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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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Osborne vows to take on Lords after tax credit cut defeat

Chancellor George Osborne has vowed to take on the House of Lords after peers dealt a devastating blow to plans to cut tax credits.

The vote - the first time in 100 years the Lords has defied the elected Commons on a financial matter - saw a motion to delay the £4.4 billion of cuts while an impact assessment is carried out win by 307 votes to 277.

The government was defeated in the House of Lords Credit: PA

A second motion to delay the cuts by at least three years was also passed, by 289 votes to 272.

Mr Osborne said both he and Prime Minister David Cameron were "clear" that the rebellion would "need to be dealt with".

"It has happened, and now we must address the consequences of that. I said I would listen and that's precisely what I intend to do," he added.

"I believe we can achieve the same goal of reforming tax credits, saving the money we need to save to secure our economy, while at the same time helping in the transition."

A Number 10 spokesman said now that the century-old agreement between the Commons and the Lords had been broken, Mr Cameron had ordered a "rapid review" to try to "see how it can be put back in place".

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