Independent Scotland likely to keep benefit caps, says Salmond

5 Aug 13
An independent Scotland would retain the household benefits cap introduced by the UK coalition, though possibly at a different level, First Minister Alex Salmond said this weekend.

By Keith Aitken in Edinburgh | 5 August 2013

An independent Scotland would retain the household benefits cap introduced by the UK coalition, though possibly at a different level, First Minister Alex Salmond said this weekend.

Salmond's speech came as Scottish ministers announced fresh members of its Expert Working Group on Welfare, set up to develop plans for the welfare system of an independent Scotland. 

Salmond’s deputy, Nicola Sturgeon, has promised an early end to the so-called bedroom tax, but the first minister admitted: ‘We don’t believe we can change everything overnight.’

Asked specifically about the benefits cap, currently set at £26,000 per household, he replied: ‘If you have the right cap, deployed in the right way, then that is a reasonable thing to have.

‘We will inherit a structure of a benefits system and then we will make the changes that are required to take some of the hard edge off,’ Salmond added. ‘We are not going to change the things which are sensible.’

The new phase of work by the Expert Working Group on Welfare follows an initial report in June on the affordability of welfare in an independent Scotland. The group has been refreshed to draw up a new report early next year on what the system might look like.

Among five new members are Professor Jon Kvist from the University of South Denmark, known for promoting the Scandinavian welfare system’s emphasis on combating inequality. His co-option is seen as reflecting a growing enthusiasm in the Scottish National Party for the communitarian Common Weal approach to public policy championed by the Left-of-centre Jimmy Reid Foundation. 

Other new members are Joseph Rowntree Foundation chief executive Julia Unwin; Glasgow economics professor and women’s rights expert Ailsa McKay; Scottish Institute of Directors chief David Watt; and leading charities director Annie Gunner Logan. The group will be chaired by Martyn Evans of the Scottish Consumer Council, one of three continuing members from the initial group. The other two are Lynn Williams from the Scottish Council for Voluntary Organisations and Mike Brewer, economics professor at Essex University.

Meanwhile, Sturgeon today gave the go-ahead for a ground-breaking programme led by Falkirk Council to lever more than £400m from the private sector into a 25-year public investment programme that is projected to create almost 6,000 jobs and hundreds of apprenticeships.

The scheme is one of six at various stages of development in Scotland under the Tax Incremental Funding (Tif) concept, pioneered by the Scottish Futures Trust.  Tif allows local authorities to borrow capital against future business rate income that will arise from the ensuing development.

Falkirk’s Tif scheme is focused on the petro-chemicals industry around Grangemouth and includes improved industrial links to the M9 Motorway.  It envisages £413m of private investment in return for a council input of £67m, well up on the typical Tif leverage ratio of 5:1.

Sturgeon said that while Scotland needed full independence to tailor investment priorities to Scottish economic needs, ‘we will use every lever at our disposal within our devolved powers to boost capital spending and, through innovative financing schemes such as Tif, support jobs and apprenticeships and help the Scottish economy’.

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