Battle over plan to cap benefits ahead of Commons vote

Cash Increases in benefits have cost £6.3bn since the start of the 2008 recession, Iain Duncan Smith says

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It is unfair for benefits to rise at a faster rate than wages, the work and pensions secretary has said ahead of a key Commons vote on capping benefits.

Figures highlighted by Iain Duncan Smith show jobless benefits rose 20% in the last five years, compared with an average 12% rise in private sector pay.

He said benefits should no longer automatically increase with inflation.

But Labour opposes the cap and said jobseekers allowance had failed to keep pace with wages over the past 10 years.

MPs are due to debate legislation on Tuesday which is designed to break the link between benefit rises and inflation.

Instead there will be a three-year cap of 1% - which is below the expected rise in the cost of living - on most working-age benefits and tax credits for three years from 2013/14.

Child benefit, housing benefit and universal credit will be capped for two years from 2014/15.

Labour, which will fight the 1% cap, says that jobseekers allowance has risen by 32% over the past decade, whereas wages have gone up by 36%.

'Tightening belts'

These are not new figures from either the government or the Labour Party.


The figures are complex but the government's central argument is simple.

Ministers ask: why should benefits rise quicker than wages?

And they are relishing the row.

They think it leaves the opposition arguing against the interests and instincts of "strivers" - or hard-working voters.

Labour says those strivers will be hit too.

They cite a think tank report saying more than two-thirds of working-age households affected by the policy are in work.

Before long the debate will come to the House of Commons.

But both sides know it's vital for them to persuade the public at large that they have got this right.

BBC political correspondent Ross Hawkins said: "Both sides know it's vital for them to persuade the public at large that they have got this right."

Chancellor George Osborne told MPs in his Autumn Statement last month that the incomes of those on out-of-work benefits had risen "twice as fast as those in work" over the last five years.

Mr Duncan Smith said that working families had been tightening their belts after years of pay restraint while watching benefits rise - and that, he said, was not fair.

Increases had cost the taxpayer £6.3bn since the start of the 2008 recession, he said.

"The welfare state under Labour effectively trapped thousands of families into dependency as it made no sense to give up the certainty of a benefit payment in order to go back to work.

"This government is restoring fairness to the system and universal credit will ensure it always pays to be in work."

Shadow work and pensions secretary Liam Byrne said cuts to tax credits had pushed millions of working families into poverty and now meant thousands of part-time workers were "better off on benefits".

'Not justified'

Mr Byrne told BBC Radio 4's The World at One: "The lion's share of the savings from this bill will actually come from people's tax credits - on top of the £14bn that has already been carved out of tax credits, this bill is going to take about another £4bn out.

"Now that's going to hit hard-working people very hard and at a time when you're giving a £40,000 tax break to Britain's millionaires, that just doesn't seem justified."

He said Labour would reverse the cut in the top rate of income tax from 50p to 45p.

But Conservative Party chairman Grant Shapps told the same programme the top rate tax cut was a "red herring" and pointed to the removal of millions of people on lower pay from income tax.

He said taxpayers should not feel that they are having to pay for people on benefits to get a higher increase than people actually working.

"This is an argument about fairness and what Labour need to work out is if they're going to say: 'Well, we don't agree with this, we think that these benefits should carry on going up twice the speed of average earnings'. That's fine. How are they going to pay for it?"

As tensions rise ahead of the vote next week, Lib Dem leader and deputy PM Nick Clegg also entered the debate, telling The Times that Labour was "learning the tricks of opposition" but "to oppose everything is to offer nothing and the country will not be duped".

He said opposing the 1% benefits cap meant Labour "believe welfare claimants should see a bigger rise than the 1% that public sector workers will get on their wages - which they support".


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  • rate this

    Comment number 501.

    Shocking how propaganda manages to turn groups of people against each other. Seems history has thought us nothing.

    Hopefully all those looking down on benefit scroungers (employed&unemployed) will never experience any adverse life events which might put them in a position needing financial support from the state (accidents, death, family breakdown, redundancy only ever happen to others...)

  • rate this

    Comment number 500.

    #455 Are you a wind up?

    If what you said is true you need to be imprisoned. If you want children then learn to support them first. I see no reason why my taxes should go to paying for your family when my earnings would be better spent on my own. What you do in nothing short of fraud and theft.

    You are part of what is wrong with this country.

  • rate this

    Comment number 499.

    Percentage this, percentage that, blah blah.
    Duncan-Smith is out to sow hatred.
    It's the sterile, "Why should...?" debate starting point in politicla so-called debate.
    What's 1% of, say, 71 quid?
    These rich cabinet ministers could draw £10000

  • rate this

    Comment number 498.

    People aren't missing the point and waiting for a job they like that pays decent wages. That's why so many people are in P/T work and need top ups through benefit, myself included! Yes I apply for F/T work every week, but with hundreds of other people applying aswell it's rare to even get an interview, and no, I don't have children. You obviously don't have a clue what's going on!

