SNP considers handing Scots thousands in benefits to guarantee minimum income

Telegraph

5 hours ago

SNP ministers are considering 'guaranteeing' Scots an income of up to £28,000 each by handing out billions of pounds more in benefits.
An expert group commissioned by the Scottish Government has recommended establishing a minimum income guarantee, below which nobody is allowed to fall.
The SNP was told the cap should be set at £11,500 per year for a single adult, £20,000 for a couple and £28,000 for a couple with a child or a single parent with two children.
Claimants would receive less if they had another source of income, such as a salary, and the payment would 'gently' taper off as earnings increased. Those earning higher amounts would receive nothing.
It would be paid out via a variety of sources, including social security benefits and cutting the cost of services in kind, like childcare and public transport.
The report said the payout could also be subjected to a 12-month time limit, after which claimants would revert to 'strengthened' benefits provided under the current welfare system.
A Scottish Government analysis said the policy would cost £8.1 billion a year, falling to £5.9 billion if tapering was introduced.
The expert group recommended that the huge cost be funded through income and council tax hikes on better-off Scots. It argued that £500 million could be generated by carrying out a council tax revaluation and increasing the amount paid in the higher bands.
In addition, it recommended freezing the salary thresholds for Scotland's income tax bands, a stealth tax that means workers would pay more when they received pay rises.
'Fundamental change to the social contract'
However, the move was called 'bizarre and unaffordable' by Scottish Tories. Around 1.5 million Scots earning at least £30,318 already pay more income tax than if they lived elsewhere in the UK. There are six tax bands in Scotland, double the total south of the border, and the top band is 3p higher.
The group of charities, campaigners and academics said there should be a pilot of the policy following next year's Holyrood election, with an interim minimum income guarantee established by 2036.
They said the plan, which the SNP pledged to examine when Nicola Sturgeon was First Minister, would be a 'fundamental change to the social contract'.
'Bizarre and unaffordable'
Craig Hoy, the Scottish Tories' Shadow Finance Secretary, said SNP ministers should 'immediately rule out this bizarre and unaffordable policy'.
He added: 'This report shows that a minimum income guarantee would cost billions when Scottish taxpayers are already footing the bill for spending that is simply unsustainable and unaffordable.
'The SNP's existing plans involve benefits spending £2 billion higher than other parts of the country by the end of the decade – and it's Scottish workers that will be saddled with the cost when they are already paying the highest rates of tax in the UK.'
The group recommended 'strengthening the existing safety net' between 2026 and 2031, including scrapping the two-child benefit cap and the five-week wait for the first Universal Credit payment.
UK ministers should 'end punitive conditions and sanctions' in the welfare system, the report said, while their SNP counterparts doubled the Scottish Child Payment to £55 per week. These 'initial steps' would cost the Scottish Government £671 million per year, the study estimated.
Between 2031 and 2036, SNP ministers would be handed new powers by the UK Government to implement the minimum income guarantee and a commission set up to decide on its level.
The minimum income guarantee would 'replace Universal Credit payments and where possible combine with other means-tested entitlements for simplicity,' the study said.
'We must act urgently'
Russell Gunson of the anti-poverty charity the Robertson Trust, who chaired the group, said: 'A minimum income guarantee could be transformative, putting in place a universal guarantee that's there for everyone in Scotland. Given the levels of poverty and inequality we see, we must act urgently.
'The first steps we set out over the next five years are affordable in the current context, and doable within existing powers. We can't wait – and we don't need to wait – to begin to make the changes outlined in this report.'
Shirley-Anne Somerville, the SNP's Social Justice Secretary, welcomed the report but she said there were 'no plans to change tax policy'.
She said: 'We will consider the Expert Group's report and the accompanying research and respond to the recommendations of the Expert Group in due course.'