Saturday, December 14, 2019
Home Osborne Urged To Reverse 'Potentially Catastrophic' Tax Credit Cuts

Osborne Urged To Reverse ‘Potentially Catastrophic’ Tax Credit Cuts


Nicola Sturgeon will use a speech in Glasgow later today to urge the Chancellor to reverse “potentially catastrophic” cuts to tax credits, ahead of the spending review on Wednesday.

Scotland’s first minister and SNP leader will say that £4.4bn in cuts to tax credits directly target low-income working families with children, leaving around 200,000 Scottish households an average £3,000 a year worse off.

She will also highlight how the lack of any real public consultation on the changes could “breed alienation”, by not allowing people a say on shaping their own futures.

George Osborne remains committed to cutting welfare spending by £12bn, but is likely to slow down the pace of tax credits cuts following defeat in the House of Lords. There has also been growing concern among Tory MPs.

It is reported that the Chancellor will seek to mitigate, or slow down tax credit changes through cuts to Universal Credit and Housing Benefit.

Iain Duncan Smith is said to have resisted attempts by the Chancellor to raise the Universal Credit taper rate to mitigate tax credit cuts. The move would see the taper rate for Universal Credit rise from 65p to 75p, meaning that working people would lose 75 pence for every pound earned over the earnings threshold.

However, the Chancellor let slip in an interview on The Andrew Marr Show that the government hopes to press ahead with cuts to Universal Credit.

Shadow Work and Pensions Secretary Owen Smith described the move as “simply rebadging cuts to tax credits”, whilst admitting that Labour is in the dark over the government’s plans.

Nicola Sturgeon says the Autumn spending review will be the Chancellor’s “final chance” to rethink changes to tax credits, that “hurt many of the people we most need to help”.

Sturgeon will say: “Tomorrow, the Chancellor of the Exchequer will announce the results of the UK government’s spending review. He has a chance – possibly a final chance – to change course on some potentially catastrophic decisions.

“For example, if all of the UK Government’s proposed tax credit changes are implemented, around 200,000 families with children in Scotland stand to lose an average of approximately £3,000 a year.

“More than three quarters of the families who receive tax credits have at least one person who works. The cuts are directly targeted at working people on low incomes and their children. They hurt many of the people we most need to help.

“I call again tonight on the Chancellor to reverse his decision to cut tax credits when he has the opportunity to do so tomorrow.

“If he doesn’t do so, the Scottish Government will set out proposals to protect the incomes of low paid families in our budget in December.

“Obviously, the substance of the Chancellor’s proposals on tax credits is of greatest concern, but the process is deeply damaging too.

“There was no consultation before the Chancellor announced these cuts in June and no mention of them in the Conservative manifesto. The decision was taken behind closed doors and the full implications will be made clear to families in letters around Christmas time.

“This is something which is being done to people – to working families and their children – with no opportunity for meaningful debate or discussion.”

She will add: “If you reflect on the opening of Jimmy Reid’s rectorial address – its evocation of ‘the despair and hopelessness that pervades people who feel with justification that they have no real say in shaping or determining their own destinies‘ – it’s hard to avoid the conclusion that UK Government policy is not tackling alienation, but breeding it.”


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