Scottish Government Claims UK Tax Reforms Will Cost Scottish Families £700m
Scottish families who rely on tax credits will face nearly £700 million of cuts under the UK Government's Budget plans, according to the Scottish Government.
Families with more than two children will not receive tax credits for their third or subsequent children under fundamental changes to the welfare system.
The income level at which people can claim tax credits will also go down, meaning far fewer people will be eligible to claim them. Social Justice Secretary Alex Neil has called on the UK Government to abandon the cuts ahead of a meeting of the Joint Ministerial Working Group on Welfare on Monday.
But Scottish Secretary David Mundell said Holyrood ministers needed to "start spelling out'' their devolved welfare policies and "stop looking for contrived complaints on process''.
Mr Neil's comments come as Scottish Government analysis found that households with the least money will be disproportionately impacted by benefits and tax changes.
Reforms to tax credits alone will reduce the incomes of between 200,000 and 250,000 households in Scotland, it found.
Mr Neil said: "The shocking reality of the UK Government's budget is that it will widen the poverty gap and push more families into desperate situations.
"To date, the UK Government's austerity agenda has led to unacceptable levels of inequality, including child poverty, with the Institute of Fiscal Studies reporting this week that two thirds of children in poverty live in working households.
"Tax credits can be a lifeline for families on low incomes that rely on them to get through daily life, put food on the table, heat their home and pay their bills.
"By cutting tax credits, households across Scotland will be faced with nearly £700 million cuts and additional worries and stress about caring for their families.''
He added: "On Monday's meeting of the Joint Ministerial Working Group on Welfare, I will urge the Secretary of State for Scotland to call a halt to the UK Government's inexcusable attack on low-paid families. I will also reiterate the Scottish Government's opposition to the UK Government's Welfare Reform and Work Bill which will make things even worse.
"We have long pushed for more powers over social security and this shows exactly why the Scotland Bill does not go far enough. We will be highlighting these concerns and once again urging the UK Government to clarify how its budget cuts and proposals will affect any new powers we will receive.''
Mr Mundell, the only Tory MP north of the border, said the Scotland Bill going through the UK parliament will give Holyrood £2.5 billion worth of welfare powers.
"Welfare provision in Scotland is about to become a shared space where the UK and Scottish Governments will need to work together,'' he said.
"If we are to provide the best possible service for people then Holyrood ministers need to start sharing their plans instead of looking for contrived complaints on the process.
"What new benefits are you planning? Which existing benefits do you want to top up? How are you going to pay for it?''
Mr Neil's call to abandon the cuts were welcomed by charities, who have warned of the impact on Scotland's poorest families.
Peter Kelly, director of the Poverty Alliance, said: "The chancellor of the Exchequer tried to sell this as a budget for so called hardworking families but it is clear that it has been anything but.~
"It is also important that families who are out of work are given adequate support, and that we as a society recognise that there are other ways for people to contribute beyond paid work.''