9th November, 2015

Tax Credits

Politics is about choices. When the previous UK Labour government introduced tax credits it chose to do so because it wanted to create a fairer and more equal society.

Tax credits have helped lift hundreds of thousands of children out of poverty and have allowed families to aspire to more than just making it to the end of the month. Six thousand families in Inverclyde currently benefit from the policy.

When George Osborne recently announced his plans to cut tax credits the political parties in Scotland where faced with a choice about how they would protect working families from these cuts.

Last week, Scottish Labour committed, in the event that Osborne’s plans go through, to use the new powers coming to the Scottish Parliament to top up tax credits. We would pay for the move by cancelling the SNP’s plans to cut air passenger duty and by choosing not to cut the tax rate for higher rate taxpayers.

The SNP Government, true to form, have made this an issue about the constitution. They have asserted that they will need even more powers to be devolved before they can act. No surprise there. This is the wrong choice. And here’s why.

In a recent meeting of the Scottish Parliament’s Devolution committee, Judith Paterson of the Poverty Action Child Group raised concerns about what would happen if we fail to top up tax credits.

She said it had been forecast that if Scotland does not do so, many more children will fall into poverty over the next few years, which would have associated impacts on children’s health, education and prospects.

I hope that George Osborne chooses to scrap his plan altogether but, if he does not, the Scottish Parliament must move away from the distractions of the constitutional debate, and act to stop thousands of working families being pushed back into poverty.