Benefits Cap

Oral Answers to Questions — Work and Pensions – in the House of Commons at 2:30 pm on 24th February 2014.

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Photo of Andrew Turner Andrew Turner Conservative, Isle of Wight 2:30 pm, 24th February 2014

How many people have had their benefits reduced to the maximum of £26,000 (a) nationally and (b) on the Isle of Wight to date.

Photo of Iain Duncan Smith Iain Duncan Smith The Secretary of State for Work and Pensions

By December 2013, 36,471 households had been capped nationally. Local figures obviously vary from area to area. The Isle of Wight is an area that does not get capped as much; some 100 households or fewer have been capped so far. These numbers include single households without children, for whom the cap is less than £26,000.

Photo of Andrew Turner Andrew Turner Conservative, Isle of Wight

The average gross wage on the Isle of Wight is just over £18,000, so take-home pay is about £15,000. The benefits cap is £10,000 more than the average islander earns. How can I explain this to islanders? Does the Minister think that I should mention that the Labour party believes that there should be no limit at all on the largesse of taxpayers?

Photo of Iain Duncan Smith Iain Duncan Smith The Secretary of State for Work and Pensions

Far be it for me to recommend to my hon. Friend what he should mention to his constituents, but he might well start with the fact that this benefits cap was opposed by Labour when we implemented it. His point about the level is simple. We have embedded the cap now, it has been rolled out and we have made sure that it has worked properly. We have seen a huge number of people move back to work; some 19,000 people who were going to be capped have gone to work and thus avoided the cap. So the cap is successful everywhere. However, we should remember that there are differences in income and in London a lower cap would be a rather severe penalty to put on people. Therefore, although I keep the cap under review, I have no plans at the moment to change its level.

Photo of Steve McCabe Steve McCabe Shadow Minister (Education)

Mr Turner clearly wants the cap to be reduced in his area and the Secretary of State makes an important point about London. Does that not suggest that there is some argument for taking into account regional variations in costs, so that the cap reflects what is happening locally?

Photo of Iain Duncan Smith Iain Duncan Smith The Secretary of State for Work and Pensions

I am intrigued and pleased that the hon. Gentleman says that he supports the principle of the cap, which is more—in essence—than the Opposition have ever done in any vote. They voted against the cap—just in case they have forgotten. My point to him is a viable one. The trouble is where should regional calculations be made? Cities in regions have different levels of income from some of the countryside, so it starts to become quite a complicated process. Of course, I am willing to discuss this issue with the hon. Gentleman and anybody else who thinks that they have a plan, and I will certainly look at that, but right now the cap is successful, the majority of the public think it is a good idea and it was only his Front-Bench team who decided to vote against it.

Photo of David Hanson David Hanson Shadow Minister (Home Affairs)

Does the Secretary of State think it appropriate to consider putting a cap on the amount of housing benefit that landlords can receive? Can we at the very least have some transparency, so that we can see how many people who support the Tory party rake in hundreds of thousands of pounds in benefits?

Photo of Iain Duncan Smith Iain Duncan Smith The Secretary of State for Work and Pensions

I do not know if it is now Labour policy to cap landlords in that way; I suspect that the immediate effect would be fewer landlords making properties available. It seems to me that that would be a complicated, tortuous and pointless policy. However, I think there is plenty of transparency; some of the papers seem to have found out the facts for themselves.