Tax credits vote: PM accuses Lords of breaking constitutional convention

‘Rapid review’ sought after peers vote to delay tax credit cuts until compensation scheme for low-paid workers is worked out

David Cameron is planning to set limits on the power of the House of Lords after George Osborne suffered a major blow to his authority when peers voted to delay tax credit cuts in order to protect those who would lose out.

Downing Street will on Tuesday outline plans for a “rapid review” that will examine ways to guarantee that the House of Commons always has supremacy on financial matters, after the prime minister accused peers of breaking a constitutional convention. The move comes after peers voted in favour of a motion by the former Labour minister Lady Hollis to halt the cuts until the government produces a scheme to compensate low-paid workers for three years.

A furious prime minister made clear that the upper house had ridden roughshod over conventions dating back to the aftermath of Lloyd George’s People’s Budget of 1909 and beyond, according to which peers do not interfere in financial matters. The planned tax cuts are designed to provide £4.4bn of the chancellor’s planned £12bn in welfare cuts.
“The prime minister is determined we will address this constitutional issue. A convention exists and it has been broken. He has asked for a rapid review to see how it can be put back in place,” said a Downing Street spokesman.

George Osborne, the chancellor, indicated that he will seek to calm tensions by softening the impact of the cuts which have been put on hold by the upper house’s vote. In language that reflected some of the motion, he told the BBC he would help people struggling in the “transition” period when he delivers his autumn statement on 25 November.
Osborne, who is likely to face Labour taunts in the House of Commons on Tuesday morning when he takes the monthly session of Treasury questions, told the BBC: “Unelected Labour and Liberal Lords have defeated a financial matter passed by the elected House of Commons, and David Cameron and I are clear that this raises constitutional issues that need to be dealt with. However, it has happened, and now we must address the consequences of that. I said I would listen and that is precisely what I intend to do. I believe we can achieve the same goal of reforming tax credits, saving the money we need to secure our economy while at the same time helping in the transition. That is what I intend to do at the autumn statement.”

It is understood that Osborne will make clear in his autumn statement that he remains determined to scale back the use of tax credits which used to be available to nine in every 10 families and are set to be available to only five in 10 under his changes.

But he will announce that he will soften the impact of the planned cuts for a transitional period amid concerns among ministers about the lack of government response to claims by the Institute for Fiscal Studies (IFS) that 3 million families would lose £1,000 a year. Under his original plans, the earnings level at which tax credits start to be withdrawn will be reduced from £6,420 to £3,850 from next April.

The “rapid review” will find ways of ensuring that financial measures cannot be overturned by the House of Lords. Labour argued that it had a free hand because the tax credits were being introduced through a statutory instrument and had not been declared as a formal financial measure. The review will also look at ways of guaranteeing that statutory instruments cannot be overturned by the Lords, who have only done so on five occasions.

http://www.theguardian.com/money/2015/oct/26/tax-credit-cuts-halted-as-lords-vote-to-protect-low-income-earners


They really don't like being bested do they, the stream to fasicm becomes a river, and the selfish look on.

If the vote came in their favour the scumbags would be crowing.

I do not have any time for these pompous lazy pigs in the trough Lords but happyish on this occasion.

I agree Stormee.
Usually the Lords are only there for their expenses, but this time they earned their corn and did the right thing by the British people

Handy Andy wrote:I agree Stormee.
Usually the Lords are only there for their expenses, but this time they earned their corn and did the right thing by the British people

Don't talk daft you stupid prat.The Lords made a mistake & it's only a matter of time until the Tories reduce benefits to the scroungers even more.