Lib Dem Lords will try and kill off Tory tax credit cuts as Farron decries Osborne’s “Poll Tax”

Cameron Osborne Tax Credit Poll TaxGeorge Osborne could be told to think again on tax credits by the House of Lords next week if a “regret motion” co-sponsored by Lib Dem peer Archy Kirkwood is successful.

Party leader Tim Farron has asked all Lib Dem peers to support it, making a government defeat possible.According to the Guardian, though, some Labour peers might get the collywobbles about challenging a government’s financial bill. According to the Guardian:

By custom and practice, the peers do not challenge financial measures, but Farron has been arguing that the specific tax credits measure was not in the Conservative party manifesto and was even specifically denied by David Cameron in a leaders’ TV election debate, after the Guardian revealed a document leaked by the Lib Dems showing that the government had been considering cuts to tax credits.

This has also attracted coverage in the Express and Star, Sky News and the Evening Standard.

Danny Alexander did warn people that the Tories had tax credits in their sights and Cameron flat out denied it.

In an article for the Huffington Post, Tim Farron sets this out in more detail, quoting Cameron directly.

David Cameron stood on a stage at the last debate during the General Election and was asked a simple question about cutting tax credits, I know because I was there in Leeds. He said: “No I don’t want to do that.”

He then said: “This report out there is something I rejected in my time as Prime Minister and I reject today.”

So many people went to the ballot box thinking that their help and support was safe. They heard vague phrases about reforming welfare.

The Lib Dems warned about the £12billion of welfare saving and the impact on communities. But in the heat of an election people get tired of claim and counterclaim and people thought: ‘I’ve heard the PM rule it out’. Their tax credits were safe.

Tim outlines the research carried out by the Resolution Foundation which took all the Tories’ planned changes to the National Minimum Wage and the tax threshold into account and which shows that the poorest families will lose signifiant amounts of money before imploring Osborne to change his plans:

They claim that by 2020, a low-earning single parent, with one child, who works 20 hours a week, and who earns £9.35 an hour, will end up £1,000 a year worse off.

A low-earning couple with two children, also on £9.35 an hour, will be £850 a year worse off.

And yet, the Tories still call themselves the ‘Workers’ Party’. They are more like the Poll Tax party revisited. My party will work with anyone to try and make the Chancellor see sense.

Let’s hope that, one way or the other, Osborne is forced into a climbdown on this. However, even if he is forced to ditch the measure, he’ll go looking for savings elsewhere and he might pick on a vulnerable group of people who might not attract much in the way of public sympathy.

 

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23 Comments

  • Eddie Sammon 20th Oct '15 - 10:03pm

    Tim Farron is a great chap, but he’s gone foreign policy walkies again. What’s his opinion of the Xi visit? I’d love to enjoy it, but I can’t, because I think we are letting down peaceful imprisoned democracy activists and our allies.

    Regards

  • Speaking of the Vhinese visit, did anyone see the State Banquet? I watched it straight after the reporting of the Commons vote on Tax Credits. One minute we were being told ” we have to get state spending under control” then the next minute a lavish banquet with people in diamond tiaras etc costing ???? , all paid for by the State.

  • Philip Rolle 20th Oct '15 - 10:47pm

    The tax credits issue was bound to be a controversial one. In July, I posted this:

    “Much has been said about the restriction of tax credits to families with two children, but for existing claimants the devil lies elsewhere; namely:

    (a) The income threshold for tax credits will be reduced from £6,420 to £3,850. (b) The rate at which a household’s tax credits are reduced above the income threshold will be raised, by increasing the taper rate to 48 per cent ( it is now 41% ) (c) The year to year income increase disregard will be reduced from £5,000 to £2,500

    Assume a salary equivalent to minimum wage £12,675. The withdrawal of tax credits under the existing rules comes to £2,564. Under the new rules, it would come to £4,236. So that’s a reduction of a whopping £1,672 ( or about 14% of after tax income )!

