A temporary shared benefits system between an independent Scotland and the rest of the UK would be in the “common interest” of both countries, according to a Scottish Government working group.
A report by the Expert Working Group on Welfare warned immediately separating the systems would present “serious risk to the continuity of payments” to people both north and south of the border.
However, while Deputy First Minister Nicola Sturgeon agreed such a transitional period with shared services “would make sense”, she said any attempts to curb Scotland’s ability to implement its own benefits policies post-independence would be a “red line” issue.
Ms Sturgeon also said an independent Scotland’s welfare policies could be paid for with no need for taxes to rise despite the expert group’s prediction of a £20.3 billion bill by 2017/18.
She added the report showed benefits, including pensions, would be delivered “seamlessly from the point of independence” and that a transitional period of shared administration made sense.
The expert group said if Scots voted for independence the Scottish Government could take over welfare services immediately, although it warned this would be “complex” and could create a “significant risk” to the continued provision of benefits to claimants in both Scotland and the rest of the UK.
Ms Sturgeon said: “Given that many people in Scotland are concerned about the welfare policies of the UK Government, I am very clear that a transitional period of shared administration would only be in Scotland’s interests if it allows us, from day one of independence, to address the inequities of the current system and work towards a system that better reflects Scotland’s needs and circumstances.
“The fact that Northern Ireland already has policy flexibility within a system of shared administration suggests that such an arrangement is perfectly possible.”
Alistair Darling, chairman of the cross-party Better Together campaign bidding to keep Scotland in the UK, said the expert group’s report “makes a strong case for keeping the UK together”.
The UK Government’s Scottish Secretary, Michael Moore, added: “The Scottish Government seem to have their heart set on the impossible.”
Labour’s shadow Scottish secretary, Margaret Curran MP, said: “There are no answers to important questions like how social security would be funded or whether people would get out of the system what they’ve paid in during their working life.”
Scottish Conservative leader Ruth Davidson said: “The biggest disappointment of this report is the authors’ refusal to consider how any changes to welfare would be paid for under separation.”
Scottish Liberal Democrat leader Willie Rennie said: “The group has ducked the central question of how to pay for the SNP’s numerous and expensive welfare promises worth £2.5bn every year.”
The next stage of work by the group will look at the medium- to longer-term options for reform of the welfare system.