  • rate this

    Comment number 497.

    The biggest "benefits" are those paid to people who can afford accountants to find ways to fiddle the tax system, legally or less legally. By comparison the few quid given to those in need are chickenfeed.

  • rate this

    Comment number 496.


    Poor excuse. You have an area of work (suitable distance), why don't you go out and knock on doors asking if they have vacancies (your doing nothing else?). I've done it in many countries and always find something even when I only speak a few words in the language.

    Typical Brit who wants everything done for them, the internet is a bonus to finding a job!

  • rate this

    Comment number 495.

    While I'm sure there are a few people who 'abuse the system' (true in any area of life), life must be far from easy for those on benefits. Why would anyone CHOOSE such a life style?

    Honest hard work is no guarantee these days; it seems only selfish greed pays. Give people genuine HOPE, not rhetoric, and things might change for the better.

  • rate this

    Comment number 494.

    For 30 yrs I've paid my taxes and NI to the government without complaint, but in November last yr I had to have emergency heart surgery.

    Imagine my surprise because I pay a morgage and have a reasonable amount in savings, I dont qualify for any benefits, even though my income currently is £0.00/wk

    If an insurance company tried that on, they be up in court and out of business,,,,,

  • rate this

    Comment number 493.

    I am a single parent (my partner died) and though I work full time now, I was never capable of surviving on benefits alone. I'd love to know how people can buy all these fantastical things- I can only imagine their parents/relatives buy them or they are seriously in debt to credit card companies or loans people. We didn't have an extravagant lifestyle, could only afford the basics.

  • rate this

    Comment number 492.

    Benefit is to me a strange word to me the only benefit should be for the disable and the out of work.
    The wage o salary or pension should have a value to cover the need of a decent standard of living.
    Regarding children benefit should not exist a decision about having children should be made with a calculator.
    In conclusion until all worker and pensioner receive a living wage or pension we stack.

  • rate this

    Comment number 491.

    The solutions to the problem of high benefit spending are a Living Wage and Rent Controls.

    If greedy employers were forced to pay a wage that people could survive on, the government would not have to subsidise wages through tax credits.

    If greedy landlords were prevented from charging excessive rents, the government would not have to subsidise the costs through housing benefits.

  • rate this

    Comment number 490.

    455, I hope your comment was just a wind up. If not you're exactly what's wrong with this country. I hope you get kicked off benefits.

  • rate this

    Comment number 489.

    The problem in the UK is low pay & greedy bosses. - The PM infamously told us all that we all in it together. However, according to the Telegraph FTSE 100 directors have enjoyed 27% pay rises. – Low pay is the Issue. Unemployment benefits & other benefits go, by & large, to ordinary people who are either not paid enough or have lost their jobs & are briefly unemployed after years of working.

  • rate this

    Comment number 488.

    Many people on here still dont get it! Most people who are claiming benefits WORK !! They have to claim benefits to top up their wages which are too low. This policy will effect hard working people who are trying to make ends meet! This is typical conservative philosophy, hit the poorest in society the hardest. Why are we not surprised !

  • rate this

    Comment number 487.

    Why aren't the whingers on this forum out looking for work???

  • rate this

    Comment number 486.

    Benefits are not too high, they are calculated so that people can live on them. Let's face it, the real issue is that wages are far far too low. Let's not pit workers against the unemployed, see the real picture, the extremely wealthy (owners of companies) are stealing the wealth from the workers. This is what needs to change!

  • rate this

    Comment number 485.

    Wake up...
    Only yesterday I was in Tesco shopping, and outside was all the people on benefits with a trolley full of shopping, in the queue waiting for a taxi to take them home to idle to walk home, playing on there new 'I-phone' looking forward to watching the darts on sky sports....I work 60 hours a week and can afford any of these ....benefits should be given in food vouchers...

  • rate this

    Comment number 484.

    "Most low paid jobs are at minimum wage nowadays and frankly, that's communism."

    I think you need to learn what Communism is really all about.

    Will someone please tell me what IDS plans to do about the fact working people need certain types of benefits because they are not getting paid enough to live on by their employer? Can a Tory fan please tell me what this government is doing about it?

  • rate this

    Comment number 483.

    430.Big Dogs Only. Can you point me in the direction of the figures that back your assertion that " but for every 'you' there is someone in a large family where several generations have never worked, and have no intention of"? I accept there may be a few families of this type but don't know the actual number, like you appear to

  • rate this

    Comment number 482.

    The problem is that extreme right wing nutters like IDS are feeling that they can do anything now, propped up as they are by the disgraceful Liberal Democrats. When Norman Baker, a LibDem minister, says today that rail fares are "not that expensive" you realize that there is nothing the LibDem weasels won't say or do to stay in power.


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