IDS says “Nobody will be made homeless”
Welfare reform: Lords bid for benefits cap concessions
Work and Pensions Secretary Iain Duncan Smith: “Nobody will be made homeless”
Peers will press for changes to government plans for a cap on benefits families can receive when the measure is debated in the House of Lords later.
Church of England bishops and some Liberal Democrats will push for child benefit to be excluded from the cap – so as not to penalise large families.
Work and Pensions Secretary Iain Duncan Smith says there are already exemptions for disabled people and those in work.
The £26,000-a-year cap would affect England, Scotland and Wales from 2013.
Average income
The government estimates about 50,000 households would be affected by the cap on working-age benefits – which would be £500 a week, equivalent to the average wage earned by working households after tax.
Mr Duncan Smith said most of those affected were people who had never worked – and have no incentive to do so because they are living in expensive properties which they would have to move out of, if they lost their housing benefit entitlement.
What the benefit cap will involve
- From April 2013, the total amount of benefit that working-age people can receive will be capped so that households on out-of-work benefits will not receive more than the average weekly wage earned by working households.
- Applies to the combined income from the main out-of-work benefits – Jobseeker’s Allowance, Income Support, and Employment Support Allowance – and other benefits such as Housing Benefit, Child Benefit and Child Tax Credit, Industrial Injuries Disablement Benefit
- Exemptions for households in receipt of Working Tax Credit, Disability Living Allowance or its successor Personal Independence Payment, Constant Attendance Allowance and war widows and widowers.
He rejected suggestions children could be pushed into poverty by the cap – saying that assumed families would not move house.
And he denied that some families would be left homeless, saying there was “no reason” why a family on £26,000 a year would not be able to find suitable accommodation.
‘Extraordinary argument’
The Bishop of Ripon and Leeds, the Rt Rev John Packer, has put down an amendment to the Welfare Reform Bill that would exclude child benefit from the overall cap.
He said: “Child benefit is a universal benefit. I believe that it’s wrong to see it as being a welfare benefit. It’s a benefit which is there for all children, for the bringing up of all children and to say that the only people who cannot have child benefit are those whose welfare benefits have been capped seems to me to be a quite extraordinary argument.”
And the former Bishop of Hulme, the Right Reverend Stephen Lowe, told the BBC that some parents “perhaps are not particularly capable of working” but had large families.
“The fact that child benefit, which is meant to be attached to the number of children, is being discounted in relation to this particular £26,000 is actually going to damage those children’s welfare and put potentially another 100,000 children into poverty.”
But Mr Duncan Smith said excluding child benefit would make the cap “pointless” – as it would raise the amount families could receive to an average of about £50,000 a year. He said he wanted to be “fair” to taxpayers on low wages, who were supporting families in homes they themselves could not afford.
He has admitted his plans could face defeat in the Lords on Monday.
He told the BBC: “We have a year before this comes in. We now know exactly which families [the cap will affect], what their size is, where they live.
“It’s not about punishing them. It’s about saying ‘Look, if you live in a house that you couldn’t afford if you were in work, then you’re disincentivised from taking work’.
“We want people to find work. We want them to be in work.”
Mr Duncan Smith also said the public was “overwhelmingly in favour” of the cap.
But he said there could be some “transitional arrangements” to help those families affected, in the year before it comes in.
Former Lib Dem leader Lord Ashdown has said he will vote against the coalition’s plans for a benefits cap, unless there are measures to cushion the impact on those affected.
Labour has said it will not vote against the cap but it is likely to propose that vulnerable adults and families with children facing homelessness should not be bound by the change.
Peers have already inflicted a series of defeats on the government’s flagship Welfare Reform Bill but ministers say they are determined to get key changes through Parliament.
The changes would affect England, Wales and Scotland. Northern Ireland has its own social security legislation, but it is expected that what is approved at Westminster will be introduced there too.
A small number of provisions will apply directly to Northern Ireland, regarding the abolition of benefits, state pension credit, tax fraud investigation and information sharing about tax fraud.
