Scotland – Page 2 – Social policy: commentary and updates

Scotland is not ready for an independence referendum

The First Minister of Scotland has been pressing for a further independence referendum, and the UK government seems determined to refuse the request. I am not sure that either party means what it says. If the polls are to be believed, there is a narrow majority against independence; and in a time of great insecurity, with the difficulties of leaving another union all too apparent, many voters will be apprehensive about what a vote for independence might mean in practice. The longer the process, the more likely the movement for independence is to gain in credibility and support. If the UK government genuinely wishes to maintain the Union – which is uncertain – a proposal for independence is far more likely to be defeated if it takes place very soon.

On the other side, one has to ask whether the Scottish Government really is prepared for a referendum campaign that will avoid the traps that the last one fell into. During the long campaign before the 2014 referendum, the Scottish Government presented a ‘White Paper‘ with specific plans for action. Alex Salmond told the electorate that this is what they would be voting for. That was a miscalculation: it meant that every detail that people disagreed with became a reason to vote against the deal. The debate about currency was an illustration: units of exchange are not decided exclusively by governments, there was no need to commit to any specific plan, Scotland could use multiple currencies (it already trades oil in dollars) and in practice no-one can stop people accepting trades in foreign currency. Committing the country to a specific single policy outcome was unnecessary and destructive.

Similarly, the draft Independence Bill went off-track when it started to legislate for future policies, such as sustainability or the possession of nuclear weapons, which serve no useful purpose in a constitutional document. None of the constitutional issues that have to be nailed down was clearly settled. The draft Bill left gaps in terms of rules of recognition (such as delegation of authority to ministers or to local government), change (such as how to amend the constitution) and adjudication (such as the power of the courts). It assumed that there would be only one legislative chamber, which could not possibly have the capacity to deal with national legislation; it proposed no constitutional limitations on the power of government. I argued at the time that Scotland’s great strength was in participative public engagement, and that what Scotland needed to have was an extended period of discussion about constitutional arrangements. That discussion has not happened yet.

An early referendum would require the Scottish Government to go into the campaign either with another White Paper – a settled prospectus – or with a promise to have a discussion in time to come, something that would depend largely on on trust. Neither or those is a winning proposition.

Harry Burns on mortality figures

I’ve recently joined the board of Barony Housing Association, which is part of the Wheatley Group, and consequently was invited to a institutional lecture by Prof Sir Harry Burns, who was considering mortality statistics in Scotland and the UK. He made the case that, despite the emphasis on nutrition in much of what’s written about public health, nutrition is not at the core of the problems. Scotland’s nutrition-related mortality follows a pattern, astonishingly, which is not much different from Finland’s. Finland has an exemplary nutritional policy and lots of virtuous practices, and Scotland (notoriously) doesn’t.

The real difference in mortality, he argued, occurs in younger age groups; and the primary issues for the mortality of younger adults are drugs, alcohol, violence and suicide. All of which are social.

Some snippets on the Scottish variations in benefit rules

I have spent a little time this week preparing for an evidence session of the Commons Scottish Affairs Committee, which was reviewing the development of social security in Scotland. The hearing, scheduled for next Tuesday, has now been cancelled, because everyone is currently more concerned with High Politics; the process may resume in due course, or it may not.

I’d been focusing on the back half of the committee’s remit, which was concerned with the relationship between the Scottish system and the UK system. In the process, I’ve spoken with people from a range of organisations, including the Scottish Federation of Housing Associations, Glasgow Welfare Rights, Citizens Advice Scotland, Clydebank Independent Resource Centre, Child Poverty Action Group and One Parent Families Scotland. I’ve also seen the written submissions from Inclusion Scotland, Poverty Alliance and the Scottish Campaign on Rights to Social Security: the written submissions should be published more generally shortly, but publication has to be approved by the Committee first. Thanks to you all. I also found a SPICE paper, on administrative costs and relationships with the DWP, particularly helpful.

