Scottish Government admits it can mitigate tax credit cuts

Social justice secretary Alex Neil has accepted the Scottish Government can use new powers laid out in the Scotland Bill to offset the impact of future UK Government cuts to tax credits.

It comes less than 24 hours after the Scottish Government had said the power wasn’t being devolved.

In a Scottish Labour debate in the Scottish Parliament Neil was challenged to match a new Labour policy to restore tax credit cuts, funded by raising the top level of income tax.

“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,” he said.

Neil told the chamber the wording of an amendment published today might allow the government to do more than it thought.

“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,” he said.

Scottish Liberal Democrat leader Willie Rennie said it had been “a humiliating day” for the cabinet secretary while Labour’s Jackie Baillie said if the SNP did not vote for Labour’s motion it would prove the "politics of grievance is more important to them than helping working families in Scotland".

Scottish Secretary David Mundell said earlier “there is no doubt” the Scottish Government “will be able to make top-up payments to people on reserved benefits including tax credits”.