Minister pledges to protect working families

Neil urges unity in fight against tax credit cuts

Alex NeilSocial Justice Secretary Alex Neil today called on the Scottish Parliament to unite in opposition to UK Government plans to slash the top-up payments to low income working families.

Faced with Scottish Labour calls for the Scottish government to defy cuts to tax credits and find money in the budget to maintain payments,  Mr Neil instead turned his attention to Westminster.

He urged the UK Government to dump its cuts and support a Scotland Bill amendment that would devolve full responsibility for child and working tax credits.

He also welcomed a new amendment to the Scotland Bill that would allow the Scottish Government to introduce new social security schemes and confirmed the Scottish Government would be seeking clarity over the impact that would have on individuals.

Tax credits were worth around £2 billion to Scottish households in 2013/14, with two thirds of support directed at low income working families. The cuts introduced next April will mean an immediate loss of an average £1,500 a year to a quarter of a million low income working families.

Mr Neil said: “The UK Government must totally reverse its damaging changes to tax credits which are a lifeline for families on low-incomes. These cuts will have heart-breaking long-term consequences that will rebound on other public and charitable services.

“Once we hear the details of the Chancellor’s changes, have a clear final version of the Scotland Bill, and know the outcome of the comprehensive spending review the Scottish Government will set out credible proposals to support low income households.

“The Scottish Government has a long standing record on protecting the poorest and most vulnerable in our society. We are already spending £296 million on limiting the damaging effects of the UK Government’s welfare cuts, including £90m fully mitigating the ‘Bedroom Tax’, the council tax reduction scheme, and the Scottish Welfare Fund.

“But we should be taking a long-term preventative approach to tackling poverty rather than continually having to fight the UK Government’s austerity agenda and continued attacks on low income families.”

Commenting on further amendments from the UK Government which deliver the commitment to allow the Scottish Government to introduce new social security benefits Mr Neil added: “After nearly a year of pressure the UK Government has finally recognised that its bill did not deliver the Smith agreement. These new amendments should allow the Scottish Government to introduce new social security measures, in line with Scottish priorities.

“We welcome today’s amendment but we need clarity that any additional benefit provided by the Scottish Government will not be clawed back through reductions in UK benefits or through UK taxation – that would go completely against the agreement and make them meaningless.

“This will not substitute for having the ability to operate one unified system in the interests of the people of Scotland, and we continue to call for the devolution of tax credits in particular, but it is a welcome step forward.

“Our proposed amendments for full powers over child and working tax credits would enable a fairer approach to social security which will protect people in Scotland. The worrying fact of the matter is that by leaving tax credits and welfare in UK Government hands people remain at risk from further UK cuts.”

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