while it’s findings are unlikely to come as a major surprise, committee convener Labour MSP Michael McMahon said: “Our committee wanted a detailed picture of what would happen on the ground when these reforms were fully implemented. It is obvious to all that the impact is dramatic – and more so in the areas that can least afford it.”

A Scottish government spokesman said: “Sheffield Hallam have used the same publicly available data as the Scottish government analysis and reach broadly the same conclusions on the scale of the cuts. It is completely unacceptable that hard-working people and vulnerable groups will bear the brunt of the UK government’s welfare cuts.”

The UK government insists that changes must be considered alongside other measures like the increase of the tax threshold, that changes to the welfare system were necessary and that reforms will benefit the Scottish economy in the long-term.

‘Bedroom Tax’ – minister demands fair deal for Scotland

Today (1 April) is day one of the Westminster government’s controversial welfare reforms. The Scottish government pre-empted the changes with two statements on the eve of the changes:

If the UK Government proceed to impose their plans for the bedroom tax on Scotland then Scotland must get its fair share of funds to deal with both the human and financial impact, Welfare Minister Margaret Burgess said yesterday.

In a letter to the UK Welfare Reform Minister Lord Freud, Mrs Burgess (picured below) demanded a fair deal for Scotland to address the potentially devastating impact of the bedroom tax, which is set to impoverish families and individuals.

The Scottish Government is completely opposed to the bedroom tax, which will affect 16,000 families with children in Scotland, but if UK Ministers proceed with cuts then Scotland must get its fair share of Discretionary Housing Payment (DHP) funding, says Mrs Burgess.

Despite both Scotland and London having the same number of households hit by the bedroom tax, Lord Freud is set to award London with £56.5 million of DHP compared to only £10 million in Scotland.

Welfare Minister Burgess said: “The bedroom tax is a socially divisive measure that will increase social inequalities across Scotland. It’s a policy that the Scottish Government is totally against as it hits our most vulnerable citizens in these already challenging economic conditions.

“This is a policy devised in London on the basis of housing benefit increases and overcrowding. However, in inflation-adjusted terms, 93 per cent of the housing benefit increase is attributable to the situation in England whilst London has almost two and a half times the level of overcrowded households compared to Scotland.

“We have consistently made that case to UK Government Ministers that we are opposed to these cuts – if they proceed to impose their plans then Scotland must get its fair share of funds to deal with both the human and financial impact.

“The small levels of DHP in Scotland is woefully inadequate and unfair to deal with the impact and scale of this policy.

“Civic Scotland is united in opposition to the bedroom tax and this Government has already taken action to strengthen the protection against eviction for rent arrears in advance of the introduction of the tax. From 1 August 2012 we brought pre-action requirements for rent arrears into force to ensure that proceedings for eviction is always the last resort.

“We are also providing an extra £2.5 million to social landlords for advice services to ensure there is support on hand for people who will lose housing benefit due to the under occupancy measures and other housing benefit cuts being introduced by Westminster from April.

“The UK Government’s agenda is completely at odds with the values of the people of Scotland and the aspirations that this Government has for our nation. Only through independence can Scotland have the levers required to create a welfare system that is aligned to Scottish needs and values.”

Thousands of vulnerable people in Scotland will be protected from increased Council Tax bills following the UK Government’s abolition of council tax benefit this week, Cabinet Secretary for Finance, Employment and Sustainable Growth John Swinney announced yesterday.

Around 560,000 people will receive support to ensure they are not affected by the UK Government’s 10 per cent cut in funding for Council Tax Benefit successor arrangements.

The Scottish Government and local authorities in Scotland are working in partnership to invest £40 million in 2013/14 to bridge the funding gap and mitigate the impact of the UK Government’s benefit cuts.

Mr Swinney (pictured below) said: “Hard working and vulnerable people are having to bear the brunt of these Westminster benefit cuts. Instead of protecting our poorest households, Westminster has responded to this recession by imposing deeply damaging welfare cuts which will make it far harder for people to meet the rising cost of living.

“To ensure households across Scotland do not face additional burdens the Scottish Government and Scotland’s councils are providing £40 million in 2013/14 to ensure that around 560,000 people in Scotland are protected from this reduction.

“Whilst Council tax bills will be increasing in many areas of England as a result of benefit cuts we are using the limited resources we have to ensure vulnerable people do not have to face increasing bills.

“We are determined to do everything that we reasonably can to help those who need it most, however we cannot meet every Westminster cut. We are making available an extra £2.5 million to social landlords to help them ensure that people affected by housing benefit changes have the advice and support they need.

