Considered in Grand Committee
My Lords, I thank noble Lords for the opportunity to debate this order, which is part of the Government’s ongoing commitment to devolution. I will begin by providing background to the order, which is made under the Scotland Act 1998. The 1998 Act devolved powers to Scotland and legislated for the establishment of a Scottish Parliament. The Scotland Act 2016 was the second major update to the settlement, making amendments to the 1998 Act and delivering the cross-party Smith commission agreement, which was established following the 2014 Scottish independence referendum. As a result of the 2016 Act, a wide range of powers, including welfare powers, has now been transferred to the Scottish Government and Scottish Parliament.
Scotland Act orders are used to implement, update or adjust Scotland’s devolution settlement. The order before the Grand Committee today is a Section 63 order, which provides for functions to be shared by Scottish Ministers concurrently with a Minister of the Crown. This is commonly known as executive devolution. Section 63 orders are Orders in Council and are subject to approval by affirmative resolution in both Houses of this Parliament and the Scottish Parliament. Indeed, this order was approved by the Scottish Parliament on 4 December last year.
I will now turn to the instrument itself and explain exactly what it does. The Scottish Government have committed to introducing a grant, known as job start payment, for young people aged between 16 and 24 who have been out of paid employment for six months or more and who make an application. The Scottish Government do not currently have the executive competence to provide assistance to this cohort of young people to help them retain employment. This order is therefore required to enable the introduction of the Scottish Government’s job start payment.
To be clear, the order only gives Scottish Ministers the necessary powers and does not set policy. Furthermore, the powers of the UK Government will not be reduced as a result of the order as the functions are simply being shared with the Scottish Government. My right honourable friend the Secretary of State for Work and Pensions has agreed to share the function of making arrangements to provide assistance to this cohort concurrently with the Scottish Government.
The order will achieve this by amending the Employment And Training Act 1973 to make certain existing powers for the Secretary of State exercisable concurrently by Scottish Ministers. Section 31 of the Scotland Act 2016 created exceptions to the reservation of the subject matter of the Employment And Training Act 1973 in order to give the Scottish Parliament certain powers in this area. However, those exceptions did not extend to providing assistance to retain employment to this cohort of young people. The amendment is therefore required to enable the introduction of the job start payment as without it, Scottish Ministers would not have the necessary powers.
I will now explain what the Scottish Government intend to do with the powers transferred through this order. I previously explained the nature of the grant. In targeting young people, the Scottish Government are targeting the people who need support most. Evidence suggests that the unemployment rate for young people is higher than for those over 25. The unemployment rate for young people in Scotland was 9.1% from October 2018 to September 2019, compared with an overall unemployment rate in Scotland of 3.9%. The proposed payment will consist of a one-off cash payment of £250, or £400 for young people who have children. This will help with the initial costs associated with entering and remaining in work. It could be used to pay for food and clothing and to help towards travel costs, thus removing some of the initial pressure of starting a new job.
Young people will have a three-month window from receiving an offer of employment to apply for the benefit. Upon receipt of a job start payment application, the Scottish Government anticipate that it will take 21 working days and a further three working days for payment to be made. Care leavers will be able to apply for an additional year compared with other young people and will have to be out of paid work only on the date of the job offer, rather than for the previous six months, to be eligible.
The job start payment is expected to be introduced in spring 2020. This is of course dependent on the order being made. Job start payments will be administered by Social Security Scotland, the Scottish Government’s benefit delivery agency. Any costs associated with delivering the payment will fall solely on the Scottish Government. In the Scottish budget 2020-21, announced on 6 February, £2 million was allocated to fund the benefit expenditure for job start payment.
The UK Government do not view the order as controversial and are fully supportive of the Scottish Government’s plans to support young people to retain employment through the introduction of the job start payment. Indeed, we take no issue with the Scottish Government using their budget to support young people in this way, in addition to the support provided across the UK by the UK Government within reserved competence.
The order demonstrates that the UK Government remain committed to strengthening the devolution settlement and shows Scotland’s two Governments working well together. I commend the order to the Committee, and I beg to move.
