Government wins first welfare vote

The government is under pressure over proposals critics say will plunge tens of thousands of children into poverty

6.01pm: Liberal Democrat peer Lord Kirkwood says he is “implacably opposed to a benefit cap”. He adds he is opposed in principle to any attempt to undermine the universality of child benefit

Clause 94 is a “ministerial override,” he argues, which enables the secretary of state to decide arbitrarily and by regulation whether a child gets child benefit if their family are affected by the a cap.

It’s not safe to grant minsters this power, he says.

He confesses he wanted to vote against the whole bill but was persuaded by fellow Lib Dem peer Lord German “in a darkened room” to vote for this amendment instead.

This amendment would mitigate the effects of the cap on people who are “as poor as church mice.” It’s essential to protect the interests of children, he says, and he will vote “with enthusiasm” for the amendment.

It’s a powerful, passionate intervention.

5.47pm: Lord Greaves, a Lib Dem peer, calls the benefit cap

an attack on the fundamental principle of child benefit

He asks the government to think again. He wasn’t asking for the minister to clarify “transitional arrangements,” he was pretty straightforwardly saying the government should concede the child benefit arrangement.

5.41pm: Labour peer Baroness Sherlock points out that the cap will impact on child protection strategies

At risk-children whose families are forced to move as a result of the cap are in danger of falling off the radar of safeguarding authorities, she says.

She adds that it is anomolous that some families earning over £80,000 a year will get child benefit, but some poor families will get nothing as a result of the cap.

She wants child benefit to placed on the list of exemptions from the cap

If we cannot do that for the children of our community what can we do?

Baroness Tyler of Enfield – a Lib Dem peer – and CEO of the relationships charity Relate, speaks in favour of the amendment.

She warns there is a “couple penalty” built into the cap that will put pressure on families to split up she says. She concludes by saying:

I do not think that children should be the innocent victims of this policy

5.28pm: We are now on to amendment 59, introduced by the Bishop of Ripon and Leeds, John Packer. He wants the cap figure to exclude child benefit in order to protect the very poorest families.

He emphasizes the importance of child benefit for both working families and the unemployment. Child benefit is not paid for the need of adults but of children, he points out.

It’s a compromise between the current situation and the cap as proposed in the bill, he argues.

A raft of cross benchers will support this, including Baroness Grey-Thompson, who led the charge against disability living allowance cuts in the Lords last week.

Labour may suppport it too, according the Politics Home website, which reports that:

[The shadow work and pensions secretary] Liam Byrne has announced that Labour will back a Bishop’s amendment to strip child benefit from the Government’s £26,000 benefit cap.

5.16pm: That was a blow for the opposition. Lord Freud was not convincing in his response to the speech, and the Lib Dems who spoke appeared to be unhappy with the cap. It will interesting to see how the voting broke down.

5.17pm: The government wins! For the amendment 222 Against the amendment 250

5.00pm: But what transitional arrangements – ways in which the government can protect families hit by the cap – can Lord Freud propose to convince peers that they should back the government?

Ministers are tackling the high costs of temporary accomodation for homeless families, he says.

But other than that seems to have has very little to say about the detail of transitional arrangements and support mechanisms. Will it be enough to prevent a Lib Dem rebellion?

Lord McKenzie, the shadow welfare minister points out that the cap is nothing to do with the psychology of claimants but the high cost of private rented accommodation in London and the south east.

He argues that it is not a wrecking amendment. It’s not about challenging the principle of a cap, he says, but a challenge to the consequences of the cap in terms of homeless families.

The peers proceed to a vote.

4.52pm: Lord Freud, responding to the amendment on behalf of the government, says the cap is about “changing behaviours” among workless families.

He says the government has a year to properly support socially excluded families and help them prepare for the cap. He says:

It’s a simple answer for most of them: to get them into work

He rejects the amendment, which he calls a “wrecking amendment” designed to make a policy unworkable: “It’s the same as not having a cap at all.”

