Lib Dem MPs, including the party’s deputy leader Simon Hughes, look set to obtain concessions from Iain Duncan Smith to win their support for the Coalition’s controversial welfare bill, which will introduce a benefit cap of a maximum of £26,000. Here’s how The Guardian reports the news:
The government is expected to make a series of concessions in the coming days on it controversial £26,000 household benefits cap to win over wavering Liberal Democrat MPs. Iain Duncan Smith, the work and pensions secretary, is expected to agree that a discretionary fund should be established to ease the burden on families who could be made homeless at a sensitive time in their children’s education. …
There are growing expectations that Simon Hughes, the Lib Dem deputy leader who has voiced concerns about the cap, will be won over by a new “discretionary fund”. Hughes has expressed fears that the cap, which includes housing benefit, could force thousands of families out of their homes in London and the south-east.
The discretionary fund would allow councils to exempt some families from the cap for a limited period of time if, for example, a child was due to sit examinations. The fund, which would only apply to existing recipients, would be modelled on the system that was set up after Hughes voiced fears last year about the impact of the housing benefit cap.
The cap, which will mean that no working household will be allowed to receive benefits of more than £26,000, is due to come into force in April 2013. This means that councils will have around a year to introduce the changes … The Lib Dems have argued that showing discretion for a limited period of time could avoid families moving into expensive bed and breakfast accommodation if they are forced out of their rented home but need to remain in the same area for their child’s schooling. The government is also looking at the introduction of a grace period for people who suddenly lose their jobs and are immediately hit by the cap.
Meanwhile, Labour’s shadow work and pensions secretary Liam Byrne — who supports the cap in principle — has called for the Coalition to agree a local rate for the cap in recognition higher living costs, especially in London. It’s a curiously inconsistent position for Labour to adopt as Lib Dem blogger Mark Thompson highlights here in a post titled ‘Have Labour just made a big mistake on the benefits cap?’:
The coalition has been pushing the idea of regional pay bargaining for a while now which has thus far been responded to by protest from Labour MPs. How can they now credibly fight that when they have made pretty much the exact same argument the government make in favour of it in the context of a benefits cap?
7 Comments
Hmmm. So the Government looks like it’s doing something and then can blame local councils when families who need the help can’t get it.
While these changes are welcome, the Cap is the least troublesome of the reforms included in the Bill. The massive cuts to DLA (and its replacement PIP), the time limit to ESA (which, let’s us not forget, Conference voted against) and the reduction in support payments to parents of disabled children are the reforms that will hit the most people and hurt the most vulnerable. The contents of the Welfare Reform Bill are considerably more callous and dangerous than either the Health and Social Care Bill of the Legal Aid Bill. More changes are needed before tomorrow, but I’m not holding my breath that they’ll come.
it should say “no workless” not “no in work” in the quote!
The “discretionary fund” sounds an awful lot like Discretionary Housing Payments, which have been released throughout the process. Not a good concession I’m afraid. As the name suggests they are purely discretionary and there is little a soon to be homeless family can do if a local authority rejects their application. This is just the government passing the buck to local authorities. I will be very disappointed if Lib Dem MPs are reassured by this approach.
Thank you to Jonathan for raising the subject of DLA; this something that members of the LDDA, and wider disabled community for that matter, have been seriously worried about.
For the uninformed, Disability Living Allowance (DLA) is not an out-of-work benefit, as Iain Duncan Smith constantly tells everyone; but a benefit to assist those with disabilities with very day life – in fact many disabled people in receipt of DLA use it to assist them in employment.
The Welfare Reform Bill will see this scrapped and replaced with a new benefit called Personal Independence Payment (PIP). Here’s where it gets nasty – PIP’s main purpose is to reduce the money spent on people with disabilities; PIP will have a reduced budget of 20%, compared to DLA, and will be harder to qualify for, meaning many of those currently on DLA will not qualify for the new benefit.
If people suddenly have to move home all at once then that will push up rents in the areas where they have to move to given that demand will exceed supply. The discretionary element to this policy will mitigate that so this is good news.
That said there will be costs in terms of administration which might be a farce unless cash-strapped local authorities are provided funds to do this. In addition there is the general point that moving house is a costly business and if you are claiming benefits it is not fair that you should have to pay for this. This is where I am concerned that this will make many people homeless.
The overall amount of money saved by the policy is small in terms of the overall warefare budget. I think this policy will do far more harm than good and should be opposed.
If a cap is needed (and all parties seem to agree that it is though I don’t!) it should be set on all benefits excluding the housing benefit since it’s housing rents that are the problem. Then the rent elecment shouldbe calcualted separately either according to the actula rent or by local/regional circumstances.
A typical private sector rent for a 2/3bedroom terraced house in East Lancashire is not mroe than £400 per month. You won’t easily get a 2-bedroom flat in London for less than £400 per week and often more. If the benefits for a 3-4 children family (and everyone else) are capped aqt £26000 that’s £520 as week. Not much left after the rent is paid to keep a family of kids.
Tony Greaves