Living Wage 'Could Fund Better Welfare'

The Scottish government should increase the minimum wage by more than a pound, if Scots vote for independence.

An expert report on welfare says the country's lowest paid workers' should be earning the Living Wage of £7.65 an hour.

It's claimed the move would increase tax revenues which, in turn, could pay for White Paper plans on a more Scandinavian style welfare system in an independent Scotland.

Immediate recommendations:

• Re-establishing the link between benefits and the cost of living, with benefits and tax credits (which are currently subject to a one per cent annual increase) being increased each year by the Consumer Prices Index of inflation.
   
• The minimum wage should rise in phases to equal the Living Wage, with Employers National Insurance payments reduced to help business make this transition.
   
• Abolition of the ‘Bedroom Tax’.
   
• Abolition of the current system of sanctions and replacement with a new approach which is personal, proportionate and positive.
   
• Introduction of a new Social Security Allowance (SSA). The SSA would bring together existing benefits into a single payment, but would not include Housing Benefit. The household would have choice over how often to receive their assessed SSA, and who in the household should receive it, with the default position being payment to the main carer rather than the main earner.
   
• An increase in the Carer’s Allowance so that it’s paid at the same rate as the Jobseeker’s Allowance.
   
• Replacement of the ‘Work Programme’ with new initiatives to help people find, and stay in, employment.
   
• Establishment of a National Convention on Social Security at the start of 2015.
   
• Scrapping of the current Work Capability Assessment. The assessment process that takes its place should be carried out by clinical professionals and should be developed in partnership with those affected. A review group should consider detailed recommendations for replacing the Disability Living Allowance and the Personal Independence Payment with a new social security benefit for disabled people.

​'Strong safety net'

Deputy First Minister Nicola Sturgeon said an SNP government in an independent Scotland would act on the recommendations.

She said: “In particular, I strongly endorse the Group's view that the welfare system should act as a strong safety net and a springboard to a better life. They are right when they say that work should be the best route out of poverty for most people but that the rise in in-work poverty needs to be addressed if this is to be the reality.

“We will be considering the Group’s recommendations to replace the Work Programme with more innovative, locally-based schemes, designed to help people find jobs and, importantly, stay in work.

“We will also look at the introduction of a new Social Security Allowance, but would keep Housing Benefit separate from this.

“Our focus will be on prevention rather than dealing with existing symptoms, to develop a society that not only provides fair support and decent opportunities for all but also protects the vulnerable in our society. The only way to guarantee that is to have the powers to deliver progressive reform of the Welfare State.

“Only with independence will we have the opportunity to create a welfare system that is fairer and works for all the people of Scotland.”

Commenting on the Expert Working Group on Welfare report, Graeme Brown, Director of Shelter Scotland, said:
 
"We welcome any fresh thinking aimed at supporting and finding appropriate solutions for people facing housing difficulties due to affordability or accessing safe and secure homes.
 
"We know that the private rented sector in Scotland faces a number of challenges as it has more than doubled in the last ten years.  More than a  quarter of the 300,000 households who rent privately are families with children and we think it is time to rethink private renting in Scotland and we welcome the focus this report brings to the sector.
 
"We want to see a private rented sector that delivers longer-term stability and security, particularly for low-income households and families, a sector fit for the 21st century."

Martyn Evans is behind the paper.