Duncan Smith defends benefits cap ahead of Lords vote
Rolling coverage of all the day’s political developments as they happen
Here’s a lunchtime summary.
• Iain Duncan Smith has revealed that a total of 67,000 households – and 310,000 individuals – will have their benefits reduced by an average of around £83 per week as a result of household benefit cap being debated in the Lords this afternoon. Nearly 20% of those households losing benefit will lose more than £150 a week. There will be a transfer from these households of £290m in 2013/14 and £305m in 2014/15. The figures come in an impact assessment published by ministers (pdf). In interviews this morning, Duncan Smith said the cap would not increase child poverty and that it would not lead to families becoming homeless. My colleague Polly Curtis has been looking at this on her Reality Check blog. She concludes: “There is quite extensive evidence to suggest that some children will be tipped below the poverty line as a result of the introduction of the benefits cap and that larger families and those in the south and city centres where rents are highest will be most negatively affected.” There is more detail on our welfare bill live blog.
• Vince Cable has been forced to make his statement about the government’s plans to curb executive pay this afternoon. He was planning to announce the measures tomorrow, in a speech to the SMF. But following protests from Labour about Cable ignoring parliament, he will instead by unveiling his plans in the Commons this afternoon.
• William Hague, the foreign secretary, has welcomed the EU’s decision to impose an embargo on Iranian oil imports. “The UK has been looking for an unprecedented set of sanctions and that is what we have agreed,” he said. “This shows the resolve of the European Union on this issue. It is absolutely right to do this when Iran is continuing to breach United Nations resolutions and refusing to come to meaningful negotiations on its nuclear programme.” Hague has also welcomed the EU’s decision to impose an 11th round of sanctions on Syria.
• A senior MP has suggested that the News of the World may have impeded the police investigation into the murder of Milly Dowler. John Whittingdale, chairman of the Commons culture committee, was commenting after the committee released a letter it has received from Surrey police about its dealing with the News of the World in relation to messages left on Milly’s phone. Whittingdale said: “What it appears to tell us is that several journalists at the News of the World were involved in hacking the voicemails left on Milly Dowler’s phone. They did so in pursuit of a story rather than wanting to help the police with their inquiries and it appears as if they may actually have interfered or impeded the police in their investigations into what turned into a murder inquiry, because they went on claiming that they had evidence that Milly Dowler was still alive at a time when sadly it became clear she was not.”
• Diane Abbott, the shadow health minister, has cast doubt on the government’s plans to give councils £2bn so that they can take more responsibility for public health. “Labour welcomes handing local authorities new responsibility for public health,” she said. “In principle, this should make it easier to deal with the social determinants of ill health and issues like obesity. But in practice, these powers are being given at a time of unprecedented financial pressures on local councils. The government has not demonstrated how it can effectively ring fence the money and stop cash-strapped councils from diverting the funds to related issues like social care.”
• Mark Thompson, the BBC director general, has told the Leveson inquiry that the BBC spent £310,000 on private detectives over a six-year period. As the Press Association reports, the corporation once used investigator Steve Whittamore, who was later convicted of illegally accessing personal data, to check whether someone was on a particular flight. On another occasion a BBC journalist commissioned a private detective to find out the owner of a car from its number plate, the hearing was told. Thompson said that the corporation’s staff used investigators 232 times between January 2005 and July 2011 at a total cost of £310,000. There more details on our Leveson live blog.
• David Cameron has launched Business in You, a campaign to encourage people to launch a business. He has also announced that empty and under-used government offices will be made available to people who need space where they can start a business.
• Peter Hain has accused Tony Blair of not giving Wales “proper respect and attention”. According to the BBC, Hain made the comments in his memoirs.
The new letter from Surrey police to the Commons culture committee about the Milly Dowler phone hacking runs to 16 pages. Nothing in it strikes me as sensational, although it does provide more detail about the contacts between the police and the News of the World about the information the paper obtained from hacking Milly Dowler’s phone with the police while her disappearance was still being investigated. The letter is from Jerry Kirkby, deputy chief constable at Surrey police. Here are the main points.
