Editorial: A Lord’s makeover is overdue and changes to the institution are in train, it was confirmed this week.
George Osborne will wish it was the House of Lords I’m talking about here, not the cricket ground, as he was bowled over by the Lords’ move on Monday to veto his changes to tax credits. It is now suddenly imperative to Tory top brass that the chamber is reformed.
George Osborne will wish it was the House of Lords I’m talking about here, not the cricket ground, as he was bowled over by the Lords’ move on Monday to veto his changes to tax credits. It is now suddenly imperative to Tory top brass that the chamber is reformed.
And it will be. Despite not previously showing any urgency to overhaul the Lords, the embarrassing block to Osborne’s much-maligned tax credit changes has spurred a review.
For many, this is the right action but with the wrong motivation. The fact the infamously unelected Lords wield as much power as they do in British politics is unpalatable in a democracy.
But the one time they show their worth and mettle by coming down on the side of ‘hard-working families’ (I’m sure that phrase is probably now the basis of a drinking game among policy wonks) – and setting precedents in the process – government is up in arms.
The Lords has never before broken ranks on financial matters and the Tories are bleating that the googly was an affront to our non-existent constitution.
Illustration by Ben Jennings
But much like something out of a street gang dispute, it’s this lack of ‘respect’ by the Lords for the elected chamber to determine all matters financial that has led to the Tories’ embittered response.
So poor George has been forced to break for sandwiches and rethink his game plan before the next innings.
The cuts on tax credits are set to raise around £4.4bn, but if the Lords’ rejection delays this in order to hold a full financial review of the proposal’s impact, or a climbdown on the extent of the cuts, then the money will have to be found elsewhere.
The government has a finite number of avenues it can take when it comes to topping up Treasury coffers. The tax credit proposals have demonstrated the inherent danger in targeting those allowances where people understand exactly how it will hit their pockets.
Let’s hope this new fundraising need doesn’t lead the government to take aim at the little-understood pension tax reliefs during what is an extremely delicate time in the reform of pensions.
Maxine Kelly is editor at Pensions Expert. You can follow her on Twitter @MaxineEK and the team @pensions_expert