There have been very positive things said about a couple of the new benefits that rely heavily on the cooperation of the DWP, particularly the Carers Allowance Supplement and the Best Start Grant. There are more reservations about the operation of variations in Universal Credit, partly because the system from direct payment of rent to landlords isn’t adequately integrated, and because there seems to be some hesitation about applications. That may reflect advice from housing associations, and there have been some problems with some rent being paid monthly while income is bi-monthly; but I’d guess that it may also be because bi-monthly payments don’t get over the outstanding problems of an unpredictable, fluctuating level of benefit.

Additional note, 30th October: I have just received notice that, following the announcement of a General Election, the Committee’s review of the Scottish social security system will not now take place.

Functional illiteracy in Scotland: Andrew Neil’s figures were out of date, but they weren’t made up

Andrew Neil has been censured by Ofcom for saying in an interview in 2017 that one in five pupils who left primary school in Scotland were “functionally illiterate”. According to the BBC report of the judgment, the BBC submitted that

“the figure had come from a 2009 report, but that “it was not accurate to say that this allowed the conclusion quoted in the programme … It should have been made clear that the phrase ‘functionally illiterate’ was not used in that report and that its source was the education spokeswoman of the Scottish Conservatives.” When it published its findings in November 2017, the ECU said that the 2009 survey “contained no reference to ‘functional illiteracy’, and no data which would have justified the claim in question”.

That surprised me, because I’d come across the 20% figure before.

The main source of the figure is arguably a report written by Professor J Lo Bianco, Language and Literacy Policy in Scotland, published in 2001 by SCILT at the University of Strathclyde. Lo Bianco’s report was a wake up call for Scottish education – it had a major impact on the treatment of Gaelic and BSL. He wrote that “More than one adult in five is not functionally literate in English and even more people have problems with numeracy.” He wrote:

The UK-wide Report Improving Literacy and Numeracy, A Fresh Start (Moser Report 1999) notes in its opening paragraph that ‘something like one adult in five in this country is not functionally literate and far more people have problems with numeracy. This is a shocking situation and a sad reflection on past decades of schooling. It is one of the reasons for relatively low productivity in our economy, and it cramps the lives of millions of people.’ Whilst the situation that is reported is indeed shocking it is far from clear that it is valid to make a direct and causal connection between the levels of assessed adult literacy and ‘past decades of schooling’. The International Adult Literacy Study of 1997 suggests that 23% of adult Scots have low literacy skills.

Subsequently, England developed the “Skills for Life” survey, which by 2011 recorded marked improvements in functional literacy. A Scottish report in 2008, “New Light on Adult Literacy and Numeracy in Scotland” avoided the question of functional literacy. Based on a study of adults aged 34, it commented that ” literacy levels in England and Scotland were nearly identical”(p 8) but commented that ” 39% of men and 36% of women in the survey had literacy abilities at a level likely to impact on their employment opportunities and life chances.”

What’s been happening since is important. The Scottish Survey of Literacy and Numeracy shows a marked improvement in standards in primary schools, where the foundations of literacy are laid, and now 88% of pupils in P7 are considered to be performing ‘well’ or ‘very well’. That improvement probably wouldn’t have happened without those earlier reports.

I don’t much like Andrew Neil’s politics, but he’s a terrific journalist. Even if on occasion he gets things wrong, he doesn’t make things up. The main charge against him is not that he was wrong, or that his use of the term ‘functional literacy’ was inappropriate, but that he was outdated. That’s a mistake that any of us who are trying to distill information drawn from a wide field might have made.

Scotland doesn’t have to have one currency. It could use four.

I was puzzled when Alex Salmond, during the referendum on Scottish independence, opted to push a particular model for currency in an independent Scotland; it simply wasn’t necessary. As Iain McWhirter recently argued in the Herald, it’s the sort of decision that can be put off till later, and it’s perfectly possible to change the model if something isn’t working. In the current debates, I think we’re seeing a reiteration of many of the same arguments. All of them seem to me to be based on a false premise: that Scotland must choose its currency. Why?

