Tax Credits Debate Could Spark British Constitutional Crisis

The ruling Conservatives accuse opposition parties of abusing their majority in the House of Lords.

Britain’s ruling Conservatives warned opposition parties on Monday against going down an “unprecedented constitutional path” if they use their majority in the country’s unelected upper chamber to block a reduction in tax credits.

The proposed changes in tax credits, which would save the government over £4 billion in annual spending, are among Prime Minister David Cameron’s most controversial austerity measures.

The reforms narrowly passed the House of Commons where Cameron’s party has a twelve-seat majority. But in the House of Lords, unelected Labour and Liberal Democrat peers could outvote the government.

“Never is ever cut and dried”

By convention, the Lords do not block financial legislation when it has the backing of the Commons.

“But nothing is ever cut and dried in Britain’s fluid, unwritten constitution,” the BBC reports.

Labour and the Liberal Democrats argue that because the law to reform tax credits isn’t technically part of a money bill, they are not breaking with tradition.

Different figures

The opposition parties cite independent research that shows low-income families could be up to £1,000 per year worse off as a result of the changes.

But the Conservatives say that a higher income tax threshold, a rising minimum wage and the extension of free child care will make up the difference.

Stacking the Lords

Should Labour and the Liberal Democrats follow up on their threats, Cameron could stack the upper house with loyalists to get his legislation through. The prime minister can appoint as many peers as he wants. But the sudden appointment of 150 or more Conservative members to tilt the balance in the government’s favor would surely raise questions about the Lords’ legitimacy.

Ironically, it are the Conservatives who oppose Lords reform while the largest opposition parties favor turning the chamber into an elected body.