Page last updated at 20:56 GMT, Monday, 23 January 2012

Government defeated over benefit cap plans

The government has been defeated in the House of Lords over its plans to introduce a £26,000-a-year cap on benefits.

Lib Dem, Labour and crossbench peers backed a bishops' amendment to exempt child benefit from the cap, by 252 votes to 237.

Those in support of the amendment argued that imposing the same benefits cap on all families, regardless of size, would penalise children.

As peers debated the bill for a fifth day at report stage on 23 January 2012, the Bishop of Ripon and Leeds, the Rt Rev John Packer, said: "It cannot be right for the cap to be the same for a childless couple as for a couple with children.

"Child benefit is the most appropriate way to right this unfairness."

The government wants to introduce the £500-a-week cap to ensure households cannot receive more in benefits than the average family earns from work.

It would come into force for working-age families in England, Scotland and Wales from 2013, and by the government's own estimates will affect about 67,000 families.

The government was defeated three times on votes on other parts of its flagship Welfare Reform Bill two weeks ago.

In the Lords, opposition spokesman Lord McKenzie of Luton said Labour would support the bishops' bid "with enthusiasm".

It provided "some protection" for children and introduced "greater fairness" in the construction of the cap, he said.

Labour's own amendment - exempting those at risk of homelessness from the cap - was defeated earlier in the day, by 250 votes to 222.

Liberal Democrat Lord Ashdown, former party leader, opposed the government's proposals, branding them "completely unacceptable" in their current form.

He joined forces with 25 other party colleagues and voted in favour of the bishops' amendment.

The measure was also supported by the Bishops of Chichester, Leicester, Lichfield and Manchester.

Welfare Minister Lord Freud insisted it was "right" that child benefit was considered along with other benefits when applying the cap, because, like other welfare benefits, it was provided by the state and funded by taxpayers.

"The effect of excluding child benefit would simply be that families on child benefit would have an income higher than average earnings - there would be no upper limit to the amount of benefit a household could receive as that would clearly depend on the number of children," he said.

Ministers have indicated they will seek to overturn the defeat when the bill returns to the Commons.

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