John Swinney urges George Osborne to change course on 'unacceptable' cuts
George Osborne's plan to raise more money than he needs to spend is "unacceptable" when he is cutting benefits, taxing Scotland's police force and doing little to support the faltering North Sea energy sector, according to Scotland's Deputy First Minister.
John Swinney has written to the Chancellor to urge him to abandon his plan to raise a budget surplus by the end of the decade, and move to a budget balance instead so he can use the extra cash to fund public spending which boosts UK productivity.
He said Mr Osborne's cuts to tax credits will deprive a quarter of a million households, many living on low pay and raising children, of an average £1,500.
Mr Swinney also urged the Chancellor to do much more to support the North Sea industry, which is struggling in the midst of an oil price slump.
And he again asked the Treasury to make Police Scotland exempt from VAT, as the old eight forces were, insisting it is depriving the cash-strapped national force of £30 million a year - more than enough to cover its spiralling budget shortfall.
The Deputy First Minister has also raised concerns about suggestions that the Treasury may penalise the Scottish Government if it does not cut social housing rents, which are already among the lowest in the UK, to bring down the housing benefit bill.
Mr Swinney said: "Given the growing opposition to your plans for further cuts to public services and social security, and the impact that they are having on families across the country, I urge you to change course.
"The Scottish Government has outlined a path for UK fiscal policy that ensures the public finances remain on a sustainable path, reducing the deficit, whilst also allowing for increased investment in public services.
"One option would be to target a current budget balance rather than an overall budget surplus from 2019-20 onwards.
"This target ensures that no borrowing is required to fund day-to-day public services. Limited borrowing would be undertaken only to support capital investment aimed at boosting the UK's long term productive capacity.
"Given the slowing global economy, and the pain that further cuts will cause families, there is a strong case for a new direction. I have set out how this can be done in a sustainable manner and encourage you to use the Autumn Statement for that purpose.
"I remain extremely concerned over your planned tax credit cuts. Approximately 250,000 households in Scotland, many with children and on low incomes, stand to lose on average £1,500 each from next April due to these measures.
"Such cuts are unacceptable, not only do they cut the incomes of working families across Scotland, but they will damage work incentives and inhibit future economic growth."
Scottish Labour leader Kezia Dugdale has also written to the Chancellor demanding a halt to his cuts to tax credits.
She has sent a second letter to First Minister Nicola Sturgeon urging her to match Labour's commitment to use Holyrood's new powers to ensure people in Scotland do not lose money if Mr Osborne continues with his planned cuts.
She told Mr Osborne: "Your plan to cut tax credits will have devastating consequences for the incomes of working families in Scotland.
"When you announce the results of your joint Spending Review and Autumn Statement on Wednesday you must reverse your plan. It is unfair and it will drive hundreds of thousands of working families into poverty.
"Tax credits work. They have lifted hundreds of thousands of children out of poverty and allow families across Scotland to aspire to more than just making it to the end of the month.
"That's why the last UK Labour government introduced them and that's why Scottish Labour will use the new powers coming to Holyrood to protect working families if you don't change course."
In her letter to Ms Sturgeon, she said: "I asked you to guarantee that under any proposal by your government working families in receipt of tax credits will receive the same entitlement as they do today.
"Despite repeated requests you failed to provide that guarantee.
"Can you confirm for the avoidance of doubt that under any proposals from the SNP Government to support working families who lose out, everybody who is entitled to tax credits today will receive the same entitlement in the future?"
A Treasury spokesman said: "On Wednesday the Government will set out its plan to deliver economic security for the whole of the UK so that we can enhance our national security, and extend opportunity to all.
"Key to this is delivering sustainable public finances and getting the deficit under control to prepare the country for any economic shocks that lie ahead.
"The Chancellor has already made clear that the Government will listen about how we make a transition to a higher wage, lower tax and lower welfare economy he wants to see, and will announce his proposals at the Spending Review and Autumn Statement.
"But the end goal is clear - this country cannot have an unlimited welfare budget that squeezes out other areas of public expenditure."