The introduction of a minimum income guarantee, which would ensure a level that nobody would fall below, could eradicate poverty by 2030, says the IPPR Scotland analysis.
The think-tank’s radical recommendations also include the doubling of the value of the Scottish Child Payment at the start of the next Parliament, and then again to £40 a week within the next five years, paid for by a new social renewal supplement on higher rate taxpayers.
The report ‘Securing a living income in Scotland’ also urges the next Scottish Government to seek the power to remove the two-child limit and benefit cap, and consult on a premium for lone parents and disabled families in receipt of the Scottish Child Payment.
Furthermore, it recommends reforming council tax to raise additional revenues from higher-value properties, raise the value of newly devolved disability and carer’s assistance payments, and deliver a new social contract for work, including committing to ‘living hours’ alongside a living wage.
The report comes a day after new figures revealed child poverty was increasing in Scotland before the Covid pandemic with 26 per cent of children living in relative poverty in 2019/20 – around 260,000 youngsters – compared to 23 per cent in 2018/19.
The Covid pandemic also showed the failures of the existing social security system, according to the IPPR Scotland report, and as a result they claim major transformation is needed.
Its researchers said there was a “concerning gap” between current social security provision for low-income households and what is needed to support an acceptable standard of living.
They found some households are living on between a third and a half of the income needed to meet this standard, revealing that a couple with three children in Scotland could be left more than £1,300 per month short of what they need.
As a result the report recommends a minimum income guarantee that includes a monthly “core entitlement” of £1,244 for a couple and £792 for a single person. Additional payments for households with children would be worth £267 for the first child and £224 for each additional child per month – with no limit on the number – with the payment withdrawn as earnings increase.
Overall, it says this would require an estimated £7 billion of additional investment in social security spending in Scotland per year.
And while further devolution of powers over social security and tax would be needed to deliver a full minimum income guarantee, the report states it is within the power of the Scottish Government to take steps towards one, including establishing an independent body to set an income floor and increasing the Scottish Child Payment to £40 per week.
Rachel Statham, senior research fellow at IPPR Scotland, said: “The pandemic was a once-in-a-century test of our social security system and it failed.
"When it hit, the government had to scramble to provide furlough and emergency uplifts to prevent disastrous consequences. But without a new approach, the system will continue to fail people living in poverty and insecurity every day. We need to learn lessons from this crisis, so that we are prepared for the next.”
She added: “As we emerge from the health crisis, it’s now time to rebuild Scotland on the foundations of social, economic and climate justice.
"A minimum income guarantee, that can ensure that no-one in Scotland falls beneath an income floor that supports an acceptable standard of living, is an idea that's time has come. The next Scottish Government should set its sights on radically reforming social security to provide a springboard to fall back on, not a tightrope over poverty.”
A minimum income guarantee is different to recent demands for a universal basic income as it is a targeted payment to those whose income falls beneath an established standard or who are unable to work due to sickness, disability or caring responsibilities. It also sets payments based on need and circumstances, tied to minimum income standards, rather than a flat-rate individual payment.
Mubin Haq, chief executive of Standard Life Foundation, which supports IPPR Scotland’s research on social security, said: “A year on from the first lockdown it is clear how fragile our existing safety nets are. The insecurity this created was apparent before the pandemic, but was made more stark as millions of us have needed support.
“This report outlines an ambitious programme to benefit the whole of society, reducing the hardship and financial insecurity which blight too many lives. It would guarantee incomes we could live on, helping people to thrive, not barely survive.”
Social security spokesperson and North East lead candidate Rosemary Bruce said the report underlined the need to use the Scottish Child Payment to tackle child poverty.
She said: "We also support an enhanced carers’ allowance in Scotland and are campaigning for a UK-wide uplift of £1,000 per year to recognise the value of carers as well as financial support for carers to access education and training.
“As the country recovers from the pandemic, we need to be bold. A Universal Basic Income to provide everyone with a safety net would be a way to ensure that everyone has the freedom and opportunities they deserve.”
Scottish Greens co-leader Patrick Harvie said: "The pandemic has revealed our economy is over reliant on poor wages and insecure jobs, with a social security safety net that is full of holes.
"That's why the Scottish Greens secured pandemic relief payments for half a million household in this month's budget, but it's clear we need to go further. Our Scottish Green manifesto will contain bold proposals to tackle unequal pay, make the case for a universal basic income and protect people's right to a home."