SCOTLAND has the power now to ensure that future cuts to tax credits will not operate north of the border, Iain Duncan Smith has said.
It has emerged the work and pensions secretary made the revelation after Britain's youngest MP Mhairi Black challenged him over the weight of welfare cuts, while calling for Scotland to have full power over welfare.
He told the MP for Paisley and Renfrewshire South that the Scottish Government already has enough autonomy to raise the money to protect Scots from the worst of any Westminster welfare cuts.
He said any shortfall to benefits can be covered by raising revenue, usually through taxation in Scotland.
When challenged over whether Scotland could negate the tax credit changes through its tax raising powers, Mr Duncan Smith said: "As I understand it, that is the case."
He added: "The main basic point here is that if they want to make a change in Scotland, they raise the money themselves, it won't be part of the UK benefit system."
Ms Black's challenge over Scotland's ability to control its destiny over welfare came at the work and pensions select committee after the House of Lords delayed the Chancellor of the Exchequer's plans to cut £4.4 billion from working tax credits and child tax credits through changes expected to have left more than three million families an average of £1,300 a year worse off from April.
The Scottish Labour leader Kezia Dugdale wants to use new tax powers proposed for Holyrood to offset tax credit cuts amounting to £355million in Scotland next year.
But Mr Duncan Smith told Ms Black Scotland already has the powers to raise revenue to offset any welfare cuts they do not agree with.
He said that providing Scotland raised the revenue it "is wholly within the power of the Scottish government to add additional payments".
He said: "After our UK benefits system operates, they can decide what they would like to do, should they wish to do something additional to that and they would have to raise that money themselves.
"It would not be money that would fall on the shoulders of English, Welsh and Irish...."
After being challenged by Ms Black about whether the Scottish Government would have to come to the Department for Work and Pensions, he stressed: "They (the Scottish Government) don't have to come to us, this power exists.
"But if the Scottish Government wanted to talk to us about it, then we would be happy to talk to them, but my point is this power, this authority lies with the Scottish Government, so I guess in the process of this, the question is, what will you do about taxation."
Research by IPPR Scotland suggests Scotland's poorest households could be more than £500 a year worse off in 2020 as a result of tax and benefit changes made in the most recent UK Budget. The package included highly-controversial cuts to tax credits.
The full details of the discussion which have emerged in a video of their exchange, began when the 21-year-old politics and public policy honours graduate asked why all welfare should not be devolved to Scotland.
Mr Duncan Smith replied : "The Scottish Government already has the power and this will be re-stressed again I think in the process... should the Scottish Government want to make extra additional payments themselves, they can do that.
"If it perceived by a Scottish Government they would wish to make more payments for which they would then raise the money, that power exists already and they are capable of doing it at the moment and will be able to do that separate to our existing UK-wide benefit system.
"Any comment to the Scottish Government is that they have already and will have significant powers, the question is do they want to use them and when do they want to take them on board. My suggestion to them is that if there is something they disagree with in terms of the national benefit system, they still have the capability if they wish to create a parallel process themselves if they wish it."
Ms Black added: "Following on from that, with the powers that you're talking about is there an assurance that in the event that the Scottish Government feels a need to use these powers, to top up any benefits or if the Scottish Government is even able to realistically top up these benefits, is there an assurance that that money will actually lead to an additional income for the individual or can it be taken off through universal credit through some other way."
Mr Duncan Smith said: "As I said, it's a matter for the Scottish Government to do what they want to do with regard to any payments they want to make separate to the existing benefits system..."
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