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Review of Lords confirmed in wake of tax credit defeat

A review into how MPs can be given the "decisive role" over key financial decisions has been set up following the Government's humiliating Lords defeat over plans to cut tax credits.

Chancellor George Osborne has insisted he will press ahead with changes to reduce the welfare bill, despite the double defeat in the House of Lords.

David Cameron ordered a "rapid review" of the relationship between the two Houses of Parliament which will be chaired by former Lords leader Lord Strathclyde.

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Grayling says 'not right' for Lords to block tax credit cuts

Chris Grayling said the Lords had broken 'the traditions of decades'. Credit: Good Morning Britain

The House of Lords vote to block tax credit cuts creates a "big constitutional issue", leader of House of Commons Chris Grayling has said.

The former Conservative Justice Secretary said it "cannot be right" for the unelected Lords to stand in the way of the changes.

Mr Grayling told Good Morning Britain: "Of course it's a difficult decision to have to take but we have a big task still ahead of us to balance the nation's books and create a sound financial foundation for the next generation.

"What shouldn't happen is unelected peers breaking the traditions of decades and throwing out a financial measure in the wake of three votes in the House of Commons which said we need to go ahead with this."

Mr Grayling said the tax credit cuts were part of a package of changes, including free childcare and cuts to social rents, designed to help working families.

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