House of Lords throws out tax credits proposals in a strange reversal of history

[-:Undertaker:-]

http://www.theguardian.com/money/201...income-earners

Tax credits vote: PM accuses Lords of breaking constitutional convention

‘Rapid review’ sought after peers vote to delay tax credit cuts until compensation scheme for low-paid workers is worked out

House of Lords

Prime Minister David Cameron has accused the House of Lords of breaking a constitutional convention after the House of Lords voted to force George Osborne to pay compensation to low-paid workers who would be hit by planned cuts to tax credits. Downing Street will outline on Tuesday plans for a “rapid review” – which could limit the power of the upper house – after peers voted in favour of a motion by Lady Hollis, the former Labour minister, to halt the cuts until the government produces a scheme to compensate low-paid workers for three years.

A No 10 spokesman said: “The prime minister is determined we will address this constitutional issue. A convention exists and it has been broken. He has asked for a rapid review to see how it can be put back in place.” But George Osborne indicated that he will seek to calm tensions by softening the impact of the planned reforms which have been put on hold by the vote. In language which reflected some of the motion, he told the BBC that he would act to help people struggling in the “transition” period.

The chancellor told the BBC: “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 is precisely what I intend to do. I believe we can achieve the same goal of reforming tax credits, saving the money we need to secure our economy while at the same time helping in the transition. That is what I intend to do at the autumn statement.” Downing Street swung into action after the chancellor suffered a blow when peers voted in favour of a motion by the former Labour minister Lady Hollis to halt the cuts until the government produces a scheme to compensate low paid workers for three years.

The motion, which also called on the government to respond to an analysis by the Institute for Fiscal Studies that 3 million families would lose £1,000, was passed by 289 to 272 votes. Peers also voted in favour of a milder motion by crossbench peer Lady Meacher – by 307 to 277 votes – that declined to support the cuts until the government responds to the IFS analysis. A fatal motion, tabled by Lady Manzoor, the Lib Dem peer, was defeated by 310 votes to 99. The votes will force Osborne to rewrite his planned welfare cuts – a key part of his deficit reduction plan. The cuts were due to account for £4.4bn of his £12bn welfare cuts.

Labour dismissed government claims that its motion could trigger a constitutional crisis on the grounds that it was simply asking ministers to have a rethink and offer compensation. The Hollis motion said that the upper house would decline to approve the tax credit cuts until the government delivers a “scheme for full transitional protection for a minimum of three years for all low income families and individuals currently receiving tax credits before 6 April 2016”.

Michael Ellis, Tory MP for Northampton North who serves as parliamentary aide to Theresa May, described the vote as a constitutional outrage.
He told Sky News: “We cannot have a situation where the unelected [House of Lords] over rules the democratically elected House of Commons. The House of Lords has resisted that temptation for 100 years ... Tonight’s votes, particularly on the Labour motion, is a constitutional outrage. This involves £4.4bn worth of public spending. The principle that the House of Commons holds sway over financial matters is a crucial one to the functioning of our constitution.”

It is a strange reversal of history this, no matter what you think of the policy. At the end of the Edwardian era in 1910-1911 a reverse situation occurred when the House of Lords (mainly Conservative) threw out the so-called "People's Budget" of David Lloyd George's Liberal Party: a situation which was only solved when the new King George V threatened to create hundreds of new Liberal peers in order to overcome the Conservative Lords majority in the upper chamber. In that instance, a constitutional convention was established that over money matters the Lords would always relent and the House of Commons would have it's way.

In this case, you've now got a Liberal Democrat-Indepedent-Labour majority in the House of Lords which has rejected tax credit cuts (which would curb spending rather than increase) against a Conservative government. In other words, a complete reversal of the situation in 1910 and 1911.

My own thought is this: I am probably for the tax credit cuts as we do need government spending cut in all areas however as a recent-covert to an unelected upper chamber (I used to want it abolished) I actually support the Lords using more power and making the party-leadership dominated Commons think again about this. Imagine if we had a slavish upper chamber that was elected and simply followed the orders of the party hierarchies as is what happens in the Commons.

