Benefit rises capped as coalition regulates pubs

THE SECOND half of the coalition’s parliament got off to a busy start yesterday, as the government pushed through a one per cent cap on increases to most working-age welfare payments, as well as setting out its stall for the new year with plans to speed-up large infrastructure projects and regulate the pub industry.

The coalition won last night’s vote on welfare legislation by 324 to 268, despite a number of rebellions and abstentions among Liberal Democrat MPs. The affected benefits had been due to rise by 2.2 per cent in April.

Iain Duncan Smith, the work and pensions secretary, said the policy would save taxpayers £1.1bn in its first year and was fair at a time when private sector incomes are rising below the rate of inflation.

“We inherited an unsustainable and costly system,” he said. “These are not decisions taken lightly or easily, but we have to take them and [Labour] are in denial.”

During a lengthy debate, Labour spokesman Liam Byrne insisted the changes would hurt the low-paid who rely on tax credits: “It’s turning into a hit-and-run on working families and we should not stand for it.”

Meanwhile Vince Cable said he would call time on allegedly unfair practices in the pub industry and announced plans to introduce legislation to regulate the relationship between large pub companies and tenant landlords.

“Last year we gave the pubcos one last chance to change their behaviour but it is clear that the self-regulation approach was not enough so we are changing the law,” he said.

And newly appointed infrastructure minister Lord Deighton told MPs he has launched a “capability review” to ensure Whitehall departments are working hard to deliver projects such as railway investment and new power stations.


Most working-age benefits, including jobseeker’s allowance and tax credits, will only rise by one per cent for three years starting in April.

The pub industry could get a regulator. It would focus on abuse of the beer tie, which forces some tenants to buy all their beer from large ‘pubcos’.

Lord Deighton has pledged to ensure the best civil servants are working on key infrastructure projects.