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| * Paul Waugh |
by Paul WAUGH | Politics
It’s the Opposition Day debate on tax credits and Labour is urging Tory MPs to take a stand. Given this is a non-binding vote, it’s doubtful many, if any, Conservatives will want to defy their whips despite their worries about the impact of the changes. But that doesn’t mean this is in the bag for the Tories. Tory MP Lucy Allen is calling for a tax credit hardship fund, while others are seeking to extract concessions from the Treasury in return for support.
At 2.30pm, the Backbench Business Committee will hear from Frank Field on his case for a debate - and a vote - on his alternative plan for tax credits, to be held sometime in the next few weeks. George Osborne has little time for the Field plan to change tapers and thresholds, believing it is not ‘cost neutral’ as the Labour MP claims.
The Chancellor yesterday had a gaggle of Tory MPs in for a briefing, telling Peter Aldous and others that there was no alternative that would yield such big savings. The Speccie reports that Osborne asked: ‘do you really want to start raiding the police budget, the health budget, or other pots of money for seriously vulnerable people?’ He repeated his line under close questioning from the left and right of his party at the backbench 1922 committee last night.
And what’s notable is the way Osborne and No10 last night became more robust in the face of opposition. ‘They say cutbacks, we say fightback’ is the joke among some Osborne supporters, inverting that old lefty demo slogan. The Treasury issued its own analysis claiming tax credit changes to date had saved £15bn since 2010.
And yet, as I’ve reported, the real roadblock could be the House of Lords and its fatal motion plan. I hear the motion is set for Wednesday or Thursday and crossbencher Baroness Meacher made plain on Wato yesterday her opposition. “I feel it is important to make a stand,” she says.
The fact that the Lords can kill off a statutory instrument is not lost on some. The government is liable to be “clever fools when it comes to their parliamentary tactics”, David Davis tells the FT. A brand new SI will be needed in the Commons if the Lords does vote against.
As if to underline some in Government see this as a political virility test for Osborne, I’ve been told that if the Lords goes ahead ministers could retaliate by suspending the Upper House altogether or flooding it with peers. This whole row would no longer be about tax credits but about un-elected Lords overstepping their powers, furious Tories warn. They are also questioning whether the Lib Dems have the stomach for the fight.
Much of the internal Tory criticism is about the sequencing of the tax credit cuts not the principle of them: many think the cuts should take place as wages rise in the economy not beforehand. Lord Tebbit tells The Times “it depends how far and fast you want to go with this...Clearly there should be transitioning.” Too far, too fast? Reminds me of someone..Ed Balls yesterday took up a new visiting professorship at King’s College London, to teach ‘the Treasury and economic history since 1945’. He, more than anyone, could perhaps teach the Chancellor on Gordon Brown’s handling of his own 10p tax disaster.
Tax credit campaigners should be aware that Osborne wants more spending cuts, not fewer. The Guardian points out that he chaired the first meeting of the Cabinet public expenditure (PEX) committee yesterday - and some departments (FCO, Home Office) have yet to submit final bids for the spending review. The Treasury is upbeat though, redirecting DfiD cash and speeding up devolution.
* Paul Waugh is the Executive Editor, Politics, HuffPost UK.
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