He suggests the only cap the opposition would be prepared to consider would exempt most households. Opinion polls – ‘the court of public opinion” – show the public would set the cap higher than £26,000, he says.

So the government proposals, he implies, are awfully reasonable. Hmm.

4.42pm: Lib Dem peer Lord German makes it clear that the onus is now on the minister to convince peers that no-one will be made “roofless” as a result of the policy.

He wants re-assurance from Lord Freud that vulnerable families will be supported and not simply cast out on the street, or forced into overcrowded homes.

4.35pm: Baroness Hussain-Ece – a Lib Dem peer and a former councillor in Islington is unhappy about the impact of the cap on poorer families, who will be “forced out” of inner city London.

There should be some form of cap she says; but its the implementation of the cap which worries her

I don’t want to live in a Paris-style ghetto… We should support mixed communities.

Where will people forced out of London go? She suspects they will have to go areas where there is very little work to be had. “It doesn’t make sense,” she says.

4.20pm: Lord Ashdown intervenes. He says he has voted with the government on everything so far, and he is in favour of the principle of universal credit and a benefit cap.

But he is worried about the detail of how the cap will be implemented.

Like Baroness Walmsley, I believe I cannot pass it without some sight of what the government proposals are for transitional measures.

That suggests he will vote for the amendment unless the welfare minister Lord Freud can convince him that all is in hand. But it wasn’t an outright statement of his intention to rebel.

4.11pm: Lord Fowler, a former social security secretary, speaks against the amendment. He argues that if the welfare budget is subject to “all sort of amendments, we might as well not start looking for economies.”

The £26,000 is not an ungenerous cap, he says. The cap will affect just 1% of the claimant population.

He is intrigued where Labour stands on the issue. Are they for or against the benefit cap? he wonders. Their policy seems to be a now-you-see-it now-you-don’t one.

His old mucker, former Conservative welfare minister Lord Newton intervenes. He complains that large numbers of people are “trying to shoot [the benefit cap] full of holes before it’s left the launchpad”.

Newton rebelled in December on benefit cuts for social tenants. But he won’t be stepping out of line today. He urges the peers to reject the “hasty and off the cuff” amendments.

4.01pm: Lib Dem Baroness Walmsley has announced she will vote againt the government on the benefit cap issue.

She says she supports the principle of the bill, but she’s worried about the effects on children. Interrupting school for children who are made homeless will be very disruptive for them, she points out.

If homelessness predictions are correct, she points out, it will cost local authorities millions, potentially wiping out savings to the welfare budget.

She calls for the government to think again.

Unhappily I feel I have to vote at odds with my front bench.

But how many of her fellow Lib Dem peers will follow her?

3.51pm: Lord Best is speaking in support of amendment 59a. He points out that moving families into temporary accommodation is complex and expensive, and even where it is available, it is not suitable for families.

He notes:

We are beginning to see a return to seedy BnBs as homeless rises. The cap will significantly compound the problem

The Bishop of Ripon and Leeds warns of “extensive homeless” as a result of the cap. He says schools are worried about children being moved as a result of the cap: it will affect their schooling and the life of the school.

This amendment will go some way to preventing the spiral of homelessness

We’ll be hearing more from the bishop later, on child benefit exemptions

3.44pm: We’re on to the first of the Big Three amendments, 58d. Lord McKenzie, Labour’s shadow welfare minister in the Lords says:

My party supports a benefit cap but one based on fairness

He says the cap will increase the prospect of homelessness. It does not only affect households with large families. In all of central London families with two children will be affected, he says.

Affected families will get into rent arrears and be evicted, and be made homeless, he claims. It will increase child poverty. He says:

The impact on families will be traumatic, especially for children.

He calls for homeless people and people threatened with homelessness to be exempted from the cap.

The cap will generate “human misery” he says. The amendment will save councils millions in extra costs caused by homeless, and will prevent vulnerable people being uprooted from their communities.

