George Osborne faces revolt over benefits cap pledge


George Osborne faces a rebellion within the Coalition over his pledge that no family should get more in benefits than the average wage.

A Liberal Democrat minister has become the first member of the Government to openly question Mr Osborne’s plan to cap benefits at £26,000 for workless families.

Sarah Teather, the Families Minister, said she was “extremely worried” about the cap which will apply to all households where no-one works from 2013. Her concerns are known to be privately shared by a number of Conservative ministers as well.

Lib Dem sources yesterday predicted that unless the Treasury backed down there would be a rebellion against the Government’s Welfare Bill when it is debated in the House of Lords.

“I can’t see us voting for it as things currently stand,” said one senior Lib Dem figure in the Lords. “It is not just us. There are powerful people in the Conservative Party who are also opposed to this.”

But Mr Osborne is said to be standing firm and insisting there should be no compromise on his pledge which received a rapturous reception when he announced it at the Conservative Party conference.

“We are not going to budge on this,” said one ally of the Chancellor. “It is popular and right. Ninety per cent of the public agree with the cap.”

Under the proposals put forward by Mr Osborne no family – no matter how large – would be entitled to benefits of more than £26,000 when the payment system is simplified and unified through the Welfare Bill.

But opponents say the cap is simplistic and doesn’t take into account the high cost of housing in London. Campaigners estimate that up to 50,000 families could be forced out of their homes by the change. They also point out that families who earn the average wage of £26,000 a year can also claim child benefit whereas child benefit is included in the figure for those on benefits.

“We are not opposed to the principle that families should not get more in benefits that the average wage – but there are significant complications in how you calculate the average wage,” said the Liberal Democrat peer Lord German. “For example the average wage in London is much higher than the average wage in the Welsh valleys.”

Earlier this month a leaked email revealed that David Cameron had been warned by Eric Pickles, the Community Secretary, that 40,000 families would be made homeless unless the policy was changed.

It suggested the policy could even be counter-productive as homeless families would actually increase the burden on the taxpayer.

Answering questions at the Family and Parenting Institute Ms Teather said: “The theory behind having a cap is that we know a lot of families at the moment are effectively trapped by work not paying.

“So in a situation where if you can gain more in benefit than you can in work, it can be very difficult to make that decision to go back to work. But if you are asking me if I am worried about the level that the cap is set at, yes I am extremely worried. We need to get the detail right.”

Officials in the Department of Work and Pensions are thought to be examining proposals that would provide “transitional” protection but this has not got the agreement of the Treasury.

The Liberal Democrat MP Jenny Willnott said: “Any changes are obviously complicated and have to be worked through – but the principle is important.”

ebookA delicious collection of 50 meaty main courses
Life and Style
ebookNow available in paperback
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?

ES Rentals

    Independent Dating

    By clicking 'Search' you
    are agreeing to our
    Terms of Use.

    iJobs Job Widget
    iJobs General

    SThree: Trainee Recruitment Consultant - Dublin

    £13676.46 - £16411.61 per annum + OTE: SThree: SThree Trainee Recruitment Cons...

    Ashdown Group: Marketing or Business Graduate Opportunity - Norwich - £22,000

    £18000 - £22000 per annum + training: Ashdown Group: Business and Marketing Gr...

    SThree: Trainee Recruitment Consultant

    £20000 - £25000 per annum + Commission: SThree: Are you great at building rela...

    Ashdown Group: Database Analyst - Birmingham - £22,000 plus benefits

    £20000 - £22000 per annum + excellent benefits: Ashdown Group: Application Sup...

    Day In a Page

    General Election 2015: Ed Miliband's unlikely journey from hapless geek to heart-throb

    Miliband's unlikely journey from hapless geek to heart-throb

    He was meant to be Labour's biggest handicap - but has become almost an asset
    Amr Darrag: Ex-Muslim Brotherhood minister in exile still believes Egypt's military regime can be replaced with 'moderate' Islamic rule

    'This is the battle of young Egypt for the future of our country'

    Ex-Muslim Brotherhood minister Amr Darrag still believes the opposition can rid Egypt of its military regime and replace it with 'moderate' Islamic rule, he tells Robert Fisk
    Why patients must rely less on doctors: Improving our own health is the 'blockbuster drug of the century'

    Why patients must rely less on doctors

    Improving our own health is the 'blockbuster drug of the century'
    Sarah Lucas is the perfect artist to represent Britain at the Venice Biennale

    Flesh in Venice

    Sarah Lucas has filled the British pavilion at the Venice Biennale with slinky cats and casts of her female friends' private parts. It makes you proud to be a woman, says Karen Wright
    11 best anti-ageing day creams

    11 best anti-ageing day creams

    Slow down the ageing process with one of these high-performance, hardworking anti-agers
    Juventus 2 Real Madrid 1: Five things we learnt, including Iker Casillas is past it and Carlos Tevez remains effective

    Juventus vs Real Madrid

    Five things we learnt from the Italian's Champions League first leg win over the Spanish giants
    Ashes 2015: Test series looks a lost cause for England... whoever takes over as ECB director of cricket

    Ashes series looks a lost cause for England...

    Whoever takes over as ECB director of cricket, says Stephen Brenkley
    Fishing for votes with Nigel Farage: The Ukip leader shows how he can work an audience as he casts his line to the disaffected of Grimsby

    Fishing is on Nigel Farage's mind

    Ukip leader casts a line to the disaffected
    Who is bombing whom in the Middle East? It's amazing they don't all hit each other

    Who is bombing whom in the Middle East?

    Robert Fisk untangles the countries and factions
    China's influence on fashion: At the top of the game both creatively and commercially

    China's influence on fashion

    At the top of the game both creatively and commercially
    Lord O’Donnell: Former cabinet secretary on the election and life away from the levers of power

    The man known as GOD has a reputation for getting the job done

    Lord O'Donnell's three principles of rule
    Rainbow shades: It's all bright on the night

    Rainbow shades

    It's all bright on the night
    'It was first time I had ever tasted chocolate. I kept a piece, and when Amsterdam was liberated, I gave it to the first Allied soldier I saw'

    Bread from heaven

    Dutch survivors thank RAF for World War II drop that saved millions
    Britain will be 'run for the wealthy and powerful' if Tories retain power - Labour

    How 'the Axe' helped Labour

    UK will be 'run for the wealthy and powerful' if Tories retain power
    Rare and exclusive video shows the horrific price paid by activists for challenging the rule of jihadist extremists in Syria

    The price to be paid for challenging the rule of extremists

    A revolution now 'consuming its own children'