ON Tuesday the opposition parties lost a vote calling on the Government to reverse its planned cuts to tax credits by by 317 to 295. Despite multiple Conservative MPs raising their concerns, including Heidi Allen who I personally complimented, none of them voted against the Government.
When I started my speech in the Commons I began with a rather strange declaration, which is that I agree with the Conservatives. I, too, believe that “work should pay”. The sad reality is, however, that in Scotland, more than 60% of children in poverty come from families that are in work. We already heard in previous debates that the proposed cuts will hit those in work the hardest, with in-work families losing, on average, £1,300 in 2016-17.
We have heard, multiple times, how that financial gap will be filled with the introduction of the new so-called national living wage; but it is not a living wage. It falls 65p short of the real living wage, which, outside London, sits at £7.85 per hour. It should therefore be referred to as what it is: a new minimum wage.
If we look across the board at the families, both in and out of work, who will be affected by the cuts, we see that the Institute for Fiscal Studies believe on average, households will lose roughly £750 as a result of social security cuts, while that that benefit from the new minimum wage will gain only £200. That means that the new minimum wage will compensate for only 26% of the total losses created by cuts in tax credits.
For a Conservative Government that loves to speak of financial “black holes”, especially when it comes to the SNP, the cold reality is that if they proceed with their proposals they will create a financial black hole of £550 for roughly 8.4 million people in this United Kingdom. It is clear from the figures that their policy serves no purpose other than to push more and more people into poverty, and, in particular, to push more children into poverty. In Scotland, more than half a million children are currently in families that rely on tax credits, and 350,000 of those children are from more than 200,000 low-income families that will be hit by these changes.
The House of Commons Library conducted its own research and reached the conclusion that the proposed changes will deliver savings of £4.4 billion in 2016-17, but that means that the Government will be taking £4.4 billion out of the pockets of the poorest people in this country.
If people qualify for tax credits, it is clear their wages are considered inadequate to live on. Given that we can cite credible evidence that the new minimum wage will not compensate for the loss of income from the cuts, we can conclude only that they exist purely for ideological purposes and to continue the madness of austerity. As was pointed out multiple times during the election, we know when the average person has money in their pockets they spend it. By taking £4.4 billion out of their pockets, we are taking money out of local economies, further tightening the economy and increasing the pressure on ordinary people.
During the debate both Labour and Conservatives were pushing the inevitable line that given the Scottish Parliament has received new powers over income tax, why doesn’t it simply raise income tax to cover any losses?
There are three points to be made to combat that argument. Firstly, it is worth remembering that 85% of power over welfare and 70% of power over taxation remains reserved at Westminster in Tory hands. Tax credits are a reserved issue. Secondly, in the event that the Scottish Government felt there was a need to top up losses due to tax credits, then surely that highlights a deficiency and inadequacy in what the Tories are doing to that benefit in the first place? But the third and most powerful argument against this is quite simply, why should we have to? Scotland actively rejected the Conservatives at the election. It rejected their cuts and their ideology as it has done for decades. Why should we still have to endure at the hands of a party with absolutely no mandate to Scotland?
However, for me the most disturbing and disgraceful aspect of the cuts to tax credits is the two-child policy. Are we really saying that people should count themselves lucky if they qualify for tax credits only for their first two children? In Scotland, 54% of families have only one child and poorer families are no different, so this aspect of the policy serves only to perpetuate the myth and the stereotype that the poorest in society have lots of children that they cannot afford. The Chancellor’s budget stated: “The Department for Work and Pensions and HMRC will develop protections for women who have a third child as the result of rape.”
So not only that, but are we really making the disgraceful proposal to our citizens that our Government is so compassionate we might consider helping them if they have a third child so long as they have been raped? Is that where we are now setting the bar for providing decent opportunities for our children – only if they are the product of rape?
Forget that this is a moral outrage from the get go, it is also completely unsustainable. How does someone qualify? Does there have to be a conviction for rape? Or could there just be a claim? This is completely unrealistic.
What further damage will it do to women who have suffered a heinous sexual attack if we make them relive it by giving evidence to ministerial bodies?
Fundamentally, this is an ill-thought-out, illogical and harmful proposal. It highlights that when David Cameron says he wants a “war on poverty” he really means a war on the poor. These appalling measures serve only to reinforce the reality that the Tories cannot be trusted with making decisions for society, furthering the reality which is the realisation that independence is best for Scotland, and if not, then the need for power over welfare is at least a minimum essential.
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Callum Baird, Editor of The National
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