3.31pm: The Lords have started debating Clause 94 of the welfare reform bill – the household benefit cap. You can follow it live here.

The key amendments are expected to be:

Amendment 58d. This seeks to introduce and amendment for vulnerable individuals and couples with children who are deemed at risk of homeelessness, as well as those families who are in temporary accomodation. This is a Labour amendment, backed by crossbencher Lord Best and the Bishop of Ripon and Leeds. Debate on this will start shortly

Amendment 59: This would take child benefit out of the cap calculations. This is sponsored by the Bishop of Ripon. Debat eon this may start around 4.30.

Amendment 60. This will give households where a member has lost their job a 26 week “breathing space” to enable them to find work before the benefit cap kicks in. A vote on this might be expected around 6.45.

It is hard to say which way the votes will go. A lot depends, as ever, on how the bishops and the crossbenchers vote. It will also being interesting to see whether – or how many- Liberal Democrats vote in the light of former Lib Dem leader Lord Ashdown’s view that he “could not accept” the benefit cap as it stands.

I’m told there is “a lot of activity” in the Lords at the moment. Could we be in for another dramatic night?

2.59pm: The Children’s Society has been doing some number-crunching on the government’s revised impact assessment of the household benefit cap, which was published this morning.

As we know, the new impact report increased its estimates of the number of people affected from 50,000 to 67,000 (rising to 75,000 in 2014). Its policy advisor Sam Royston has sent me this brief analysis:

The estimated number of children affected has also been revised upwards to 220,000. This means there is an average of around three children per household affected – showing this is not just affecting very large families.

The estimated saving is £275 million. The impact assessment notes that the Government spent £192 billion on welfare payments in 2010, so this policy saves only 0.1% of the welfare bill.

Excluding child benefit would reduce the savings made by the benefit cap by £100 million – this would cost just 0.05% of the overall welfare budget – but support thousands of families.

2.46pm: What do the Right think about the benefit cap? The director of the right of centre think tank Policy Exchange, Neil O’Brien, writing on the Telegraph blog, seems disapointed. If anything, it’s not draconian enough, he suggests:

I think the cap is broadly fair. That said I think we could possibly have a tighter cap, based on a series of principle-driven caps on the different elements of welfare.

2.17pm: My colleague Patrick Wintour has the latest on the welfare reform bill story here. Government sources are hinting that they may make some more families exempt from the cap. Patrick writes:

Ministers are still looking at transitional arrangements and government sources were stressing it would not be expected that families with children in important stages of their school term, such as exams, would be required to be uprooted.

He adds, ominously for the government, that “such concessions are unlikely to satisfy Liberal Democrat rebel peers, such as Lord Ashdown“.

We’ll be covering the Lords debate on the welfare reform bill live blog later this afternoon.

2.09pm: Has the Department for Work and Pensions (DWP) been spinning again? My colleague on the politics live blog, Andrew Sparrow, has noted that the new impact assessment deletes “three embarrassing sentences” from its previous impact report. Read more here.

2.06pm: The prime minister David Cameron, has been asked about the benefits cap during a visit to Leeds:

It’s a basic issue of fairness. Should people really be able to earn more than £26,000 just through benefits alone? I don’t believe they should. And I think the overwhelming majority of people in the country would back that view.

But that depends of course on whether you think £26,000 is a fair benchmark. As we’ve discussed before on the blog, there’s a very good case for saying the £26,000 is an arbitrary and excessively draconian figure.

12.45pm: The household benefit cap is the issue of the day: but on Wednesday peers will be returning to debate the proposed changes to the social fund.

On the welfare reform bill live blog we asked readers how the proposed abolition of the social fund would affect them. You can read their accounts here.

Here’s an extract from one anonymous reader, who says that as a homeless teeanger the social fund was vital. Losing it, she says, is “immoral” and “abhorrent”:

By abolishing the social fund and passing the responsibility on to local authorities, they’re ensuring that more people will end up desperate, in abject poverty and ultimately that costs social services/local authorities/the NHS/the police far more, when it’s entirely avoidable. By refusing to ringfence the funding, they’re making it entirely inevitable that councils will divert that funding elsewhere, given how profound the cuts are.

