Holyrood 'will have tax credit powers'

Changes to the Scotland Bill will give Holyrood the power to restore any tax credit cuts made by the UK government, the Scottish government has said.

But Social Justice Secretary Alex Neil said it would not reveal its plan until they had been "properly costed".

His comments came after new amendments to the Scotland Bill were lodged by the UK government.

Scottish Secretary David Mundell said the amendments made it "crystal clear" that Scotland could act on tax credits.

Conservative MSP Murdo Fraser asked Mr Neil during a Holyrood debate on the issue to confirm that the amendment to the Scotland Bill would give the Scottish Parliament the power to replace in full any reduction in the tax credit.

'Additional funding'

Mr Neil responded: "The amendments tabled today should give the Scottish Parliament those powers, but until today none of the amendments tabled would have given us that power.

"We will properly address the needs of people affected by cuts in tax credits.

"We will establish the most effective way to administer any top-ups to tax credits. We will properly cost our proposals before we bring them before this parliament. We will identify where any additional funding will come from.

"Unlike Labour we won't draw up our proposals on a whim without proper research and consideration. We will make sure we get this right for the people of Scotland."

Alex Neil said the Scottish government would not reveal its plans until they had been "properly costed"

Analysis by Brian Taylor, BBC Scotland political editor

There is another element to this which probably explains the caution inside the Scottish government.

That element is the fiscal framework which accompanies the transfer of new powers. It is still being negotiated - with hard, if courteous, bargaining on either side. Indeed, Mr Mundell was repeatedly questioned in the Commons by Angus Robertson and others with regard to the timetable.

John Swinney does not want to make commitments - especially costly commitments - before he knows the full story. Before he knows the full powers, before he knows the full extent of the cuts to tax credits, before he knows the scope of the concomitant fiscal framework.

Which left the Scottish government sounding just a mite discomfited at various points today and since Labour announced its policy on Saturday. But there will be more to come, there will be other days.

Read more from Brian Taylor

But Mr Neil said the proposals still did not go far enough, and pledged that the SNP would continue to press for tax credits cuts to be scrapped entirely and to call for all tax credit policy to be devolved to Holyrood.

Scottish Labour gave an immediate pledge to restore tax credits in full and pay for it with the £250m coming to Holyrood with the devolution of air passenger duty (APD) and income tax from high-earners.

The party had tabled a motion calling on the Scottish government to use the new tax and welfare powers coming to the Scottish Parliament to restore tax credits.

The motion was backed by 62 votes to 48 after being heavily amended by the SNP to state "that the parliament believes that the UK government's proposed changes to tax credits would leave working families worse off".

Afterwards Labour accused the SNP of a "shambles" and "betrayal" over tax credits.

Scottish Labour's finance spokeswoman Jackie Baillie said: "The SNP have spent days telling us we wouldn't have the power to top-up tax credits, yet Alex Neil now accepts that's just not true.

"Yesterday Alex Neil issued a press release demanding tax credits be devolved, even though he conceded today that the power to top-up tax credits is already being devolved. Why can't the SNP just embrace the new powers instead of always talking Scotland down?

"The tax credit debate exposed what really matters to the SNP government - constitutional grievance rather than helping working families in Scotland."

'U-turn'

A spokesman for the Scottish Conservatives accused the Scottish government of failing to understand the detail of the powers being devolved to Holyrood.

"This U-turn explains why the SNP spends all its time complaining about powers it doesn't have," he said.

"It's because it hasn't got the first clue what powers it is getting nor what to do with them. The so-called competent SNP has been exposed today as a total shambles."‎

Liberal Democrat leader Willie Rennie said the "ideologically-driven cuts" to tax credits would directly affect 250,000 Scottish families and 300,000 children.

He added: "Alex Neil made a ludicrous U-turn in the course of a single six-minute speech. He changed his mind halfway through about whether he has the power to mitigate these damaging tax credit cuts. It is the final nail for claims of SNP competence.

"The SNP have spent so much time sticking the boot into the Scotland Bill they have lost sight of how powerful it is."

The SNP accused its political opponents of being more concerned with "cheap political attacks" than with mitigating the effects of the proposed cuts.

SNP MSP Mark McDonald said: "While our first priority is to stop tax credit cuts happening in the first place - unlike Labour, who appear to have run up the white flag - if these cuts do go ahead, the SNP in government will set out sensible, credible and costed proposals to support low-income households."