Page last updated at 20:58 GMT, Wednesday, 1 February 2012

MPs overturn welfare defeats and approve benefit cap

MPs have overturned all seven defeats inflicted by the House of Lords on the government's flagship Welfare Reform Bill, and backed ministers' plans to impose a £26,000 annual cap on household benefits.

Considering peers' amendments on 1 February 2012, MPs voted by 334 to 251 to throw out a key proposal, tabled by a group of bishops, that would have excluded child benefit from counting towards the £26,000 cap.

But the government agreed to make concessions on the bill, with Work and Pensions Minister Chris Grayling outlining several "transitional arrangements" in a bid to reduce the effects of the cap.

He said the government would allow up to £130m for local authorities to provide short-term help for families, as well as a nine month "grace period" for people who have worked for at least a year and then lost their job through "no fault of their own".

Mr Grayling said the public "overwhelmingly" supported the £26,000 benefits cap, telling MPs that it would be equivalent to a gross salary of £35,000 a year.

He accused Labour of "flip-flopping" over the issue, having initially supported a benefits cap before then supporting the bishops' amendment to exclude child benefit.

'Dog's breakfast'

Speaking for Labour, shadow work and pensions secretary Liam Byrne said the government's policy was badly drafted and would not work.

He told MPs there were "dangerous flaws" in the "one-cap-fits-all approach" and called for a series of local caps, set by an independent commission, instead of one national cap.

Mr Byrne dismissed government claims that Labour had never raised the issue of a local cap before and said they had made plenty of calls for safeguards in the proposals.

The measures in front of the House were a "dog's breakfast", he concluded.

Labour refused to support the coalition, but the government overturned all the contested amendments after seven hours of debate.

The bill will now go back to the House of Lords for consideration, but there are unlikely to be further changes.

Earlier the government announced its intention to invoke "financial privilege" over certain parts of the bill.

This rarely-used procedure relates to the principle that the Lords cannot oppose tax and spending decisions agreed by the Commons.

As a result, peers are unlikely to send the same amendments back to the Commons; effectively ending parliamentary opposition.

You can watch the first part of the debate here .

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