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Iain Duncan Smith calls benefit rises unfair Battle over plan to cap benefits ahead of Commons vote
(about 4 hours later)
  
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.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.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.He said benefits should no longer automatically increase with inflation.
But Labour said job seekers allowance had failed to keep pace with wages over the past 10 years. 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.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.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.Child benefit, housing benefit and universal credit will be capped for two years from 2014/15.
The Opposition, who will fight the 1% cap, say that job seekers allowance has risen by 32% over the past decade, whereas wages have gone up by 36%. 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%.
BBC political correspondent Gary O'Donoghue said that these are not new figures from either the government or the Labour party.
"But this is not really a row over numbers - this is a battle to win not just a Parliamentary vote, but the public argument over whether those on benefits should feel the squeeze to the same extent as those in work," our correspondent said.
'Tightening belts''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.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.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.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."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.""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".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".
"Now he wants to hit working families again with his strivers tax bill. Yet this omnishambles government thinks it's right to give an average £107,000 tax cut for 8,000 millionaires," he said. 'Not justified'
"This Tory-led government is comprehensively out of touch with the reality of Britain's working families." 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".