Parties ‘sink bedroom tax boat to bottom of the sea’

chief executive of Children in Scotland.

“We are particularly pleased that joint working between Scottish Labour and the Scottish Government appears to have resulted in extra provisions to offset the under-occupancy charge, or bedroom tax, in Scotland,” she said.

About £50m is needed to fully offset the impact of the most controversial of the current welfare reforms in Scotland.

Emergency funding for hardup tenants has already reached the £38m limit allowed under Westminster rules, a mixture of Scottish (£23m) and UK (£15m) cash.

But the SNP wants this cap lifted by the UK Department of Work and Pensions (DWP). If this is agreed, Mr Swinney announced yesterday he will provide the additional £12m needed to meet the £50m required, bringing the Scottish total to £35m.

The only previous occasion Labour has backed an SNP Budget was in 2009 – only after the then minority Nationalist administration had seen its spending plans rejected at the key final stage and Holyrood was facing the prospect of an election to break the impasse.

Mr Swinney, to applause from Labour and SNP benches, said yesterday: “I give parliament the assurance today that if the DWP says no, the Scottish Government will put in place a scheme to make this additional £12m available to social landlords so that we need not see any evictions in Scotland this year as a result solely of the bedroom tax.”

He added: “The bedroom tax is an iniquitous and damaging policy.”

The UK government decision to withdraw the spare room subsidy for council tenants has been the most controversial of the coalition’s welfare reforms. It means working-age people renting from councils or housing associations lose up to a quarter of their housing benefit if officials decide they have more bedrooms than they need.

About £15.4m was claimed by struggling tenants in emergency housing benefits between April and November last year – a fourfold increase on all of 2012.

The extra cash announced yesterday was secured through £10m in leftover cash for Network Rail, as well as £3m in additional Scottish cash from Westminster and other budget exchange flexibilities. The Scottish Government will spend more than £244m alleviating the impact between 2013-14 and 2015-16, at the expense of spending in other areas.

Labour finance spokesman Iain Gray was behind the proposal which will effectively see councils and housing associations “write-off” the extra cash owed by tenants as a result of the bedroom tax.

He told MSPs: “If we pass my amendment we will have turned it into a ‘sink the bedroom tax boat to the bottom of the sea’ Budget.”

Mr Swinney’s Budget was passed by 108 votes to 15 with only the Tories voting against. It also confirms another year of the council tax freeze, support for free university tuition, free prescriptions and free personal care.

From next January, the SNP administration will fund free school meals for all schoolchildren in the first three years of primary school.