Skip to content
Sunday 23 August 2026London --:--Frankfurt --:--Zurich --:--
NewslettersSearchEN · DE · FR
MorningWire

European business, markets and politics

FTSE 100
10,816.56
+0.64%
DAX
26,136.56
+0.59%
CAC 40
8,484.43
+0.37%
STOXX 50
6,462.22
+0.63%
  • Europe
  • Markets
  • Business
  • Economy
  • Regulation
  • Politics
  • Opinion
More
GermanyFranceEU InstitutionsCompetitionPublic AffairsBankingTechnologyEnergy
  • Germany
  • France
  • Europe
  • Markets
  • Business
  • Economy
  • Regulation
  • Politics
  • Opinion
  • DE
Monday 26 October 2015 8:58 pm

Tax credit changes: House of Lords slams government by voting twice to delay tax credit cuts

By: Lauren Fedor

Add as a preferred source on Google

In a move that Downing Street has accused of breaking convention, the House of Lords has twice voted to delay the implementation of the government's controversial tax credit cuts, backing amendments from both Labour peer Baroness Hollis and crossbench peer Baroness Meacher.

Baroness Hollis's amendment, which passed 289 to 272, required a three-year "transitional period" with "full protection" for all families affected by the cuts.

Baroness Meacher's amendment, which passed 307 to 277, called for a government response to Institute for Fiscal Studies (IFS) analysis of the impact of the cuts to working tax credits. The IFS has said that the proposed cuts would cost low-income families an average of £1300 each year.

Downing Street criticised the votes last night, saying they raised a "constitutional issue".

"The Prime Minister is determined we will address this constitutional issue," a Number 10 spokesman said, adding, "A convention exists and it has been broken. He has asked for a rapid review to see how it can be put back in place."

Chancellor George Osborne said: "Unelected Labour and Liberal Lords have defeated a financial matter passed by the elected House of Commons, and David Cameron and I are clear that this raises constitutional issues that need to be dealt with."

He added: "However, it has happened, and now we must address the consequences of that. I said I would listen and that’s precisely that I intend to do. I believe we can achieve the same goal of reforming tax credits, saving the money we need to save to secure our economy, while at the same time helping the in the transition. That is what I intend to do at the Autumn Statement."

Earlier tonight, peers rejected a so-called fatal motion tabled by the Liberal Democrats, which would have killed the proposed cuts entirely, by 310 votes to 99. Labour peers abstained from the vote, in a move Lib Dem leader Tim Farron called "utterly depressing".

Farron said: “We support the delay in the proposals and the demand for transitional protection, but this alone won’t stop the Conservative’s attack on working families who rely on tax credits, or ensure that it really does pay more to be in work than remain on benefits."

"George Osborne must now go back to the drawing board and come back with plans to balance the books that don’t simply attack working families who are already struggling to get by," Farron added.

Shadow chancellor John McDonnell, meanwhile, called the votes a "huge blow" for the government.

McDonnell said: "The chancellor needs to understand that cutting on average £1,300 a year from over 3 million working families is not a sensible plan, and people are waking up to what Labour has been warning on this for months."

Repeating his earlier calls for a U-turn, McDonnell added: "George Osborne needs to now go away, and consider the only reasonable option open to him. If he U-turns fairly and in full on his tax credit cuts then I will support him on it, and so will the public."

Osborne told MPs on the Treasury Select Committee last week that he was "comfortable" with the tax credit cuts, saying: “This is fundamentally a judgement call, and I’m comfortable with the judgement call that I have made, and that the House of Commons has supported this week."

MPs have voted in favour of the tax credit cuts three times since Osborne first introduced the measures at the emergency summer budget in July.

Share this article

  • Facebook
  • X
  • LinkedIn
  • WhatsApp
  • Email

Similarly tagged content:

Sections

  • News

Categories

  • Business
  • Politics

Trending Articles

  • Ratcliffe’s Ineos saves Runcorn plant

  • Can debt-ridden Morrisons become a Big Four supermarket again?

  • Mike Ashley’s Frasers offers to pay personal shoppers in Harvey Nichols takeover

  • Amazon says it buys books in bulk to ‘improve products’

  • Burnham predicted to raise taxes for ‘fundamental’ cost of living support

More from Morning Wire

  • Lammy’s cohabitation rules threaten unmarried couples with ‘horrendous’ court costs

    Legal
    Foreign Secretary David Lammy is set to hold talks with officials about Iran and Israel.
  • Rupert Lowe axes pensions triple lock and pledges tax cuts in economic plan

    Politics
    Rupert Lowe, former Southampton FC chairman, smiles while holding files on a city street, wearing a suit and pink tie
  • Inflation leaps to 2.9 per cent in blow to Burnham 

    Economics
    Burnham cityscape showcasing modern architecture, bustling streets, and vibrant community life in a thriving urban setting
  •  Burnham to unveil new cost of living measures on UK tour

    Politics
    Andy Burnham, Mayor of Greater Manchester, speaking outdoors with a lapel microphone on his suit jacket.
  • Vistry shares slide after Allianz ‘cuts insurance cover’

    Property
    Vistry said the outcome of the government's spending review and a "recovery in consumer confidence" would prove pivotal.
  • Can John Healey deliver Burnham’s make-or-break devolution agenda?

    Economics
    John Healey, in a red tie, speaking with Andy Burnham, wearing glasses and a dark blue jacket, outdoors.
  • Vibes matter with tax, so here’s how Healey can deliver a feel-good Budget

    Opinion
    Chancellor John Healey smiling, wearing a navy suit, white shirt, and red tie.
  • Stamp duty on shares is ‘biggest handbrake’ says UK bank chief

    Markets
    LSEG logo on a large screen inside a modern building with stock tickers and glass ceilings.
MorningWire

Independent European business, markets and political news for decision-makers.

Morning Briefing

Europe

  • Germany
  • France
  • EU Institutions
  • Europe

Business

  • Markets
  • Business
  • Economy
  • Regulation
  • Competition
  • Public Affairs

Editorial

  • Opinion
  • Editorial Policy
  • Corrections
  • Contact

Company

  • About Morning Wire
  • Privacy Policy
  • Terms of Use
  • Cookie Policy
© 2026 Morning Wire Ltd · Published by Morning Wire Media, Bahnhofstrasse 65, 8001 Zürich, Switzerland
Privacy · Terms · Cookies · Facebook