Hands up – who knows what a Statutory Instrument is? Yep, before I became an MP I didn’t know either. However, a few weeks ago, we saw the devastating impact that this seemingly innocuous legislative tool can have on the lives of people across Edinburgh. Because it is by that means that the Conservative government has broken its solemn election promise and rammed through its unnecessary punitive assault on working tax credits. In the course of one 90-minute debate, David Cameron and George Osborne slashed the incomes of millions of hardworking households.
Tax credits were introduced by the last Labour government to help households on low incomes make ends meet and lift them out of poverty. The overwhelming majority of households and families that receive them are in work, but earn barely enough to get by, rendering tax credits indispensable when it comes to paying the rent or bills, or ensuring there is enough left over to buy clothes and put food on the table. Yet, in their obsessive and ideological assault on the state, it is this vital lifeline that the Conservatives have chosen to target, despite promising before the election that they wouldn’t.
No-one should underestimate the impact this will have. I’ve already had tearful families at my advice sessions. There are currently just under 350,000 households in Scotland in receipt of tax credits, including almost 300,000 families with half a million children. In Edinburgh South alone, there are 4200 households on tax credits. The vast majority of these households will lose out from these changes. The House of Commons Library has estimated that working families affected will be on average £1300 a year worse off, and research shows that some households will have their incomes reduced by almost £2000.
The government has claimed that it wants to encourage people to work, and that the reduction to tax credits will be compensated for by the introduction of the so-called “National Living Wage”. However, most of those receiving tax credits are already in work, and the impartial and respected Institute for Fiscal Studies has rubbished any suggestion that the “National Living Wage” will compensate families hit by the cuts to tax credits, calling this “arithmetically impossible”.
However, there is a glimmer of hope, at least for Scotland. Thanks to the new social security powers being transferred by the Scotland Bill, powers that I have been fighting tooth and nail to secure, the Scottish Government will have the ability to shield Scottish families from this savage assault on the working poor.
I have been urging the Scottish Secretary David Mundell, and the Scottish Tory Leader, Ruth Davidson, to agree to Labour’s proposed changes to this Bill, that will allow the Scottish Government to design their own social security system. This would allow them to protect thousands of families from the impact of these draconian policies.
I want to see a Scotland of opportunity, free of inequality and poverty. I will work with anyone who shares that vision, and the Scotland Bill is a huge step in the right direction. However, if we are to progress, two things are needed: first, we need the Tories to keep their promises, accept Labour’s amendments, and deliver the most powerful devolved parliament in the world; second, we need the Scottish Government to show the courage of its convictions, and tell us how it will use these new powers to create a better Scotland.
When Gordon Brown introduced the tax credits system it lifted hundreds of thousands of Scots and Scottish children out of poverty. These changes reverse that. Our ambition must be to make child poverty our focus again.
Ian Murray is Labour MP for Edinburgh South