The Guardian published a leader column on social fund abolition today. It accepts that there is no saving the fund in its present form, or ring fencing it, but argues that an amendement on Wednesday would at least require councils to account for their actions:

Peers have a last chance to back an amendment which would at least make town halls accountable – requiring them to report on the loans and grants they provide, and enabling Whitehall to act if they are not providing enough.

11.51am: One of the prime movers behind the astonishingly successful #spartacusreport campaign against disability benefit cuts, Kaliya Franklin, is in London today, speaking at a TUC conference on work and disability.

Kaliya – aka @BendyGirl – writes on her blog:

After three months I’m finally leaving the flat to go somewhere other than my GP’s or physio….so a trip to London could be a tad ambitious even with a PA. But assuming no-one shuts me in a tradesman’s cupboard, or makes me use a pallet lift as ‘access’ I’ll be speaking (ok, croaking) at the TUC seminar on monday afternoon…. Hope to see some of you there!

The conference is free and in central London. Kaliya is on at 2.30pm. It’s definitely worth catching her if you can. Please do go along if you can make it (but please register in advance).

More details here

11.38am: The Bishop of Ripon and Leeds, the Rt Rev John Packer, is sponsoring an amendment to the welfare reform bill that will take child benefit payments out of cap calculations.

My colleague David Shariatmadari, the Guardian’s acting religious affairs correspondent, spoke to the bishop on Friday about why he wants to amend the bill.

It was no ordinary lord, but a ‘Lord Spiritual’, Bishop John Packer, who tabled the amendment to exclude child benefit as part of a household’s earnings for the purposes of the benefit cap. He’s got a record of speaking out on social issues since he took his place in the house back in 2006.

He used his maiden speech to highlight the plight of asylum seekers, particularly children and has returned to the subject a number of times since.

I caught up with him on Friday and he explained what motivated him. “This amendment is about children, who cannot directly speak for themselves. One of my roles is to speak up for those who have no voice, and that fits in with my own Christian commitment.

“Christianity is deeply concerned with the way in which we treat others in our society and especially those in most need. And I would also say that from the beginning of the discussion about how to cope with the financial crisis and what cuts we needed to apply, I’ve always been clear that cuts should be borne by those who can bear them, not by those who cannot.”

On the austerity agenda more widely, he says “I believe that the government and parliament have been in a very difficult position in terms of reacting to the crisis and therefore establishing the cuts. I do not doubt that cuts are necessary, but I believe as I said that they should be borne by those that can bear them.

“I think that we need to be very careful in a whole range of areas, of which welfare reform is one, health and social care would be another, issues concerned with legal aid would be another – to make sure that those who most need the provisions which we give as a nation are able to access them.”

How does he fit all the legistlative work in? Packer of course already has a full-time job as bishop of Ripon and Leeds: “Well, where something’s important, you make time for it. That sounds a bit pious but I do.”

He’s hopeful that the amendment will pass, but sees it as just one more battle in a broader struggle to reduce inequality, one he seems to take very seriously. Whatever you think about the rights and wrongs of having church of England bishops revise legislation, there’s no doubt that with John Packer, we’re getting our money’s worth.

11.18am: As you read the government’s impact assessment, it’s worth bearing in mind the work and pensions secretary Iain Duncan Smith’s words on the BBC Radio Four Today programme this morning. He said:

We’re releasing today a series of the impact assessments, those will be for public gaze later on today. Our department does not believe you can directly apportion poverty to this particular measure. We just don’t believe that that is going to happen. The reality is that [at] £26,000 a year it’s very difficult to believe that families will be plunged into poverty.

My colleague Polly Curtis will be looking in more detail at IDS’s assertion on her Reality Check blog here.

