THE BLOG

Today's Debate on Tax Credits Is a Defining Moment for Holyrood

04/11/2015 07:33 GMT | Updated 03/11/2016 09:12 GMT

Tax credits work. They have lifted hundreds of thousands of children out of poverty and let working families aspire to more than just making it to the end on the month.

It's why the last UK Labour Government introduced them.

It's why the Lords sent George Osborne back to rethink his plan to cut tax credits.

And it's why at the weekend I pledged to use Scotland's new powers to restore the money lost from tax credits for working families.

Today the Scottish Parliament will debate Scottish Labour's tax credits plan. It's a defining day for Holyrood. At long last the debate will move on to setting out what all parties will do with the new responsibilities over tax and welfare heading our way.

In Scotland nearly 350,000 families rely on the money from tax credits. The average family will be more than £100 a month worse off as a result of George Osborne's proposed changes.

Across the UK it is opposition from Labour that has forced the Tory Government into a rethink. Unlike promises made before the election not to cut tax credits, I hope George Osborne actually sticks to his word.

But if he doesn't, we can do things differently in Scotland.

Labour will always put those on lower and middle incomes first. That's why we will restore the tax credits that families in Scotland lose, once the powers to do so are devolved. And let's be clear - the powers are coming.

The power to top up reserved benefits is being devolved to Holyrood. Scottish Labour would actually put it to good use. The experts at the Scottish Parliament (SPICe) have confirmed this can be done.

We'll pay for it by taking different decisions on tax than both the SNP and Tory Governments.

We will not make the Tory tax cut for higher rate taxpayers and we won't make the nationalist tax cut for Air Passenger Duty.

Tax cuts costs government money. Both governments have set aside pots of money to pay for these tax cuts. Scottish Labour would simply use that pot of money to do things differently. Our fairer choice won't require any taxpayer in Scotland to pay a penny more tax than they do today.

So the question now for the SNP and the Tories is - what's your priority? The incomes of working families or the price of a business class flight?

Today's vote on tax credits will be an important moment in the history of devolution.

If the SNP do not vote for this motion to restore the money lost from tax credits it will confirm once and for all that the politics of grievance is more important to them than helping working families in Scotland.

It's a question about having the political will to make fairer spending choices.

Meanwhile, Scottish Conservatives leader Ruth Davidson has been busy portraying herself as a different kind of Tory in Scotland. She even spoke out on tax credits, saying the Chancellor's plans are unacceptable. I agree. So her party should back our plans.

My view is pretty simple - a tax cut for those who can already afford to shop for airline tickets cannot be Scotland's priority when families cannot afford the weekly shop. We'll find out today if the SNP and the Tories will join us, and build a fairer Scotland.

Kezia Dugdale is leader of the Scottish Labour Party, and MSP for Edinburgh and Lothians