Exempt more people from benefit cap, urges Lib Dem peer

The government said the cap would encourage "responsibility"

A Liberal Democrat peer with responsibility for the party's welfare policy has said there must be exceptions to the proposed £26,000 benefits cap to provide "fairness" and "justice".

Lord German suggested child benefit could be excluded from the limit.

He said: "There must be an exception in order to provide fairness and justice for this relatively small group of people."

The comments came after the work and pensions secretary Iain Duncan Smith told the House of Commons: "This policy is not changing because it's a good policy."

Lord German is the co-chairman of the Liberal Democrat backbench committee for Work and Pensions.

He added he supported the principle people should not get more money on benefits than the average working family, but said his personal view was child benefit could be excluded from the cap.

A senior Lib Dem source said the party accepted the cap would stand, but was hoping extra transitional arrangements would be put in place for parents at risk of losing their homes.

Junior welfare minister Lord Freud raised the prospect of a backtrack on the cap when he told the BBC's Politics Show: "We're also looking currently at exceptional circumstances which some people may find themselves in and we're going to be putting out arrangements for that later in the year."

Ministers and civil servants at the DWP insist the policy is unchanged.

They say the benefits cap proposal has always excluded households where someone receives Working Tax Credit, or receives Disability Living Allowance or Constant Attendance Allowance.

War widows and widowers are also excluded.

Lord Freud was referring to an existing scheme of discretionary payments for those affected by housing benefit changes, they argue.

The Welfare Reform bill has its its report stage and third reading in the House of Commons on Monday and on Wednesday.