George Osborne has vowed to take on the House of Lords over the constitutional crisis sparked by the devastating blow peers inflicted over plans to cut tax credits.
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Cuts to tax credits which would see over 4000 families in Wrexham “lose out” have been delayed – with local MP Ian Lucas warning policy changes need to be made. Theresa May’s Parliamentary Private Secretary, said: “It should and hopefully will have consequences for the House of Lords”.
The review, to be led by former leader of the House of Commons Lord Strathclyde, comes as Tory MPs continue to express anger at the House of Lords’ decision to vote to delay cuts to tax credits and to compensate those affected in full.
Mr Osborne later appeared on the Commons frontbench during a debate on the Finance Bill where he railed against a Labour MP over the defeat.
Denying the move “trespassed” on the financial privileges of the elected Commons, she said this did not extend to statutory instruments like the one before the House.
He also lashed out at the Lords, claiming their rejection of his cut “raises clear constitutional issues which we will deal with”.
Changes to his tax credits plan, which will derail his £4bn savings target, will be announced at the Autumn Statement at the end of November.
Chris Grayling has accused the House of Lords of creating a “big constitutional issue” after they voted to block tax credit cuts yesterday.
Key changes proposed include slashing in half the amount people can earn before tax credits reduce, from £6,420 to £3,850, and families will only be able to claim child tax credit for two children from April 2017.
That responsibility – to protect and serve the people of this country – is why I voted against the government’s plans.
“My view is I would be reluctant to see us do really dramatic changes, but it is really a matter of trying to sort out the relationship between the Commons and the Lords, if the Lords is intent on wrecking the manifesto of the elected Government”.
The Chancellor said it was his long-held opinion that there should be an elected House of Lords.
But the real problem is how on earth ministers, and particularly George Osborne, pull themselves out of a hole they have dug with their own hands.
“We will listen on the transition, but we are determined to deliver controlled welfare”, he continued, adding that it is essential to remove the deficit and reject those who want to “borrow forever”.
Downing Street said a review of the constitutional implications would begin straight away, arguing that a “convention exists and it has been broken”.
Mr Green said: “The convention is that the Lords don’t overturn bills related to money – so it is unconstitutional”.
The DUP’s Sammy Wilson said that the changes would have meant a drop in income of £1,000 for about 5,000 residents in his East Antrim constituency, and as many as 120,000 across the Province as a whole.
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But Treasury select committee chairman Andrew Tyrie called it an “unprecedented challenge to the authority of the House of Commons” that “cannot be allowed to rest”.
