Independent Scotland ‘could customise benefits’

31 Jul 13
Independence would allow Scotland to redesign its benefits system around its relatively older population, according to the Institute for Fiscal Studies.

By Mark Smulian | 31 July 2013

Independence would allow Scotland to redesign its benefits system around its relatively older population, according to the Institute for Fiscal Studies.

A study by the economic think-tank found that overall spending on benefits in Scotland did not sharply diverge from that in the rest of Great Britain.

Scotland spent more on old age and disability benefits than England and Wales, but less on housing and child benefits.

The projected more rapid ageing of the Scottish population suggested that benefit spending would grow somewhat more quickly than in Great Britain as a whole in the coming decades, the IFS said.

If voters back independence in next year’s referendum, it would allow Scotland to ‘improve a benefit system, parts of which make little economic sense – or, of course, to make its own mistakes’, the IFS said.

But radical reforms would be difficult as any major redesign would either require Scotland to spend more on benefits, or create large numbers of losers.

Benefit spending in Scotland was £17.2bn in 2011/12, accounting for around 30% of all government spending there.

This was equivalent to £3,238 per person, some 2% higher than the average for Great Britain. This was lower than the rates for Wales and the English north and Midlands, but higher than for London and southern England.

Average spending on disability benefits per person was 22% higher in Scotland, at £593, than in Great Britain as a whole, reflecting a higher prevalence of disabilities and health problems.

Housing Benefit spending was some 12% lower in Scotland because its rents are generally lower than in the rest of Great Britain.

Spending more on pensioners but less on children reflected Scotland’s age profile, the IFS said.

Senior research economist David Phillips said: ‘Overall benefit spending per person is similar in Scotland to the rest of Great Britain, but within this there are considerable differences.

‘Looking ahead, independence – or further devolution – would provide Scotland with an opportunity to design its own benefits system to reflect the priorities of the Scottish people. It would also need to adapt it to the fact that Scotland’s population is projected to age faster than the rest of the UK.’

Scottish Labour’s William Bain said: ‘This report is another example of where the facts, when properly considered, undermine the assertions of the SNP when it comes to the affordability of breaking up Britain.’


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