Charities' warning as benefits rises capped
CHARITIES working with the poor have reacted with dismay as MPs voted to break the link between welfare benefits and inflation.
The House of Commons voted by 324 to 268 in favour of a Bill to place a 1% cap on benefit upratings over the next three years, effectively imposing a real-terms cut on most working-age benefits and tax credits.
Some four Liberal Democrats, including former minister Sarah Teather, rebelled against their leadership to vote against the below-inflation cap, while former leader Charles Kennedy and backbencher Andrew George voted in both lobbies – the traditional way of registering an abstention.
But the revolt was not enough to prevent the Welfare Benefits Uprating Bill from clearing the first hurdle in its passage through Parliament. A Labour bid to block the Bill was also voted down.
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In a message on Twitter, Prime Minister David Cameron said: "The Commons vote to limit benefit rises to 1% while pay is only rising at 1% is fair. Labour have the wrong priorities."
The cap, announced by Chancellor George Osborne in his Autumn Statement last year, is aimed at slashing £5 billion from the welfare bill over the next five years.
Work and Pensions Secretary Iain Duncan Smith told MPs that benefit levels have grown by 20% since the beginning of the recession, while incomes for those in work have risen by just 10%. "What we are trying to do over the next few years is get that back to a fair settlement and then eventually it will go back onto inflation," said Mr Duncan Smith.
But Labour branded the move a "strivers' tax", pointing out that almost 70% of those who will lose out are in employment, many of them low-paid. Shadow work and pensions secretary Liam Byrne told MPs: "Welfare to work will not work without jobs. This Bill does not create a single job, it creates a heck of a mess and it asks Britain's working families to clear it up."
Responding to the vote, Barnardo's chief executive Anne Marie Carrie said: "By voting to break the link between benefits and inflation MPs have risked condemning children in Britain's poorest families to growing up stuck in the poverty trap, as their parents struggle to cover basic costs of living."
Oxfam's director of UK poverty, Chris Johnes, said: "Yet again, working-age benefits, which poor families rely upon, are bearing the brunt of the Government's cuts.
"The benefits budget seems to be the child constantly picked on, whose unpopularity makes it easy fodder for the axe."
Welfare cuts – Page 16, Postbag – Page 10