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Welfare reform: Lords bid for benefits cap concessions Welfare reform: Lords bid for benefits cap concessions
(40 minutes later)
Peers will press for changes to plans for a £26,000 cap on the benefits families can receive when the measure is debated in the House of Lords later. Peers are pressing for changes to plans for a £26,000 annual benefits cap, as they debate the Welfare Reform Bill.
Church of England bishops and some Liberal Democrats will push for child benefit to be excluded from the cap - so as not to penalise large families.Church of England bishops and some Liberal Democrats will push for child benefit to be excluded from the cap - so as not to penalise large families.
Work and Pensions Secretary Iain Duncan Smith says there are exemptions for some disabled people and those in work. Work and Pensions Secretary Iain Duncan Smith says it would mean the cap was effectively raised to £50,000 - beyond the reach of most working people.
Labour say they will back the call - if their amendment does not win support.
The annual cap would come into force in England, Scotland and Wales from 2013.The annual cap would come into force in England, Scotland and Wales from 2013.
The government was defeated three times on votes on other parts of its flagship Welfare Reform Bill two weeks ago.
But Mr Duncan Smith has said he is determined his reforms will get through Parliament - and defeats will be overturned when the legislation returns to the Commons.
If implemented in its current form, the government's benefit cap will save £290m next year, with 67,000 families losing on average £83 a week.If implemented in its current form, the government's benefit cap will save £290m next year, with 67,000 families losing on average £83 a week.
It's not a vast amount of money in the context of a welfare budget that runs to tens of billions of pounds, but its significance goes wider for the government.It's not a vast amount of money in the context of a welfare budget that runs to tens of billions of pounds, but its significance goes wider for the government.
First, ministers believe that they are in the same place as a significant portion of public opinion.First, ministers believe that they are in the same place as a significant portion of public opinion.
Second it reinforces the government's central policy aim of getting more people off benefits and into work by, they would say, encouraging a change in behaviour.Second it reinforces the government's central policy aim of getting more people off benefits and into work by, they would say, encouraging a change in behaviour.
Thirdly it puts pressure on Labour, who know they can't oppose the cap outright, but have ended up having to criticise the implementation, a much less clear-cut position.Thirdly it puts pressure on Labour, who know they can't oppose the cap outright, but have ended up having to criticise the implementation, a much less clear-cut position.
For the Lib Dems, this is difficult.For the Lib Dems, this is difficult.
They believe their role is to soften Tory zeal when it comes to the benefits system.They believe their role is to soften Tory zeal when it comes to the benefits system.
Picking a fight, along with the bishops, also helps to create the fabled "definition" the party needs to secure its identity.Picking a fight, along with the bishops, also helps to create the fabled "definition" the party needs to secure its identity.
But if no real concessions are wrung, then they could end up looking impotent.But if no real concessions are wrung, then they could end up looking impotent.
There have been suggestions that some "transitional arrangements" could be introduced for the cap - which applies to working age benefits. The government was defeated three times on votes on other parts of its flagship Welfare Reform Bill two weeks ago.
BBC News Channel chief political correspondent Norman Smith said it could mean giving families a period of grace to find a new home when the cap is introduced in April 2013. But Mr Duncan Smith has said any defeats will be overturned when the legislation returns to the Commons.
Prime Minister David Cameron said the cap was "relatively generous": "Should people really be able to earn more than £26,000 just through benefits alone? In the Commons, he accused Labour of saying they were in favour of a cap on benefits - while tabling a "wrecking amendment" to be voted on later.
"I don't believe that they should and I think the overwhelming majority of people in this country would back that view... I think this is a basic issue of fairness. It's time to call time on these excessive welfare payouts and that's what the benefit cap will do." "They can't weasle their way out of it and say they are in favour on the one hand and against on the other."
The Labour amendment would exempt people who would be considered "threatened with homelessness" under the cap - and obliged to be rehoused by their local council. The opposition says it supports the policy but as it stands it could end up costing the taxpayer more if 20,000 families have to be rehoused.
Shadow work and pensions secretary Liam Byrne said, if the government did not accept Labour's amendment, the party would support the amendment to exclude child benefit to avoid "another bill for council tax payers to clean up the cost of homelessness".
On Monday the government revised up its estimate of how many households would be affected - from 50,000 to 67,000, although the amount of money they would lose was revised down from £93-a-week to £83-a-week. More than half of those affected live in London.On Monday the government revised up its estimate of how many households would be affected - from 50,000 to 67,000, although the amount of money they would lose was revised down from £93-a-week to £83-a-week. More than half of those affected live in London.
'Relatively generous'
The cap would be £500 a week - equivalent to the average wage earned by working households after tax - for families and £350 a week for single adults without children.The cap would be £500 a week - equivalent to the average wage earned by working households after tax - for families and £350 a week for single adults without children.
