Tories could suspend House of Lords over tax credit rebellion

Britain's Chancellor of the Exchequer George Osborne. © Phil Noble
Spurned Conservatives have threatened to suspend the House of Lords after speculation peers could use a rare “fatal motion” to ensure Chancellor George Osborne’s tax credit cuts are blocked in a vote planned in the upper chamber next week.

The motion would be put in place to specifically block Osborne’s controversial £4 billion (US$6.2 billion) worth of cuts to the tax credit system.

A government source told the Huffington Post they were considering suspending the House of Lords, or filling the chamber with Tory peers to ensure the vote had a Conservative majority.

A “fatal motion” is considered a last ditch option by the House of Lords. It is considered a risky move as using the motion could be seen as an attempt to overstep the powers of the unelected house.

“If they do this, they will turn this from being a matter about tax credits into a huge constitutional issue of the Lords’ powers” the source said.

But if a motion is used, the Lords will argue that usual conventions do not apply because the tax credit cuts were not featured in the pre-election Conservative manifesto.

Liberal Democrat leader Tim Farron, who had always staunchly opposed the cuts, has issued his party peers a heavy whip to back the motion. 

The Treasury have attempted to defend the cuts, releasing data on Tuesday showing the combined effects of changes to tax credits since 2010 had nearly halved the tax bill for the government from a projected £40 billion to £25.3 billion next year.

A commons briefing paper recently showed the poorest families would be hit by the cuts, despite claims from ministers that 80 percent of households would be better off by 2017/18.

The briefing papers stated single earner couples with two children, working a 35 hour week on minimum wage would see their income fall by almost £1,000 from £21,699 to £20,322 during the next year.

The Institute for Fiscal Studies (IFS) echoed the comments made in the briefing paper, saying the cuts would hit people in work rather than those out of work.

Director Paul Johnson told the BBC on Tuesday that Osborne’s policy would not provide an incentive for people to get a job.

The Chancellor made quite a big choice in the budget, he’s decided actually to hit people in work rather harder than people out of work,” Johnson said.

“So he’s actually made the choice, relatively speaking, to protect some of the poorest people on tax credits.

“The cost of that is that he’s hitting rather harder some of those that are in work, thereby reducing work incentives and, of course, hitting what he might call ‘hardworking families.’”