Farron attacks Osborne’s ‘obsession’ with tax credit cuts

UK Lib Dem leader Tim Farron made a scathing attack on George Osborne’s plans for cuts to tax credits when he addressed his Scottish party conference yesterday.

With opposition building to the controversial proposal, Farron claimed the Chancellor’s “blind ideological obsession” would see 250,000 hard-working Scottish families lose £1,000 per year, with the brunt being borne by 300,000 children.

Farron was speaking as more evidence of internal Tory objections to the plan emerged. Appearing this weekend on Have I Got News For You, the Scottish Conservative leader Ruth Davidson said she would like to see “movement” on the policy by Osborne’s Autumn Statement next month.

Speaking to Lib Dem activists in Dumfermline, Farron criticised David Cameron, saying that tax credit cuts clashed with the prime minister’s attempts to present the Conservatives as the workers’ party.

Farron said: “In Scotland, almost 250,000 hard-working families will lose an average of £1,000 a year. That’s more than 300,000 children who are being made to bear the brunt of the Chancellor’s blind ideological obsession.

“This is a policy that every independent organisation – from the Institute for Fiscal Studies to the government’s own social security advisory panel – has said is ill-thought through, inexplicably punitive and deeply divisive.

“In the House of Commons, MPs described the policy – and I quote – as a message ‘to the poorest and most vulnerable in our society that we do not care’  and called on the Chancellor for, I quote, ‘something – anything – that might mitigate its harshest effects’. And that’s just the Tory MPs.

“So be in no doubt: this cruel, heartless, mean-spirited and misjudged policy is George Osborne’s poll tax and we will fight it as we fought the poll tax. It will not stand – not on my watch.”

Farron’s speech included an attack on the SNP’s record in government. He also argued that despite his party’s disastrous performance in the general election, a liberal party was needed in Scotland more than ever as an antidote to the SNP, which he called a “terrifyingly authoritarian party”.

“The SNP are many things to many people, but the one thing they are not is liberal,” Farron said. “Scotland has never needed a liberal party more than it does today. I need you to win here next May, but Scotland needs you to win even more.”

Tax credits came up when Davidson appeared on Have I Got News For You on Friday night.

Questioned about Osborne’s plans, Davidson said: “We have got a lot of people back into work and we want to make sure they are not worse off for being in work, and that’s what all of this has been about. And, yes, there are a lot of us very angry, who want to see it working.”

Team captain Ian Hislop then asked Davidson if she thought Osborne was going to perform a U-turn. “I would like to see some movement by the Autumn Statement,” she replied.

Tax credits are a series of benefits introduced by the last Labour government to help low-paid families. There are two types: working tax credit for those in work and child tax credit for those with children.

Under government proposals, the income threshold for working tax credit – £6,420 – would be cut to £3,850 a year. In other words, as soon as someone earns £3,850 they will see their payments reduced.

The SNP government’s Social Justice Secretary Alex Neil yesterday joined the clamour against tax credit cuts. Neil has written to the UK Work and Pensions Secretary Iain Duncan Smith accusing him of attacking low-income families and urging a rethink.

Neil said: “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. Removing this vital support from thousands of families will widen the gap in inequalities and push even more people into poverty.

“The UK government’s plans are a clear attack on low-income working families, and those families must be protected as a matter of urgency.

“The Scottish Government has made clear its opposition to these changes and I urge the UK government to reconsider the severity and timing of these changes and make changes before the Welfare Reform and Work Bill reaches its next legislative stage, so that the poorest households in receipt of tax credits can be protected from this fall in their incomes.”

‘No’ to NHS tax

A proposal to raise Scottish income tax to fund the NHS has been shelved by the Liberal Democrats.

Holyrood candidates Alex Cole-Hamilton and Christine Jardine moved to head off a motion at the party’s autumn conference in Dunfermline which would have committed the party to an unconditional 1 per cent tax rise.

Instead, the party has voted to “resolve the current funding crisis in our health sector and deliver additional resources through a fair reallocation of spending” before it would consider tax rises.

Allan Heron, who proposed the motion on behalf of Paisley and Renfrewshire Lib Dems, said any solution to NHS funding that does not consider tax rises amounts to inventing “a magic money tree” where resources could be found.

“I struggle to see the other areas where funds can be reallocated from,” he said.

But the conference backed an amended motion proposed by Cole-Hamilton and Jardine shelving tax rises unless current spending can be reshuffled.