Defeat for government on Welfare Reform Bill
The government has tonight lost another key vote on the Welfare Reform Bill
Peers voted by 252 to 237 to exclude child benefit from the calculation of a households income for the purposes of the proposed total benefits cap for workless households.
The outcome represents yet another setback for the government following previous defeats on the bill over plans to limit Employment and Support Allowance and for a ‘bedroom tax’ for underoccupying social housing tenants.
Tonight’s amendment was tabled by the Lord Bishop John Packer.
Lord Bishop Packer argued that the inclusion of child benefit would disproportionately hit families with large numbers of children as it was not included in the calculation of average household earnings the £26,000 a year cap was based on.
He said: ‘In setting the cap it [child benefit] has been ignored by the government, it should also be ignored when calculating benefit income against the cap.’
Baroness Maeve Sherlock argued that it is wrong that some families earning more than £80,000 a year will get child benefit while poorer families could get nothing because of the cap. Her Labour colleague Baroness Josephine Farrington said the cap ‘will penalise children to appease those who believe those children ought not to have been born.’
Lord David Freud, welfare reform minister, tried in vain to persuade Lords to defeat the amendment. He said it would reduce the number of families affected by the cap from 67,000 to 40,000.
Lord Freud said: ‘That’s the real cost of this amendment. It takes the pressure away from these families.
‘These families will go on in the way they have been and we will not have the behavioural change we want and need from these families.’
The government is expected to try and overturn the amendment when the bill returns to the Commons later in the year.
Earlier tonight, the government successfully defeated an amendment from Labour peer Lord William McKenzie calling for households to be exempt from the proposed £26,000 cap if councils consider they would be ‘threatened with homelessness’.
The Lords voted against the amendment by 250 votes to 222.
Lord McKenzie said the cap as it stands would ‘uproot families form their support networks, friends and communities’. He said the measure would increase costs for councils, which would have to place people in temporary accommodation.
Crossbench peer Lord Richard Best said: ‘The logistics for local authorities of moving large numbers of families to cheaper areas will be complicated and expensive.’
Lord Bishop Packer said schools are concerned about the possibility of children being moved as a result of parents becoming unemployed.
Liberal Democrat peers Lord Paddy Ashdown and Lord Michael German called for the government to release more details about promised ‘transitional arrangements’ to mitigate against the cap.
But Lord David Freud, welfare reform minister, said the Labour amendment was ‘a wrecking amendment.’
He said: ‘It is very easy to see that any local authorities could consider people threatened with homelessness or priority need as any household with children.
‘In practical terms this is the same as not having a cap at all.
Lord Freud said the government is working with the 67,000 families which will be affected by the cap to help them get into work.
He said dismissed fears of a ‘benefit ghetto’. He said: ‘We are not talking about massive numbers by any standards.’