Why Scotland Must Act Now to End the Two Child Benefit Cap

Last week, Alba Party’s leader Alex Salmond called on the Scottish Government to act now to end the two-child cap on benefits. 

It has parallels to his Government’s actions to end the Bedroom Tax in Scotland nearly a decade ago. 

Some have accepted a narrative that the Scottish Government don’t have the powers to mitigate the abhorrent Westminster policy. 

Was it not the case that the SNP and Labour persuaded the Westminster parliament to devolve power over the bedroom tax to Holyrood in 2014 so that it could pass the legislation needed before the Scottish Government could provide councils with the funds to mitigate the tax?

The simple answer is, no. It was most likely the case that the Scottish Parliament did not have the powers to mitigate welfare cuts as the devolution of welfare powers did not happen until after the independence referendum on the back of recommendations made by the Smith Commission. 

Back in 2014, John Swinney was still the Finance Secretary. The budget he set provided the funding to fully mitigate the Bedroom Tax. To do this, Mr Swinney had to set aside a sum of money that would’ve resulted in Scottish Council’s spending more discretionary housing payments than Westminster said we were “allowed to spend”. 

This didn’t stop Alex Salmond’s Government from acting. 

During the budget debate in 2014, John Swinney said: 

“I give parliament the assurance today that if the DWP says no, the Scottish Government will put in place a scheme to make this additional £12m available to social landlords so that we need not see any evictions in Scotland this year as a result solely of the bedroom tax."

This was a clear signal from Alex Salmond’s Government, we are going to fund the end of the Bedroom Tax in Scotland and if you want to stop us then try. 

Westminster could have taken the Scottish Government to court because the Scottish Parliament did not have the power to spend more than £50 million on discretionary housing payments but they chose not to because it would have been absurd to challenge the Scottish Government to overturn their actions because the bedroom tax was opposed by the overwhelming majority of Scots. 

So instead of letting the Scottish Government disregard Westminster rule, messers Danny Alexander and Alistair Carmichael quickly intervened to devolve the cap on discretionary housing payments to the Scottish Parliament in order that they didn’t have to drag the Scottish Government to court in the run-up to the independence referendum. 

If Humza Yousaf listens to Alex Salmond’s advice then by the end of next month the Two Child Benefit Cap would be scrapped in Scotland. The Scottish Government already provinces funding through discretionary housing payments - that is how Alex Salmond outfoxed Westminster and funded the scrapping of the unacceptable hardship of Westminster’s bedroom tax. 

If the Scottish Government added a further £85Million in funding this would mean that if you are affected by the two-child benefit cap, just like those that were affected by the bedroom tax, you could simply apply to your local authority for a discretionary housing payment and you should get one. 

Or if they wanted to, the Scottish Government could put in place extra funding to give those hit by Westminster’s two-child cap an extra Council Tax Credit. That’s how my old Council implemented Alba Party’s £500 payment to 10,000 households in receipt of Council Tax reduction back in 2021. This also outfoxes any attempts by the DWP to try to make the payments interfere with any other legacy benefits or universal credit entitlement. 

£85 Million might sound expensive because it’s a big number but it amounts to 0.17% of the entire Scottish Government Budget. In fact this year the Scottish Government will carry forward £244M in full through the Scotland Reserve if confirmed at the final outturn.  It is made up of £180.6 million fiscal resource, £24.7 million in capital and £39.0 million in Finance Transactions. Therefore the money exists to fund the policy right now without having to make a single cut elsewhere and of course that’s the whole point of the Scottish Parliament- to make different decisions than those made by Westminster. It will also re-emphasise the narrative that there simply is no point in voting Labour or Tory at the General election. 

With independence we will have full control of all of our nation’s resources and our Scots Parliament won’t need to be a sticking plaster for Labour or Tory austerity imposed from Westminster as we could make our own decisions set on our own priorities. 

But until then, we have the power, the resources and the ability to lift 15,000 Scottish children out of poverty right now and around another 75,000 would be driven further away from poverty. We should, and we must, do this and for heaven's sake do it now and don’t wait to see if a Labour Government will do it for us. 

If Alex Salmond had waited in 2014 for a Labour Government and hoped that they would’ve then scrapped the Bedroom Tax then people across Scotland would still be paying it today.

Chris McEleny

General Secretary 

Alba Party