There have been suggestions that some "transitional arrangements" could be introduced for families affected by the cap - which applies to working age benefits.
Prime Minister David Cameron said the cap was "relatively generous": "I think this is a basic issue of fairness. It's time to call time on these excessive welfare payouts and that's what the benefit cap will do."
Mr Duncan Smith said most of those affected were people who had never worked - and had no incentive to do so because they were living in expensive properties which they would have to move out of if they lost their housing benefit entitlement.Mr Duncan Smith said most of those affected were people who had never worked - and had no incentive to do so because they were living in expensive properties which they would have to move out of if they lost their housing benefit entitlement.
He rejected suggestions children could be pushed into poverty by the cap, saying that assumed families would not move house. He has rejected suggestions children could be pushed into poverty by the cap or that some families would be left homeless.
And he denied that some families would be left homeless, saying there was "no reason" why a family on £26,000 a year would not be able to find suitable accommodation. The Bishop of Ripon and Leeds, the Rt Rev John Packer, has put down an amendment that would exclude child benefit from the overall cap.
The Bishop of Ripon and Leeds, the Rt Rev John Packer, has put down an amendment to the Welfare Reform Bill that would exclude child benefit from the overall cap.
He said: "Child benefit is a universal benefit. I believe that it's wrong to see it as being a welfare benefit. It's a benefit which is there for all children, for the bringing up of all children and to say that the only people who cannot have child benefit are those whose welfare benefits have been capped seems to me to be a quite extraordinary argument."He said: "Child benefit is a universal benefit. I believe that it's wrong to see it as being a welfare benefit. It's a benefit which is there for all children, for the bringing up of all children and to say that the only people who cannot have child benefit are those whose welfare benefits have been capped seems to me to be a quite extraordinary argument."
And the former Bishop of Hulme, the Right Reverend Stephen Lowe, told the BBC: "The fact that child benefit, which is meant to be attached to the number of children, is being discounted in relation to this particular £26,000 is actually going to damage those children's welfare and put potentially another 100,000 children into poverty." And the former Bishop of Hulme, the Right Reverend Stephen Lowe, told the BBC if child benefit was included it would "damage those children's welfare and put potentially another 100,000 children into poverty".
But Mr Duncan Smith said excluding child benefit would make the cap "pointless" - as it would raise the amount families could receive to an average of about £50,000 a year. He said he wanted to be "fair" to taxpayers on low wages, who were supporting families in homes they themselves could not afford.But Mr Duncan Smith said excluding child benefit would make the cap "pointless" - as it would raise the amount families could receive to an average of about £50,000 a year. He said he wanted to be "fair" to taxpayers on low wages, who were supporting families in homes they themselves could not afford.
He told the BBC: "We have a year before this comes in. We now know exactly which families [the cap will affect], what their size is, where they live.
"It's not about punishing them. It's about saying 'Look, if you live in a house that you couldn't afford if you were in work, then you're disincentivised from taking work'."
Former Lib Dem leader Lord Ashdown has said he will vote against the plans, unless there are measures to cushion the impact on those affected.Former Lib Dem leader Lord Ashdown has said he will vote against the plans, unless there are measures to cushion the impact on those affected.
Labour has said it will not vote against the cap but it has put down an amendment proposing that those at risk of losing their homes should be exempt.
Shadow employment minister Stephen Timms told the BBC: "We think that the cap is a good idea, we think the principle is right. But we are very worried about the way the government is going to introduce it, which we think is going to lead to a large number of people losing their homes and having to be rehoused by their local council, ending up costing more."
The housing charity Shelter disputed Mr Duncan Smith's claims about the way "homelessness" is defined by it and the government. The minister told the BBC earlier: "The definition inside government and places like Shelter is that children have to share rooms. For most people who are working, their children share rooms, they would find that a strange definition."The housing charity Shelter disputed Mr Duncan Smith's claims about the way "homelessness" is defined by it and the government. The minister told the BBC earlier: "The definition inside government and places like Shelter is that children have to share rooms. For most people who are working, their children share rooms, they would find that a strange definition."
But Shelter chief executive Campbell Robb said that was "simply not true" and the comments were creating "unnecessary confusion".But Shelter chief executive Campbell Robb said that was "simply not true" and the comments were creating "unnecessary confusion".
"Shelter uses the same definition of homelessness as the government, as set out in the Housing Act 1996, passed by the last Conservative government.""Shelter uses the same definition of homelessness as the government, as set out in the Housing Act 1996, passed by the last Conservative government."
The changes would affect 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.The changes would affect 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.
What do you think of the planned cap? Would you be affected by the proposed limit on benefits for households? You can send us your views and experiences using the form below.What do you think of the planned cap? Would you be affected by the proposed limit on benefits for households? You can send us your views and experiences using the form below.