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| Tax credits vote: PM accuses Lords of breaking constitutional convention | |
| (35 minutes later) | |
| David Cameron has accused the House of Lords of breaking a constitutional convention after the House of Lords voted to force George Osborne to pay compensation to low-paid workers who would be hit by planned cuts to tax credits. | David Cameron has accused the House of Lords of breaking a constitutional convention after the House of Lords voted to force George Osborne to pay compensation to low-paid workers who would be hit by planned cuts to tax credits. |
| Downing Street will outline on Tuesday plans for a “rapid review” – which could limit the power of the upper house – after peers voted in favour of a motion by Lady Hollis, the former Labour minister, to halt the cuts until the government produces a scheme to compensate low-paid workers for three years. | Downing Street will outline on Tuesday plans for a “rapid review” – which could limit the power of the upper house – after peers voted in favour of a motion by Lady Hollis, the former Labour minister, to halt the cuts until the government produces a scheme to compensate low-paid workers for three years. |
| A No 10 spokesman said: “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.” | A No 10 spokesman said: “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.” |
| But George Osborne indicated that he will seek to calm tensions by softening the impact of the planned reforms that have been put on hold by the vote. In language which reflected some of the motion, he told the BBC that he would act to help people struggling in the “transition” period. | |
| The chancellor told the BBC: “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.” | The chancellor told the BBC: “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.” |
| Downing Street swung into action after the chancellor suffered a blow when 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. | |
| Related: Experts urge Tories to phase in planned reform of tax credit system | Related: Experts urge Tories to phase in planned reform of tax credit system |
| The motion, which also called on the government to respond to an analysis by the Institute for Fiscal Studies that 3 million families would lose £1,000, was passed by 289 to 272 votes. | The motion, which also called on the government to respond to an analysis by the Institute for Fiscal Studies that 3 million families would lose £1,000, was passed by 289 to 272 votes. |
| Peers also voted in favour of a milder motion by crossbench peer Lady Meacher – by 307 to 277 votes – that declined to support the cuts until the government responds to the IFS analysis. A fatal motion, tabled by Lady Manzoor, the Lib Dem peer, was defeated by 310 votes to 99. | Peers also voted in favour of a milder motion by crossbench peer Lady Meacher – by 307 to 277 votes – that declined to support the cuts until the government responds to the IFS analysis. A fatal motion, tabled by Lady Manzoor, the Lib Dem peer, was defeated by 310 votes to 99. |
| The votes will force Osborne to rewrite his planned welfare cuts – a key part of his deficit reduction plan. The cuts were due to account for £4.4bn of his £12bn welfare cuts. | The votes will force Osborne to rewrite his planned welfare cuts – a key part of his deficit reduction plan. The cuts were due to account for £4.4bn of his £12bn welfare cuts. |
| Labour dismissed government claims that its motion could trigger a constitutional crisis on the grounds that it was simply asking ministers to have a rethink and offer compensation. The Hollis motion said that the upper house would decline to approve the tax credit cuts until the government delivers a “scheme for full transitional protection for a minimum of three years for all low-income families and individuals currently receiving tax credits before 6 April 2016”. | |
| Michael Ellis, Tory MP for Northampton North who serves as parliamentary aide to Theresa May, described the vote as a constitutional outrage. | Michael Ellis, Tory MP for Northampton North who serves as parliamentary aide to Theresa May, described the vote as a constitutional outrage. |
| He told Sky News: “We cannot have a situation where the unelected [House of Lords] overrules the democratically elected House of Commons. The House of Lords has resisted that temptation for 100 years ... Tonight’s votes, particularly on the Labour motion, is a constitutional outrage. This involves £4.4bn worth of public spending. The principle that the House of Commons holds sway over financial matters is a crucial one to the functioning of our constitution.” | |
| The vote came after Hollis was heard in silence as she spoke of the impact of the cuts. She told peers: “I hope I don’t sound pious but I think this is about honouring our word, the prime minister’s word, that work must always pay. It is about, surely, respect for those who strive to do everything we ask of them but now find themselves punished for doing what is right. It is about trust between parliament and the people we serve.” | The vote came after Hollis was heard in silence as she spoke of the impact of the cuts. She told peers: “I hope I don’t sound pious but I think this is about honouring our word, the prime minister’s word, that work must always pay. It is about, surely, respect for those who strive to do everything we ask of them but now find themselves punished for doing what is right. It is about trust between parliament and the people we serve.” |
| Tim Farron, the Lib Dem leader, said: “The government has been forced into an embarrassing climbdown. George Osborne must now go back to the drawing board and come back with plans to balance the books that don’t simply attack working families who are already struggling to get by. We have sent a clear signal to the Tories that the British people will not accept this scale of attack on the vital support they need.” | Tim Farron, the Lib Dem leader, said: “The government has been forced into an embarrassing climbdown. George Osborne must now go back to the drawing board and come back with plans to balance the books that don’t simply attack working families who are already struggling to get by. We have sent a clear signal to the Tories that the British people will not accept this scale of attack on the vital support they need.” |
| Related: Lord Butler: peers have no place in attempting to block tax credit cuts | Related: Lord Butler: peers have no place in attempting to block tax credit cuts |
| Peers across the house registered their deep unease with the cuts to tax credits. Lord Lawson of Blaby, the former chancellor, highlighted the unease on all sides of the upper house when he called on Osborne to do more to help low-income earners. He said: “Here a great deal of the harm is at the lowest end and that is what needs to be looked again. That is what concerns me. I think it is perfectly possible with tweaking it to take more from the upper end of the tax credit scale and less from the lower end of the tax credit scale ... It is not just listening [by the chancellor] that is required. It is change that is required.” | |
| The vote came after an impassioned debate in which Lord Campbell-Savours, the Labour peer, accused David Cameron of lying after indicating to voters during the election that he would not cut tax credits. The peer said: “The British public would regard what he said now as a lie, a lie to win the general election.” | The vote came after an impassioned debate in which Lord Campbell-Savours, the Labour peer, accused David Cameron of lying after indicating to voters during the election that he would not cut tax credits. The peer said: “The British public would regard what he said now as a lie, a lie to win the general election.” |