Tax credit changes will ‘hammer’ Swansea families, claims AM Peter Black

Finance minister George Osborne, a possible successor to Cameron and his de facto deputy, wants to cut tax credits as part of £12 billion (17 billion euros, $18 billion) in welfare cuts to help reduce Britain’s deficit.

Lord O’Neill, a Treasury minister in the Lords, had been due to address the House about the reforms.

Labour’s leader in the Lords, Baroness Smith of Basildon, said that had been done deliberately “to sidestep the more usual detailed parliamentary scrutiny”.

Education Secretary Nicky Morgan said yesterday the Chancellor was in “listening mode” about the impact of controversial Government cuts to tax credits – signalling a possible future climbdown on the issue.

A poll found 57% of people said George Osborne’s plans to cut tax credits should not go ahead as planned.

“But the chancellor’s track record has been very much about supporting budgets in working families”.

The House will vote on a so-called “fatal motion” calling for the welfare changes to be scrapped.

Conservative peers had acted similarly in 2008 over the then Labour government’s attempt to increase the National Insurance upper earnings limit without further primary legislation, she added.

It has emerged that 70 per cent of votes are being lost in the Lords at the moment.

Mr Osborne has refused to back down, insisting rising wages will offset the effects, but with senior Tory MPs leading a Commons rebellion later in the week, it was reported he could unveil mitigation measures in his Autumn Statement on November 25.

Peers last week defeated laws which would end subsidies for onshore wind farms, a Tory manifesto pledge. Writing for the CapX website, David Davis, David Cameron’s main rival in the 2005 leadership election, upheld the right of the House of Lords to challenge the measure, because – he claimed – the Commons had not been allowed to debate it properly. “These measures have been voted on three times by members of parliament who are elected”.

“People are of course going to be anxious… but I think it’s a question of working through all the numbers”.

“So if the Lords do throw this out tomorrow and put it back to the Government, I’ve said to him “if you change your mind, bring back a policy in which people are protected – not a political stunt, but real protection”.

The Tory former cabinet minister Lord Heseltine said fellow peers were “playing with fire” by threatening to block the reforms. “He very much is always in listening mode”. “If they don’t that will be a matter which will no doubt be considered, I think there are quite likely to be consequences, it’s not for me to speculate on what they might be”.

It says that the Government has “failed to take account of the short-term impact” that the cuts will have. “They are completely over-reaching themselves”.

The respected Institute for Fiscal Studies (IFS) says higher wages will make up for only a fraction of the loss of income – and the Chancellor has refused to publish Treasury analysis.

A number of senior Conservatives including Boris Johnson, the Mayor of London, and Ruth Davidson, the leader of the Scottish Tories, have expressed concerns about the tax credit cuts.

MPs will have a fourth chance to vote on the cuts on Thursday – after Conservative backbenchers David Davis and Zac Goldsmith joined forces with Labour’s Frank Field to secure a cross-party debate. It will be put to a non-binding vote in the Commons on 29 October.