Thoughts on that Tory Tax Credit Car Crash

It is hard to know where to begin with George Osborne's tax credit car crash as it is such a target-rich environment.


Let's start with the low-grade way in which the tax credit policy was concocted, symptomatic of the dismal quality of much government policy-making (so much for the Tories being the 'natural party of government'). One complaint aired by MPs and peers is their frustration about the lack of detailed justification for the tax credit cuts or reliable information about their impact on Britain's poorest working families. Even the Treasury Select Committee has struggled to get its hands on the data it wants. It should not be left to the IFS to demonstrate that so many people will be so badly hit, or to identify the blatant inaccuracy of Tory assurances that working families will be compensated by other policy changes such as the phased introduction of a (so-called) 'living wage' by 2020. This information should have been on the table months ago, as soon as George Osborne set off down this road in July.


It is also difficult to square the parade of Tories complaining vociferously about the impact of these particular cuts with the fact that many of them have supported shocking reductions on welfare support for so long. Where have they been for the past five years? Many voted for the successive Osborne budgets in 2010, 2011, 2012, 2013 and 2014 that worsened poverty and widened inequality across the UK; and those who won their seats for the first time in May stood as Tory candidates squarely behind a manifesto commitment to carve another £12 billion off the welfare bill. It's true that senior Tories were coy about the precise nature of the welfare cuts, but where on earth did these Tories think the axe was going to fall given that pensions are protected? It is also true, as Cameron has pointed out, that these multi-billion pound cuts have attracted majority support in the Commons on several occasions in recent weeks, yet barely any Tory MPs - including those now queuing up so eagerly and publicly to berate the Chancellor - were prepared to stand up and be counted by voting NO. Had they done so sooner, these proposals would have been slung back into the Treasury boiler room long before they ended up in 'The Other Place'.


It is saying something that, as a citizen of one of the world's oldest democracies, my main line of defence against these tax credit cuts has been the House of Lords. I am happy to toast the way these peers wedged their crowbar in the government gearbox. But they remain a group of unelected, unaccountable legislators who have been handed well-paid jobs for life in an absurdly over-populated parliamentary chamber (the second largest in the world). We need a reformed parliament in which power is shared across two chambers and is not concentrated in the hands of a few key individuals who use their single-party majority to dominate the Commons and drive through bad policy. In short, we need this kind of sustained parliamentary scrutiny of government decisions to be the norm rather than the exception and the only way to legitimately achieve that is to elect the upper house.


Excitable press reports that Cameron is threatening to create 100+ new Tory peers to regain Tory control over the Lords are probably exaggerated. Apart from anything, it is hard to imagine that the Queen would be thrilled to play a starring role in such a politicised drama. Moreover, the creation of another batch of 'Cameron Cronies' would shine an unflattering light back on a prime minister who won support from just 38% of voters in May 2015 on a miserly turnout of 66%. In other words, Cameron and Osborne and their cocksure Tory ministerial colleagues - part of a pack of 330 Tory MPs in the Commons - enjoy the backing of barely a quarter of the electorate and are therefore hardly brimming over with democratic legitimacy themselves. If this policy-making disaster has demonstrated one thing about our democracy, it is that a reformed House of Commons is as essential and long-overdue as a reformed House of Lords.