Benefits system reform clash expected

A combination of Church of England bishops and rebel Liberal Democrats is threatening to derail a planned £500-a-week cap on benefit payments when peers vote on the measure.

Former Lib Dem leader Lord Ashdown became the most high-profile figure so far to speak out against the plans, denouncing them as “completely unacceptable” in their current form.

He said that as president of the United Nations children’s agency, Unicef, he was not prepared to support them in the vote on amendments to the welfare reform bill.

Soften the impact

Despite the divisions in his own ranks, Deputy Prime Minister Nick Clegg has said he is fully signed up to the changes. Mr Clegg suggested there was some scope for softening the impact of the changes through “transitional arrangements” around the introduction of the cap.

However, he flatly rejected an amendment tabled by the Bishop of Ripon and Leeds, the Rt Rev John Packer, which would exclude child benefit payments from the £500 a week limit. A report from the NFU Mutual has suggested that almost 700,000 families will lose child benefit when the government’s changes come into force.

How will child benefit changes affect you? Read the Channel 4 News Child benefit Q and A.

Ministers appear determined to ride out the opposition, believing there is strong public support for their plans to curb the benefits dependency culture and “make work pay”.

Employment Minister Chris Grayling has acknowledged some families would be forced to find new accommodation as a result of the changes, but strongly defended the measure.

“There certainly will be people who have to move house as a result of this, who have to move to a part of town they can afford to live in, but surely that is right,” he said.

Labour faces dilemma

However, the vote poses a dilemma for Labour which has to decide whether it wants to try to inflict a damaging defeat on the government, even if it means taking the blame for blocking a measure popular with much of the public.

Party officials were staying tight-lipped last night on whether they would back the bishop’s amendment, saying they would be concentrating on their own compromise amendment designed to protect families facing losing their homes.

“Labour won’t be voting against the benefits cap because we support the principles and the responsibility to take a job if you can work,” a spokesman said.

“But we will be seeking to amend the bill, to bring a compromise between the bishops and the government because we don’t think council taxpayers should be hit with a massive bill for homelessness.”

However, Mr Grayling said Labour now needed to decide where it stood on the issue.

“Does it want to deliver the kind of change to the welfare state that all the evidence says the public overwhelmingly want or is it going to line up on the other side and try and chip away at reforms that are essential?” he said.