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Ministers pressurised peer to drop 'fatal motion' on tax credits cuts

Published 21/10/2015

Chancellor George Osborne.
Chancellor George Osborne.

The Government put pressure on an independent peer to withdraw a motion which could have killed off George Osborne's controversial cuts to tax credits.

Crossbench peer Baroness Meacher dropped a plan to table a "fatal motion" that would throw out the changes altogether and will instead call for the Government to delay pressing ahead with the changes until MPs have had a fresh chance to debate them.

The Chancellor faces a revolt by Tory backbenchers in the Commons next week, with London mayoral candidate Zac Goldsmith and former leadership contender David Davis among backers of a cross-party demand for extra protections.

The vote - due on October 29 - could take on extra significance if the House of Lords approves Lady Meacher's move to refuse to back the reforms without further consideration by MPs.

Explaining her decision not to table a fatal motion, which could have triggered a constitutional crisis, Lady Meacher said she was responding to the pressure she had come under from ministers.

Lady Meacher told the BBC: " There has been enormous political activity around this proposal for a fatal motion. In response to that pressure from the Government I am prepared to table a motion to delay the approval of this regulation."

She added: " The role of the Lords is not to change Government spending, that is absolutely crucial that is not our role. The role of the Lords is to examine a regulation or a Bill, to use our professional judgment about whether the Government is making a major mistake and, if they do, then to provide an opportunity for the Government to think again and an opportunity for the elected House to hold the Government to account. That's what we are doing."

The motion Lady Meacher plans to table would delay consideration of the measures by the Lords until the Government has responded to the Institute for Fiscal Studies' analysis of the plans, which showed that the introduction of the National Living Wage would not make up for the cuts to tax credits.

The Commons debate next week, on a cross-party motion tabled by Work and Pensions Select Committee chairman Frank Field, could see a defeat for David Cameron and Mr Osborne.

Lady Meacher said the Government was " expected to lose a vote, and they could lose heavily" on October 29.

An Opposition-led Commons motion was easily defeated last night - and attracted no Tory rebels - despite a string of Conservatives, including several newly-elected MPs, criticising the policy and calling for a rethink.

Tory Heidi Allen used her maiden Commons speech to warn the changes go "too hard and too fast" and Johnny Mercer, a fellow member of the 2015 intake, urged the Chancellor to do "something, anything" to ease the "harshest" effects of the cuts on vulnerable people.

Former party chairman Baroness Warsi hailed Ms Allen's "brave and principled" speech, adding that tax credits "provided my parents the necessary buffer to allow us to study and work our way out of poverty".

The second Commons debate will present an opportunity for increasingly disgruntled Conservatives to make their feelings plain by seeking to overturn the Government's fragile majority on the issue.

In a joint statement, Labour MP Mr Field and Mr Davis welcomed the decision of the backbench business committee "to grant us a debate in which we can vote on a House motion, rather than a party one.

"All the MPs requesting the debate wish to have a motion which is designed to help the Government meet its fiscal goals while supporting some of our most vulnerable constituents," they said.

The motion, which calls on the Government "to bring forward proposals that mitigate at nil cost the impact of its proposed changes to tax credits ... so as to protect the lowest paid workers", will be debated on October 29.

It is also signed by figures including Liberal Democrat leader Tim Farron, the Westminster leaders of the DUP, Plaid Cymru and the SDLP, the Scottish National Party's health spokeswoman Philippa Whitford and another two Tories, Stephen McPartland and Jason McCartney.

Shadow chancellor John McDonnell said the issue could be as damaging to the Tories as the Liberal Democrats ditching a pledge not to increase student tuition fees in joining the coalition government in 2010.

"David Cameron needs to listen to MPs in his own party on the tax credit cuts.

"Heidi Allen is following other Tory MPs like David Davis, Boris Johnson and many more who are waking up to what Labour has been saying: it's simply not fair to make families £1,300 a year worse off to pay for tax breaks for the few.

"The Tories risk following the Lib Dems in breaking pre-election promises to the British people, and voters won't forget the broken promises made during this year's election campaign any more than those made by the Lib Dems on tuition fees in 2010."

Mr Field said: "The House of Lords will consider a motion that refuses to approve the tax credit changes properly until the House of Commons has been able to have a full debate on their consequences.

"That opportunity now arises when Commons backbenchers have their own debate and motion for approval next Thursday."

The Commons vote would not be binding on the Government but piles pressure on Mr Osborne to calm the growing dissent in Tory ranks.

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