Why the referendum will kill Universal Credit - and what should follow it

My apologies for starting another thread about Universal Credit and the referendum.  I’m justifying this on the basis that we should now start talking about the policy implications of the referendum and what might / should be in place in the benefits system after the result is decided.

It now seems that Scotland, whatever the result of the referendum, will get control of at least some of, what are now, national benefits.  In particular it seems that Housing Benefit will be devolved to Edinburgh in the event of a vote to remain in the UK.

That seems, in some ways, to be logical.  The very similar Council Tax Reduction scheme has been devolved to Scotland already and, administratively, it would be a relatively simple undertaking.

*BUT*

What does this mean for Universal Credit?

UC is meant to be a universal ‘one benefit fits all’ for working age people; originally Council Tax Benefit was meant to be included as well – which would, as an aside, have been much better than the current mess.  Pulling rent support out of it would be a serious dilution.  Pulling it out only in Scotland would be difficult, confusing and add considerably to the IT woes of the project.

There are more fundamental problems though. Rent is integral to much of the UC scheme.
To point to only one, the variable levels of earnings disregards in UC depend on the rent element in the calculation.  Reintroducing multiple tapers in different means-tested benefits will make things more complex for claimants and a nightmare to administer.  A mix of weekly and monthly benefit cycles, minimum notional income in some of them and the necessity to separately consider the needs of children and disability in each scheme will be ‘interesting’ to say the least.

Even if it works, socially, benefit tourism might become attractive if a bedroom tax exists outside Scotland and the rent caps and overall benefit cap nay add to the differential between nations.

If it works is the big question though.  My own feeling is that it will make Universal Credit unworkable, driving a rethink of the future – or provide a much sought for excuse to exit the mess.

But what comes next?  Maybe the government will be looking for answers from other sources - what would we suggest; practically and acceptably, not ideal systems please!

I dont think housing benefit or other powers will actually be devolved post a no vote and even if they are it wont be for a very, very long time.

If housing benefit is devolved then your right it more or less kills of UC up here.  I cant see much in the way of benefit tourism though as you are already more likely to be impacted by the benefit cap in london due to housing prices than you are in glasgow.

I think the no campaign have been a bit surprised by the momentum of the yes campaign and these are attempts to stifle that momentum. Thatcher made a similar statement around the first devolution vote in 79 but then we had to wait until (98…i think im going off memory here) for the issue to be raised again.

(these are my personal opinions not those of my employer)

A couple of interesting articles about this issue. Now a couple of years old but increasingly relevent:

http://strathprints.strath.ac.uk/46827/

http://www.cih.org/resources/PDF/Scotland Policy Pdfs/Politics and Housing/Devolving Housing Benefit.pdf

UC? Might be just the excuse Westminster is looking for (it was on target and on budget until Scotland de-railed it because they think people should be paid benefits even if their curtains are still drawn when you go to work etc)

Benefit Tourism - or forced evacuation that has already been posed. Doesn’t take much more to move people to Scotland than it does to move them to Hull

Preferred option - just pretend the last 20 years haven’t happened. Bring back IVB, supp ben, UB… Perfect - we even still have the old law books in our library

Sorry - due to Rightsnet not recognising gaps in the link copy the addresses of the links above to the URL

this from the BBC this morning -

‘Labour is proposing that control over a number of welfare benefits be given to the Scottish Parliament.

These would include control over housing benefit - enabling Scotland to get rid of the spare room subsidy or “bedroom tax”, a policy favoured by the Scottish National Party.

It has also proposed devolving the attendance allowance - paid to disabled people over the age of 65. Scotland would also control the Work Programme, used to help people find jobs.

The Conservatives agree on devolving housing benefit and attendance allowance, but the Liberal Democrats believe both should still be controlled by Westminster.

The first clue as to what Scottish taxpayers will actually be granted will come when MPs debate the issue on 16 October.

A consultation will open in November, and final plans will be published in January.

They are expected to become law as soon as possible after the general election in May 2015. ‘

http://www.bbc.co.uk/news/business-29239727

ps: here’s the other thread gareth refers to above http://www.rightsnet.org.uk/forums/viewthread/6856/