Challenge Poverty Week: First Minister's speech - 8 October 2024

Presiding Officer,

I welcome this opportunity to open a debate during Challenge Poverty Week in Parliament, and I move the motion that stands in my name.

As Parliament will know, on 29 July, the UK Government announced its decision to restrict entitlement to the Winter Fuel Payment to those in receipt of Pension Credit and other means-tested benefits from this winter.

That meant that an important provision of financial support that was available to pensioners in the United Kingdom would no longer be in place. Instead, eligibility would be much more limited to those eligible for Pension Credit and other relevant benefits.

This decision was taken with no notice or discussion with the Scottish Government. 

The decision came as a surprise to the Scottish Government, despite officials from both governments working closely together on the social security programme that had been focused on delivering an effective transition to provide this benefit through devolved social security powers this Parliament now holds.

As a result of this decision, Scotland’s share of this year’s Block Grant Adjustment funding is expected to reduce by roughly £150 million. 

That is over 80% of the cost of our own devolved payment, the Pension Age Winter Heating Payment.

This means we no longer have the funding to offer the payment as a universal benefit as we had intended to provide.

Additionally, the timing of the UK Government announcement, and the lack of prior consultation with Scottish Ministers, means that alternative approaches to universal payment and the means-tested approach advocated by the UK Government cannot be implemented in the time left available to us.

After careful consideration – we have made the difficult decision to replicate the UK Government’s approach here in Scotland should that be necessary.

My government however will continue to press the UK Government to reverse this damaging decision, and we invite the Scottish Parliament to support that view in the debate today. 

The Chancellor told us there would be “no return to austerity.”  But Scottish Government analysis indicates that roughly 900,000 pensioners will no longer be entitled to support with heating costs this winter.

That feels a lot like a return to austerity to me.

And with Ofgem announcing an increase in the energy price cap from this month, low-income households will be under even greater pressure this Winter.

The cut to Winter Fuel Payments and the increase in energy costs is a double whammy for people in Scotland and especially for many of the older and more vulnerable individuals in our country.

The Scottish Government is working urgently to mitigate the impact of the UK Government’s damaging decision. 

I have written to councils and COSLA to seek their urgent assistance in promoting the take-up of Pension Credit, as this is the main qualifying benefit by which our older people receive a Pension Age Winter Heating Payment.

And Scottish Government officials have been attending events across the country to raise awareness of the connection between Pension Credit and the Pension Age Winter Heating Payment, as well as to provide advice and support.

We are also continuing to invest heavily to protect vulnerable households from poverty and to mitigate the impacts of the UK Government’s approach to funding social security.

This year alone, we are spending £134 million on schemes – such as Discretionary Housing Payments and the Scottish Welfare Fund – which provide vital support to households struggling to meet their housing and energy costs.

We have also committed £6.1 billion for benefits expenditure.  This is a record for Scotland and nearly £1.1 billion more than the UK Government provides to us through the devolution of social security arrangements. 

This will help older people and low-income families with their living costs. In total, it will support over 1.2 million people – that is around 1 in 4 Scots – when all Scottish Government benefits have been introduced and clients have been transferred from the Department for Work and Pensions.

And we have consistently up-rated all our benefits in line with inflation.  Our intention is to make it a legal requirement to annually uprate all devolved benefits. 

According to the Scottish Fiscal Commission, this is an estimated investment of at least £6 million for 2025-26, rising to at least £12 million in 2029-30. 

Presiding Officer,

There are some who have questioned – and even criticised – the level of social security expenditure in Scotland.

But more so than ever in these tough financial times, I and my government, make no apology for putting more money into the pockets of pensioners, families and those struggling with the cost of living. 

We are also investing over £12 million in free income maximisation support, welfare and debt advice services.  This includes support for the Citizens Advice Scotland Money Talk Team Service, which last year supported over 9,000 older people.

We have invested in our Council Tax Reduction Scheme and free bus travel for all older people over the age of 60 in Scotland.

We have provided over £2 million from our Equality and Human Rights Fund to support older people’s organisations to deliver work focused on tackling inequality and to enable older people to live independent and fulfilling lives.

In all of this, we are continuing our other forms of heating cost support. 

Our Winter Heating Payment guarantees a reliable annual payment of £58.75 to people on low-incomes.  And, unlike the UK Government’s Cold Weather Payment, it does this regardless of the weather or temperature.

We are also continuing our Child Winter Heating Payment, which last year provided £7.2 million to support over 30,000 children, young people and their families who had higher fuel needs due to disability or a health condition.

