Bloodletting: Labour and Tories hammer each other in Commons benefits debate

The debate over the cap on benefits led to a spectacularly emotional and bad-tempered Commons debate today, as Labour and the Tories tried to gain public support in a battle set to form a key dividing line at the next election.

Work and pensions secretary Iain Duncan Smith enjoyed one of his most commanding performances in the chamber while his opposite number, Liam Byrne, issued a colourful and passionate attack on the government's attempt to cap benefits at one per cent.

"Not only is [Labour] against what we’re doing today, they have opposed in every single vote, in every single motion," Duncan Smith said.

Labour spent money "like drunks on a Friday night" while in government, he added.

In rowdy scenes, Duncan Smith refused to give way to the shadow work and pensions secretary until he apologised for Labour's performance on the economy

Meanwhile, Byrne strongly objected to the fact George Osborne was not present in the chamber, despite it being a debate on his policy.

"The chancellor's disappearance is frankly a hall-mark of the contempt for this House," he said.

Duncan Smith said Osborne was giving a speech in Berlin and would be in the Commons in time for the summing up at the end of the debate.

Byrne also criticised the one-day fast-tracking of the debate, saying it was a "hit and run" on the income of working families.

He added: "I want incomes to go up faster than benefits – that why I want to make sure tax credits are protected."

He was not the only figure attacking the government plan. Green MP Caroline Lucas told MPs it was a "mean and miserable" piece of legislation.

The debate was particularly memorable for a powerful intervention by David Miliband, who resurrected rumours about him taking the shadow chancellor job with the strength of his performance.

"This rancid bill is not about fairness or affordability. It reeks of politics, the politics of dividing lines that the current government spent so much time denouncing when they were in opposition in the dog days of the Brown administration," he said.

"It says a lot that within two years it has fallen into the same trap.

"We all know the style. Invent your own enemy. Spin your campaign to a newspaper editor short on facts – or high on prejudice. 'Frame' the debate."

Read David Miliband's intervention in full

Osborne ensured a parliamentary vote for the welfare benefits uprating bill in a bid to put Labour on the wrong side of an issue which has considerable support from the public, but new data suggests he may have overplayed his hand.

Research by the respected Institute for Fiscal Studies found seven million working households would be hit by Osborne's decision.

The finding means one in two households where someone works will be hit by the change, losing around £165 a year.

The report is crucial to Labour's ability to win the argument. Voters remain suspicious of benefits being directed at the unemployed but are far more sympathetic when asked about government help for those in jobs.

Research by the Children's Society suggests the chancellor's sub-inflation benefits and tax credits plan would take money from 40,000 soldiers, 300,000 nurses and 150,000 primary school teachers.

Meanwhile, the Residential Landlords Association predicted a surge in homelessness as the cap leaves many tenants unable to pay their rent.

Most Liberal Democrats will vote with the government today, ensuring the bill passes. But former minister Sarah Teather, who refused to attend the last welfare vote, hit out at the plans.

"I hate the scroungers versus strivers rhetoric that drives this stuff, and the use of legislation to try and force artificial dividing lines," the Brent Central MP told the Evening Standard.

"We were elected to serve the common good, not to use parliament and the vulnerable we serve as a playground for petty games."

Nick Clegg seemed to back up that protest yesterday when he hit out at the rhetoric around benefits during a joint press conference with David Cameron.

"I don't think it helps at all to try and portray that decision as one that divides one set of people against another, the deserving and the undeserving poor, people in work and out of work," he said.

The comments suggest the Liberal Democrats have become increasingly uncomfortable with the way Osborne has presented the issue, including his description of benefits claimants as people "with the curtains drawn all day".

Around five Lib Dem MPs are expected to vote against or abstain from the bill. South Manchester Lib Dem MP John Leech pledged to vote against the bill.

"I voted against the welfare reform bill, and I find it objectionable that the Tories are using 'skivers vs strivers' rhetoric to justify a cut to seven million working families," he said.

"I strongly support raising the tax threshold for low paid workers, but this cut will wipe out much of that good work."

Many suspect Osborne did not need to force a parliamentary vote on the change, but that he chose to put forward a bill to highlight Labour's position.

If polls continue to show the public turning against the idea, that move may further damage Osborne's reputation.

Labour is hoping families on working tax credits will turn against the government due to the bill. Such a development could make a crucial difference in key marginals such as North Warwickshire, where the Tory majority is significantly smaller than the number of people claiming working tax credits.

Polling on the issue suggests the public still broadly supports the government's position, however.

Forty-five per cent of voters back the decision to limit benefit increases to one per cent for the next three years, while 35% oppose it.

Forty-seven per cent also believe "the government is not being tough enough towards people on benefit, and more should be done to force them into work".

However, Labour is more trusted on welfare benefits than the Tories – by 30% to 22%.

In a sign of their continued confidence in the issue, the Tories released a poster today reading: "Today, Labour are voting to increase benefits more than workers' wages. Conservatives: standing up for hardworking people."