Welfare Benefits Up-rating Bill Passes Commons Vote By 56

The Government’s controversial plans for a real-terms cut in working-age benefits have cleared their first Commons hurdle by 324 votes to 268, majority 56.

The proposals, which will limit annual increases in working-age benefits to 1% for the next three years, passed despite Labour calls to stop the bill, and threats from several Lib Dem MPs to vote against the coalition.

Work and Pensions Secretary Iain Duncan Smith speaking during the second reading of the Bill

The move is aimed at slashing £5 billion from the welfare bill over the next five years, however many have argued that the cuts will "punish the poorest".

The vote followed a tempestuous five-hour debate in parliament in which senior Tory and Labour MPs clashed over the benefits bill.

Some four Liberal Democrats, including former minister Sarah Teather, rebelled against their leadership to vote against the below-inflation cap, while former leader Charles Kennedy and backbencher Andrew George voted in both lobbies - the traditional way of registering an abstention.

But the revolt was not enough to prevent the Welfare Benefits Uprating Bill from clearing the first hurdle in its passage through Parliament. A Labour bid to block the Bill was also voted down.

In a message on Twitter, Prime Minister David Cameron said: "The Commons vote to limit benefit rises to 1% while pay is only rising at 1% is fair. Labour have the wrong priorities."

The cap, announced by Chancellor George Osborne in his Autumn Statement last year, is aimed at slashing £5 billion from the welfare bill over the next five years.

Work and Pensions Secretary Iain Duncan Smith told MPs that benefit levels have grown by 20% since the beginning of the recession, while incomes for those in work have risen by just 10%.

"What we are trying to do over the next few years is get that back to a fair settlement and then eventually it will go back onto inflation," said Mr Duncan Smith.

But Labour branded the move a "strivers' tax", pointing out that almost 70% of those who will lose out are in employment, many of them low-paid.

Shadow work and pensions secretary Liam Byrne told MPs: "Welfare to work will not work without jobs. This Bill does not create a single job, it creates a heck of a mess and it asks Britain's working families to clear it up."

Responding to the vote, Barnardo's chief executive Anne Marie Carrie said: "By voting to break the link between benefits and inflation today, MPs have risked condemning children in Britain's poorest families to growing up stuck in the poverty trap, as their parents struggle to cover basic costs of living.

"It makes it effectively impossible for the UK's poorest parents to 'strive' their way out of poverty, as high childcare costs eat up the wages they earn and leave families without an income they can survive on, let alone thrive on."

Oxfam's director of UK poverty, Chris Johnes, said: "Yet again, working-age benefits, which poor families rely upon, are bearing the brunt of the Government's cuts. The benefits budget seems to be the child constantly picked on, whose unpopularity makes it easy fodder for the axe.

"Already, compared to average earnings, benefits are at their lowest levels since the welfare state was founded. On top of this, inequality will deepen as the proposed changes in the Bill are undoubtedly going to hit poor families hardest."

Ms Teather, who lost her job as children and families minister in September last year, hit out at Tory ministers' characterisation of the measure as a division between "shirkers and strivers", which she warned would have "long-term impacts on public attitudes, on attitudes of one neighbour against another".

She was joined in the no lobby by fellow Liberal Democrats David Ward, John Leech and Julian Huppert.

Labour former foreign secretary David Miliband described the Bill as "rancid" and claimed it was motivated by party politics.

"It reeks of the politics of dividing lines that the current Government spent so much time denouncing when they were in opposition in the dog days of the Brown administration," he said.

"The enemy within is not the unemployed, the enemy within is unemployment. I don't want to live in a society where we pretend that we can enjoy the good life while our neighbours lose their life chances."

But Mr Duncan Smith accused the last Labour administration of "spending taxpayers' money like drunks on a Friday night" and "buying votes" by increasing handouts.

Labour had tied increasing numbers of households into the benefit system and created a "ridiculous nonsense" which made nine out of ten families with children eligible for tax credits, he said.

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