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Osborne's Tax Credit Cuts Facing Lords Defeat

Osborne's Tax Credit Cuts Facing Lords Defeat

George Osborne is facing a poll tax moment and must reverse his decision to cut tax credits, the Liberal Democrat leader has warned.

Tim Farron has said Liberal Democrat peers will vote against the Chancellor's cuts in a crunch vote expected to take place in the House of Lords on Monday.

The vote in the upper chamber could kill off the cuts, which would see three million low-paid families losing more than £1,000 a year.

The Conservatives do not enjoy a majority in the House of Lords and Mr Farron said the Liberal Democrat's 108 peers will vote against their former coalition partners. It could tip the balance.

Mr Farron said: "This is George's Poll Tax. George Osborne's attack on working families is an aggressive assault on millions of people in Britain.

"Saying you are listening is cold comfort to hard-working people who face losing a large part of their pay packet.

"The Tories promised tax credits were safe during the election but this was completely untrue. It is time for the Chancellor to show the leadership he so badly craves and scrap this disastrous policy.

"George Osborne should learn from his own party's history, and change his mind on tax credits, or give up on any desire he has to be prime minister."

The rare "fatal" motion is expected to be tabled by peers opposed to the measures this week. Fatal motions are rarely used as peers are unwilling to undermine the supremacy of the Commons.

But opponents will argue that the Salisbury Convention does not apply as the tax credit plans did not feature in the Conservative election manifesto.

The Chancellor has gone on the offensive over his plans to cut tax credits, claiming it would cost tax payers £40bn by next year without the proposed changes.

Treasury analysis shows that spending on the benefits has risen by more £15bn in the past five years, equivalent to 200,000 nurses or the entire Home Office budget.

It follows increasing concern among Conservative MPs about the impact of the cuts on working families and the threat that the cuts will be killed off in the House of Lords.

The Chancellor was questioned about the plans during a meeting of the 1922 Committee of Conservative backbenchers on Monday night as Tories broke cover to criticise the policy.

:: Tax Credits Explained

Following the meeting in Parliament, Conservative MP Steve Baker told reporters Mr Osborne had been asked about the issue.

The High Wycombe MP said: "Lots of us don't like the tax credit changes. Colleagues are well aware that some families will miss out.

"Lots of us are very concerned about it but the vast majority of colleagues accept that these changes are a consequence of all the other pledges we made in the manifesto."

Mr Osborne said it had been a "very good meeting".

London Mayor Boris Johnson has added to the pressure on Mr Osborne, saying that he was "sure" the Chancellor could take action to soften the blow on low-paid workers.

He hinted to Sky News that he would be looking at bringing forward the implementation of the London Living Wage. He had previously tasked advisers at City Hall with looking at ways of easing the impact of tax credit cuts.

Stevenage MP Stephen McPartland - one of only two Tories to vote against the tax credit cuts - said he believed Mr Osborne would also help mitigate the cuts.

Labour will seek to maintain the pressure on the Government with an opposition day debate in the Commons on Tuesday.

Owen Smith MP, the Shadow Work and Pensions said: "Tomorrow's debate is an opportunity for MPs to transcend party lines, by voting to help avert deeply damaging cuts to the incomes of low and medium paid working people across Britain.

"Independent expert analysis has shown around three million working families will lose an average of £1,300 per year as a result of the Government's damaging tax credit cuts, hitting thousands of people in every constituency."

"However, every MP now has the chance to stand up for working people in their own constituencies and across the country, by voting with Labour to protect tax credits."