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Tax credits: Lords challenge defended by Labour and Lib Dems Tax credits: Ministers urge opponents to back down
(about 1 hour later)
Labour and the Lib Dems have defended their challenge to tax credit cuts as ministers warned of taking an "unprecedented constitutional path". The government has urged opponents of tax credit cuts to withdraw attempts to delay or scupper them, at the start of a crucial debate in the House of Lords.
The House of Lords will vote on motions that could delay the controversial cuts or scupper them altogether. Lords leader Baroness Stowell said MPs had given the cuts their "clear and unequivocal backing", and urged the Lords not "to challenge their primacy".
Ministers say peers do not have the right to block financial measures approved by the House of Commons. If opponents backed down, she said, Chancellor George Osborne would listen "very carefully" to their concerns.
But Labour's shadow welfare secretary Owen Smith said such arguments were a "total sideshow". Critics have accused the Conservatives of misleading the public on the issue.
Cabinet Office minister Matthew Hancock said Chancellor George Osborne was in "listening mode" over the cuts. As the House of Lords prepares to vote on motions that could delay the controversial cuts by three years or scrap them altogether, ministers say peers do not have the right to block financial measures approved by the House of Commons.
But the bill was "obviously a financial matter" and should not be blocked by peers, he added. Baroness Stowell told peers the "financial primacy" of the House of Lords had been in place for 300 years and to ignore this would be an "unprecedented" challenge to the elected chamber and put the two Houses in "direct contrast".
'Comradely' Lib Dems Urging peers to reject three separate motions calling for the cuts to be either scrapped or delayed, she said the policy should not be treated "in isolation" but was part of the government "economic strategy and vision for the country".
This was dismissed by Mr Smith, whose party is putting forward a motion calling for a delay in the reforms while a package of financial assistance is drafted. She told peers Mr Osborne would "listen very carefully" if a motion of regret put forward by Church of England bishops was passed by the Lords.
He told BBC Radio 4's Today programme: "We will not be allowing the Tories to present this as some sort of unjust use of the House of Lords."
What are tax credits and what are the changes?What are tax credits and what are the changes?
Tax credits are a series of benefits introduced by the last Labour government to help low-paid families. There are two types: Working Tax Credit (WTC) for those in work, and Child Tax Credit (CTC) for those with children.Tax credits are a series of benefits introduced by the last Labour government to help low-paid families. There are two types: Working Tax Credit (WTC) for those in work, and Child Tax Credit (CTC) for those with children.
Under government proposals, the income threshold for Working Tax Credits - £6,420 - will be cut to £3,850 a year from April.Under government proposals, the income threshold for Working Tax Credits - £6,420 - will be cut to £3,850 a year from April.
In other words, as soon as someone earns £3,850, they will see their payments reduced. The income threshold for those only claiming CTCs will be cut from £16,105 to £12,125.In other words, as soon as someone earns £3,850, they will see their payments reduced. The income threshold for those only claiming CTCs will be cut from £16,105 to £12,125.
The rate at which those payments are cut is also going to get faster. Currently, for every £1 claimants earn above the threshold, they lose 41p. This is known as the taper rate. But from April, the taper rate will accelerate to 48p.The rate at which those payments are cut is also going to get faster. Currently, for every £1 claimants earn above the threshold, they lose 41p. This is known as the taper rate. But from April, the taper rate will accelerate to 48p.
There will be similar reductions for those who claim work allowances under the new Universal Credit.There will be similar reductions for those who claim work allowances under the new Universal Credit.
Read more:Read more:
The Liberal Democrats have gone further than Labour, tabling a so-called "fatal motion" calling for the welfare changes to be scrapped.
Lib Dem leader Tim Farron said his party's peers would also support the Labour motion "in comradely fashion".
He said the government had "no mandate" for the reforms, adding: "We think it's right to use the mechanisms available to overturn this proposal."
Opponents of the tax credit changes say they will leave millions of existing recipients - many of whom work but are on low incomes - some £1,300 a year worse off when they come into effect in April.Opponents of the tax credit changes say they will leave millions of existing recipients - many of whom work but are on low incomes - some £1,300 a year worse off when they come into effect in April.
But ministers say that taking into account other changes, such as the introduction of the new national living wage, further increases in the personal tax allowance and an extension of free childcare, the majority of existing claimants will be better off.But ministers say that taking into account other changes, such as the introduction of the new national living wage, further increases in the personal tax allowance and an extension of free childcare, the majority of existing claimants will be better off.
