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Government wins benefit cap vote in Commons Government wins benefit cap vote in Commons
(about 1 hour later)
  
MPs have backed the government's plans for a £26,000 annual cap on overall household benefits and agreed child benefit should be included - overturning a key defeat in the Lords.MPs have backed the government's plans for a £26,000 annual cap on overall household benefits and agreed child benefit should be included - overturning a key defeat in the Lords.
The benefit cap is among the highest profile changes in the government's controversial Welfare Reform Bill.The benefit cap is among the highest profile changes in the government's controversial Welfare Reform Bill.
Ministers say it will bring benefits into line with average working households' income.Ministers say it will bring benefits into line with average working households' income.
MPs have now overturned four of seven defeats peers inflicted on the Bill. MPs have now overturned six of seven defeats peers inflicted on the Bill.
They voted by 334 to 251 to overturn the Lords amendment - tabled by a group of bishops - 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 voted by 334 to 251 to overturn the Lords amendment - tabled by a group of bishops - 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.
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.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.
'Transitional arrangements''Transitional arrangements'
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".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".
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.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.
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.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.
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.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.
And he said the policy would be reviewed "in a transparent way" - as they would with any major policy change of this kind.And he said the policy would be reviewed "in a transparent way" - as they would with any major policy change of this kind.
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".
The government's decision to use financial privilege rules was also criticised by Labour peers. The party's chief whip in the Lords, Lord Bassam, wrote on Twitter that it "fundamentally undermines the constitutional role of the Lords as a revising chamber". The government's decision to use financial privilege rules was also criticised by former Conservative chancellor Lord Mackay - who led a Tory rebellion in the Lords against charges for parents to access the Child Support Agency.
He suggested it was "a waste of taxpayers' money at a time of considerable austerity" for peers to pass amendments which were then rejected out of hand.
'Waste of money'
Earlier MPs voted down Lords changes to reduce entitlements to employment and support allowance (ESA).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 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.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. And they voted down a peers' amendment that would have exempted some cancer patients from means testing by 328 to 265. The government also reversed a Lords amendment limiting the proposed reduction to the lower rate of the "disabled child element" of Child Tax Credits by 324 votes to 255.
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. Critics say the move will hit working people facing severe financial difficulties - and could cost them over £1,300 a year.
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. MPs also voted to overturn a Lords proposal calling for social tenants with one spare room to be exempt from new "under-occupancy penalties" linked to housing benefit. It won the vote by 310 to 268.