Monday, 24 November 2014

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.’

Readers' comments (21)

  • Rick Campbell

    It's a pity that the word "SOME" is missing from the beginning of the headline.

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  • Chris Webb

    IDS fails to represent that only 1 in 8 persons receiving benefit are unemployed when he compares the increases in income for those on benefit and those in work as being 20% and 10% respectively. Common logic tells us that he must be lying, or misrepresenting the data to validate the otherwise false claim of making those in work better off by capping benefits.

    People will only be better off in work when the value of the minimum wage is increased to its previous value, when fewer working people are dependent upon benefits, when politicians accept responsibility for their own policies instead of blaming the poor for the effects of those policies.

    If minimal level benefits are rising faster than poverty pay then increasing pay beyond the minimal level is the obvious action to achieve fairness - if fairness is truly the government's objective!

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  • michael barratt

    What is this stigma about being unemployed, someone has to be because the Government and UK PLC are presently unable to offer an economic model that avoids unemployment and most importantly mass under employment. The so called skivvers among us are mostly victims of economic circumstances that can engulf any one of us at any time.

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  • I am being hit with bedroom tax might have to pay pole tax and cuts to my benefits ,how on earth can i pay this when money is tight now,also i missed the warm home rebate of £130 when on the news millions has not been claimed .SWALEC told me i cant claim as the date run out and on line it says, due to high number of claims the scheme has closed,what really is going on?Tories are either out of touch or worse just don't care.

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  • Jimmy Cricket

    It's not going to happen, move along!!

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  • This will be of interest and refer http://idseye.com/2012/12/12/private-sector-earnings-at-1-9-with-public-sector-at-1-4/

    Average weekly earnings growth across much of the private sector is running at close to 2 per cent. There are two exceptions to this. One is the lower paying sector of wholesale, retail, hotels and restaurants where pay growth is 2.9 per cent and the other is construction where pay growth is close to zero. Meanwhile, earnings growth in the public sector is around 1.4 per cent.

    The latest Average Weekly Earnings figures from the ONS, published on 12 December, actually show that total earnings growth in the private sector rose by 1.7 per cent in the year to October 2012, while total earnings growth in the public sector (excluding the nationalised banks) was 2.2 per cent.

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  • And refer November 2012 http://idseye.com/2012/11/14/private-sector-earning-growth-at-2-with-public-sector-at-1-5/

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  • @ David Edwards, does this help http://www.decc.gov.uk/en/content/cms/funding/whds/whds.aspx Refer Eligibility for the Core Group is linked specifically to the type of benefits received. In winter 2012/13, you may qualify for this energy discount if on 21 July 2012 (the qualifying date) you are either:

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  • Chris Webb

    kk71 - is there any clarification if the higher increase in the lower paid sector is as a result of the EU ruling that part time and temporary workers should be paid the same rate as permenant and full time workers? If it is then this marginal at inflation increase is likely to be restored to the more diresory average in future periods.

    Also, is there any attempt to remove the skewing effect of the massive payrises for the top decile in the private sector making otherwise below inflation pay rises look higher?

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  • Also of interest, refer Long-term incentives fuelling FTSE 100 directors’ pay growth http://idseye.com/2012/11/06/long-term-incentives-fuelling-ftse-100-directors-pay-growth/

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