My Lords, I thank the Minister for that introduction and explanation. As he said, this is a relatively small measure, it is not contentious and it is clearly the wish of the Scottish Government, so in that sense we do not need to detain the Committee for long. I commend the basics of the grant, accept that there are circumstances in which young people might find it difficult to get work if they have been unemployed for a long time, and accept that this would be a benefit, but is there any accountability for this money, or is it simply cash in hand for young people to do with as they wish?
My second point concerns perhaps a more general characteristic of the Scottish Government’s campaign to secure control over social security and welfare payments in Scotland—they proceed very slowly and with some timidity in implementing them. We know how big the welfare Bill is, and the Minister has put a maximum figure of £2 million on this measure. I know that this is a very small cohort of people and that is probably as much as it deserves; nevertheless, against the big picture of welfare and social security it is a very modest measure. When we compare that with the profligacy with which the Scottish Government have managed to nationalise, at great expense, significant sections of the Scottish economy—shipyards that cannot complete ships, airports that do not run planes and trains that do not run at all—one would like to think that they might be a little more ambitious in saving money on those projects and using it for more radical welfare benefit measures in Scotland.
Many of us had hoped that the Scottish Parliament and the Scottish Government would use the transferred powers to show how Scotland and its needs are different, and possibly to develop different ways to deliver welfare and social security peculiar to those needs, but in ways that also might influence delivery methods in other parts of the UK. It is disappointing that the Scottish Government do not seem able to show a great deal of imagination and vision. While one would of course not object to the transfer of these powers and to the processes whereby it is co-determined—I guess that means that each decision is sanctioned by the appropriate Minister in the UK Government—it is nevertheless worth putting on record that the Scottish Government need to show a little more vision and imagination if they really want to demonstrate that their campaign to get these welfare powers was worth the effort.
My Lords, I also thank the Minister for outlining this modest, minor order. We are happy to support it, given that its whole purpose is to enable Scottish Ministers to help young people who have been out of work for six months or more by giving them a £250 grant to help them take up a job. That is pretty important because, as the Minister said, the unemployment rate for those aged under 25 is higher than for older people. Having supported the order’s aims, I have a few brief questions for the Minister.
First, could he outline what consultation, if any, took place, particularly with the young Scottish people who will be affected by this? Secondly, and I guess this will have a technical answer, why is it necessary to have a whole statutory instrument for what seems a very minor issue? Why was it not included in the Scotland Act 2016? It seems even more minor than I thought when I first read it. If the expenditure is still a joint responsibility, it is giving only a little bit to Scotland and it seems extraordinary that it needs all this. I am delighted to be here with colleagues this afternoon to deal with it, but it is hard to understand why it needs a whole SI.
Thirdly, given that the Minister said the figure would be £2 million for the total pot, does he happen to know how the Scottish Government propose to raise the money to fund this? Fourthly, to his knowledge—I understand this is not his responsibility—are the Scottish Government planning any evaluation to ascertain the scheme’s effectiveness? Before the noble Lord, Lord Bruce, got in first, I was going to ask about accountability for this expenditure. Lastly, should a young Scottish person be awarded this £250 grant, is there any risk that they would lose access to any UK-wide funding?
As I said, we welcome any initiative that helps young people into work, but do the Government have any explanation for how an SNP Government are overseeing such a horrendously high level of youth unemployment? According to the Scotsman, the figure is even higher for this age cohort than the Minister said: 9.8%, which is three times higher than that in England and a rise of 0.8% in the year to July 2019. Does the Minister have any thoughts about that? Do the Scottish Government have any other plans in hand that are more meaningful than a £250 grant to ensure that these youngsters have a more successful entry into adulthood? If I may again borrow the words of the noble Lord, Lord Bruce, should the Scottish Government perhaps be a little more ambitious in seeking to reduce young people’s unemployment in Scotland? Nevertheless, we agree to the order.
My Lords, I thank the Committee, the noble Lord, Lord Bruce of Bennachie, and the noble Baroness, Lady Hayter, for their points and questions. I will do my best to answer them. The first question to address is about accountability for this money. A young person receives the £250 cash in hand; the point is to allow the young person to spend the money in the way they feel is right. It is designed to go on travel or food costs to help them in their early days in work. However, they could easily decide to spend it on a PlayStation or something. That is the truth. The only answer I can give is that there is trust that once young people have the job they will decide to spend the money wisely.
