U-Turn Looms on Tax Credits; Osborne Ready to Spend Millions Softening Flagship Policy as Tory Rebels Warn Wages Could 'Fall off a Cliff '

The Mail on Sunday (London, England), October 25, 2015 | Go to article overview

U-Turn Looms on Tax Credits; Osborne Ready to Spend Millions Softening Flagship Policy as Tory Rebels Warn Wages Could 'Fall off a Cliff '


Byline: Simon Walters POLITICAL EDITOR

GEORGE OSBORNE is set to perform an embarrassing U-turn to defuse the growing Tory revolt over his tax credit cuts, according to ministers.

The Chancellor is considering a multi-million-pound package of measures to avoid claims his flagship welfare reform policy penalises low-paid workers.

News of the rethink comes on the eve of tomorrow's Lords revolt over the cuts to tax credits which, according to opponents, could initially cost some families PS20 a week.

Several Tory peers, including former chancellor Nigel Lawson and ex-Conservative chairman Norman Tebbit, have backed warnings that the cuts are a misjudgment. Senior Tory MP David Davis compared them to Margaret Thatcher's ill-fated 'poll tax' and Boris Johnson said they 'bear down unfairly on the working poor'.

Government sources concede in private that the cuts will almost certainly be watered down. It is believed the concessions will be announced in Mr Osborne's Autumn Statement on November 25.

A well-placed source said: 'Understandably, the Chancellor does not want to lose face by acting before the issue is settled in Parliament. It is mainly about timing, details and costings.' But Treasury sources last night denied there will be a climbdown and maintain the thrust of the reforms will remain intact.

Last night, a senior Treasury source said: 'The policy is not changing and it has been backed by MPs more than once. It is up to the House of Lords to decide if it wants to defy 400 years of convention and seek to hold up a measure involving billions of pounds of public money put forward by a Government elected with a clear mandate to save PS12billion from the welfare bill.' Reports of an impending U-turn were fuelled by Ruth Davidson, leader of the Scottish Tories, who told The Mail on Sunday she is certain the cuts will be modified. She said it would be wrong for the wages of some workers to 'fall off a cliff' when the reforms are introduced in April, adding: 'If we're not the party of getting people into work and making it easier for them to get up the tree then what are we there for?' She had raised her concerns at 'Cabinet level' and been assured changes were coming. …

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