Socialist Worker

Tax credits humiliation shows Tory weakness

The House of Lords vote to delay tax credit cuts shows the Tories are far from unstoppable, says Judith Orr

Issue No. 2477

The House of Lords was the scene for a Tory defeat on tax credits—now we need to scrap it altogether

The House of Lords was the scene for a Tory defeat on tax credits—now we need to scrap it altogether (Pic: ukhouseoflords/flickr)


The Tories were humiliated on Monday of this week when they lost a House of Lords vote on tax credits.

Chancellor George Osborne wants to cut £4.4 billion from tax credits paid to people on low incomes. 

Some 3.3 million families receive an average of £123.90 a week in tax credits. That’s one household in eight.

The cuts could snatch £1,300 a year from up to 3 million of the poorest people.

The Tories claim no one will be worse off. But one study showed that two thirds of families on tax credits would still be worse off in 2020. 

The Tories had a three line whip to try and win the vote. They even flew in Andrew Lloyd Webber from the US to try and get a majority. 

The defeat shows the Tories can’t get everything their own way. If they faced a determined mass fightback from below, they could be beaten.

But Osborne has made it clear that this setback will not mean the end of his plans. He said, “I’m determined to deliver that lower welfare economy the British people want to see.”

The vote means he will have to commission an independent study of who the cuts will have most impact on.

He will also have to stagger the cuts to those now receiving tax credits over three years. 

Yet there is no need to examine who will suffer the most. It’s obvious. 

Debate

None of the Lords rely on tax credits—they each can claim £300 for just turning up for the debate. 

The cuts will have the most impact on the poorest people in Britain.

Some politicians go on about “hard working families” deserving financial support. This implies that people who can’t work, are disabled, or have been made unemployed don’t deserve help.

But the welfare state should be there for everyone. No one should have to live in poverty.

Tax credits do not subsidise poor people—they allow bosses to continue to pay wages so low that workers can’t live on them. 

The Tories want to make it a row about the power of the Lords. The Lords should be abolished. 

There is nothing democratic about this unelected bunch of aristocrats, bishops and friends of politicians.  

But the Tories don’t care about democracy. The row about the constitution deflects attention from the real issue. 

The Tories are waging war on millions of ordinary people and they don’t want anyone to stand in their way. 

David Cameron has declared he will carry out a “rapid review” of the House of Lords’ ability to block government spending plans. 

But it’s the Tories who need a rapid review. 

We need to get rid of this government of the rich for the rich and stop its assault on the poor. 


What will the cuts mean?

The Tory plan to slash tax credits will hit the poorest

  • Currently a household earning up to £6,420 a year receives the full amount of credits they are allowed to claim
  • The Tories want to cut this threshold to just £3,850 a year
  • The cut is estimated to snatch £1,300 a year from up to three million people
  • The Lords have forced the cuts to be delayed. But chancellor George Osborne will press ahead

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