GEORGE Osborne is under intense pressure to soften the impact of the UK Government’s £4.5 billion tax credit cuts with London Mayor Boris Johnson urging him to take action so the effects don’t bear down "too unfairly” on the working poor.
Ahead of a crunch Commons debate and vote today on a Labour motion to reverse the reductions, the Chancellor was expected to address Tory MPs at Westminster to explain the highly controversial cuts and his strategy to make Britain a low welfare, low tax, high pay economy.
With calls already made for Mr Osborne to “tweak” the cuts - which could affect three million families across the UK, including 350,000 in Scotland, costing them as much as £1300 a year - Mr Johnson said: "What I would like to see is working with the tax and benefit system and the Living Wage to make sure that hard-working people on low incomes are protected; I'm sure the Chancellor can do that.
“Everybody is concerned about something, which bears down unfairly on the working poor and it's very important as we take this thing forward that we do it in such a way as to minimise that impact."
Mr Johnson stressed that the Chancellor was "completely right" to try to reform the tax credit system, which could not continue in its present form.
The London MP said he understood the "pain and anguish" expressed by working mother Michelle Dorrell, who confronted Energy Secretary Amber Rudd over the issue on BBC One's Question Time last week but noted: “Somehow or other we've got to reform this system."
Mr Johnson said he believed the tax credit changes were under "intensive review" and added: "Let's see what they come up with."
But Downing Street made clear that the policy was being pursued as planned. A source said: “We are not going to move on it all. We are steadfastly committed to this whole policy; no caveats.”
Meantime, Conservative think-tank, the Bow Group, released a report warning that the planned tax credit cuts would damage Tory claims to be "the workers' party" and remove a key part of the self-employment boom.
Nic Conner, the report’s author, said: "Tax credit cuts could damage Britain's entrepreneurial economy and the Conservative Party's claim to be the workers' party.”
He added: "If tax credit cuts are to go ahead, they need to be implemented at a slower pace, in line with the introduction of the National Living Wage and the raising of the tax threshold."
Seema Malhotra, the Shadow Chief Secretary to the Treasury, described the Bow Group’s report as “damning” and said it showed “how even many Tories are now beginning to understand how socially unfair and economically illiterate the proposed cuts are”.
At Holyrood, Willie Rennie, the Scottish Liberal Democrat leader, challenged Ruth Davidson, his Scottish Conservative counterpart, to join opposition to tax credit changes that would take hundreds of millions of pounds away from working families in Scotland.
Earlier this month at the Tory Party conference, Ms Davidson told a fringe meeting that she would like to see more detail on how the tax credit cuts would work in practice.
"The people set to lose the most as a result of these unfair Tory plans are people on low or middle incomes, who are working hard to provide for their families,” declared Mr Rennie.
“Ruth Davidson cannot hide behind the so-called Living Wage, which goes nowhere near to making up for these cuts. She needs to join the growing chorus of opposition to these cuts and stand up for the thousands of children in Scotland, who will be affected by these changes," he added.
In a separate development, Mr Osborne is facing a possible last-ditch bid to kill off the cuts in the House of Lords.
A rare "fatal" motion is expected to be tabled by peers opposed to the measures this week with a potential crunch vote next Monday.
Labour sources suggested such a motion would be almost certain to result in a Government defeat because there was no Tory majority in the Upper House.
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