GEORGE Osborne was last night facing calls from the SNP and Labour to reverse tax credit cuts ahead of his Autumn Statement this week.
John Swinney yesterday wrote to the Chancellor urging him to “change course” as the Deputy First Minister renewed his criticisms of Osborne’s austerity agenda.
Scottish Labour leader Kezia Dugdale has also written to Osborne expressing her concern at the effect tax credit cuts will have on already hard-pressed families.
Wednesday’s Autumn Statement is expected to see Osborne announce major cuts to government department budgets as he renews his efforts to balance the books.
Swinney has urged the Chancellor to abandon his plan to raise a budget surplus by the end of the decade, and move to a budget balance instead, using the extra cash to fund public spending in order to boost UK productivity.
Swinney also said Osborne’s cuts to tax credits will deprive a quarter of a million households, many living on low pay and raising children, of an average £1,500.
He urged the Chancellor to do more to support the North Sea industry, which is struggling in the midst of an oil price slump.
And he again asked the Treasury to make Police Scotland exempt from VAT, as the eight former forces were, insisting it is depriving the cash-strapped national force of £30 million a year – more than enough to cover its spiralling budget shortfall.
The Deputy First Minister has also raised concerns about suggestions that the Treasury may penalise the Scottish Government if it does not cut social housing rents – which are already among the lowest in the UK – to bring down the housing benefit bill.
Swinney said: “Given the growing opposition to your plans for further cuts to public services and social security, and the impact that they are having on families across the country, I urge you to change course.
“I remain extremely concerned over your planned tax credit cuts. Approximately 250,000 households in Scotland stand to lose on average £1,500 each from next April due to these measures.
“Such cuts are unacceptable – not only do they cut the incomes of working families across Scotland, but they will also damage work incentives and inhibit future economic growth.”
In her letter, Dugdale said: “Your plan to cut tax credits will have devastating consequences for the incomes of working families in Scotland. In reality, it will mean the difference between heating and eating for working families.
“When you announce the results of your joint Spending Review and Autumn Statement on Wednesday you must reverse your plan. It is unfair and it will drive hundreds of thousands of working families into poverty.”