Iain Duncan Smith will offer minor concessions to critics of his plan to cap state benefit payments as he seeks to rescue his welfare reforms.

The House of Lords defeated the Government on seven key parts of the Welfare Reform Bill, including the centrepiece proposal to cap out-of-work benefits at £26,000 per household.

However, ministers are determined to overturn all the defeats and will table their own amendments, reinstating the original plans, in the Commons today.

In an attempt to appease Liberal ­Democrats who have joined Labour ­critics of the Bill, Mr Duncan Smith is likely to offer “transitional arrangements” to help families who will be hit by the cap.