The Growth Commission, which fell victim to the same elephant trap, starts off its discussion by identifying three purposes of money: as a medium of exchange, as a unit of account, and as a store of value. They could quite reasonably have added a fourth, because it’s most of what their discussion is about: money as an instrument of economic policy. The histrionic criticisms made by some of the pro-independence commentators have suggested that it is not possible to be independent without an independent currency. This quotation from Wynne Godley, objecting to the Euro, is going the rounds on Twitter:

the power to issue its own money, to make drafts on its own central bank, is the main thing which defines national independence. If a country gives up or loses this power, it acquires the status of a local authority or colony.

Have at you, France! Italy, you are a local authority! I blow my nose in your direction!

Let’s take some of the heat out of this. Money of all kinds can be used as a unit of exchange. There are lots of places where currencies of different sorts will be accepted, regardless of what the official currency might be. I’ve been places where they wouldn’t accept local currency, but asked to be paid in dollars. As someone told me in Croatia, asking for payment in pounds: “Money is money.” And money can be a unit of account in one currency while it is being exchanged in another. When I was in Poland, my formal contract was paid in zloty, as the government requires, and tax was deducted in zloty, but the job offer and the pay were in Euros.

Scotland could survive while using the British pound. Despite some of the nonsense that people come out with – such as George Osborne’s preposterous claim that Britain would “stop” Scotland using the pound and that there’d have to be trucks crossing the border carrying notes and coins – whether or not Scottish people use the pound, or any other currency, is down to them. But things don’t have to stop with the pound. The Scottish economy, for those who haven’t noticed, already uses two currencies. Most people use the pound sterling in ordinary life, but the oil industry conducts its transactions in US dollars.

In the past, it’s been difficult for buyers and traders working in multiple currencies. The main issue has been the practice of the banks. A combination of technology and competitive innovation has already largely overcome that. Most retail payments in the UK are now made by card, not cash. I use a bank which offers me parallel currency accounts and transfers without holding or transaction fees. As transactions are cashless, there’s absolutely no reason why people shouldn’t hold accounts in Euros, pounds, dollars and other currencies at the same time; traders could make their own choices. Scotland could reasonably have four currencies: a Scottish currency, the dollar, the pound and the Euro. The main reason for having a separate Scottish currency would be as a unit of account and a tool of economic policy. Whatever the choice is, we don’t need to get hung up about it.

Disability Assistance: the consultation paper opts for too many of the wrong answers

The Scottish Government has launched A Consultation on Improving Disability Assistance in Scotland, with a closing date set for the end of May. The consultation paper makes the important assumption that the design of Disability Assistance should be based broadly on the existing pattern of benefits. In particular, it proposes

A distinction between benefits for children and young people, for people of working age and for older people
The continued use of a functional assessment, and
The maintenance of components to cover ‘daily living’ and ‘mobility’

A risk of confusion At three points (on pages 15, 16 and 17) the document suggests that they want to reduce the “risk of confusion between benefits being delivered by both UK and Scottish Governments”. The existing system of benefits is already deeply confusing, and as a consequence it fails in many important respects to reach the people it is meant to help. The approach laid out in the consultation paper is designed to make sure it is at least as confusing as it was before.

I would point here to three pieces of evidence. The first is from an ad hoc study done for the DWP. Three-quarters of the people who benefits are supposed to support do not recognise themselves as being ‘disabled’. Most of them do not think of themselves as being disabled; others answer that they’re disabled ‘sometimes’. The second is that people do not understand the basic premise of a benefit that is supposed to cover daily living or care. A study of unsuccessful claims for Disability Living Allowance found that people receiving Employment and Support Allowance – the long-term sickness benefit – did not understand that DLA was there for different purposes from ESA; that they sometimes made claims with no reasonable hope of success, thinking that they may as well have a crack at it anyway; and if they were refused, they put it down to luck rather than the operation of appropriate criteria. The third issue is that takeup of these benefits is worryingly low. None of these figures is certain, but the best guesses are that the mobility component of DLA is claimed by something in the region of 60% of the people entitled, Attendance Allowance by 50% and the care component of DLA (now the ‘daily living’ allowance of PIP) is taken up by 40%.

