Scotland politics

Scottish independence: Call to increase minimum wage

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Image caption The expert group believes a higher minimum wage would increase tax receipts

An expert group on welfare set up by the Scottish government has recommended a substantial rise in the minimum wage.

It said the rate received by the lowest paid should go up by more than £1 per hour if Scotland votes for independence.

The experts argued that the move would increase tax revenues.

Scottish Lib Dem leader Willie Rennie said people who expected "big changes" to welfare after independence would be "disappointed" by the report.

The recommendation from the Scottish government's advisory group was that the minimum wage should match what is known as the living wage within five years of independence.

That would represent a rise from £6.31 to £7.65 per hour.

Their report argued that tax revenues would increase as a result by £280m annually, and they said the cost to employers could be eased by staged reductions in their National Insurance contributions.

The report contained 40 recommendations, which the group said were aimed at ensuring a future Scottish welfare system was "fair, personal and simple".

The recommendations included:

  • the abolition of what the report described as the "Bedroom Tax"
  • increasing benefits and tax credits annually in line with inflation rather than the current 1%
  • introduction of a new Social Security Allowance, which would bring together existing benefits into a single payment, but would not include Housing Benefit
  • replacement of the Work Programme with new initiatives to help people find, and stay in, employment
  • scrapping work capability assessments and the current benefit sanctions regime
  • increasing cash for carers, so they receive the same rate as job seekers

In the medium term, a key focus should be on better supporting those with long-term disability and illness into work and ensuring a more supportive housing market, the report said.

The group also suggested taking a much more personalised approach to welfare, with the longer-term aim of building on renewed trust in the system to achieve further improvement and change.

Martyn Evans, who chaired the expert group, said the welfare state should be a "springboard to a better life" rather than merely a "safety net".

He added: "We have concluded that a future welfare system should be based on three principles: fairness, personalisation and simplicity.

"We had a lot of feedback on what is wrong with the current system. It is too complex and too remote. It can be impersonal and can work against the needs of the citizens who need its support.

"There is clearly a breakdown of trust in welfare and we all have an interest in restoring that trust and confidence."

Deputy First Minister Nicola Sturgeon said that, in the event of independence, the current Scottish government would take forward the recommendations on improving support for carers, restoring the link between benefits, tax credits and the cost of living, and abolishing the current Work Capability Assessment.

It would also "carefully consider" the group's recommendations on the minimum and living wage, the introduction of a new Social Security Allowance and replacement of the Work Programme, she said.

'Effectively the same'

Ms Sturgeon added: "The group's report includes a wide ranging package of recommendations which would help us create a welfare system in an independent Scotland that better meets our needs.

"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.

"Following a vote for independence, we would be committed to taking on several recommendations straight away to deal with those aspects of the current system that are pushing so many people into poverty."

But Mr Rennie said the report "recommends replacing the Universal Credit with a universal credit, replacing the Work Programme with a work programme and replacing sanctions with a system of sanctions".

He added: "They are effectively the same in all but name. These are not the changes that people were promised by the SNP.

"Many people who expected the SNP's independence plans to deliver bold and radical change will be disappointed that the only change on offer is to by label and not substance."

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