Government wins 1% benefits cap vote

Published by Jon Land for 24dash.com in Central Government and also in Communities, Finance

The Government last night won a Parliamentary vote to cap annual working-age benefits increases at 1%.

A Labour motion to block the plans, which will be in effect for the next three years, was defeated by 328 votes to 262.

Benefits have traditionally risen at the rate of inflation (currently at 2.2%) but the Government has argued that they should be in line with public sector pay, which is currently also frozen at 1%.

Labour, various charities and other bodies have argued that millions of poorer working families will be worse off as a result of the cap.

The Residential Landlords Association has warned that the change will lead to an increase in homelessness.

The vote followed five hours of passionate debate in the Commons.

Lib Dem MPs David Ward, Sarah Teather, Julian Huppert and John Leech all chose to vote against the Coalition’s proposal.

During the debate, Labour's David Miliband described the proposal as "rancid".

However, one of the bill's chief architects, the works and pensions secretary, Iain Duncan Smith, said that Labour had "spent taxpayers' money like drunks on a Friday night" whilst in power.

CIH chief executive Grainia Long said: “We have serious concerns about limiting benefit uprating to one per cent per annum. Inflation on household essentials has been high throughout the recession, further eroding the living standards of those on the lowest incomes – including those in work, the ‘strivers’ government says it wants to support.

"Capping benefit rises at one per cent will hit families who are already struggling to pay for basics like housing, food and fuel, and who are turning to food banks in increasing numbers.

“The Government needs to act now to address these concerns. Last week’s news that 1.4 million people are struggling to keep up with their rent or mortgage underlines the importance of a simple, robust welfare safety net that helps people with housing costs when they face financial pressure.

"The cuts that have been implemented and the complexity introduced in the last 18 months create added problems for households struggling to cope.”