George Osborne managed to see off a Tory rebellion against his planned cuts to tax credits by reassuring a series of backbenchers and ministers that he would address their concerns about the impact on low-paid workers.
The cuts to tax credits, which will see the earnings level above which they are withdrawn cut from £6,420 to £3,850 from next April, were approved by 325 votes to 290. David Davis, the former shadow home secretary, and Stephen McPartland, were the only Tory MPs to vote against the government alongside Labour, the SNP and the Democratic Unionists.
The Labour leader, Jeremy Corbyn, had earlier told the TUC conference he would oppose the cuts to tax credits – and called Tory ministers “poverty deniers” – but the measure was passed by a majority of 35.
The Tory rebels said Osborne had made clear in meetings he held at Westminster on Monday and in the hours leading to the vote that he could not row back on the changes, which will save him £4.4bn in 2016-17 – a large chunk of his planned £12bn in welfare cuts. But they said he had listened to their concerns and had indicated that he would seek to reduce the impact on low paid workers in future budgets.
One Tory MP, who decided not to rebel after meeting the chancellor, said: “I went in to see the chancellor expecting to have the thumb screws applied. But instead he listened and said he would work hard to address our concerns about low-paid workers.”
It is understood that the chancellor did not promise any new measures. He instead pointed out that he is committed to raising the tax free personal allowance to £11,000 next year as “a down payment on our goal of reaching £12,500”.
Osborne also said that his “national living wage”, which will be set at £7.20 an hour from next April to rise to £9 by 2020, would give 2.7 million people a pay rise. It would also have a “ripple effect” for 6 million by delivering knock-on pay rises up the income scale.
The chancellor also said his plans would mean that five out of 10 families would still benefit from tax credits, down from one in six under the coalition. The figure stood at nine in 10 under Labour.
Peter Aldous, the Tory MP for Waveney, praised the government but voiced deep concerns. He told MPs: “I do have serious concerns about the impact on working families in the short term over the next two to three years, and I urge the government to address these issues in the coming months before the measures come into effect next April.”
Frank Field told MPs: “In one single move [the chancellor] has destroyed his 2020 election strategy because we heard the very powerful speeches the chancellor made saying the Conservative party was in favour of those individuals who got up in the morning, who did grotty jobs for very low pay and they passed the windows of their neighbours whose curtains were still drawn, who were on benefits.
“Those individuals who still rise to the work motive in this country, which is so important for both economic and human advance, will know as they pass those windows with the curtains drawn they do so on average with £1,300 a year less in their pocket.”
This article was written by Nicholas Watt Chief political correspondent, for theguardian.com on Tuesday 15th September 2015 18.28 Europe/Londonguardian.co.uk © Guardian News and Media Limited 2010