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Scottish independence: Welfare reforms 'possible but potentially costly' Scottish independence: Welfare reforms 'possible but potentially costly'
(about 11 hours later)
Independence would give Scots the opportunity for radical reform of pensions and benefits, according to a think tank.Independence would give Scots the opportunity for radical reform of pensions and benefits, according to a think tank.
But the Institute for Fiscal Studies (IFS) has warned that an ageing population could bring additional costs in the future.But the Institute for Fiscal Studies (IFS) has warned that an ageing population could bring additional costs in the future.
It also compared the effect of UK government tax and benefit changes.It also compared the effect of UK government tax and benefit changes.
The IFS calculated they have reduced incomes in Scotland by less than the rest of Great Britain.The IFS calculated they have reduced incomes in Scotland by less than the rest of Great Britain.
The IFS said benefit spending in Scotland was 2% higher than the average across Great Britain in 2011-12, although the gap has been shrinking in recent years.The IFS said benefit spending in Scotland was 2% higher than the average across Great Britain in 2011-12, although the gap has been shrinking in recent years.
They said this is partly explained by Scotland's population profile, which is older than the rest of the GB. They said this is partly explained by Scotland's population profile, which is older than the rest of GB.
But, researchers struggled to explain why spending per person on disability benefits in Scotland is 22% higher than the average across Great Britain. But researchers struggled to explain why spending per person on disability benefits in Scotland is 22% higher than the average across Great Britain.
'Fits Scotland's needs''Fits Scotland's needs'
The IFS concludes independence would give the opportunity for "radical reform" of the benefits system but warn that the country's increasing number of older citizens "could place a greater burden on Scotland's finances than it will on Great Britain as a whole". The IFS concludes independence would give the opportunity for "radical reform" of the benefits system but warns that the country's increasing number of older citizens "could place a greater burden on Scotland's finances than it will on Great Britain as a whole".
The Scottish government has said it would abolish what it calls the bedroom tax, which sees housing benefit payments reduced if the government decides spare rooms are being subsidised by the taxpayer.The Scottish government has said it would abolish what it calls the bedroom tax, which sees housing benefit payments reduced if the government decides spare rooms are being subsidised by the taxpayer.
It has also promised to match a current coalition pledge to protect pensioner benefits with a so called triple lock - where pensions increase by the rate of the Consumer Prices Index (CPI) or 2.5% after the introduction of a flat-rate state pension.It has also promised to match a current coalition pledge to protect pensioner benefits with a so called triple lock - where pensions increase by the rate of the Consumer Prices Index (CPI) or 2.5% after the introduction of a flat-rate state pension.
The IFS warn this "would become costly in the long term".The IFS warn this "would become costly in the long term".
Reacting to the report, Finance Secretary John Swinney said: "Social protection, which includes expenditure on welfare, is currently more affordable in Scotland than the UK as a whole.Reacting to the report, Finance Secretary John Swinney said: "Social protection, which includes expenditure on welfare, is currently more affordable in Scotland than the UK as a whole.
"With the boost to the working population that can be delivered by using the full economic levers of independence to grow the economy we can ensure Scotland's welfare policy fits Scotland's needs.""With the boost to the working population that can be delivered by using the full economic levers of independence to grow the economy we can ensure Scotland's welfare policy fits Scotland's needs."
In April, Works and Pensions Secretary Iain Duncan Smith warned an independent Scotland faced higher bills in the future to fund state pensions.In April, Works and Pensions Secretary Iain Duncan Smith warned an independent Scotland faced higher bills in the future to fund state pensions.
He told an Edinburgh conference: "In today's terms, in 50 years time, it will cost each working age person in the UK £700 more per year to pay for state pensions and other pensioner benefits than it does now.He told an Edinburgh conference: "In today's terms, in 50 years time, it will cost each working age person in the UK £700 more per year to pay for state pensions and other pensioner benefits than it does now.
"In Scotland, the position is much worse - it will cost another £1,100 per working age person to pay for pensioner benefits.""In Scotland, the position is much worse - it will cost another £1,100 per working age person to pay for pensioner benefits."