Lords block tax credit cuts

Chancellor George Osborne has been forced to rethink his plans
Chancellor George Osborne has been forced to rethink his plans

THOUSANDS of working Wigan families set to be hit in the pocket by tax credit cuts have been given a reprieve.

The House of Lords inflicted a crushing blow to the Government by voting to block the divisive welfare reform plans.

Speaking before Monday’s vote, town MPs Lisa Nandy and Yvonne Fovargue had urged the Government to draw back amid mounting pressure from within its own ranks.

Peers - including Wigan’s council leader Lord Smith - voted by a majority of 17 to back Labour calls for the cuts to be delayed until chancellor George Osborne can outline a help package for those due to be hit worse by the reforms.

Government figures show more than 18,000 working families in Wigan borough are in receipt of tax credits with thousands understood to be affected if the changes had been voted through.

But the result of the vote has been met with criticism from Conservative MPs with Mr Osborne accusing the Lords of having behaved in an unconstitutional manner by interfering in financial matters.

Mr Osborne criticised “unelected” Labour and Liberal Democrat peers for blocking the government on a financial measure and David Cameron is launching a “rapid review” into the constitutional fallout of the bruising result.

The Chancellor said: “David Cameron and I are clear that this raises constitutional issues that need to be dealt with.

“However, it has happened, and now we must address the consequences of that. I said I would listen and that’s precisely that I intend to do.

“I believe we can achieve the same goal of reforming tax credits, saving the money we need to save to secure our economy, while at the same time helping in the transition.

“That is what I intend to do at the Autumn Statement. I am determined to deliver that lower welfare, higher wage economy that we were elected to deliver and the British people want to see.”

Speaking before the vote, Yvonne Fovargue, MP for Makerfield, said: “With six million jobs paying less than enough to live on, now is exactly the wrong time for a cut to working people’s tax credits. The Government’s approach is completely wrong and needs an urgent re-think.

“People understand that governments have to make difficult decisions, but what is impossible to fathom is why the Conservatives continue to think that the low paid and middle earning families should bear the brunt of austerity.

“Before the general election David Cameron pledged not to cut tax credits so the sense of betrayal so many people now feel is acute. His so called National Living Wage is not a real Living Wage and will not compensate families in Makerfield who will be up to £1300 worse off.”

Wigan MP Lisa Nandy said: “Thousands of working families across Wigan will get a massive pay cut if the Government presses ahead with these plans. It’s fundamentally wrong to expect millions of people to go to work every week and come home without enough money to live on.

“This week in Parliament, after Labour tried to stop the cuts, David Cameron said he was delighted they were going ahead even though they will push 200,000 more children into poverty.

“Before the election he denied the Tories would cut tax credits. Now he’s cutting help for some of the most hard-pressed families in the country. This Government has shown only too clearly it will not support working people. Labour will do everything we can to defeat them.”