LABOUR, and its supporters (Letter, October 28) should remember that tax credits were born out of the party’s mismanagement of the economy – a matter reserved to Westminster. It appears now that it perpetrated a trap for any incoming government, just as it did when it introduced the 50p higher tax rate in the final month of their 13 years from 1997 to 2010. It is astonishing that MPs, on their inflated levels of pay, also qualify.

Having benefited from credit-driven GDP growth, and more than 100 stealth taxes, Labour found it necessary to borrow an accumulated £160bn – we know that that helped finance its one million increase in public sector staff, which had to paid for one day. How much of the £160bn went towards funding the tax credits? That level of borrowing is detrimental to the whole economy – it does not make sense, but we are entitled to ask: How many more Labour votes resulted from these tactics? Had they, instead, improved the opportunities for outside employment, they could have avoided tax credits.

A minimum wage, and a living wage, are flavours of the month – but what are the real repercussions of that? In the private sector, where taxpayers are seen as subsidising low wages - which practice Labour condoned - the offset to withdrawing tax credits is described as “higher wages and more jobs”. But, say, if a small business of 10 employees has costed its product according to the claimed lower wages, and the living wage increases these by 10 per cent, then the cost of the price of the product would also have to go up. So the proper concept should be increased productivity – and the small firm could sack one employee against the expectation of the remaining nine would maintain the original output level – but one more on unemployment benefit.

Adequately educated individuals would command higher wages on merit, but Labour presided over some 970,000 of youth (18 to 24 year-old) unemployment when it left office in 2010, yet it had the nerve, when, thereafter, reported numbers reached one million, to try to saddle the new coalition with responsibility for the whole million. And all of them had the bulk of their education under Labour.

In the public sector, applying the living wage would become a burden on the taxpayer, unless offset by tax credits, but it is unlikely that increased productivity would come into the equation.

Regarding the expectation that we in Scotland would be able to use the new powers to increase income tax (the last thing we need) to compensate for perceived benefit iniquities, that could not happen since there would be a reduction in block grant equal to the amount of the tax proceeds.

Douglas R Mayer,

76 Thomson Crescent, Currie, Midlothian.

I READ with interest the mock outrage by Stewart Hosie when he accused George Osborne of being in "absolute denial" regarding the proposed tax credit cuts which has ballooned out of control since its introduction by Gordon Brown from around £4billion when first introduced to £30billion this year (“Osborne vows to push ahead with cuts despite Lords revolt”, The Herald, October 28)n

He makes these attacks in the full knowledge that an independent Scotland would be facing additional cuts of around £8 billion (double austerity) merely to keep its spending on par with the rest of the UK. As most people understand the way forward is to grow the economy and create better-paid jobs over time through a higher minimum wage and growth in knowledge-based industries. In this connection the UK has the fastest growing economy of the major western countries, with more jobs being created than the whole of the EU combined. The only "dark star" on the horizon is Scotland, where the economy is now flat-lining and unemployment rising due to a fixation on independence by the SNP which is undermining business confidence.

Rather than Mr Hosie expressing concern for Mr Osborne's future he should explain exactly where the extra cuts would fall if we voted Yes with no revenue from the Barnett formula, oil prices in meltdown and businesses moving South.

Ian Lakin,

Pinelands, Murtle Den Road, Milltimber, Aberdeen.