House of Lords reject tax credit reduction

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Houses of Parliament

WHEN George Osborne announced a proposal to reduce the tax credits for the lower paid, he could hardly have expected that members of the House of Lords would break with over 100 years of tradition by voting against a finance measure approved by the House of Commons.

Downing Street said the UK was in ‘uncharted waters’ after the vote and Commons leader Chris Grayling has indicated that whilst the government does not want to take precipitate action, they are not ruling out anything to ensure that the bill goes through.

There is speculation that the government may consider appointing a further 100 or more new peers to the House of Lords to ensure that they are able to have a majority over the combined votes of Labour and Liberal Democrat Lords.

At the moment, however, the proposed bill, which could have adversely affected up to three million low-paid workers, will have to go on hold until the Chancellor is either in a position to appease the Lords by publishing plans of how these workers will be compensated or when he has enough new Tories in place.

Former minister and senior Conservative backbencher David Davis was one supporter of the negative vote, saying: “It was worth it. Somebody had to tell the government to think again.” He added that the threat to pack the Lords with new peers was ‘ridiculous’.

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