“We can be supportive of the government… or we can be supportive instead of the three million families facing letters at Christmas telling them, on average, they will lose around £1,300 a year”, said Patricia Hollis, a Labour lord who tabled one of the successful motions, which aimed to soften the impact of the cuts for three years.
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Last night Osborne said, “Tonight un-elected Labour and Liberal Lords have defeated a financial matter passed by the elected House of Commons”. Mr Osborne made clear that the implications of the defeat would “need to be dealt with” and moves to rein in the Lords are expected.
Earlier in the Lords, peers demanded that Mr Osborne “rethinks” the pounds 4.4?billion cuts to the tax credit system that he announced earlier this year.
But crossbencher Baroness Hayman, who voted to delay the cuts, pointed out Commons Speaker John Bercow had said there had been no “procedural impropriety”.
Richard Graham, MP for Gloucester, said he welcomes the chancellor’s decision to research effective ways of making welfare savings through tax credits fairly.
“I said I would listen and that’s precisely what I intend to do”, he said.
“We are as determined as ever to have a low tax, low welfare, high wage economy that Britain needs and the British people want to see”.
SNP MP Stewart Hosie told Mr Osborne he had not only “lost his political touch but his chance of being Prime Minister have gone up in a very large puff of smoke”.
“Whilst we remain steadfast in our opposition to these changes to working tax credits, Ulster Unionist lords intentionally did not vote”.
“Those families believed us when we all said that work was the best route out of poverty – that work would always pay”, she said.
“The review would consider in particular how to secure the decisive role of the elected House of Commons in relation to (i) its primacy on financial matters; and (ii) secondary legislation”.
Tax credits were introduced by Labour to help low-paid families.
The House of Lords decision not to pass the Government’s tax credit bill was hailed by a former Northern Ireland finance minister – while another unionist described it as an act of “constitutional vandalism”.
However, former Tory leader Lord Howard said: “The basic principle is this: the House of Commons is elected, the House of Lords is not”.
At least 50 MPs have vowed to defy the party line and vote down the pledge to cut the income of poor families, insiders say.
He said: “These cuts would hit working people the hardest”.
But senior Conservative backbencher David Davis, who is backing another critical motion on the tax credit changes to be debated in the Commons on Thursday, said the constitutional questions raised by Monday’s votes were a side issue.
It followed days of veiled threats from David Cameron to flood the Lords with more than 100 new Tory peers if they dared to opposed the cuts.
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Downing Street has accused the Lords of causing a constitutional crisis and promised a “rapid review” of the relationship between the Commons and the Lords.
