Benefit cap defeat will be reversed, says Clegg


Bishop of Ripon and Leeds, the Rt Rev John Packer: "It is wrong to see child benefit as being a welfare benefit"

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Nick Clegg has said ministers will seek to overturn a Lords defeat for plans to cap benefits for households at £26,000, when the bill returns to the Commons.

The Welfare Reform Bill looks set to "ping pong" between the two chambers, after peers voted to exclude child benefit from the overall cap.

Ministers say that would raise the cap to the take home pay of someone on a £50,000 salary, making it "pointless".

Former party leader Lord Ashdown was among 26 Lib Dem peers to rebel.

The peer said that as president of the United Nations children's agency Unicef, he could not back the government's plans in their current form.


But Lib Dem leader and Deputy Prime Minister Mr Clegg said on Tuesday he was a "strong supporter" of the cap, as were the "vast majority" of people, because it was "fair to say you can't receive more in benefits than if you were to earn £35,000 before tax".

He added: "That's the simple principle which we will stick to and we will make sure that any amendments in the Lords that make that impossible will be reversed."

However, he said those worried about "transitional arrangements" - Lord Ashdown's key concern - would be "comforted that we're sticking to the cap but we're going to implement it in a sensible way".

Labour peers also backed the amendment from the Bishop of Ripon and Leeds, the Rt Rev John Packer, after their own amendment to exclude people at risk of homelessness from the cap failed to get enough support.

Crossbenchers also backed the amendment which was carried by 252 votes to 237.


  • Lord Ashdown of Norton-sub-Hamdon
  • Lord Allan of Hallam
  • Lord Avebury
  • Lord Cotter
  • Lord Dykes
  • Lord Greaves
  • Lord Hussain
  • Lord Kirkwood of Kirkhope
  • Lord Macdonald of River Glaven
  • Lord Maclennan of Rogart
  • Lord Oakeshott of Seagrove Bay
  • Lord Redesdale
  • Lord Roberts of Llandudno
  • Lord Smith of Clifton
  • Lord Taylor of Goss Moor
  • Lord Tyler
  • Baroness Benjamin
  • Baroness Doocey
  • Baroness Harris of Richmond
  • Baroness Hussein-Ece
  • Baroness Miller of Chilthorne Domer
  • Baroness Thomas of Winchester
  • Baroness Tonge
  • Baroness Tyler of Enfield
  • Baroness Walmsley
  • Baroness Williams of Crosby

The cap - which applies to England, Wales and Scotland and would be introduced from April 2013, applies to out-of-work benefits like Jobseeker's Allowance, and Employment and Support Allowance (ESA). But it also includes Child Benefit - currently paid to all parents who want it, regardless of income.

Critics argued that imposing the same cap on all families - regardless of the number of children - effectively meant some children would no longer get child benefit, once the £26,000 cap was reached.

The bishop said: "It cannot be right for the cap to be the same for a childless couple as for a couple with children. Child benefit is the most appropriate way to right this unfairness."

But the government argues that the cap merely brings families on benefit into line with working households - it amounts to £500-a-week, equivalent to the average household wage after tax.

Work and Pensions Secretary Iain Duncan Smith says including child benefit would effectively raise the cap to £50,000 a year, and told MPs on Monday it was "rather pointless to have a cap set so high that nobody could ever earn it".

Monday's vote was the latest in a series of defeats for the government's flagship Welfare Reform Bill - peers also voted down changes to ESA and Disability Living Allowance. The government has made some concessions but says it intends to overturn the defeats in the Commons.

BBC News Channel chief political correspondent Norman Smith said ministers appeared relaxed about the Lords defeat, because they felt they had public opinion on their side and they felt it put Labour in a difficult position. The party said it supported the cap in principle but voted to support the amendment - arguing the current cap risked making people homeless, ultimately increasing the cost to the taxpayer.


Welfare Reform Bill

  • Has completed its Commons stages and is now in the Report (penultimate) stage in the Lords
  • Ministers have already said they they will overturn Lords defeats in Commons
  • Unless and until agreement on differences is reached the bill is likely to "ping-pong" between the Lords and Commons

Mr Duncan Smith says the cap on out-of-work benefits would save "something in the order" of £600m.

The cap would be £500 a week for working-age families - equivalent to the average wage earned by working households after tax - and £350 a week for single adults without children.

The government says 67,000 households, more than half of which are in London, can expect to lose £83-a-week when it is brought in.

The legislation affects England, Wales and Scotland. Northern Ireland has its own social security legislation, but it is expected that what is approved at Westminster would be introduced there too.

How two families' weekly welfare benefits compare

Source: Benefits totals provided by DWP; BBC calculations based on figures from Direct Gov, HMRC

Family size

Family of five Family of 12

No. families affected by policy



Housing benefit (based on rent in Barnet, N London)



Child benefit



Child tax credit



Other benefits (ESA/JSA)



Weekly total




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  • rate this

    Comment number 763.

    Even £26k net doesn't really challenge dependency culture. Benefits should be a safety net not offer an average wage other than for those disabled or seriously ill. Government should cut the 26k and tackle profiteering private landlords who are ripping off both the state and ordinary families

  • rate this

    Comment number 755.

    I agree with the cap but not the implementation. Why should someone who has worked hard for decades potentially lose what they built up, just because they may be out of work for a few months when someone who has never intended to work gets the same limit? Perhaps have the cap apply after a period of months dependent upon how long one has worked?

  • rate this

    Comment number 734.

    I am in full agreement with the cap and the cap to include child benefit. Most of the benefits claimed goes on housing allowance for people to rent at exhorbitant rates. What low paid people and people on benefits want, is what was provided as Council or Social housing, but a good majority of this stock was sold under the last Tory govt. What is needed now is more housing to replace that stock.

  • rate this

    Comment number 677.

    A sad thing is, that the majority of people that seem to want this cap, or feel hostile that they have to pay anything to the unemployed are the people on on lowest incomes. I understand the sense of jealousy here, that these people are having their basic needs met and you are not. But unless you are paying into a fantastic payment protection plan (which you couldn't afford) stop as it's you soon!

  • rate this

    Comment number 603.

    I have sympathy for people who may have to move into cheaper accommodation but benefits are not supposed to fund a better lifestyle than you would otherwise be able to afford.
    Working people live within their means; people of benefits also need to live within their means.
    This is the problem with the welfare system. It has been allowed to fund better lifestyles not just support.


Comments 5 of 19


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