Sadly, the letter does not reveal how the messages came to be deleted in such a way as to encourage Milly’s parents to believe she was still alive when she was not.
• A News of the World reporter falsely told a recruitment agency that left a message on Milly’s phone that he was cooperating with the police. Kirby says: “It should be noted that the NOTW reporter’s assertion that he was working with the police was untrue.”
• Surrey police downloaded voicemails from Milly’s phone on two occasions, on 26 March 2002 and 17 April 2002. On both occasions they had a court order allowing it. In March just one message was downloaded. In April a number of messages were downloaded.
• A simple mistake led to the recruitment agency leaving a number on Milly’s phone. The agency was trying to contact a Ghanain woman called Nana who had registered, but for some reason her number had been listed wrongly. Instead, the number listed was Milly’s mobile number.
• The police were told that the News of the World was in possession of the recording of a voicemail message from Milly’s phone. The published letter does not say who passed this information on to the police (because the name is redacted), but it seems to have been a News of the World journalist.
• The police were told that the News of the World had got Milly’s phone number and PIN number from schoolchildren.
• The News of the World seems to have rejected police suggestions that the recruitment agency message had something to do with a hoaxer. The letter quotes someone (presumably from the paper) telling the police that the paper was “110%” sure that Milly had applied for a job in a factory.
• Kirkby says the police did not supply the information about the recruitment agency call to the News of the World. (In September last year Tom Crone, the former News of the World lawyer, suggested the information could have come from the police in the first place.)
a letter from Surrey police about the Milly Dowler phone hacking affair. I’ll post the highlights in a moment.The Commons culture committee has just published
Here are the main points from the Number 10 lobby briefing.
• Downing Street refused to endorse a claim from Iain Duncan Smith that the welfare system incentives the unemployed to have more children. In one of his interviews this morning, Duncan Smith said: “They’re incentivised, many of these families, to find more children so that they can stay out of work. This is utterly wrong.” Asked if David Cameron agreed, the prime minister’s spokesman said: “People have children, decide to have children, for a whole host of reasons. The key incentive that we are trying to change is the incentive around work.”
• Downing Street said the government would not be making an announcement today about the transitional arrangements being introduced to ameliorate the impact of the housing benefit cap. The spokesman would not say if the new measures would include any new money, but he said the government was alreading spending £190m on measures to help people affected by the cap on housing benefit. He also said there would be no retreat on the “fundamental principle” behind the cap. “We are sticking with that fundamental principle,” he said
• David Cameron will be doing a PM Direct event today at about 1.50am. He has also been visiting an Asda store, and welcoming Asda’s announcement that it will create 5,000 new jobs this year.
Just back from the lobby. Downing Street said that we won’t get a formal announcement today about the transitional arrangements being promised to ameliorate the household benefit cap. And the prime minister’s spokesman distanced himself from Iain Duncan Smith’s claim this morning that the benefits system incentivises people to have children.
I’ll post a full summary shortly.
As for the rest of the papers, here two articles that are particularly interesting.
• Michael Savage in the Times (paywall) says Labour has decided to save money by indexing its own pensions to the consumer price index (CPI) instead of the retail price index (RPI), even though Labour has criticised the government for doing the same with public sector pensions.
Several senior Labour figures have criticised the coalition’s decision to link public sector pensions to a lower rate of inflation, a significant part of the deficit reduction programme that is expected to save the Treasury £7.5 billion a year by 2015. But Labour’s latest accounts show that the party has saved £4.2 million by switching the inflation rate used in its own scheme from the retail prices index (RPI) to the lower consumer prices index (CPI).
It is an embarrassing revelation for Mr Miliband, who introduced a Commons motion last year, arguing that it was unfair permanently to use the lower inflation rate for calculating the pensions of retired nurses, teachers, dustmen and civil servants.
