David Cameron’s Conservative government has been dealt a major blow after the House of Lords voted to delay tax credit cuts for three years and to compensate those affected in full.
The House of Lords shrugged off warnings of a constitutional crisis and voted to delay the £4.4bn package of cuts. In an utterly humiliating rebuff for the Chancellor, his proposals were twice snubbed as peers queued up to condemn the measures for hitting the poorer communities and attacked the government for not coming clean in the Tori manifesto about the proposals.
Peers voted by 289 votes to 272 to provide full financial redress to the millions of recipients affected across the UK. Following an impassioned and extensive debate the Lords voted for low-income families to be given ‘full transitional protection’ from the cuts. Letters warning more than three million families that their tax credits would be cut next year were due to be sent out in December.
The House of Lords later inflicted a second wave of anguish for the Tori’s by supporting a pause until an independent study of the impact was carried out. George Osborne said he fully recognises the outcome of the vote, but said it has raised “constitutional issues”. This double defeat, which follows a growing rebellion among Conservative MP’s over the impact of tax credit cuts on their constituents, leaves a centerpiece of Mr Osborne’s plans to find £12bn in savings from welfare spending in crisis.
Following a shocking result for the government the Labour Party has responded by calling for a “full U-turn” over the tax credit changes.
However Osborne remains in a positive frame of mind and believes that he is able to lessen the impact of the cuts as changes are introduced. Osborne stated, “We remain as determined as ever to build the low-tax, low-welfare, high-wage economy that Britain needs and that Britain wants. The end goal is clear. This country cannot have an unlimited welfare budget”.
TNT News Billy Rooney