Friday, 29 May 2015

Liberal Democrats seek changes to welfare bill

Liberal Democrat rebels are seeking to change the controversial Welfare Benefits Uprating Bill.

The legislation, currently going through parliament, will cap rises in a number of benefits to 1 per cent rather than the level of inflation as it is currently. Local housing allowance base rates, used to calculate housing benefit levels for private renters, will be capped at 1 per cent for two years from April 2014. Increases in most other working age benefits will also be capped at 1 per cent for three years.

Liberal Democrat MPs including former leader Charles Kennedy, Alan Reid, John Leech, Dan Rogerson and Andrew George, have submitted amendments to change the bill. The amendments call for benefits to be uprated in line with wage inflation. One amendment calls for benefits to be uprated by 1 per cent or by wage inflation, whichever is higher. An alternative amendment from the MPs calls for the 1 per cent rule to be removed from the bill entirely in favour of increases based on wage inflation. Wage inflation is defined in the amendments as the percentage increase in earnings over a tax year.

Mr George, speaking in the Commons last week during the bill’s second reading, said: ‘We have…heard that one justification for capping benefits at 1 per cent is that, allegedly, benefits have risen significantly more than wages.

‘In that case, would it not be wise for the government to introduce a measure so that benefits do not increase by more than average wage inflation?’

In response Iain Duncan Smith, work and pensions secretary, said payments for those ‘in work’ have risen by about 10 per cent and payments for those on benefits have risen by about 20 per cent. He said the bill will bring ‘fairness back into the welfare payments process’ and said eventually benefits will go back to being inflation-linked.

Green Party MP Caroline Lucas has also tabled an amendment to the bill which would simply remove the 1 per cent cap rise in favour of linking benefit increases with the retail price index measure of inflation.

The Welfare Benefits Uprating Bill enters its committee stage, where MPs debate the bill line-by-line, next Monday.

Meanwhile, Welsh housing minister Huw Lewis has labelled the Westminster government’s welfare reforms a ‘social atrocity’ and warned tens of thousands of Welsh people could be forced to leave their homes or cut back on food or heating to make ends meet as a result.

Mr Lewis, in comments reported by the Wales Online website, said: ‘We’ve got a government now that is deflationary in terms of its economic politics and is also axing the welfare bill simultaneously. That’s something that not even Thatcher attempted.

‘The combination of those two things is that we are heading, to my mind, towards a social atrocity that is being perpetrated on people that are struggling to get by.’

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