'Clear message''Clear message'
The government is more vulnerable to defeats in the House of Lords, where it has no majority.The government is more vulnerable to defeats in the House of Lords, where it has no majority.
The Bishop of Gloucester, the Right Reverend Rachel Treweek, said she wanted the government to "hear loud and clear" concerns about the impact of tax credit cuts on working families.
Speaking on the day she was sworn into the House of Lords, Bishop Treweek said: "We do not want them to be worse off and I hope that somehow in this afternoon's and this evening's proceedings, there will be found a way to give a very clear message to the chancellor of the exchequer that we want things to be thought about very carefully and decisions taken ahead of his Autumn Statement."
The measures have been approved on three occasions by the Commons since June but there has been growing unease on the Conservative benches about their impact and calls for Mr Osborne to rethink his approach.The measures have been approved on three occasions by the Commons since June but there has been growing unease on the Conservative benches about their impact and calls for Mr Osborne to rethink his approach.
When they consider the proposals from about 1600 GMT, peers could be asked to vote on as many as four motions urging a different approach. Most attention has focused on a motion tabled by Liberal Democrat peer Baroness Manzoor "declining to approve" the proposals. When they consider the proposals from about 16:00 GMT, peers could be asked to vote on as many as four motions urging a different approach.
The Liberal Democrat peer Baroness Manzoor has tabled a so-called "fatal motion" that would "decline to approve" the proposals.
Constitution warsConstitution wars
It should not really be much of a problem - the House of Lords is not traditionally supposed to block financial legislation that has the backing of MPs.It should not really be much of a problem - the House of Lords is not traditionally supposed to block financial legislation that has the backing of MPs.
This principle was established in 1911 during the constitutional gridlock that followed a decision by peers to block the Liberal Party's "people's budget".This principle was established in 1911 during the constitutional gridlock that followed a decision by peers to block the Liberal Party's "people's budget".
But nothing is ever cut and dried in Britain's fluid, unwritten constitution. And both sides are angrily trading precedents and claiming that their opponents are overstepping the mark. If they could only agree where the mark is.But nothing is ever cut and dried in Britain's fluid, unwritten constitution. And both sides are angrily trading precedents and claiming that their opponents are overstepping the mark. If they could only agree where the mark is.
Lords v Commons: Tax credit battle gets constitutionalLords v Commons: Tax credit battle gets constitutional
The Lib Dems have told their 111 peers to vote for the motion, which would effectively send the proposals back to the drawing board.The Lib Dems have told their 111 peers to vote for the motion, which would effectively send the proposals back to the drawing board.
However, it is not clear how much support the Manzoor motion will attract from Labour and the 176 crossbench members of the Upper House.However, it is not clear how much support the Manzoor motion will attract from Labour and the 176 crossbench members of the Upper House.
Labour's motion, under the name of Baroness Hollis, calls for the changes to be delayed until a three-year package of transitional financial help has been agreed upon.Labour's motion, under the name of Baroness Hollis, calls for the changes to be delayed until a three-year package of transitional financial help has been agreed upon.
Two other motions, one under the name of crossbench peer Baroness Meacher calling for a pause, and one from the Bishop of Portsmouth urging further consultation have also been tabled. However, it is not clear if they will be voted on.Two other motions, one under the name of crossbench peer Baroness Meacher calling for a pause, and one from the Bishop of Portsmouth urging further consultation have also been tabled. However, it is not clear if they will be voted on.
The Upper House, whose main function is as a revising chamber, has no powers to amend or block government money bills but the tax credit changes are incorporated in a so-called statutory instrument rather than primary legislation.The Upper House, whose main function is as a revising chamber, has no powers to amend or block government money bills but the tax credit changes are incorporated in a so-called statutory instrument rather than primary legislation.
According to parliamentary records, peers have killed off secondary or delegated legislation supported by the Commons on five occasions since 1945: in 1968, 2000 (twice), 2007 and 2012.According to parliamentary records, peers have killed off secondary or delegated legislation supported by the Commons on five occasions since 1945: in 1968, 2000 (twice), 2007 and 2012.
Are you receiving tax credits? Have you been affected by any of the issues raised in this story? You can share your comments and experience by emailing haveyoursay@bbc.co.uk.Are you receiving tax credits? Have you been affected by any of the issues raised in this story? You can share your comments and experience by emailing haveyoursay@bbc.co.uk.
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