Tories could soften blow on tax credit cuts, hints Morgan
FORMER Tory leader Michael Howard yesterday accused peers of trying to challenge the supremacy of the Commons amid signs that the Lords could inflict a historic defeat on ministers over tax credits today.
Labour sources said they expected victory in a crunch House of Lords vote, with support from Lib Dem peers and a number of crossbenchers who have no party affiliation.
Tory sources said they feared defeat over a Labour motion which ministers say would scotch £4.4billion of tax credit cuts. A group of 20 crossbench peers are expected to hold the balance of power in the vote which could provoke a constitutional crisis.
In an attempt to head off the revolt, Education Secretary Nicky Morgan said George Osborne was in ‘listening mode’ and hinted at further support in the Autumn Statement for those affected by the loss of tax credits.
The Chancellor is said to be considering speeding up changes to the personal allowance on which no income tax is paid. Other plans believed to be under consideration include raising the National Insurance threshold so poorer people pay less, although this would be very expensive.
Lord Howard said the Commons had voted for tax credit cuts three times, each time by a majority significantly larger than the Government’s technical majority. He told Radio 4’s The World This Weekend that the opposition parties in the Lords ‘are seeking to throw to the wind conventions that have been observed for at least 350 years, and are seeking to challenge the supremacy which has been recognised for the whole of that period in the House of Commons on matters relating to tax and spend’. A Tory source said the vote was in the balance but they ‘feared defeat’.
In this Parliament the Tories have mobilised a maximum of 166 peers. That compares to 144 for Labour and 82 for the Lib Dems. A maximum of 77 crossbenchers have voted on any one occasion, suggesting they will hold the balance of power.
The Government’s last hope is a ‘regret’ motion pushed forward by the Bishops which would not undermine the policy but register the Lords’ opposition.
The Labour motion, pushed by former minister Patricia Hollis, will be backed by the Lib Dems and calls for ‘full transitional protection for a minimum of three years’. Sources said that would cost billions, and if passed would have the effect of killing off the policy. A Labour source said: ‘It will be very close but I think we will just do it.’
Mrs Morgan told the BBC’s Andrew Marr Show the basic thrust of the tax credit reform would not change, but added: ‘The Chancellor’s track record has been very much about supporting budgets in working families. He very much is always in listening mode.’
She said she ‘ didn’t recognise’ claims three Cabinet ministers had expressed grave concerns about the policy.
Ministers will also face a rebellion by their own MPs on Thursday on a backbench motion calling for help for those affected by the measure that is due to come into force in April. Independent studies suggest the cuts could cost one million people an average of £1,300.