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A principled stand

Lords defy govt on tax credit cuts
Hajera Blagg, Tuesday, October 27th, 2015

The government was forced to back down on tax credit cuts last night (October 27), after the House of Lords’ historic vote in favour of two motions that will halt the cuts until there is a plan to compensate low-income workers.


Now, families up and down the country can breathe a sigh of relief – the cuts, which would have clawed an average of £1,300 a year from low-paid workers, were set to come into full force next April, but now Chancellor George Osborne has said that he will include transitional measures in his Autumn statement to soften the cuts’ impact.


That peers voted on legislation concerning finances prompted the Prime Minister David Cameron to say that the upper chamber had triggered a constitutional crisis. A government spokesperson said last night that it would look into a “rapid review” of House of Lords’ conventions.


Last night’s debate reached a high point as Labour peer Baroness Hollis, who tabled one of the successful motions that will delay the cuts, gave an impassioned speech urging peers to act.


She argued that the House of Lords was well within its rights to vote down the legislation, discrediting the idea that they were voting on financial matters beyond their remit.


“If the government wanted financial privilege, these cuts should be in a money Bill; they are not,” she said.


“If they wanted the right to overturn them on the grounds of financial privilege, they could be introduced in the welfare reform Bill on its way here; they did not. So why now should we be expected to treat this [statutory instrument] as financially privileged when the government, who could have made it so, chose not to do so?


‘Not a constitutional crisis’

“It is not a constitutional crisis,” Hollis went on to say. “That is a fig-leaf possibly disguising tensions in the Commons between members of the government.


“We can be supportive of the government and give them what they did not ask for – financial privilege – or we can be supportive instead of those three million families facing letters at Christmas telling them that on average they will lose up to around £1,300 a year, a letter that will take away 10 per cent of their income on average.”


“That is our choice,” she added. “Those families believed us when we all said that work was the best route out of poverty and that work would always pay. They believed the Prime Minister when he promised that tax credits – and they are one package – would not be touched.”


Baroness Hollis’ motion would mean that the tax credit cuts would only affect future claimants, in essence sparing low-income earners who now depend on them to make ends meet. The Labour peer noted that the government can still achieve the same savings without causing so much suffering.


The government’s defeat in the House of Lords last night was considered a massive blow to the Tories’ legitimacy.


Osborne urged peers last night to vote against the tabled motions or to vote in favour of a “motion of regret”, which would only express peers’ concerns but would effectively still let the planned cuts go through.


In exchange, the chancellor said he would “listen very carefully” and take on board different opinions about the tax credit cuts.


But both motions that would delay the cuts were approved by a comfortable margin. Baroness Hollis’ motion was passed 289 votes to 272, while Lady Meacher’s motion, which would also delay the cuts, was passed 307 to 277 – a clear sign that peers were not willing to take Osborne’s “listening” promises at face value.


During the debate, criticism of the tax credit cuts came from all corners.


‘Morally indefensible’

Christopher Foster, Bishop of Portsmouth noted that “these proposals are morally indefensible.


“It is clear to me, and I believe to very many others, these proposals blatantly threaten damage to the lives of millions of our fellow citizens,” he said.


Even Tory peer Lord Lawson said during that debate that the chancellor must think again about the cuts, and understand how they would hit those on the lower end of the earning spectrum.


And this afternoon, as the controversy over whether the House of Lords breached convention boiled over, with the government threatening to take action, Commons speaker John Bercow put to bed any suggestion that peers acted inappropriately.


“The responsibility of the chair is for order,” he said. “Nothing disorderly has occurred. There has been no procedural impropriety. That would not have been allowed.


“Whether people like what happened last night, the substance of the issue, or in terms of their views on constitutionality is a matter for each and every one of them.”


Unite political director Jennie Formby praised peers for taking a principled stand.


“The House of Lords were rightly acting on behalf of the various parties that have come out against the cuts – the general electorate, millions of whom will be targeted by these vicious cuts; countless MPs, including Tory ministers; as well as faith leaders, charities, and independent think thanks who’ve calculated just exactly how damaging these reforms will be for hardworking, low-income families,” she said.


“Peers do not take this sort of action lightly,” Formby added. “But in this instance they used the powers that were perfectly within their remit to take a stand against the government’s assault on the working poor.


“Now, millions of working families can sleep soundly knowing that as Christmas approaches, they won’t be served with letters detailing how their livelihoods will be ripped apart from next year.”


But Formby noted that “the fight was not yet over”.


“We must continue to pressure the government to make good on its promises to revise their plans,” she said. “Chancellor Osborne says he is ‘in listening mode’ – it’s now up to us to make sure he does listen. We urge everyone to contact their MPs and tell them why they are opposed to these vicious cuts.”


“What’s more, we must press this government to dispose of its bogus National Living Wage and institute a statutory living wage that actually says what it does on the box – enable people to live,”


Formby went on to say. “This means a wage by which every working person can adequately feed, clothe and house themselves and their families, and we believe that this would mean a minimum of £10 an hour today.


“The only way to ‘make work pay,’ a phrase the chancellor is fond of using, is to actually make sure employers pay up. In the sixth richest country in the world, we can well afford to do this – all that’s necessary is the political will.”


Stay tuned on UNITElive as the government reveals how it will alter tax credit cuts in the chancellor’s Autumn statement next month.


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