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Government wins three benefit votes in Commons Government wins benefit cap vote in Commons
(about 1 hour later)
  
MPs have overturned three of seven defeats inflicted on the Welfare Reform Bill in the House of Lords. MPs have backed the government's plans for a £26,000 annual cap on overall household benefits - overturning a key defeat in the Lords.
Seven amendments were backed by peers over the past week but the government has pledged to overturn them. The benefit cap is among the highest profile changes in the government's controversial Welfare Reform Bill.
MPs have voted down Lords changes to reduce entitlements to employment and support allowance (ESA). Ministers say it will bring benefits into line with average working households' income but peers wanted child benefit to be excluded.
Prime Minister David Cameron said the plans were "right and fair" but Labour criticised changes that would affect cancer patients as "dreadful". MPs have now overturned four of seven defeats peers inflicted on the Bill.
As the debate got under way on Wednesday, MPs voted by 324 to 265 to back the government over plans to stop young disabled people who have never worked from being able to claim "contributory" ESA. They voted by 334 to 251 to overturn the Lords amendment which would exclude child benefit from counting towards the £26,000-a-year cap on benefits to working-age households - set at the equivalent to the average post-tax salary of a working household.
They backed ministers by 332 to 266 over plans to means-test the same allowance after 12 months. Labour say they support the cap in principle but argue that rather than one national cap - there should be local caps, set by an independent commission.
'Complete silence' 'Transitional arrangements'
And they voted down a peers' amendment that would have exempted cancer patients from means testing by 328 to 265. In the Commons, Work and Pensions Minister Chris Grayling said that idea was "ill-thought out" and "would be more credible if it was not being made at the very last minute".
They are now debating whether to overturn the Lords amendment which would exclude child benefit from counting towards the £26,000-a-year, or £500-a-week cap on benefits to working-age households - set at the equivalent to the average post-tax salary of a working household. He said there were already exemptions to the cap - such as families in receipt of Disability Living Allowance (DLA) and Working Tax Credit - and outlined "transitional arrangements" to minimise the impact.
Labour says it supports the cap in principle but it is arguing that rather than one national cap - there should be local caps, set by an independent commission. People who had been in work for the previous 12 months would get a nine-month "grace period" before the cap kicked in and he said people in receipt of the "support component" of ESA - for people deemed unable to work due to illness - but who do not receive DLA, would not be penalised.
In the Commons Work and Pensions Minister Chris Grayling said that idea was "ill-thought out" and "would be more credible if it was not being made at the very last minute". Additional payments would be made to families in certain circumstances, following a similar model used when the housing benefit cap was introduced - at a cost of up to £80m for 2013/2014 and £50m in 2014/2015.
He said there were already exemptions to the cap - such as families in receipt of Disability Living Allowance and Working Tax Credit - and outlined "transitional arrangements" to minimise the impact. And he said the policy would be reviewed "in a transparent way" - as they would with any major policy change of this kind.
People who had been in work for the previous 12 months would get a nine-month "grace period" before the cap kicks in.
And additional payments would be made to families in certain circumstances, following a similar model used when the housing benefit cap was introduced - at a cost of up to £80m for 2013/2014 and £50m in 2014/2015.
Mr Grayling told MPs the government would use parliamentary rules known as "financial privilege" to get their measures on ESA and the benefit cap through - it refers to the principle that the Lords cannot oppose tax and spending decisions agreed by the Commons.Mr Grayling told MPs the government would use parliamentary rules known as "financial privilege" to get their measures on ESA and the benefit cap through - it refers to the principle that the Lords cannot oppose tax and spending decisions agreed by the Commons.
It will have to be formally signed off by a special committee of MPs tonight before the bill returns to the Lords.It will have to be formally signed off by a special committee of MPs tonight before the bill returns to the Lords.
It means that the Lords cannot send their same amendments to the welfare bill back to the Commons, preventing parliamentary "ping pong" over aspects of the bill.It means that the Lords cannot send their same amendments to the welfare bill back to the Commons, preventing parliamentary "ping pong" over aspects of the bill.
For Labour, Liam Byrne suggested the reason the government had resorted to the measure was because they wanted to block a Labour amendment calling for a flexible, local limit on the benefits cap.For Labour, Liam Byrne suggested the reason the government had resorted to the measure was because they wanted to block a Labour amendment calling for a flexible, local limit on the benefits cap.
He told MPs there were "dangerous flaws" in the "one cap fits all approach". Mr Byrne dismissed government claims that Labour had never raised the issue of a local cap before and said they had made plenty of calls for safeguards in the cap. He told MPs there were "dangerous flaws" in the "one-cap-fits-all approach". Mr Byrne dismissed government claims that Labour had never raised the issue of a local cap before and said they had made plenty of calls for safeguards in the cap.
He said the government had already "burnt a third of the savings they proposed for this measure" - because they had got the policy wrong - and the proposal had become a "dog's breakfast".He said the government had already "burnt a third of the savings they proposed for this measure" - because they had got the policy wrong - and the proposal had become a "dog's breakfast".
Earlier MPs voted down Lords changes to reduce entitlements to employment and support allowance (ESA).
They voted by 324 to 265 to back the government over plans to stop young disabled people who have never worked, due to illness or disability, from being able to claim "contributory" ESA - usually paid to those who have paid a certain amount of National Insurance.
They backed ministers by 332 to 266 over plans to means-test the same allowance after 12 months for those judged capable of working at some point in future.
And they voted down a peers' amendment that would have exempted some cancer patients from means testing by 328 to 265.
The government suffered its latest defeat on Tuesday when a coalition of crossbench and Labour peers - supported by two Conservatives and seven Lib Dems - voted to limit a proposed reduction to the lower rate of the "disabled child element" of Child Tax Credits.The government suffered its latest defeat on Tuesday when a coalition of crossbench and Labour peers - supported by two Conservatives and seven Lib Dems - voted to limit a proposed reduction to the lower rate of the "disabled child element" of Child Tax Credits.
A crossbench amendment tabled by Baroness Meacher calling for the lower rate to be at least two-thirds of the value of the higher rate - which ministers have proposed raising - was passed by 16 votes.A crossbench amendment tabled by Baroness Meacher calling for the lower rate to be at least two-thirds of the value of the higher rate - which ministers have proposed raising - was passed by 16 votes.
The government says it wants to target support at the children with the highest care needs - and say there will be transitional protection so those already in receipt of the benefit will not lose money.The government says it wants to target support at the children with the highest care needs - and say there will be transitional protection so those already in receipt of the benefit will not lose money.
But SDLP MP Margaret Ritchie said at prime minister's questions it would hit working people facing severe financial difficulties - and could cost them over £1,300 a year.But SDLP MP Margaret Ritchie said at prime minister's questions it would hit working people facing severe financial difficulties - and could cost them over £1,300 a year.
Mr Cameron said Disability Living Allowance was going up by 5.2% this April, "well ahead of inflation", and said anyone currently on the current lower tax credit disability rate would be "completely protected through transitional payments" under the universal credit.
However Labour MP Sheila Gilmore accused him of "being so much tougher on the vulnerable than the powerful".