So hooray for the Lords.

Thoughts?

[-:Undertaker:-]

There's some Conservatives calling for the creation of many new peers to overcome the anti-Conservative majority in the Lords chamber, if the government is stupid enough to try it then they'd escalate and cause a real constitutional crisis by dragging the Queen into it. Doubtful they'd be that stupid though.

[FlyingJesus]

How is compensation meant to be a solution surely that's just inventing extra admin work to give people the same amount of money they were already trying to claim... that's not saving money at all

[dbgtz]

Hopefully whatever the outcome, the Lords doesn't suffer from it. It's not like they can't just push the legislation through next year anyway. I also don't understand what convention they're referring to. Is it the one that they shouldn't oppose what was in the winning party's manifesto? Was tax credit cuts even in their manifesto?

[-:Undertaker:-]

Hopefully whatever the outcome, the Lords doesn't suffer from it. It's not like they can't just push the legislation through next year anyway. I also don't understand what convention they're referring to. Is it the one that they shouldn't oppose what was in the winning party's manifesto? Was tax credit cuts even in their manifesto?

The main parties have been trying to destroy the Lords for years, mainly when Blair in 1999 removed most of the hereditry peerages. The fact that there's an independent upper chamber that can revise and make the government think again rather than the party leadership having full sway annoys the hell out of them. The reason why they haven't as of yet been able to fully destroy the Lords is they don't know what to put in its place because that in itself would cause a constitutional crisis. Don't underestimate their stupidity though as I suspect the Conservative Party leadership will be simmering tonight.

And the convention of the Lords since 1911 is that it doesn't delay money bills so for example the Budget.

[abc]

I have not read much on this bill which the Lords have voted against. However the Lords power should not be diminished or weakened.

[AgnesIO]

The main parties have been trying to destroy the Lords for years, mainly when Blair in 1999 removed most of the hereditry peerages. The fact that there's an independent upper chamber that can revise and make the government think again rather than the party leadership having full sway annoys the hell out of them. The reason why they haven't as of yet been able to fully destroy the Lords is they don't know what to put in its place because that in itself would cause a constitutional crisis. Don't underestimate their stupidity though as I suspect the Conservative Party leadership will be simmering tonight.

And the convention of the Lords since 1911 is that it doesn't delay money bills so for example the Budget.

Good move, to be fair.

[-:Undertaker:-]

Good move, to be fair.

Why is that? He removed hundeds of peers who were relatively independent and who had interests outside of party politics to replace them with peers of such quality such as Lord Prescott, Lord Mandelson and those who donated £500,000 or more to the Labour Party. How did that reform, a most unconservative tinking with our constitution, make the House of Lords any better or anymore independent? The fact is it did not, it did the opposite which is why Blair did so. He precisely removed them to remove any last real questioning of his government below the monarch herself, despite having a 400+ HoC majority. Sinister.

The hereditry peers owed nothing to the party machines whereas those slid into the Lords nowadays often owe the party executives for their entitlement.

[AgnesIO]

Why is that? He removed hundeds of peers who were relatively independent and who had interests outside of party politics to replace them with peers of such quality such as Lord Prescott, Lord Mandelson and those who donated £500,000 or more to the Labour Party. How did that reform, a most unconservative tinking with our constitution, make the House of Lords any better or anymore independent? The fact is it did not, it did the opposite which is why Blair did so. He precisely removed them to remove any last real questioning of his government below the monarch herself, despite having a 400+ HoC majority. Sinister.

The hereditry peers owed nothing to the party machines whereas those slid into the Lords nowadays often owe the party executives for their entitlement.

Because giving people power purely based on who's vagina they came out of is a ridiculous idea in any modern democracy.

[-:Undertaker:-]

Because giving people power purely based on who's vagina they came out of is a ridiculous idea in any modern democracy.

And political patronage is somehow a better moral virtue? A peerage based on political favouring is somehow better?

By the way, we're not a democracy. It's a constitutional parliamentary monarchy, hence why our Head of State is based on who came out of a vagina.