1% cap on benefits rise will hit nearly 300,000 Westcountry homes
Almost 300,000 Westcountry households are poised to see their benefits cut after a Commons vote backed controversial legislation to cap welfare.
A three-year squeeze on most working age welfare payments and tax credits was backed by a Government majority of 56, despite a Westcountry-led Liberal Democrat rebellion.
By uprating benefits by 1% – rather than pegging hand-outs to inflation – ministers will slash £5 billion from the welfare bill.
The Department for Work and Pension's official impact assessment showed yesterday 30% of households will be hit by the reform. If the rate was applied to the Westcountry, 298,000 families would be affected.
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Ministers say the cap is needed because it is unfair that state handouts have been rising twice as fast as wages during recent years of austerity. The 1% cap does not apply to benefits handed to pensioners, to the disabled or to carers, said Work and Pensions Secretary Iain Duncan Smith.
Labour voted against the legislation ending inflation-linked rises, pointing to analysis that showed seven million working households will lose out by an average £165 per year.
Andrew George, Lib Dem MP for St Ives, was among the backbenchers uneasy with the plan, saying he will vote against it until it is made fairer to all low income households. The Bill will face further votes in Parliament.
He told MPs in the Commons during a fierce debate: "We do not know ... what food price inflation will be in, for example, 2016.
"We are being asked to predict what the circumstances will be in the context of the rather arbitrary figure of 1%. I simply urge the minister to keep an open mind, and to have a means by which we will uprate that is fair to both benefit recipients and those in work."
Truro and Falmouth Conservative MP Sarah Newton, also the party's deputy chairman, admitted "people will be squeezed" but that the reform "is fundamentally about fairness".
She added while some working families will lose some benefits, income tax has been cut for the lowest paid which is "helping millions of people in the South West".
The Cornwall MP also dismissed suggestions the Government was attempting to drive a wedge between "strivers" in work and "skivers" living a life on benefits.
She said: "I don't think any Conservative politician is using that language. You do read that in some tabloid media, but I haven't used that language, Iain Duncan Smith hasn't used that language, and the Prime Minister hasn't used that language. Most people who are unemployed want a job, and we are working to ensure they can get one."