Meanwhile, our Warmer Homes Scotland and Area-based schemes support people experiencing fuel poverty to make their homes warmer and more fuel efficient.

In the last decade, these two programmes have supported over 150,000 households living in – or at risk of – fuel poverty.

All of these programmes and supports are valuable, and they are making a significant difference to people all across Scotland. 

They come at the time that we’re having to address the challenges and this debate recognises that we cannot continue to backfill UK austerity policy decisions.  We have taken a number of steps to do so already, but the direct loss of funding in relation to Winter Fuel Payments make that an unsustainable option.

I therefore ask Parliament to support the Scottish Government’s call for the UK Government to reverse the Winter Fuel Payment decision and reinstate the payment as a universal benefit. That is necessary to avoid the abrupt change in policy and provision that has been forced upon us.

Presiding Officer,

Reversing this decision on the Winter Fuel Payment will be a vital step in ensuring our citizens can afford to live in warm homes – but there are of course many other reforms we need to see from the new UK Government.

We also need reform of the UK energy markets to address the root causes of fuel poverty.

We need a social tariff mechanism to provide discounted energy bills to those facing high energy costs, such as disabled people, carers and older people struggling with bills.

This is the best way to ensure that energy consumers are protected against high costs and can afford all of their energy needs.

Following a Ministerial roundtable, we secured the agreement of energy suppliers to take part in a working group aimed at co-designing a social tariff.

There is considerable work still to be done, but the group represents a real and necessary step forward.

Unfortunately, the powers to implement a social tariff are reserved to the UK Government.

We repeatedly called on the previous UK Government to introduce a social tariff as a means of targeted support for those who need it most.  Those calls went unheeded.

If we are to enjoy a more constructive discussion with the current UK Government – where the policy choices and aspirations of the Scottish Parliament and the Scottish Government are addressed in a serious, substantial and respectful way – it should be possible for us to make progress on delivering this crucial policy.

We are committed to working closely with the UK Government, as well as with Ofgem, suppliers and consumer organisations to advocate for the delivery of a social tariff across Great Britain. 

And here in Scotland, we will continue to tackle fuel poverty and support people during the ongoing cost of living crisis using the powers available to us.

If this Parliament had more powers, then of course we would be able to do more.

And I have no doubt that if the UK Government continues to take decisions – such as means-testing the Winter Fuel Payment, and does not heed calls for badly-needed reform of the energy market – then more and more people will ask themselves why it is that a country as energy-rich as Scotland should tolerate such decisions being imposed upon us by successive Westminster governments.

Presiding officer,

I recognise the restrictive fiscal environment in which the UK Government, my government, and local governments across the United Kingdom are operating.

The budgetary challenges that exist right now are the most severe we have ever faced in the history of this Parliament.

But it is a mistake to think that austerity and the restriction of entitlements is the solution to this problem.

It is a mistake to think that benefits, action to tackle poverty, and other supports for our most vulnerable are costs to be curtailed.

Rather, these measures are investments in our people, our communities and our nation’s future. 

We make these investments because they are right, and because they support thousands of people every day, all across Scotland.  But we also make these investments because they make good fiscal sense. 

They reduce later, greater strain on our public services.  They support people to take part in our communities and contribute to society.  They grow our economy. 

In the long run, they make us all more prosperous and they make our public services more sustainable

I have urged the UK Government to deliver an Autumn Budget that understands this. 

A budget that is focused on investment and opportunity rather than on austerity.

A budget that provides greater funding for public services and infrastructure, one that supports for our nation’s most vulnerable – and I repeat those calls today. 

As we begin this afternoon’s debate, I hope that members across this Chamber will work constructively with us to ensure the powers, levers and funding available to us continue to make the greatest difference to the most vulnerable here in Scotland.

The steps taken by the UK Government to restrict eligibility for Winter Fuel Payments are not in the spirit of devolution.

In nobody’s eyes can it be appropriate to devolve a power to the Scottish Parliament, and at the last minute withdraw the funds that go alongside the devolution of that policy.

Whatever our politics, no Member of this Parliament can surely believe that this is an appropriate way by which devolution of powers should proceed.

Today, I call on all Members of Parliament to unite in a clear statement to the United Kingdom Government that the decision to end universal eligibility for Winter Fuel Payments should be reversed and the resources should be available to this Parliament to ensure this vital support is available to all of those who are currently eligible in Scotland.

I appeal to Parliament to work together to make the best investment in our nation and its future. 

Let us ensure the best possible outcome for the people we represent, both this winter and for the years to come.