Monday saw a passionate exchange of words in the House of Lords as Lords debated the government’s contentious tax credit reform proposals. During the session, Lord Bilimoria voted in favour measures which forced the government to review its current proposals – which many criticise for being too blunt and for being too harsh to the lowest earners in the UK.
Shortly after the debate, Lord Bilimoria wrote to the Daily Mirror to explain the actions he took to ensure that the poorest people in the UK were protected from the proposals put forth by the government.
Cobra beer tycoon slams George Osborne’s tax credit cuts
The Government’s policy regarding tax credits has become an emotive issue, and justly so.
While reducing the deficit and balancing the books is rightly their priority, doing so through a cut to family incomes that will only be slowly and partially compensated is mistaken.
The experts are clear that, even when the new living wage is factored in, people who currently receive tax credits will be out of pocket, and especially so in the short term.
A Government which won support for its ambition to tackle the UK’s large welfare bill, not least at the General Election, now risks losing it through a means which has been too hastily conceived, pursued without compassion and which affects the poorest earners in society.
It is just not right.
It is equally hasty for critics to brand peers who did not support all relevant motions in the House of Lords this week as supporters of the Government’s policy on this matter.
I am opposed to these cuts, as I made clear publicly in advance of the vote.
That is why I voted for Baroness Meacher’s motion requiring the Government to respond to concerns raised by the Institute for Fiscal Studies and consider mitigation to those affected before proceeding with the tax credit cuts.
This motion was carried, requiring the Government to rethink.
On the other hand, I did not support the other motions raised, because — just as with the Government’s policy to cut our welfare bill — the means as well as the ends matter.
I voted against the Liberal Democrat killer motion, which was overwhelmingly defeated, with even the Labour Party abstaining.
I did not vote for Baroness Hollis’s motion because I felt we had already achieved our objective of getting the Government to reconsider, through Baroness Meacher’s motion, which I supported.
The Upper House has an important role to play as a check and balance on Government policy, however to countermand Government business, especially on a financial matter, sets a precedent with serious constitutional implications.
The motion requiring the Government to think again, which I supported, was both sufficient to encourage the change in policy that is now being considered by the Government, and an appropriate intervention on the part of the Lords.
The Chancellor was wrong to rush these tax credit changes without thinking through carefully the impact of these cuts on the poorest in society, and without considering phasing them in over a period of time to lessen their impact; let alone trying to push them through a Statutory instrument, when measures such as this should have been part of the Autumn Statement, when they could have been properly debated in the House of Commons.
This was very clumsily and poorly thought-through policy and politics by a usually politically-astute Chancellor – far worse than his Omnishambles Budget in 2012 , when he had to u-turn embarrassingly.
Now he has been forced into the same position.