Latest Public Sector News

08.01.13

1% cap on benefits vote due

MPs will vote on the controversial 1% cap on annual benefit increases tonight, which could save the Government £1.9bn annually in cash terms by 2016.

The Coalition has stated that benefits should not be rising at a faster rate than wages – public sector pay is currently capped at 1%. Traditionally, working-age benefits rise in line with consumer prices, and increased 5.2% this year. It would be 2.2% this year.

The cap would only affect working-age benefits, such as: Jobseeker’s Allowance, Employment and Support Allowance, Income Support, Maternity Allowance, elements of housing benefit, Sick Pay, Maternity Pay, Paternity Pay, and Adoption Pay.

But Labour leader Ed Miliband said: “By cutting the support that working families get - and more than 60% of those affected by the changes we are voting on are working families - that is going to be handicapping and stopping working families who want to get into work and do the right thing.”

Speaking on BBC Radio 4's Today programme, work and pensions secretary Iain Duncan Smith said: “We don't take this decision lightly. Nick Clegg myself, the prime minister, the chancellor accepted that when we discussed this we're doing this because we have to get the deficit down.

“We've seen a gap growing between those in work with their [wage] rises and those in welfare. The reality is we're trying to bring that back into a balance.”

Tell us what you think – have your say below, or email us directly at opinion@publicsectorexecutive.com

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