Government defeated on benefits cap

Published by Ross Macmillan for 24dash.com in Housing and also in Central Government, Communities, Local Government

The Government has lost a vote in the House of Lords on controversial plans to cap household benefits to £26,000 a year following concerns about the welfare of children.

Peers voted 252 to 237 in favour of a bishop's amendment to exempt child benefit from the £500-a-week cap on workless households.

The measure - which would apply from 2013 - has come under pressure from bishops and child poverty campaigners who argue that child benefit should be exempt from the cap. They argue the plans could make as many as 80,000 children homeless.

The Government insisted, however, that the cap would not result in child poverty and urged bishops to consider families trapped in the benefits system, placed into houses they can't afford.

The cap also appears to have public support. A YouGov poll shows public support for the £26,000 a year cap (after tax), including among Labour and Liberal Democrat supporters.

According to the poll, 76% are in favour of placing a cap on the amount of benefits that people can claim with 56% thinking the cap should be £26,000 or below.

The cap was expected to deliver £290million savings in 2013/14 and £330million in 2014/15.

The cap would see couples and lone parent households limited to £500 a week and single-person households where no children limited to £350 per week.

Households claiming Working Tax Credits, Disability Living Allowance and war widows and widowers would be exempt.

Research published today by the Department for Work and Pensions put the number of claimants who would see benefit cuts at 67,000 - 44% of which are in the social sector. More than half those affected are in London.

Earlier this afternoon an amendment to exempt vulnerable people at risk of homelessness from a £26,000 a year benefit cap was defeated in the House of Lords.

Peers voted by 250 to 222 against the plans.

The Government has said that it will bid to overturn any defeats in the Lords when the legislation returns to the Commons.