Tory MP warns party over planned tax credit cuts

New Conservative MP Heidi Allen made her maiden speech in the Commons today to criticise her own party over plans to cut tax credits.

Calling herself a "compassionate Conservative", she said: "As these proposals stand, too many people will be adversely affected."

The reforms narrowly passed through the Commons but because the cut to tax credits has been introduced as a change to regulations, the House of Lords has the power to throw it out.

ITV News Political Correspondent, Carl Dinnen reports.

The government narrowly win the vote for cutting tax credit benefits with 317 votes to 295 against.

Former Chancellor Ken Clarke told the House of Lords it would be "irresponsible" to block the government's tax credit cuts.

Critics say that David Cameron's pre-election pledge not to cut tax credits and the plan's omission from the Tory manifesto means that peers will be permitted to block the law.

Warning peers he would become a "fervent advocate" of reforming the Lords if it blocked the legislation, he said arguments against the cuts were "irrelevant".

Conservative backbenchers David Davis and Zac Goldsmith have signed a cross-party motion calling on the government to mitigate the impact of tax credit cuts for low-paid workers.

The MPs, along with former welfare reform minister Frank Field, have asked for a debate at the House of Commons on their proposals before George Osborne's Autumn Statement on November 25, when the Chancellor will have the opportunity to "tweak" the cuts before their implementation in April.

They believe their request stands more chance of success than Labour leader Jeremy Corbyn's opposition motion.

Mr Field and Mr Davis told the Commons Backbench Business Committee that their proposals could attract more support from Tory MPs who have concerns about plans to cut tax credits by £4.4 billion but are unwilling to vote for a Labour motion.

Supporters of the motion include Tory backbencher Stephen McPartland, Liberal Democrat leader Tim Farron, the DUP's leader at Westminster Nigel Dodds, Ukip's sole MP Douglas Carswell, the SDLP's Mark Durkan, two Plaid Cymru MPs and one from the Scottish National Party.

Labour has called for a rebellion from Tory MPs concerned about proposed cuts to tax credits, as Jeremy Corbyn's party prepares to table its opposition to the government's controversial policy.

Chancellor George Osborne stood firm on the measure despite some opposition from his own backbenchers, with the Treasury later putting out figures defending £15 billion in savings it said would be achieved by 2017 as the result of tax credit reforms since the start of the coalition government.

Shadow work and pensions secretary Owen Smith and shadow chief secretary to the Treasury Seema Malhotra have now written to Tory MPs calling on them to back a Labour motion opposing the plans.

"This issue transcends narrow party lines, as surely none of us came in to politics to take money away from low and middle paid workers," the letter said.

"If left to go ahead, the changes will make people significantly worse off the length and breadth of the country, hitting thousands of people in every constituency. This is why representatives of all parties have raised concerns about this issue."

Among senior Conservatives to have spoken out against the measures are Boris Johnson - who said he believed they were under "intensive review" - and former Cabinet minister Andrew Mitchell - who called on the Treasury to "tweak" the plans.

More than three million households could see their incomes fall as a result of the cuts to tax credits, according to Unison.

General secretary Dave Prentis called for ministers to reveal the number of households which will lose out from the controversial changes.

Ministers have said that despite the £4.4 billion tax credit cut, 80% of households will be better off by 2017-18 as a result of the tax and benefit changes introduced by Mr Osborne, including the introduction of the National Living Wage.

The union said if four-fifths of the 17.4 million working households will be better off by 2017/18, one fifth - 3.5 million - will suffer.

That figure would include the "vast majority" of the 3.3 million low to middle-income working households on tax credits, 2.7 million of which have children, Unison claimed.

The Treasury released figures on Monday saying the changes to tax credits has saved £15 billion.

Labour will challenge Chancellor George Osborne's reforms to tax credits in an opposition debate.

The debate on Tuesday will call on the Conservatives to halt the plan to cut tax credits.

Mr Osborne has come under mounting pressure to reverse more than £4bn in annual cuts to tax credits he proposed in the Summer Budget in July.

In a sign of defiance the Treasury released figures showing that without the reforms to tax credits since Mr Osborne entered Number 11, taxpayers would face a bill in 2016-17 of almost £15 billion more than is currently forecast.

The Treasury has released its own analysis of how much would have been spent on tax credits without changes made since 2010.

It claims that prior to reforms which began in 2010, spending on tax credits would have risen to £40 billion a year in 2016/17, compared with £25 billion, which is now forecast by the Office for Budget Responsibility.

The Treasury released the data ahead of an opposition day debate on Tuesday.

It said the £15 billion difference was equivalent to the cost of 70,000 doctors and 200,000 nurses or around 325,000 teachers.

Chief Secretary to the Treasury Greg Hands said: "That £15 billion that we’ve saved – while at the same time offering working people lower taxes and higher wages, thanks to our new personal allowance of £11,000 from April and the new National Living Wage – is the equivalent to £500 extra in income tax for every taxpayer.

"Labour must now explain where the money is coming from. Their economic policy lurches further from chaos to incredibility."