Smith Commission: Scottish welfare controls watered down at eleventh hour

SNP hits out at last minute change of heart

Plans to give the Scottish Parliament greater control over welfare have been watered down at the last minute.

A late draft of the landmark report by Lord Smith of Kelvin, whose cross-party commission proposed sweeping new powers for Holyrood, included the right to vary universal credit. This will merge six benefits including jobseeker’s allowance and housing benefit by 2019. But the proposal was dropped from the final version published on Thursday after the commission’s blueprint was discussed by the UK Cabinet on Tuesday.

The Smith Commission’s report said the Edinburgh Parliament should fix benefits including disability living allowance, attendance allowance and carer's allowance. MSPs would also have the power to create new benefits and top up others. But on universal credit, only the housing element was retained, a move which would allow Scotland to ditch the much-criticised bedroom tax on under-occupied public housing.

Edinburgh Parliament should fix benefits, according to the Smith Commission's report (Getty Images) (Getty)

The late draft said: “The Scottish Parliament will have the power to vary the personal allowance, the carer element, the child element, including the disabled child addition, the childcare costs element, the limited capability for work and work-related element and work allowance of UC [universal credit], child benefit & guardian's allowance, maternity allowance, and the operations of Jobcentre Plus in Scotland, including the responsibility for designing and implementing the policies it applies".

A Government source in London insisted the omission of these functions would not have a substantial impact on the next stage of devolution to Scotland. Annabel Goldie, the MSP and former Tory leader in Scotland, said universal credit would operate across the UK and “couldn’t be unpicked”.

But MSP Linda Fabiani, who represented the Scottish National Party on the commission, said: "Civic Scotland's disappointment with the Smith Commission proposals is clear - with many organisations feeling an opportunity to tackle poverty and inequality has been missed.”

She added: "Westminster decisions on welfare are continuing to devastate communities across Scotland, with food bank use rocketing 400 per cent in the past year. And in-work poverty is also on the rise as the UK minimum wage fails to keep up with the cost of living.”

Ms Fabiani said 65 organisations called for welfare devolution, with some proposing control of the minimum wage and many called for powers over equality legislation. “None of these powers have been forthcoming,” she said.