Page last updated at 18:54 GMT, Monday, 23 January 2012

MPs clash over planned benefits cap

Pensions Secretary Iain Duncan Smith and his opposition counterpart Liam Byrne have clashed over government plans to introduce a £26,000 annual cap on benefits.

Mr Byrne told MPs during questions on 23 January 2012 that the cap would lead to more people losing their homes and would therefore lead to increased costs for taxpayers.

The shadow pensions secretary warned that Labour would vote against the government in a crucial House of Lords vote if his party's "safeguards" on homelessness were not accepted.

Government measures would see an annual benefits cap of £26,000, the equivalent of £500 a week.

But an alliance of Church of England bishops and rebel Liberal Democrats peers have threatened to derail the plans during a vote on the Welfare Reform Bill .

The amendment, tabled by the Bishop of Ripon and Leeds, would exclude child benefit payments from the £500-a-week limit.

Labour peers also tabled their own amendment, calling for families at risk of homelessness to be exempt from the cap.

In a heated exchange in the Commons, Mr Duncan Smith accused Mr Byrne's party of tabling a "wrecking amendment".

He asked: "If he says he's in favour of the cap, then why do his side keep on voting against it?"

"They cannot weasel their way out of it and say they are in favour on the one hand and against on the other," he told MPs.

Responding, Mr Byrne claimed the housing benefit bill was set to rise by "an extraordinary £4bn" over the next four years.

"Now what we do not want on top of that is another bill for council tax payers to clean up the cost of homelessness," he told MPs.

The shadow pensions secretary claimed that 20,000 people could be made homeless as a result of the planned cap and that a recently published government impact assessment had put the number of families affected up by one third.

"It's almost as if he's making this policy up as he goes along," Mr Byrne said.

He warned that if the government did not accept Labour's amendment in the Lords, opposition peers would support the bishops and vote against the government.

But Mr Duncan Smith told MPs he could not accept the bishops' amendment.

"It would raise roughly the level that we would see on the level of income to about £50,000. It would be rather pointless having a cap set so high that nobody could ever earn it," he said.

Mr Duncan Smith told MPs he had received an email from a vicar saying he was wondering why the bishops "had failed to recognise that he as a vicar is only paid at £22,000 a year and wonders why they are getting excited about £26,000 being a poverty level figure".

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