SNP to launch radical overhaul of benefits system

Alex Neil will say the overhaul will be based on 'dignity, fairness and respect'. Photograph: Steven Scott Taylor
Alex Neil will say the overhaul will be based on 'dignity, fairness and respect'. Photograph: Steven Scott Taylor
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A MAJOR overhaul of Scottish social security is to be ­announced this week with Nicola Sturgeon’s government signalling its intention to fund a more generous benefits system than elsewhere in the UK.

Social Justice Secretary Alex Neil yesterday said he aimed to remove the “stigma” of accessing benefits by developing a system that departs from the controversial welfare reforms introduced by the UK government.

Neil’s intention to make it easier to apply for social security payments prompted fears that tax rises would be required to pay for the changes, as well as concerns that Scotland would see a “stampede” for benefits.

The Scottish Government’s proposals will be announced to Holyrood on Tuesday when Neil will tell MSPs that they will be based on the “principles of dignity, fairness and respect” and will “ease some of the stress” of obtaining benefits.

Next year will see Scotland receive a host of new powers over welfare as a result of the passage of the Scotland Bill, the legislation created to deliver the pre-referendum “vow” made by the pro-Union parties.

For the first time Holyrood will get the power over 15.3 per cent of welfare benefit expenditure in Scotland, which includes payments to help the most vulnerable.

The Disability Living Allowance, Carer’s Allowance, maternity grants and funeral payments are among the benefits being devolved to Edinburgh along with the power to create new benefits.

Tuesday’s statement to MSPs at Holyrood will kick-start a public consultation on the Scottish Government’s proposals, which will include raising Carer’s Allowance to the same rate as Jobseeker’s Allowance and scrapping the 84-day rule, which prevents families with a seriously ill or disabled child from receiving Disability Living Allowance and Carer’s Allowance payments in lengthy hospital stays.

Speaking ahead of the announcement, Neil said: “With our new social security powers we have the opportunity to take a different approach and develop policies for Scotland which will help to remove the stigma attached to accessing benefits.

“These policies will be based on principles which will ensure people are treated with dignity and respect. We want to show that social security can be fairer, tackle inequalities, and protect and support the vulnerable in our society.”

Neil will set out a different approach from the UK government, which is making controversial attempts to reduce the welfare bill by ending a “something for nothing” culture.

David Cameron’s supporters have applauded efforts to wean people off benefits and get them back to work.

His critics, however, believe his reforms are damaging the most vulnerable, with claims that people who are forced to undergo a “work capability assessment” are being categorised as fit to work when they are not.

Neil said: “We want to ease some of the stress of applying for benefits and will make the system easier and simpler to navigate, and align it with our devolved services that support people.

“It’s understandable that people who receive benefits, who are ill, retired or disabled, will be concerned about how these changes will affect them.

“I want to reassure them that our priority is for them to receive their benefits on time and with the right amount.”

The changes to the Scottish social security system will be announced at a critical time for the Scottish Government ahead of the Holyrood election at the beginning of May.

This week will also see the Scottish Government unveil its plans to fund local authorities using a combination of income tax and a reformed council tax that could force families in larger homes to pay more.

There is also speculation that ministers will give councils the power to add new upper bands to council tax, a move that could lead to a so-called “mansion tax” being levied.

The prospect of the changes to the social security system leading to tax rises was raised by Conservative MSP Alex Johnstone.

Johnstone said: “If Alex Neil is trying to give the impression that he is going to spend more money on social security than in the rest of the UK, then every penny of that will have to be raised through taxation on the people of Scotland.

“Next year the Scottish Government will have the power to vary rates and bands of income tax. If he is telling us that he will use these powers in a year’s time to increase the tax burden on higher earners, that will result in a flight of the tax base that will result in less revenue than gathered previously.”

His Conservative colleague John Lamont warned that the government’s proposals could lead to a “benefits stampede”.

Lamont, the Tory welfare spokesman, said: “The UK government has worked hard to get people off benefits and back into work, which has improved our economy, but the SNP are set to undo all the good progress that has been made.

“What we don’t want to see is a benefits stampede when these new powers come into effect. It always pays to be in work and we shouldn’t be making it easier for those who want to spend a lifetime on benefits.

“Many hard-working Scots will be worried about what the SNP are going to pull out of the hat next, especially when it comes to funding councils. With the Nationalists using a combination of income tax and a reformed council tax, many Scottish families are set to be worse off.

“The SNP need to be thinking these plans through and working with the UK government on the new powers. We don’t want a situation where the south of the Border is flourishing while Scotland gets left behind.”