Posted 08.01.13
Following a heated debate, the Welfare Benefits Uprating Bill was approved in the House of Commons by 328 to 262 votes.
The Bill will now pass to the House of Lords and if enacted, will introduce cap rises in a range of welfare benefits to 1% for two years from April 2014 - irrespective of inflation rates.
The proposals will mean local housing allowance base rates will be capped at 1%. Most working age benefits, including employment and support allowance, income support, and jobseekers allowance will also be uprated by 1% over the next three years, as will child tax credits and working tax credits.
An Impact Assessment published shortly before the debate confirmed capping benefit rises will save around £3 billion over two years, with poorer families hit hardest.
The Assessment states: 'Households towards the bottom of the income distribution are more likely to be affected and have a slightly higher average change because they are more likely to receive the affected benefits.'
There have been concerns expressed from many quarters, including the Chartered Insitute of Housing. Its Chief executive, Grainia Long, said:
"Inflation on household essentials has been high throughout the recession, further eroding the living standards of those on the lowest incomes - including those in work, the 'strivers' Government says it wants to support.
"Capping benefit rises at 1% will hit families who are already struggling to pay for basics like housing, food and fuel, and who are turning to food banks in increasing numbers."