Her initial assessment is:

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. Claims that any effect would be ameliorated by people changing their behaviour for example by moving house seems to be an implicit acknowledgement that people will be expected to live in cramped conditions. Claims that the “workshy” might get a job are limited in reality by the lack of jobs available.

I’ll be linking to her findings throughout the day.

10.58am: The government has just published its impact assessment into the housing benefit cap. The main points seem to be:

An upwards revision of the numbers of households affected by the cap. Most analysts up to now have worked on the assumption that 50,000 households will be affected by the cap. But the impact assessment states:

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.

It adds:

Within these households, and in 2013/14, the number of adults affected is 90,000 and the number of children 220,000.

• The Department for Work and Pensions assumes that the policy will save up to £515m over the four years from 2013 (on best estimates)

So who will be affected? The impact assessment states:

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;
b. situated in high-rent areas, and thereby receiving large Housing Benefit payments; or
c. both of these factors combined.

In geographical terms the vast majority of households affected are in greater London (54%), followed by the south east (9%), and the north west (6%). It lists those local authorities where over 1,000 people will be affected by the cap. They are:

Barnet, Birmingham, Brent, Camden, City of Westminster, Croydon, Ealing, Enfield, Hackney, Hammersmith & Fulham, Haringey, Harrow, Islington, Kensington & Chelsea, Newham, Redbridge, Tower Hamlets, Wandsworth

Scotland and Wales will account for 3,000 and 2,000 families respectively, the bulk of them in the cities of Edinburgh, Glasgow and Cardiff.

How much will these 67,000 households lose? The impact assessment estimates that:

45% will lose up to £50 a week (in 2013-14)
26% will lose between £50 and £100
12% will lose between £100 and £150 a week
17% will lose more than £150 a week

So, that’s more families affected than expected, the bulk of them in London and the south east where housing benefit payments are highest. Larger families – meaning families with three or more children – will be disporportionately affected.

Interesting – and dissapointing perhaps – that the impact assessment is published just hours before the Lords are due to debate the issue. On Twitter, @SpeyeJoe says:

How can Lords debate something when impact assessment published 30 minutes before? Affront to democracy

Let us know what you think of the figures. Please add comments below, or tweet me at @PatrickJButler

10.17am: Welcome to Day Eight of the Welfare Reform Bill live blog. Today we’ll be concentrating on the household benefit cap proposals, which will be debated this afternoon in the House of Lords, with once again the possibility of a defeat for the government.

The cap was designed by the government as a way of saving cash, incentivising work and introducing what it believes is an element of fairness into the benefits system – it argues the cap will mean no workless family will receive more in benefits than average working household earnings – an estimated £26,000.

But critics – who include Anglican bishops, a wide range of charities, housing associations and a number of Liberal Democrat peers – fear that the cap – which the government accepts will affect 50,000 housholds – will plunge tens of thousands of children into poverty and homelessness.

The former Lib Dem leader Lord Ashdown told Sky News on Sunday:

I have voted with the government on everything until now… I see my job as ex-leader to support my successor, but I will not support the benefits cap in its present form. This legislation, in its present form, I cannot accept.

Meanwhile Iain Duncan Smith, the work and pensions mininster, has admitted the government could be defeated this afternoon. He told the Sunday Times that the bishops’ and crossbenchers’ votes will be crucial :

My sense is that unless I can persuade them that they’re in the wrong place on this one, which they are, then they might be tempted to vote against it. It’s down to the crossbenchers

Today we will be:

Examining the key amendments: a proposal to take child benefit out of the benefits cap calculations; a proposal to give households a “grace period” of exemption from the cap should a family member be made unemployed; and a new proposal to exempt homeless families in temporary accomodation from the cap.
• Talking to the Bishop of Ripon and Leeds, John Packer, who is sponsoring the amendment to exclude child benefit from the cap.
• Covering the Lords debate live this afternoon

My colleague Polly Curtis will be looking at the following question on her Reality Check blog:

Will the benefits cap force more children into poverty?

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