MPs voted 324 to 268 in favour of the government’s bill to introduce a benefit-uprating cap of one percent, a real-terms cut in working-age entitlements.
The proposal, announced by Chancellor George Osborne in last year’s Autumn Statement, cleared its first Commons hurdle despite ill-tempered exchanges between Labour MPs and members of the coalition government.
Osborne hopes the measure will cut £5 billion from welfare spending over the next five years.
Labour failed in its attempt to block the bill, which it called a “strivers’ tax”.
Work and Pensions Secretary Iain Duncan Smith said the opposition was “buying votes” by increasing the dependency of working families on the state.
“They think that helping people is about trapping more and more people in benefits,” he said. “What is really interesting is that under the tax credit system, nine out of ten families with children were eligible for tax credits.
“This went in some cases up to over £70,000 in earnings. What a ridiculous nonsense they have created.”
Welfare bill clears first hurdle
