Tax credits: A hole of George Osborne's making

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George OsborneImage source, Reuters

Tonight a slightly - and unusually - shaky-looking George Osborne said the Lords have behaved in an unconstitutional way and they will be "dealt with".

There is an unresolved question about how far the Lords should stray into the governments finances. It's very clear ministers want to put the problem at peers' door, not their own.

On Tuesday, No 10 will announce some kind of review.

But the real problem is how on earth ministers, and particularly George Osborne, pull themselves out of a hole they have dug with their own hands.

For the last few weeks, while critics, including on their own side, have warned the government about the risks, ministers have been publicly, and privately, insisting there was no way round introducing cuts to tax credits in the way they planned.

Now Lords, brimming with confidence, have forced a dramatic climb down.

The government so far doesn't have an answer on how they will smooth the impact of their changes and save the same amount of money, or how George Osborne - considered the government's master tactician - will repair his reputation.

Just weeks ago, at the party's conference, his rise seemed unstoppable. Tonight, some on the Conservative benches may be thinking again.