Distinctions on the basis of age. Wherever a distinction is made on the basis of age, there will be problems in managing the transition between benefits. The suggestion that people of “working age” have different needs tends irresistibly to give the impression that the criteria have something to do with working, and one of the problems with PIP at present is the mistaken assumption that ability to work is somehow a relevant criterion in assessment – that is not what disability assistance is supposed to be about.

The most important problem, however, is that distinctions on the basis of age can lead to serious inequity, and anomalies in the operation of the benefit. As things stand at present, people under the age of 65 get PIP, and people over the age of 65 are supposed to get Attendance Allowance. That implies, on the face of the matter, that people under 65 can get help with mobility, and people over 65 cannot. However, that is not what happens. A person who becomes disabled before the cut-off date can continue to receive DLA/PIP after the date. Fully a third of PIP and DLA claims are made by older people under this rule. And that means that people with the same disability can get different benefits, depending on when their disability was incurred. One of the most common causes of disability for people aged 50-70 is stroke; some people who have strokes recover, some others recover partially. So a person who had a stroke at 63 and recovers partially may get help with mobility, while another person who has a stroke at 67 cannot, even if the functional limitation of the older person is more serious.

The use of a functional assessment. DLA was made by clumping together two rather different benefits: Attendance Allowance for adults below pension age and mobility allowance. Mobility Allowance was based on a functional assessment – whether or not people could walk; Attendance Allowance was not. While there have been many challenges to the mobility component, for example those related to conation, it is the care or daily living component which causes most confusion.

The points-based approach to functional assessment was initially based on work by the Office for Population Censuses and Surveys, when the scheme had a very different purpose. There was no intention to develop a mechanism for individual disabilities to be precisely measured, and points were not the sole test: when the OPCS scheme was initially worked out, one of the critical points made about it was that disability reflected the nature of each person’s most serious impairments, not a cumulation of smaller functional limitations. The points scheme has never worked well, and one of the reasons why entitlement to DLA and then PIP grew beyond the government’s expectations was that repeated challenges drew attention to groups of people who were simply left out – first people with learning disabilities, then mental disorders, then people with terminal illness and most recently people with fluctuating conditions. The central problem is simply this: most disabilities do not have a strict, constant and precise relationship to functional capacity or daily activity. People cannot clearly relate their circumstances to the tests.

There are alternatives. I have made the case before on this blog, and it bears repetition here. First, it is possible to identify certain conditions which should imply automatic entitlement, offering benefits on minimal or secondary evidence – either accepting on sight that the person has a qualifying disability (double amputation, severe disfigurement) or passporting benefits on the basis of provision by other agencies (congenital disability, blindness). Second, there are conditions which will have led to prolonged long term contact with health services, and certification from a consultant is sufficient to establish that the condition is there without requiring further detailed examination of personal circumstances. Examples are terminal illness, multiple sclerosis, MND, malignant neoplasms or brittle bones. Third, there are conditions where existing services in long-term contact with the individual are far better placed to judge the impact of a condition than an independent assessor could be, and it would be appropriate to accept medical certification. Examples are continued psychosis, epilepsy, dementia and learning disability. Only after these three categories are considered is it appropriate to think in terms of further individual assessment of function, or a points scheme.

Daily living and mobility components. The other main issue to consider is whether there should be two components of a combined benefit, at least for people of working age. The key problems have already been identified here. People do not understand it, and ‘have a go’ instead; takeup is poor; there are serious inequities because of the treatment of the mobility component. If there was a separate Mobility Allowance, its rules could be reconsidered to sort out which older people should get it, instead of the arbitrary current rules; and people do understand, more or less, what a Mobility Allowance is about. Then we could have a reasoned discussion about the other component – whether it is supposed to respond to extra needs, or to provide extra income, some compensation for disability, or some other purpose. (My own view is that we ought to revive SDA, rather than abandoning it, but I appreciate that that probably puts me in a minority of one.)

Whatever we do, we need to recognise that the current arrangements do not work, and that minor tweaks are not enough; it is time to bring them to an end.

Policies for devolved disability benefits

The Scottish Government has decided not to ask for the transfer of responsibility for Severe Disablement Allowance, which will continue to be managed by the DWP. I was asked by a journalist for a reaction, and what follows is my answer.