[Monitor] will be responsible not just for overseeing the financial health and performance of NHS foundation trusts, but for helping set the prices they receive for NHS work and deciding how much competition they face.
Ever since Mr Lansley first outlined this idea, before the general election, successive Monitor chairmen have acknowledged that this involves serious conflicts of interest.
The prices Monitor sets will affect foundation trust finances. Yet Monitor will be responsible for overseeing their financial viability and protecting the taxpayers’ investment in them. A competition ruling, equally, could affect the viability of a trust, and so on.
I’m off to the lobby briefing now. I’ll post again after 11.30am.
The Department for Work and Pensions has now published its impact assessment on the household benefit cap. It does not say anything about the number of people who will (or will not) be forced into poverty. But it says that 67,000 households – containing 90,000 adults and 220,000 children – will be affected.
The modelling suggests that, in the absence of any behavioural response to the policy, around 67,000 households will have their benefits reduced by the policy in 2013/14 (this is roughly one per cent of the out-of-work benefit caseload) and 75,000 in 2014/15. Within these households, and in 2013/14, the number of adults affected is 90,000 and the number of children 220,000.
Broadly this policy affects families who are both out of work, and are either:
a. Larger than average, in the most part with three or more children, and thereby receiving larger than average Child Tax Credit payments and Child Benefit payments;
or b. situated in high-rent areas, and thereby receiving large Housing Benefit payments; or c. both of these factors combined.
a story about the Houses of Parliament “sinking into the mud” and Big Ben leaning alarmingly that suggested that the taxpayer could have to spend £1bn on fixing the problem.In the Mail on Sunday yesterday there was
The Today programme thought it was such a good story that they decided to follow it up. But, as you can hear on this audioBOO, their expert, John Burland, emeritus professor at Imperial College, said there was nothing much to worry about.
where the EU is going to agree an embargo on Iranian oil imports. Speaking before the meeting, Hague said he hoped Iran would to “come to its senses” and resume negotiations on its nuclear programme.William Hague (left), the foreign secretary, is at a meeting of EU foreign ministers today
These [sanctions] are peaceful and legitimate measures. They are not about conflict. I hope Iran will come to its senses on this issue and agree to negotiate … Any attempt [by Iran, in retaliation] to close the Strait of Hormuz would be illegal, and I believe would be unsuccessful.
Here is some more comment on the household benefit cap debate. I’ve taken the quotes from PoliticsHome.
• Stephen Timms, the shadow employment minister, said Labour would try to amend the welfare bill to stop families being made homeless as a result of the benefit cap. Even though Iain Duncan Smith told the Today programme (see 8.56am) that the cap would not force families into homelessness, Timms said this claim was undermined by a leaked letter from Eric Pickles, the communities secretary, which warned about families being made homeless as a result of the policy. Timms said that problem highlighted by the Pickles letter meant the policy could cost more money than it saved.
• Enver Solomon, the Children’s Society policy director, said child benefit should not be included in the household benefit cap. The cap “is supposed to impact on unemployed adults but, actually, it’s hitting children,” he said. “They are the innocent victims of this policy.” He also said that the cap should be set at £31,500, not £26,000. The government has chosen £26,000 because that is the figure for average net household earnings. Solomon said it would be better to base it on average household income because this would take into account the amount of money families also get from benefits like tax credits, housing benefit and child benefit.
PoliticsHome and the Press Association have been monitoring them. Here are the key points.Iain Duncan Smith (left), the work and pensions secretary, has given at least three interviews about the wefare cap this morning.
• Duncan Smith insisted that the cap would not increase child poverty.
We do not believe there will be an increase in child poverty … Our department does not believe that you can directly apportion poverty to this particular measure.
He said that impact assessments about the effect of the cap would be published later today. According to the Observer yesterday, initial figures produced by the Department for Work and Pensions – rejected as “unsafe and unfit for publication” by the department – said the policy would push 100,000 children into poverty.
• He said the cap would not lead to any families becoming homeless.
