What Scottish independence could deliver for the welfare state
Craig Dalzell for The National’s In Common newsletter
To truly tackle poverty and build a fairer society, Scotland shouldn't just mimic others—it should be bold, learn from Europe's best, and lead with a Universal Basic Income that both saves money and eradicates poverty.
Back in the early days of Common Weal, while we were still finding our feet and building our reputation, we had an informal rule when it came to policy-making. We had to be able to show the policy working somewhere else.
This was because we felt that Scotland simply wasn’t ready for some of the radical ideas that we wanted to implement so being able to show it already working was a good way of building confidence in a nation too often told “we cannae dae it” (by which our opponents often mean “we shouldnae dae it” which is a different thing entirely).
We’ve since dispensed with that rule and we sometimes broke it even then (one of Common Weal’s very first policy papers, “In Place Of Anxiety”, was an advocacy for Universal Basic Income (UBI) long before it became one of the “cool” policies) but this isn’t to say that we can’t learn lessons from elsewhere.
Just this week, I was asked by a researcher which of our neighbour nations I’d like Scotland to copy if I could. My answer was that we shouldn’t copy any one but that I take a lot of inspiration from Germany on local democracy, from Denmark on energy strategy and from Norway for public ownership. Somewhere else we could do with taking inspiration from our neighbours is on social security.
The scenes this week from the UK’s attempts to hammer the poor and disabled and only backing down after shambolic chaos in the Parliament should be a lesson not just in humanity but in policy-making as well. Never fight a battle you haven’t won in advance. Never assume a large on-paper majority means certain absolute power.
With many of our neighbours basing their politics on proportional representation and coalition politics, this kind of legislation would have undergone a lot of negotiation and compromise long before arriving at the voting chamber.
The way that many of our neighbours deal with the issue of social security is markedly different from the UK in several ways. The first is that the systems are a lot more generous in general. Norway, Denmark and Sweden rank in the top three OECD nations for spending on disability protections at above 3% of GDP while the UK is well below the OECD average at less than 2%.
Many more social securities like unemployment protections follow a different model from the UK when they are calculated. In particular, instead of the flat rate paid under the UK’s Universal Credit, many countries follow a model where the protection you receive is based on a percentage of your previous income.
There are consequences to each of these models. A flat rate tends to be more redistributive if it is generous enough (which Universal Credit isn’t) whereas a proportional rate tends to be less disruptive to an individual who is already going through the shock of losing their job while still having bills to pay.
We’ve seen these impacts in the UK too. During the pandemic, the Covid furlough scheme was paid at a proportional rate to people who were employed but was often paid at a flat Universal Credit rate to self-employed people. This exposed a lot of people who were previously on the side of denigrating poor and vulnerable people as lazy slackers to just how meagre and cruel the UK “benefits” system is.
We had an opportunity then to get some serious change off the back of that and maybe we still see echoes of it in this week’s chaos but largely the Powers That Be wanted to make us forget that moment of reflection as quickly as possible.
On the other side and as tempting as it might be to copy a European-style unemployment insurance based on previous income, and as beneficial that would be to people in well-paid but otherwise insecure jobs, we have to remember that many people are not in well-paid jobs and that wage suppression has been rife in the UK for decades. Receiving 60% of your previous income when you were being paid poverty wages won’t protect you from poverty in unemployment.
So maybe rather than Scotland – particularly an independent Scotland – copying existing social security policies from our neighbours, we need to look to them for inspiration in another way and look back at that paper I mentioned at the start of this column.
Last year, the EU think tank the Coppieters Foundation published a paper called “A European Universal Basic Income” which found that a UBI sufficient to eradicate poverty across the entire union could be entirely paid for by relatively modest changes to income tax and the savings found from the reduction of poverty itself.
Its model called for a UBI of €6857 per year for adults and half that for children under 14. This is the equivalent of £113 per week for adults and £57 per week for children. The paper claimed that the increase in income taxes to pay for this level of UBI would themselves be relatively modest and the “breakeven” point for people who’d pay more income tax than they’d receive in UBI would be at around the 80th percentile.
In other words, eight out of 10 people would be directly better off with the UBI. And, to repeat, while this is still a relatively small sum per person if you have no other income, it would be enough to eradicate poverty across the entire EU and would be cheaper overall – after the health, crime and social inequality costs of poverty are factored in – than the current systems.
When this paper came out I argued that this meant a UBI was now a moral imperative because it was cheaper than the cost of poverty, but there’s clearly a financial imperative too. Whether we’re discussing an independent Scotland seeking to create a better country for all of us or even just a cynical UK trying to save money in the face of a humiliating attempt to crush the poor, here is a solution we should all support. Eradicate poverty, save money, implement a Universal Basic Income.