The decision is understandable, because SDA was closed to new claimants many years ago, and the government does not want to create disruption for the small numbers of people who are currently entitled to Severe Disablement Allowance. Having said that, the power to deliver a benefit similar to SDA could be important for the future. SDA was always a relatively small, residual benefit designed to fill in the gaps when other benefits were not available. The distinctive feature of SDA was that it was the only benefit paid to people simply because they were severely disabled. Other benefits like Attendance Allowance, DLA and PIP have tied the conditions to people’s care needs, which usually means, for example, that people in residential care may not get them. I think it’s valuable to have a mechanism of the sort, and hope that the Scottish social security system will be able in the future to recognise needs that the current UK system doesn’t.

More generally, I’d also like to see benefits for people with disabilities to be made more accessible. The proposed reforms will make it possible for older people to continue to receive Personal Independence Payments without repeated assessments, and that’s a good thing. But the basic reason why older people are continuing to claim DLA or PIP, instead of moving on to Attendance Allowance, is that Attendance Allowance doesn’t cover mobility needs. This means, for example, that someone aged 63 can get long-term mobility support after a stroke, but someone aged 67 can’t, even if the restrictions the older person faces are more severe. It would make more more sense, and it would be fairer, to have a separate Mobility Allowance without the age restrictions that currently apply.

A levy on workplace car parking is a bad idea

As part of the price for the cooperation of the Green Party in the Scottish parliament, the Scottish Government has agreed to give local authorities the power to introduce a levy on workplace car parks. “Plans to give powers to councils to introduce a workplace parking levy, as already allowed in England, will come forward via an agreed Green Party amendment to the Transport (Scotland) Bill. ” This is intended to reduce the numbers of people who travel to work by car. It’s been tested in Nottingham, where it’s been claimed to reduce congestion and raise revenue.

Both of those claims may be true, but it’s still a rotten idea. It falls into the same category as a raft of proposals, and sometimes actual policies, which try to regulate behaviour by using price as the main lever. Policies of this type have often been favored by market economists, because the most basic economics courses tell us that the way to reduce demand is to raise the price until the market is cleared. There have been loads of suggestions about policies where the same principle could be applied: they include congestion charges, road pricing, charges for GPs, water metering, and charges for rubbish collection by weight. (Often they go hand in hand with some kind of gee-whiz technology that just happens to be sold by the companies that are pressing for the policy, but that’s not the main issue here.)

The key objections to rationing by price are threefold. First, the demand for any activity depends on the resources that people have, and the people whose behaviour are most likely to be affected are those on the lowest incomes. Almost by definition, people on lower income have to be more sensitive to marginal cost than people on higher incomes can be – and the introduction of a flat-rate levy takes far more from the incomes of lower paid workers than it does for higher paid workers. It’s important to consider for any policy what the distributive implications are. Second, it’s essential to understand what the effect on behaviour might be, and changing the price of an activity is a blunt instrument. Some substitutions may be desirable – such as cycling to work instead – but it can lead to people substituting different, less desirable behaviours instead – for example, parking on residential streets instead, driving more and longer while looking for parking places, absenteeism or resignation. Third, it may conflict with other policies – recruiting specialist staff such as nurses and teachers, encouraging people to take up work at a distance, getting people to take longer hours by flexible employment practices.

I’ve argued before on this blog that there is a wide range of rationing measures, and rationing by price is markedly inferior to some of the alternatives. None of that means that rationing by price is never appropriate – there may be exceptions (reducing the demand for cigarettes by price could be one) – but it does mean that it’s hard to justify, and there are usually better ways to achieve the ends. Before penalising people for turning up to work, try some of the alternatives: encouraging collective transport such as employer-funded buses; provide rail season tickets and bus passes; tilt the balance towards remote working; tie site development planning to transport provision. It’s odd to see the Green Party advocating a set of market-driven measures that would sit more comfortably with the Institute for Economic Affairs than they do with the people-centred economic policies that the Greens claim to support.

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