Lib Dem MPs win concessions ahead of benefits cap vote

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?

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  • The Voice Caron Lindsay 31st Jan '12 - 7:38am

    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.

  • Jonathan Featonby 31st Jan '12 - 8:15am

    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.

  • Tony Greaves 31st Jan '12 - 5:57pm

    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

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