Tax credits ‘showdown’ at House of Lords

The House will vote on a motion calling for the welfare changes to be scrapped. Peers will also consider a separate motion which instead urges to delay the proposal until a package of financial assistance is drafted.

Ministers have urged the Lords not to defy the elected Commons, however one Conservative MP accused the government of bullying. David Davis said the plans risked causing ‘such agony to so many decent people’ and urged ministers to ‘calm down the debate, listen carefully… and think again’.

The Cabinet Office Minister Mathew Hancock said Chancellor George Osborne was in ’listening mode’ regarding the cuts.

The majority of opponents to the tax credit changes are concerned that millions of existing recipients, many of whom are on low incomes, will be £1,300 per year worse off when changes come into effect in April.

Ministers contend that when changes such as the new National Living Wage, increases in personal tax allowance and an extension of free childcare are taken into account, the majority of existing claimants will be better off.

However, data published by the Resolution Foundation shows that a low-earning single parent, working 20 hours a week at £9.35 an hour will be £1,000 a year worse off. Two low-earning parents with two children, assuming one is working part-time show that they will be £850 a year worse off. Finally the research has found that a middle earning couple with no children, both working full time will be £350 better off per year.

There have been warnings of a serious constitutional dispute in the lead-up to the votes, with one former Conservative leader talking of consequences for the appointed chamber it it chooses to strike down a key part of the government’s social and economic programme.

Hancock said the Bill was ‘obviously a financial matter’ and should not be blocked by peers. However, Lib Dem peer Baroness Kramer said the idea of a ’constitutional bar’ was ‘complete and utter rubbish’.

Kramer claimed the Conservatives were attempting to make the issue a constitutional one because they have ‘lost the argument’.

On each of the three occasions since June, the measures have been approved, but there has been growing unease on the Conservative benches about their impact and Osborne has been called on to rethink his approach.

Education Secretary Nicky Morgan argued that there is ‘no credible alternative’ and the ‘policy wasn’t changing’. She insisted that the cabinet is ‘united’ behind the changes.

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