Iain Duncan Smith defiant over benefits cap but concessions expected

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

Removing child benefit from the Government's proposed welfare cap would be "ludicrous" and having a regional cap - without regionalising benefits - a "chaotic mess", Iain Duncan Smith has said.

The work and pensions secretary has reiterated his plans to reverse a House of Lords amendment to exempt child benefit from the £26,000-a-year cap as the Welfare Reform Bill returns to the House of Commons next week.

The bishops and child poverty campaigners have argued that the cap on benefits for workless households could make as many as 80,000 children homeless.

Mr Duncan Smith told the BBC's Andrew Marr show: "The reason why I wouldn't take child benefit out is first of all the level of the cap would rise in terms of salary to £40,000 or even £50,000 which would be ludicrous. The second thing is this. You cannot go on as we've been doing detaching children from their parents. We keep speaking as though children are somehow there and what their parents do has no bearing. We have to show the parents that what you do, the choices you make in life have an affect on your children, you want to make positive choices so your children get positive outcomes."

He also said he wouldn't be going for a 'regional cap' - as called for by the Labour Party.

Mr Duncan Smith said: "The overall level is critical. We've got people living in London in some cases in flats costing over £100,000 a year to rent. I know that's the extreme but that's the kind of nonsense we've got ourselves into under the last government. So it's important we settle the London issue.

"I'm not going for a regional cap but I do say this to the Labour Party. If they really want a regional cap then that must mean they want regionalisation of benefits as well because you can't have both. You can't have one without the other. I'm happy to have a debate about that with them if that's where they want to go. You can't detach one and say 'we'd like a bit of this but not the other' because that would make the whole system a chaotic mess."

Reports suggest, however, the Government will agree to the establishment of a discretionary fund to ease the burden on families at risk of homelessness at a sensitive time in their children's education.

The fund - which would only apply to existing claimants - would allow local authorities to exempt some families from the £26,000 a year cap for a limited period of time.

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

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 £290 million savings in 2013/14 and £330 million in 2014/15.

A number of social landlords have raised concerns about the benefit cap and its impact on building larger homes.

They argue that aligned with flexibilities to charge higher rents - to replace lost grant - building larger homes is "unviable" because tenants can't afford them.