GEORGE Osborne delivers his seventh budget today, with working families and low paid workers expected to be hit.

It is the Chancellor’s first Tory only budget where he is due to outline where he will apply the £12billion of welfare cuts announced before the election.

The Scottish Government warn his proposals will push more children into poverty and campaigners say the cuts are an “ideologically driven choice” which will adversely affect the poorest in society.

Later today Mr Osborne is expected to make the bulk of his savings from cuts to tax credit and increase the earnings threshold before people pay income tax again.

It is thought he will lower the benefits cap to £20,000 per household and restrict housing benefit further for young people.

Mr Osborne could also raise the bar for paying inheritance tax from £650,000 to £1m.

It will be the first Tory budget since 1997, since the last parliament required the coalition partners, the Liberal Democrats to agree the measures and have some of their own also included.

Nicola Sturgeon, First Minister warned £425m could be taken from low income families across Scotland if the Tories cut tax credits to 2003 levels.

She said: “If, as we expect, the UK Government targets tax credits for cuts, it will hit Scotland’s poorest children and families hard. It is a frightening indication of the potential impact of the expected cuts in the UK budget.”

“We want to support people to get into work and to stay in work and the tax credit system provides important practical help to families on low pay.

“These are people who are in jobs and often working very hard for relatively little pay. It is unfair that their children are the people made to pay for the mistakes of the austerity approach – not to mention economically counter-productive.”

The Scottish Government said a 10% cut in all tax credits would cost Scottish households £250 million a year.

If has estimates showing if child tax credits are returned to 2003, the poorest 20% of households with children would lose 8% of their income.

Ms Sturgeon added: “Tax credits form an important part of the tax and welfare system, designed particularly to support working families on low incomes.”

Earlier this week the Evening Times reported figures warning 80,000 children in Glasgow could see their family income fall.

Labour MSP Drew Smith said: “The last Labour Government introduced tax credits to tackle working poverty, and it worked. There are thousands of people in Glasgow who can attest to that

“Recently new information has shown that over 200,000 children in Scotland are living in poverty, on what planet does slashing tax credits help those kids?

Anti poverty campaigners warn many low income families will be paying the price of the Chancellors drive to cut spending.

Peter Kelly, Director of the Poverty Alliance said the cuts would push the welfare system in the wrong direction.

He said: “Cuts such as lowering the benefit cap are ideologically driven. We know the move will save very little money and will push more families into poverty, but it is likely that the UK Government will persevere with it anyway.

“Young people are also likely to bear the brunt of cuts with changes to housing benefit and the move to a Youth Allowance for 18 – 21 year olds.

“The Poverty Alliance has campaigned, and will continue to campaign for, a fairer social security system which lifts people out of poverty and helps them achieve their full potential.

“At the moment our welfare system in the UK does not do this, and with more cuts on the way it is getting even further away from where it needs to be.

“I would urge the UK Chancellor to reconsider these cuts and ensure that the poorest families throughout the UK are able to access the support they need to lead decent, dignified lives.”

Mr Osborne and Prime Minister David Cameron have said tax credits are a disincentive to people working more hours and also subsidise employers offering low wages.

However in the absence of legislation to increase pay campaign groups warn it will only lead to cuts in income.

Sarah Jackson, chief executive of advice group Working Families, said: “From calls to our helpline, we know that parents can’t get the hours of work that they need to fit around their family responsibilities.

“It is naive to think that employers would raise wages when the balance of power is already on their side. Parents will find it even harder to remain in employment and face hard choices about how to survive financially, care for their children and stay in work.”