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 1361.


    Who do you think gives the government the money to give to you as rent, JSA, council tax subsidy, child benefit etc?


    Given that the public sector issues our currency, how do you think it gets into the private sector so ordinary people can earn it and pay tax?

    The tooth fairy? Santa?

  • rate this

    Comment number 1360.

    1997 Labour open flood gates to immigrants.

    Basic wages pushed down to minimum wage so fat cats can make more profit.

    Basic worker loses job, but now thier job area cannot fund mortgage.

    => Basic worker forced to live on benefits.

    Propoganda spread by BBC et al, that basic workers are lazy.

  • rate this

    Comment number 1359.

    'Bright youngsters i work with are "shirking" uni to earn money, that will not end well'


    Go to Uni & get a second in media studies? Then what? Become an MP?

    For years only the very brightest or those specialising in a subject went to Uni, the rest worked and believe it or not we did okay. Maybe some today shouldn't take the option of Uni to start with.

  • rate this

    Comment number 1358.

    housing rent follows the property market. It is unfair that housing benefit should go to landlords and overpriced council accommodation

  • rate this

    Comment number 1357.


    If u can answer @1322, you've solved our, and the world's problems.
    The problem with your socialism, is pretty soon you run out of other peoples' money, then you start to borrow & print the money like we are doing. Sound familiar, look at your favourite place USSR.

    I love how ever eg that reveals ur sophistry u call a straw man too. Democracy =

  • rate this

    Comment number 1356.

    @1230 torriestruffles it is obvious you were taught maths by one of these unionised idiots who say education in this country is good and the government is being unfair in its attacks on teachers. 1% of £250 is not 0.25p it is £2.50 1% of £65 is not £0.065 it is 65p otherwise known as £0.65. Benefits should not be cash they should be accomodation, food and utilities only. No luxuries!

  • rate this

    Comment number 1355.

    How do you justify stealing from a young couple with kids who have the foresight to have (health & income) insurance?"

    Oh, and what about those who can't get such insurance through no fault of their own? You know, genetic conditions, old age, major accident, pre-existing condition. You have a breathtaking lack of imagination and this panglossian view that bad things can't happen to you.

  • rate this

    Comment number 1354.

    The British public are being encouraged to be mean minded, selfish and envious for the sake of monetarism. All in this together-no we are not. Its high time our politicians set decent moral standards and promoted care for others. Some posters here live in gilt edged offshore ivory towers and don't believe they should contribute anything to the UK. Shame on them and the fools who follow their lies.

  • rate this

    Comment number 1353.

    the past the past a kingdom for the past.
    who cares about the 80s get real.
    the 8 million is fact.
    an employee of mine last year left his job paying 17k as he had 4 kids and found more money was available on the benefit system.
    ok by you to keep him with your taxes.
    he had a job but did not want to work.

  • rate this

    Comment number 1352.

    1339.Underclass Underdog
    Ever considered putting the same effort into doing something usefull as you put into HYS bashing of everyone and everything?

  • rate this

    Comment number 1351.

    1315 "all these middle class millionaires on here..will be the first people I go after"

    "Go after"?? Yet another implied threat of violence . Who do you think gives the government the money to give to you as rent, JSA, council tax subsidy, child benefit etc? The tooth fairy? Santa? Ordinary working people thats too. Talk about bite the hand that literally feeds you.

  • rate this

    Comment number 1350.

    re 1314 You can do a certain amount of voluntary(unpaid) work but it has to be for a registered charity. Speak to a different Jobcentre advisor to discuss it or the CAB if you still get the same advice. Voluntary work can help Jobseekers gain valuable experience, boosts confidence, gives you a reference and helps the community etc so well worth doing.

  • rate this

    Comment number 1349.

    Under the Thatcher governments, the link between benefits and average wages was broken because benefits were seen to be rising too fast. So benefit increases were linked to the cost of living index instead.

    Now we want to see the link between the cost of living index and benefits broken because benefits are rising too fast.

    Which rules do you want us to play by.

  • rate this

    Comment number 1348.

    Oh yes, lets just stop benefits for the poor, old and sick. Then we make the working poor pay gaffer for privilege of working for him!
    Ian Duncan Smith the Monty Python of British Politics! Trouble is it ain't funny, roll on 2015!!!

  • rate this

    Comment number 1347.

    We have to get back to the original concept of the Welfare State as conceived by Beveridge.It should be a Safety Net in times of trouble : not a way of life.The fact that we are having to debate this shows how far we have come/ strayed and debassed the original idea.There are too many 'Benefits' for too many things which should not be subject to them

  • rate this

    Comment number 1346.

    Yep the Tories want toget rid of 50 MPs - I want to get rid of about 400

  • rate this

    Comment number 1345.

    On the one hand we have Fortnum & Masons, on the other Food Banks.

    In Belgravia Prince Andrew stays at Claridges & charges the taxpayer £7,000 per night when he has the choice of 4 Palaces in London in which to reside.

    One night for Andrews 'benefit claim' equates to two years benefits for an unemployed person ....

    Work out the true injustice!!!!!!

  • rate this

    Comment number 1344.

    I think the people to blame for this sorry situation is the previous government for spending like there was no tomorrow.

  • rate this

    Comment number 1343.

    "1% of £250 per week is 25p - which covers the increase of a short single ticket rail fare for a commuter.
    1% of £65 per week is £.065p - A sum which doesn't exist in real terms."

    I hope you're not employed doing the calculations for I.D.S. (or indeed Liam Byrne) 1% of £250 is £2.50 for a start. Have another go at 1% of £65 and see how you get on!

  • rate this

    Comment number 1342.

    What no politician has dared to explain yet is that we are no longer as rich as we think we are. We have high levels of public services, public pay, public pensions & welfare but we no longer earn enough in the world to pay for it all. Same is true in America, France etc.

    Our manufacturing jobs have been exported to the far east. The stuffing has been taken out of our economy.


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