POLITICS
27/10/2015 14:02 GMT | Updated 27/10/2015 14:59 GMT

Tax Credit Cuts Vote In Lords Not A Constitutional Crisis, John Bercow Tells MPs

John Bercow has dismissed the idea the House of Lords has triggered a constitutional crisis by voting to delay George Osborne's cuts to tax credits.

David Cameron has put in place a "rapid review" into the powers of the Lords in the wake of the defeat. Since the vote, Conservatives have reacted with fury to unelected peers rejecting a financial measure agreed by the Commons.

However the Speaker told MPs that "nothing procedurally improper has taken place" when it came to the vote. "Each House knows what its powers are and are not."

And Labour has accused the prime minister and chancellor of "manufacturing a phoney constitutional crisis" to distract from the tax credit defeat.

The Lords does not block financial measures passed by elected MPs when included in a Bill. However the chancellor decided to implement the tax credit cuts via a statutory instrument (SI). While it is extremely rare for peers to reject an SI agreed by the Commons - it does have the power to do it.

The government argues that as the SI was a matter of tax and spend, peers should not have overruled the Commons.

But Bercow told MPs today: "The responsibility of the chair is for order. Nothing disorderly has occurred. There has been no procedural impropriety.

"That would not have been allowed. Whether people like what happened last night, the substance of the issue, or in terms of their views on constitutionality is a matter for each and every one of them.

"In terms of where matters rest, as I said last night from the chair, in response to a point of order from the shadow chancellor, this is now a matter for the government to take forward as it thinks fit.

He added: "I do jealously guard the rights of this House. But I have to rest with what I’ve said, that nothing procedurally improper has taken place."

TAX CREDITS: THE IMPACT

Tax credits are welfare payments to families raising children and working people on low incomes.

More than three million families will lose an average of £1,300 a year from April

The cuts will deliver £4.4bn of the Chancellor’s planned welfare cuts by reducing the earnings level at which tax credits start to be withdrawn from £6,420 to £3,850.

The Government says eight out of 10 would be "better off" overall from a package which also includes increases in the minimum wage for over-25s, rises in the income tax threshold and extended free childcare.