“And we are providing £5.4 to organisations such as Citizens Advice to help those affected by benefit reforms. This extra support will assist social landlords in their efforts to engage directly with affected tenants and seek to identify ways in which they can deal with the impact of the changes.

“These unjust policies show why we need the powers of independence to protect vulnerable people rather than simply trying to cushion the blows in Scotland. It would be far better to control benefits and welfare so unfair policies like abolishing Council Tax benefit are not even considered, let alone implemented. “

Swinney calls for welfare cuts U-turn

The Chancellor should use next week’s UK Budget to revisit welfare reforms which stand to place real strain and hardship on Scottish families, Finance Secretary John Swinney said today. Writing to the Chancellor ahead of Wednesday’s Budget, the Finance Secretary has highlighted the impacts in Scotland of the UK Government’s welfare reform programmes.

The letter sets out Scottish Government analysis which shows, for example, that whilst the bedroom tax will save the UKG money, this will be outweighed by the costs imposed on the Scottish economy. Over time the policy will remove £110m from the economy, through its impact in Scotland alone. This does not capture the wider social costs of the policy nor the distress and disruption that it will cause.

The letter also highlights that the full package of welfare reforms will present significant financial and operational challenges for all layers of government in Scotland. In his letter to the Chancellor Mr Swinney urges the UK Government to:

Provide immediate support for investment and jobs
Withdraw its bedroom tax policy
Take action on the distribution of European Structural Funds (ESF)
Improve access to finance for small and medium sized enterprises
Devolve responsibility for Air Passenger Duty to the Scottish Parliament

Commenting on his letter Mr Swinney (pictured below) said: “Since 2010 the UK Governments fiscal policy has been premised on the need to maintain market confidence and the UK’s AAA credit rating. The Chancellor has chosen austerity over investment in growth and jobs and the cost has been the continuing deterioration in the public finances, prolonged recession and the downgrade of the UK’s credit rating.

“That cost is increasingly borne by the most vulnerable in our society and public services in Scotland urgently seeking to mitigate the worst impacts of the UK’s disastrous welfare reform programme. Scottish Government analysis shows that based on reasonable assumptions the projected UK Government savings from the bedroom tax are significantly outstripped by the net loss to the UK of over £100 million over the long-term. This policy is unfair, is unlikely to deliver savings in real-terms and cuts across devolved policies. The Chancellor should use his forthcoming Budget to withdraw it.

“While we welcomed the Chancellor’s partial recognition of the need for urgent investment to boost growth in the Autumn Statement. we again call on the Chancellor to use this Budget to provide a real stimulus and greatly expand capital investment With colleagues from Wales and Northern Ireland, I have also called on the Chief Secretary to the Treasury to invest in growth.

“Small and medium sized businesses are the lifeblood of Scotland’s economy. Growth will be led by the private sector yet it continues to be choked by half-hearted Coalition measures. Figures released last week on bank lending again confirm that the UK Government’s action to improve access to finance for the country’s small and medium sized businesses is failing to deliver. We continue to press the Coalition Government to go further and faster in improving access to finance.

“With the powers of independence Scotland would have the economic levers and the scope to tailor welfare policies in line with Scotland’s interests, to ensure that Scotland’s businesses and people no longer have to fund the failures of a UK Government.”

Leith MP focuses on food bank fears

Mark Lazarowicz, MP for North and Leith, visited a ‘pop-up’ food bank outside the Houses of Parliament this week, and earlier today he at the Kirkgate collecting signatures for a petition to highlight the issue of growing poverty and the increased reliance on food parcels across the UK.

Mr Lazarowicz said: “Hundreds of thousands of people in the UK are now forced to get support from food banks. Leith is the latest area where a food bank is being set up. I have enormous respect for the dedication of staff and volunteers who are helping through food banks to meet the growing need for food aid but that need is a clear sign of Government failure.

“The depressed state of the economy combined with cuts in welfare support have led many people, both in and out of work, to turn to food banks as a last resort. The growth of food banks is stark evidence of the failure of Government economic and employment policy. Food banks show just how much people in our community care for the most vulnerable but they shouldn’t have to be a substitute for Government action. That’s why I am supporting this petition, which calls for the government to ensure there is an accurate count of the number of people using food banks in Scotland and for Government action to ensure that no families in the UK go hungry.”

Before Christmas, the North and Leith MP took part in food collection drives at local supermarkets and he recently attended a meeting at South Leith Parish Church Halls to look at setting up a food bank in Leith.

Britain’s largest network of food banks, the Trussell Trust (which is involved in the proposal to set up a food bank in Leith), estimates that they will need to support in excess of 260,000 people over the next year.