Nobody, and I can guarantee this, nobody will be made homeless in the sense of the public’s view of it – without a home to go to – as a result of this.
Claims that the cap would push families into homelessness were based on an unreasonable definition of homelessness, he claimed.
The one that’s used by the pressure groups is that certain children would have to share rooms. Well, most of your listeners would find that astonishing. For them homelessness is not having any kind of accommodation, reasonable accommodation, to go to and being on the street. I can guarantee that is not going to happen.
• He said that the number of families affected by the cap would be “relatively very small” compared to the number of families on benefits as a whole.
• He said the cap would save the taxpayer “something in the order” of £600m towards deficit reduction.
• He accused the bishops who are opposing the cap of using misleadig information. The bishops were were quite entitled to express their views on the policy, he said. “I just wish that occasionally they would call us to get their figures right,” he added.
• He said “discretionary measures” would be introduced to soften the impact of the benefit cap. These would “make sure that this doesn’t punish people and make sure that we help them to change their circumstances”. Without giving details, he talked about the need for the government to ease families “through the cap and into new housing”.
• He said that predictions that the cap imposed on housing benefit would lead to hundreds of thousands of families being cleared from central London have turned out not to be true. The cap on housing benefit is already in force.
• He said the cap was not being introduced to punish people.
I simply make the point that the purpose of this is not to punish people but it is to give fairness to people who are paying tax, who are commuting large distances because they can only afford to live in the houses that they have chosen. It is also about fairness to those who are on these benefits; it is not fair to trap somebody in an expensive house which they cannot afford then to go to work on the back of, because they would lose their housing benefit if they went to work – so they are disincentivised from going to work. This is a ridiculous system that we have inherited.
• He insisted that he personally knew what it was like to be unemployed. “Actually I’ve been unemployed and I’ve had to look for work,” he said. “I know very well how difficult it is. I’ve never said people on unemployment benefit have a cushy life.”
today it will be covering the debate and the Lords vote in detail. But I will also be keeping an eye on the issue here. Iain Duncan Smith, the work and pensions secretary, has already been giving interviews. He told the Today programme that the cap would not increase child poverty and would not lead to any families being made homeless. I’ll post the full quotes shortly.Of all the welfare cuts being imposed by the government, the household benefit cap is the most arresting. Partly that’s deliberate. Other benefit cuts will raise much more money, but ministers were particularly attracted to this one because they knew it would grab the attention of the media and the public and send out a message about the seriousness of the government’s commitment to welfare reform. Today it is being debated in the Lords. We’ve been running a welfare reform live blog and
Otherwise, here’s the full agenda for the day.
10am: Mark Thompson, the BBC director general, Lord Patten, chairman of the BBC Trust, and Jim Gray, editor of Channel 4 News, give evidence to the Leveson inquiry.
10am: Liam Byrne, the shadow work and pensions minister, and David Laws, the former chief secretary to the Treasury, will debate the report published by the Resolution Foundation saying that millions of ordinary families are unlikely to see their earnings return to pre-recession levels until at least 2020.
11am: Andrew Lansley, the health secretary, gives a speech on public health. As Ben Quinn reports, he will say that local authorities will get more than £2bn so that they can take on a greater role in improving public health.
2.15pm: Richard Wallace, the Daily Mirror editor, Sly Bailey, the Trinity Mirror chief executive, and other newspaper executives give evidence to the joint committee on privacy and injunctions.
2.30pm: Iain Duncan Smith, the work and pensions secretary, takes questions in the Commons.
Around 3pm: Peers start debating the welfare bill. As Rajeev Syal reports, Lord Ashdown is one of the peers threatening to vote against plans to impose a £26,000 cap on the the amount of benefits that can be paid to one family.
At some point this morning David Cameron is also due to make an announcement about empty government offices being made available to entrepreneurs who want to set up a business.
As usual, I’ll be covering all the breaking political news, as well as looking at the papers and bringing you the best politics from the web. I’ll post a lunchtime summary at around 1pm and another in the afternoon.
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