    Against this, a worker in that position will be paid an extra 70p an hour once the new wages rules come in. So his/her salary will increase by £1,365. But wait for it. 80% of that will be taken away in tax, national insurance and a further withdrawal of tax credits. So just £273 is left. Add in another say £90 for the increase in tax and national insurance thresholds, making £363.

    So the grab from Mr Minimum wage is £1,309!!

    It’s horrific and many have not woken up to just how severe a haircut tax credits have had.”

    Well they have woken up now! While I support reducing the amount spent on tax credits overall, I was astonished at the extent of the proposals and the absence of any transitional relief.

    If the changes proposed remain in their present form, I can see low income families having vastly increased credit card debt and utility and council tax arrears.

  • Not sure the article is quite right – Lord Kirkwood’s regret motion is just that, an expression of criticism. It’s Baroness Meacher’s motion not to approve the statutory instrument the changes are made in, that would cause it to be killed (not just returned to the commons). It’s the Lib Dems supporting this motion that’s news today, the question is whether Labour will follow? They are likely to be more swayed by threats to the Lords than we are.

  • This is Osborne’s poll tax moment and also catches David Cameron out for telling pre-election porkies.

  • It’s simple the Lib Dems who have been sent to the unelected undemocratic House of Lords on the premise of working for its abolition should at the very least oppose Tory tax credit cuts because it was not in the Tory manifesto and especially as the people of Scotland did not vote for the Tories.

  • Eddie, Would the media report a statement from Farron on China? Even if they did most people would say ‘an irrelevant statement from an irrelevant party’.

    Using the Lords when it really matters shows that we are not an irrelevant party.

  • “Using the Lords when it really matters shows that we are not an irrelevant party.” the fact that the only tool available is a bunch of unelected people shows just how irrelevant the party has become. There is no democratic mandate for anything the HoL does. They do not represent democracy in any form. 1 MEP, 8 MP, 6 AM, 5 MSP shows what the public think.

  • Bruce
    Actually slightly worse than you state, in that there are only 5 Welsh AMs now (down from 6 at most of the previous elections. Additionally there are now only 2 Lib Dems in the London Assembly. There are probably less than 40% of the Councillor numbers now, compared with peak figures in the mid – late 1990s.

  • Baroness Meacher has backed down, in the face of threats from the Government. Lord Kirkwood’s ” Regret Motion” is no more than a collective wringing of hands and a sigh of ” oh dear.

  • Brave Sir Robin ran away
    Bravely ran away away
    When danger reared its ugly head
    He bravely turned his tail and fled

    Yes, brave Sir Robin turned about
    And gallantly he chickened out
    Bravely taking to his feet
    He beat a very brave retreat

    Bravest of the brave, Sir Robin!

  • @ Bruce

    Sadly all the elected UK Parliaments are unrepresentative. Whether you think that makes them undemocratic too is up to you. However if we use our over representation in the institution we tried to get rid of, to make up for our underepresentatation in the ‘democratic’ Commons, I don’t care.

  • @ANMAW the Scottish Parliament is fairly representative lib dems got 5% of the list vote and ended up with 5/129. However no one has voted in any of the HoL. They are appointed so they have no legitimacy in a democratic system. all the other parliaments at least have everyone elected by the voters even if some of the systems are less fair than others.

    ” I don’t care.” when you take that attitude then you lose any argument. It is hypocritical to use a system that you disapprove of merely as a means to an end.

  • Denis Loretto 21st Oct '15 - 3:39pm

    I gather that Lady Meacher has not completely ditched her initiative. While the “fatal motion” has been withdrawn, she is as I understand it tabling a motion which if passed would delay the tax credit measure sufficiently to allow the cross-party Commons motion initiated by Frank Field to be debated and voted upon. Because this is not a Labour Party motion as such it has a much better chance of success. So watch this space.

