Tax credit changes: Chancellor George Osborne braces for House of Lords row

The House of Lords is set to debate two amendments on tax credits today. (Source: Getty)

Chancellor George Osborne’s plans to cut tax credits are expected to face their fiercest opposition yet today as peers consider killing the reforms.

The House of Lords is set to debate and vote on three amendments to the proposed cuts to in-work benefits, including ­a “fatal motion” which would stop the legislation from going into effect.

Another proposal seeks to prevent consideration of the bill until a report has been published considering the Institute for Fiscal Studies (IFS) analysis of the impact of the cuts, while a different motion put forward by Labour peer Baroness Hollis looks to delay the implementation of tax credit cuts until there is "full transitional protection for a minimum of three years" for those who currently receive tax credits.

A fourth proposal, put forward by the bishop of Portsmouth, is a so-called motion of regret, which would call on the government to consult further on the cuts but would not stop them from going into effect.

Osborne has come under mounting pressure from both the right and the left to U-turn on the proposals. But he maintained last week that he is “comfortable” with the planned cuts, telling MPs on the Treasury Select Committee: “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.”

In response, however, the influential committee of backbench MPs doubled down on its demands for a distributional analysis of how the emergency summer budget would affect different households, saying that while the chancellor said he was “working on it”, the committee “looks forward to receiving this analysis” by the end of the month.

Meanwhile, shadow chancellor John McDonnell has made a direct appeal to Osborne to change his mind. In an open letter to the chancellor, McDonnell said: “You, me and everyone else in Westminster knows that you will have to U-turn on this issue. However, you need to do it in full.”

“You need to drop this policy completely,” McDonnell said, adding, “I promise you personally and publicly that if you U-turn and reverse this decision fairly and in full, I will not attack you for it.”

Education secretary and former Treasury minister Nicky Morgan said yesterday that while the government would not back down on the cuts, Osborne is “in listening mode”.

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