FULL devolution of employment law is the “natural next step in delivering a system that is fit-for-purpose”, according to a report from a leading think tank.

The Institute for Public Policy Research (IPPR) Scotland document further argues that devolution of employment laws would help to cut child poverty.

The IPPR Scotland report concludes: “While devolution does not need to be the automatic starting point for policy reform, based on the evidence it appears that the current system of dual responsibility for employment support across the UK and Scottish parliaments has not led to improved outcomes for people or the economy – rather, it risks engendering duplication, confusion and complexity, hindering them instead.

“Meanwhile, greater devolution from a national system – detached from local circumstances – has been recognised as a positive in previous inquiries (House of Commons Work and Pensions Committee 2023).

“Full devolution of employment support would be the natural next step in delivering a system that is both fit-for-purpose and that can realise its full potential as a route to fulfilling Scotland’s child poverty ambitions.”

IPPR Scotland are neutral on the issue of independence and work cross-party, but are seen as progressive.

Director Philip Whyte said: “The current system is arguably failing countless people who are trapped between a devolved system that suffers from a lack of scale and a reserved system that is more often punitive than supportive.

“While devolved programmes show signs of success – but could yet do more – ultimately they are held back by a responsibility being split across governments and a reserved Jobcentre system which is more often focused on compliance than helping people reach their full potential.

“A reformed system – through increased powers – would be the next natural step in delivering a system that is person-centric and works towards positive outcomes, so that more people can enter, stay and progress in meaningful work.

“That’s not just good for individuals, but also good for the economy.”

Off the back of the think-tank's report, the SNP called on the Tories and Labour to support further devolution.

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David Linden, the SNP’s social justice spokesperson at Westminster, said: “Employment law must be devolved to the Scottish Parliament as a matter of urgency, and it is encouraging to see a leading think tank, such as the IPPR, recognise the merits of developing employment law.

“With full control over employment law, the Scottish Parliament would be able to protect and extend workers' rights – with the power to introduce progressive measures like a Real Living Wage and increased statutory sick pay.

“If the Tories continue to dither on this issue, Sir Keir Starmer must confirm whether he’ll commit to devolving employment law if he gets the keys to Number 10 at the next election.

"If he fails to do so, as he has done previously, then it is clear that Westminster does not have Scotland's best interests at heart.

"Only the SNP will stand up for Scotland's values, defend Scotland's interest, and offer voters the choice of a better future with independence."

On a visit to Scotland last year, Starmer’s deputy Angela Rayner caused controversy after she ruled out devolving employment law.

However, Scottish Labour’s Anas Sarwar has said he would “love” for Holyrood to have control over the minimum wage and workers’ rights in the first term of a UK Labour government.

A UK Government spokesperson said: “Poverty rates in Scotland are falling for adults and children compared to 2010, and we continue to help families with cost of living support worth an average of £3,800 per household.

“Work is the best way to secure financial security which is why we are investing billions through our Back to Work Plan, increasing the National Living Wage, and cutting taxes for 29 million hardworking people.

“Jobcentres across Scotland continue to offer personalised support, reflecting people’s skills, circumstances and work history, and since April 2021 they have delivered over 19,000 on the job placements so even more people can secure long-term financial security through work.”