  • Alex Macfie 21st Oct '15 - 6:57pm

    @Bruce: So what should Lib Dems in teh HoL do? Just be quiet and not oppose anything the government does because it is “unfair” that they are (over)-represented there? Not take advantage of being (for once) a beneficiary of the unfair system when we have been its victim in the HoC for so long? You seem to be implying that we should perform some sort of noble self-sacrifice by not using our representation in the Lords because in an ideal world we oppose its very existence. That is not realistic politics, and you know it. In politics you work with the system that exists, not the one you would like to exist. It is not “hypocritical” to use the system that exists to oppose the government, it is normal politics. We can’t afford any more self-sacrifice, we were doing it for too long already and look where it got us.
    And if we were to just keep quiet and not take advantage of our strength in the HoL? What image would that project? I can tell you it would NOT be seen as noble or courageous to refuse on principle to use our position in the HoL. We would be laughed at by our opponents (including you, I suspect — don’t try to deny it, you would criticise us whatever approach we took, we would not be able to win) for throwing away the chance to make a difference and to stand up for our party’s values in one of the very few places where we still can.

  • Alex Macfie 21st Oct '15 - 6:59pm

    Bruce: By your logic, it is hypocritical for Lib Dems to contest elections under FPTP and for our MPs to take our seats under this system.

  • Leekliberal 21st Oct '15 - 7:38pm

    So Baroness Meacher has backed down,on her tax-credits motion in the face of threats from the Government. What can they threaten us with? Will they reform of the House of Lords? But wasn’t it this what they stopped us from doing? Let us put down the same motion as her and challenge Labour to support it. If they do the Tories will have to start the bill process again with all the damage to them that it will involve or if Labour don’t support it we will remind the voters of their lack of backbone. Let’s go for it!

  • @ Bruce
    “It is hypocritical to use a system that you disapprove of merely as a means to an end.” I completely and utterly disagree. If it means stopping ill thought out laws and policies, like tax credit reform, which are facing opposition from all sides, I really don’t care. There I’ve said it again.

    And if it leads to a ‘Constitutional Crisis’, as suggested by Ken Clarke, so much the better. Maybe it will lead to some constitutional reform.

  • jedibeeftrix 21st Oct '15 - 7:44pm

    @ Bruce – “They are appointed so they have no legitimacy in a democratic system.”

    The Lords have all the legitimacy that we, collectively, choose to give it.

    Is it democratic? Patently not.
    Is it a valuable part of our representative government? Apparently yes.

  • “catches David Cameron out for telling pre-election porkies.”

    He also said “no more top-down reorganisation of the NHS” as a pre-election promise for 2010. Another porky, wonder what happened with that?

  • Alex “for Lib Dems to contest elections under FPTP” there is as major difference between FPTP and the HoL. FPTP is a democratic system in that each constituency chooses a representative by the process of most votes win. While it might not be fair overall and provide the fairest overall representation it is a system where the voters choose their MP. The choosing of members of the HoL is down by the preference of a small group without consultation to the electorate. The SNP contest FPTP very successfully but they won’t take part in the HoL.

  • anmaw ” stopping ill thought out laws and policies,” so when they stop any policies you agree with you won’t care either.

  • Alex Macfie 22nd Oct '15 - 1:32am

    @Bruce: You completely (and deliberately) miss the point, which was to show the folly and the logical conclusion of boycotting institutions that you don’t like out of some vain principle. Whether it’s about an entire chamber or about a voting method is irrelevant, the point is the same and it makes no sense. What the SNP does is up to the SNP; it may be able to afford to refuse to participate in the HoL because it never had a presence there in the first place, and maybe such a stance plays well with its natural supporters. Likewise Sinn Fein’s refusal to participate in either Westminster place. They remain, as far as I am concened, vain gestures, and it is unlikely that there is anything to gain by the Lib Dems for choosing not to participate in a body that (like it or lump it) is part of the UK political system and where things get changed.

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