Government wins key vote on planned 1% cap on annual benefits rises


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The government has won a crucial vote in Parliament on plans to limit annual increases in working-age benefits to 1% for the next three years.

MPs rejected a Labour bid to block the proposals by 328 votes to 262 after five hours of heated debate.

But four Liberal Democrat MPs joined Labour in voting against the proposals.

Labour argues that millions of low-income families will be worse off but ministers say benefits should not be going up at a faster rate than wages.

Benefits have historically risen in line with inflation and, without any change, would have been due to go up by 2.2% in April.

Benefits set to be capped

  • Jobseeker's Allowance
  • Employment and Support Allowance
  • Income Support
  • Elements of housing benefit
  • Maternity allowance
  • Sick Pay, Maternity Pay, Paternity Pay, Adoption Pay
  • Couple and lone parent elements of working tax credits and the child element of the child tax credit

But the government says that with public sector pay rises capped at 1%, a similar limit should apply to working-age benefits such as jobseeker's allowance, employment and support allowance and income support as well as elements of working tax credits and child tax credit.

In a message on Twitter, Prime Minister David Cameron said: "The Commons vote to limit benefit rises to 1% while pay is only rising at 1% is fair. Labour have the wrong priorities."

The Lib Dem Business Secretary Vince Cable said the welfare budget could not be "insulated" from spending cuts that were needed to rebalance the public finances.

Benefit recipients, he suggested, had done "relatively well" in recent years in comparison to working people on low incomes, many of whom who have seen their wages frozen and incomes fall in real terms.

"It seemed fair to us to distribute some of this pain in a more equitable way," he told BBC News.

Four Lib Dem MPs - Sarah Teather, David Ward, Julian Huppert and John Leech - voted against the government while Charles Kennedy and Andrew George abstained on the second reading of the legislation needed to implement the three-year cap.

Start Quote

The debate has been portrayed as an argument over "skivers versus strivers". But others might say it was a debate about the nature of the welfare state.”

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A number of other MPs - including ministers Norman Baker and Lynne Featherstone and former cabinet minister Chris Huhne, did not take part in the vote.

Mr Leech, the MP for Manchester Withington, urged ministers to "take stock" and rethink the cap - saying it was unfair to equate a 1% limit on benefits worth less than £100 a week with a 1% pay rise for someone on a salary of £25,000 a year.

And Mr Kennedy, a former Lib Dem leader, tweeted that he was "looking now to work with like-minded Lib Dems to amend the bill in its later stages".

Legislation needed to implement the cap for 2013-2016 must be approved by the Commons and the Lords.

By approving the proposals at second reading on Tuesday by 324 votes to 268, MPs have ensured they come a step closer to becoming law.

While backing the changes, Mr Cable criticised the language used by some Conservatives in the debate over welfare, in which supporters of the cap have sought to ally themselves with "strivers" against those unwilling to work, describing it as "appalling stuff".

Labour MP David Miliband described the bill as "rancid"

Labour has accused the government of trying to pit unemployed people against the low-paid while former Foreign Secretary David Miliband, speaking in the Commons, called the proposals "rancid".

Shadow work and pensions secretary Liam Byrne said welfare spending had exceeded government forecasts by £14bn and ministers were opting to try and fill the hole by penalising working families rather than asking the wealthiest in society to pay more.

An "impact assessment" of the proposals published by the government suggested single parents would be most affected by the cap - losing £5 a week or about £250 over the three year period.

The majority of working age households in receipt of state support are likely be an average of £3 a week worse off.


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  • rate this

    Comment number 340.

    What society is this where people get paid money when they choose to do nothing? Unfortunately, I know some of them personally. I came from overseas to work in academic research and 20 years later I can still not get my head round why the state pays our taxes to people that have not, and do not wish, to contribute into the system. 1% cap does not go far enough for some types of benefits.

  • rate this

    Comment number 325.

    If we were 'all in this together' then this measure would have support. But while wealthy individuals and huge corporations avoid tax and even get tax cuts the poorest without the ability to do this have to pay the difference.

    If take home pay (by the same corporations) was adequate this measure would not be needed and to see wealthy politicians gleefully implementing it is sickening.

  • rate this

    Comment number 290.

    We have all been lived beyond our means for many years, now we have to settle our debts. Even if we managed to tax the extremely wealthy without them legging it to tax havens the monies pulled in would hardly make a dent in our debts. Sad though it is, the rest of us will have to carry the bulk of the burden. My fear is that come next electionthe electorate will forget who got us into this mess .

  • rate this

    Comment number 235.

    We need to restructure the whole benefit and support system to ensure it focuses on those that really need it. There are far too many people getting tax credits theat don't 'need' them (they're not meant to be to pay for holidays, cars or electrical goods) and those that actually need financial support who are paying for it too - not just the better paid.

  • rate this

    Comment number 201.

    Some seem to think this money comes from an imaginary pot in the sky. I haven't had a rise in 3 yrs. By the end of each month I struggle to buy food after rent, bills etc. Then those receiving MY tax money complain they need more, yet have a home, food, and don't have to work. I can't save, can't afford a house, or to have children but work 11hr days to pay for those who do nothing and want more!


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