Scotland has little to show for benefits devolution, but it can make radical changes that would give people real financial security – Katherine Sangster, Scottish Fabians

Today the Scottish Fabians are launching a report which calls on Holyrood to seize the opportunity of its devolved powers. We want Scotland to show the way to the rest of the UK and build adequate protections for working people if they have to stop their job.

Over the last year, we conducted research into the experience of people in Scotland who’ve had to take a break from the workplace. We spoke to Scots out of work who are either living on benefits or off their savings. The conversations we had with people were stark – their financial positions were precarious with many struggling to make ends meet and cutting back on essentials.

They spoke of taking time off work for specific reasons – caring for a relative, caring for children, a long-term illness or a job loss. They spoke about the worry of dwindling savings and the inadequacy of the benefits available. Those who had experienced the help available at job centres said it felt demotivating and process-driven.

Short periods away from work are a fact of life. At some point in our lives, most of us will experience illness, caring responsibilities or unemployment. Yet the statutory protections in place to help workers when their earnings stop are so threadbare that most can expect their incomes to collapse. Scotland and the rest of the UK need a proper system to temporarily replace people’s earnings when they stop work and support them back into a job.

Our research showed that 31 per cent of Scottish workers lack the savings to maintain their current standard of living for a month. More than 50 per cent would struggle to make ends meet if they lost their job and 30 per cent expect to have to go without food or heating. Eighty per cent who gave an answer said jobseeker’s allowance would replace three-tenths or less of their earnings if they lost their job and claimed the benefit.

This lived experience is backed up by international comparisons. The UK compares badly with other rich nations in terms of unemployment benefits, sick pay and maternity pay. It is second worst in the Organisation for Economic Co-operation and Development, a group of rich economies, for unemployment and sickness payments, and third worst for maternity pay.

Women on maternity leave can get an allowance of up to £170 per week but, for people who are sick, unemployed or caring, the figure is around £80 per week. When it comes to time off to care for a loved one, we also lag behind other European nations. The UK is currently in the process of introducing one week of unpaid leave for carers, but paid carer’s leave is the norm in many European countries.

In Norway, for example, employees receive a period of full pay when they need to take time off to care for someone. At the UK level, the Fabian Society is proposing a new system of employment insurance to protect the income of people should they need to take a break from work. The plan would return the UK to routinely providing income protection payments worth a percentage of people’s earnings, and it leans heavily on the furlough scheme developed with remarkable speed during the pandemic.

People would receive up to six months’ support for unemployment and 12 months for sickness, maternity or caring. Payments would typically be worth half of current or recent earnings, with a cap on the amount payable to high earners. The new system would offer a major boost to UK business by helping firms retain and recruit good workers and by giving workers and consumers more financial security and resilience. Scotland does not have the powers or resources to adopt this plan on its own in full. But Holyrood could start to put some of its elements into practice using its devolved social security powers.

The Scottish Fabians report, presented to MSPs from all the political parties, shows how the devolved powers of Holyrood could be used now to make a start. We propose enhancing protection for Scotland’s unpaid carers. The Holyrood government should encourage employers to provide paid carers leave and provide financial help in the case of small and medium-sized enterprises.

We also recommend that the new Scottish carer’s allowance, due to be introduced in 2025, is paid at the same level as maternity allowance for the 12 months after a carer stops work. We propose new supplements to top up UK benefits, following the model Scotland has adopted for carers and children. We suggest an extra payment for people receiving jobseeker’s allowance and employment and support allowance in the months after they have left a job. We also propose piloting of paid training schemes for the self-employed and anyone out of work for more than six months.

These are big ideas that can capture the public’s imagination. A specially commissioned YouGov poll shows these reforms to be extremely popular in Scotland, and importantly for our politicians that support cuts across social and political divides. For example, 87 per cent of those expressing an opinion supported our proposal for one week of paid carer’s leave.

Politicians in Scotland should seize on this public support and offer the protection and security that workers in Scotland need.

Katherine Sangster is national manager of the Scottish Fabians