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 1501.

    One of the greatest pleasure I get from politics is watching election night as the results come in. I love watching greedy, bigoted and immoral MPs losing their seat and becoming unemployed. I only wish we got elections annually. I bet certain MPs would be a little more careful about how they described any part of this great country. Underdog - love the points you're raising. Election please...

  • rate this

    Comment number 1500.

    ...don't you yet realise that the chief taxman is actually the chancellor in the government & his name is George Osborne? So for you to say it's the tax man's job but not the government's job is rather silly & out of touch with reality really!
    No, the taxman operates to the tax laws not to politicians whims, that is reality,

  • rate this

    Comment number 1499.

    A man who goes into war citing non existent weapons of mass destruction becomes peace envoy to the middle east
    A man who goes to jail becomes a Lord (in fact more than one)
    A woman sacked for misleading the public about Eastern European immigration is reinstated shortly after
    I could go on and on. But hey,lets have a go at the jobless

  • Comment number 1498.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 1497.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • rate this

    Comment number 1496.

    I am surprised at some of the comments and at some of the figures quoted it is obvious that some people will believe everything they read They have forgotten how to think for themselves or even think There but for the grace of god that could be me

  • rate this

    Comment number 1495.

    "Unemployment develops, that is to say, because people want the moon;--men cannot be employed when the object of desire (i.e. money) is something which cannot be produced and the demand for which cannot be readily choked off. There is no remedy but to persuade the public that green cheese is practically the same thing and to have a green cheese factory (i.e. a central bank) under public control."

  • rate this

    Comment number 1494.

    Agree benefits need 2 b monitored. Yet - what is the real economy like in the UK? Most jobs are vulnerable 2 low pay so should I encourage UK 2 promote wage reductions 4 all in order 2 encourage employment? Low pay does not contribute 2 consumption function above necessities. & what of Govt not providing benefits 2 those entitled 2 it? Scrap benefits & 95% of us will b living in poverty in future.

  • rate this

    Comment number 1493.

    IDS and his multi-millonaire tory friends are set again to blame the striving poor and least able in society to exsist and will push them hard while putting the working poor against the unemployed.
    ThisTory led Govt is set to destroy Welfare State and reintroduce a modern Poor Law and if possible Workhouses.They are an unelected bunch of rich men out for themselves and their friends in the city.

  • rate this

    Comment number 1492.

    Sseedthrills says
    I'm not against we taxpayers paying for benefits for the truly disadvantaged .
    Carers allowance should go up !
    Sad that you know 7 people only ?
    Know exactly what you mean. im the only round here on JSA actually looking for a job,,,, Everybody else is claiming disabilities. like depression or bad back

  • rate this

    Comment number 1491.

    David Cameron has publicly stated he does not want another leadership debate prior to the next election, that sums the Tories and their right wing minions up, they are incapable of debate outside of knocking the most vulnerable in our society.

    Even the Tories who post in here have absolutely no idea what Tory economic policy actually is, because there isn't a policy.

  • rate this

    Comment number 1490.

    Hey there, don't you yet realise that the chief taxman is actually the chancellor in the government & his name is George Osborne? So for you to say it's the tax man's job but not the government's job is rather silly & out of touch with reality really!

  • rate this

    Comment number 1489.

    The point of benefits is that people don't need to steal to survive. Giving them just enough to survive. If they have to start stealing, they are going to take more than enough.

    Benefits benefit everyone. It reduces crime and poverty. We all hate paying for it, but the alternative is far worse. When there is no money why hammer the poor? They haven't got any. Its why we call them 'the poor'.

  • rate this

    Comment number 1488.

    4 Minutes ago
    Errrm just a thought, what's can we buy that's British? We sold our soul and infrastructure to European Investors, production and plant to china and Hong Kong and out sourced our work to India and other Asian countries AND pay them Economic Aid too. Neither wonder I claim JSA benefit

  • rate this

    Comment number 1487.

    Am I turning into a grumpy old man, or am I missing something obvious.
    Does anyone else get irritated about the amount of scrolling up and down you have to do to follow an article with this many posts on it?
    It is also annoying that the character limit seems to limit the quality of some posts. Many times I would like to post my opinion, but not in multiple posts, but it rarely fits within limits

  • rate this

    Comment number 1486.

    As sure as night follows day, how ever hard you work, how ever hard you grovel, you will lose your job well before your retirement age and you will NEVER work again. What will your opinion be then I wonder?

  • rate this

    Comment number 1485.

    IDS plan
    Keep people in poverty to save money

    More crime, more ill health, more suicides

    Children taken into care cost £350 per week each!
    Parents in prison cost?
    not enough prisons? build some more?


  • rate this

    Comment number 1484.

    IDS once claimed unemployment benefit when he left the army funny he voluntarily left a well paid job which he didnt have to lead yet he was willing to claim his dues and now he does his best to prevent anyone claiming the same benefits try claiming if you leave a job simply because you dont want to do it anymore utter outrageous hypocrisy from IDS

  • rate this

    Comment number 1483.

    Typical right wing solution.

    If benefits are rising quicker than wages then its not because wages are currentlky at a pitifully low level, often not actually enough to allow a worker a basic standard of living.

    Oh no, its because benefits are far too generous because they dare to keep real term awards static by increasing inline with inflation.

  • rate this

    Comment number 1482.

    "benefits rose 20% in the last five years, compared with an average 12% rise in private sector pay. "

    Statistical trickery- just choose a period (5/10/12 years) which suits your argument.

    I'd like to see the article state what inflation was over the five years quoted. This omission is slack work on behalf of the BBC.

    Also, would the BBC confirm if the 20% includes pensions?


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