That may answer the question asked by the noble Lord, Lord Bruce. I meant what accountability do the Scottish Government have in setting up this scheme that they are choosing the right people and that the pot is being handled efficiently. I recognise that this is not an issue for this government department, but the Minister might know from discussions. He might want to write, if it is not within his knowledge.
The noble Baroness makes a good point. I will need to write. On how wisely the £2 million is being spent by the Scottish Government, the assumption is that the £250 grants will go to the right people at the right time for the right reasons. I will write if we can get some more information on that point.
Do the Government have any plans to monitor this? It may well be a very good idea and prove to be very effective, and that is fine, but it may be found that it is just cash in hand and is not really used for good purposes. It is presumably worth doing some systematic modelling. It may not be an awful lot of money, but simply handing out money for a purpose without seeing whether it is used for that purpose seems not entirely right.
I feel sure that we should be able to get some information for the noble Lord. I asked these questions as part of my briefing, but I will see what more I can get. That leads on nicely to take note of the points the noble Lord made about the Scottish Government. He made the point that it is a modest measure that lacks imagination and vision. The only thing to say is that I have noted that. I think it is a fair point, but I should be careful not to criticise the Scottish Government. Again, if there is something I can put in writing on that I will certainly do so.
Moving on, the noble Baroness, Lady Hayter, asked why there is an order for such a minor provision and why it was not in the Scotland Act 2016 in the first place, which is a fair question. The intention to develop the job start payment first appeared in the SNP manifesto in April 2016 and the Scotland Act 2016 completed its passage through the UK Parliament in March 2016. The 2016 Act devolved the competence to legislate for new benefits, but only for benefits which were not connected with reserved matters. The relevant powers relating to assisting persons to retain employment are reserved under the Scotland Act 1998 under the job search and support reservation. The message is that it just missed the cut, if that is the way to put it.
The noble Baroness also asked where the money for the job start payment is coming from. The Scottish Government announced their budget last week and committed money from the Scottish Consolidated Fund. I cannot say which source of money goes to which expenditure. The Scottish Consolidated Fund comes from a range of sources, including the block grant from the UK Government, Scottish taxes and borrowing. That includes the Scottish tax-raising powers as well, which, as the Committee knows, the UK Government gave the Scottish Parliament.
The noble Baroness asked whether I am concerned that the SNP Government are not properly addressing the high level of youth unemployment. She made an extremely good point. I am concerned that my colleagues in the Scottish Government are more focused on constitutional conflict and their own agenda for independence than on using the powers that they have to address the issues that people in Scotland badly need to be addressed and which they care about. That is not just youth unemployment but failings in education, healthcare and a range of other devolved responsibilities. I suspect that the noble Baroness and the noble Lord, Lord Bruce, would probably agree with me on that front.
The noble Baroness asked what consultation exercises the Scottish Government have undertaken. To be fair to them, they ran a public consultation on the proposed format and the key eligibility criteria of the job start payment between 16 January and 9 April 2019. The analysis of 96 responses showed that the majority of individuals and respondents believed that the job grant, as it was then called, met policy intent.
The noble Baroness also asked what support was in place for unemployed young people across the UK. The people receiving the £250 would not lose out on the benefits that they might receive in addition. There are existing UK-wide benefits that support unemployed people while they search for work. Young people may also be able to access funds from other sources to support them with some of the costs associated with applying for and starting a new job. These include the flexible support fund, which is not just for young people. It is offered by jobcentres across the UK at the discretion of work coaches, who have the flexibility and discretion to make awards that will enhance the employment prospects of the claimants and other customers with whom they are engaged, if there is a need. The difference is that, unlike job start payment, the flexible support fund does not specifically apply to young people; it extends further.
Finally, the noble Lord, Lord Bruce, asked whether UK Ministers sanction decisions. The answer is no. Scottish Ministers will have discretion as to how to use the power once it is shared. It is just that UK Ministers also retain the competence.
I hope that covers all the questions. I thank the noble Baroness, Lady Hayter, and the noble Lord, Lord Bruce, for their support in principle for this.