Could Osborne drop tax credit £4bn from surplus target?

A former adviser to Work and Pensions Secretary Iain Duncan Smith has suggested that the money lost by the rejection of cuts to tax credits could simply be removed from George Osborne’s surplus target.

The House of Lords’ rejection of tax credit cuts means the Chancellor has a £4bn shortfall in his target to reach a £10bn surplus by 2020.

Baroness Stroud, now executive director of Centre for Social Justice think tank, told the Today programme Mr Osborne needed to “just pause and think. Do you actually need to make this change?”

“The most important thing to protect is work incentive,” she said.