Welfare Reform Bill

Lord Low of Dalston Excerpts

Tuesday 13th September 2011 Lords Chamber

[Lord Low of Dalston]

My Lords, this is a very important Bill. It could well be a Bill which defines the coalition every bit as much as the Health and Social Care Bill. It certainly deserves the same treatment. At its heart is the introduction of universal credit, which brings together the majority of in-work and out-of-work benefits and tax credits for people on a low income, with the aim of simplifying the benefits system and getting people off welfare and into work. Allied to measures which limit the amount of time for which people can remain on contributory employment and support allowance, and benefit from more generous levels of support, this is the Government’s flagship policy for addressing poverty. As such, by incentivising work and reforming a welfare system which has kept people in a state of dependency and out of work for too long, in making it pay to be in work, this would seem to have much to commend it. But there are losers as well as gainers.

Tony Blair is reputed to have asked what you had to do to save £1 billion on welfare and been told that a million people had to lose a thousand pounds. The Government’s welfare reforms are aimed at saving £18 billion. That is an awful lot of people who have to lose a thousand pounds—or rather more if you want to reduce the number of losers. Many of these losers are disabled people, the most vulnerable in our society, whom the Government have pledged to protect. At this point I ought to declare my interest as a disabled person myself, president of the Disability Alliance and a vice-president of RNIB.

The enhanced disability premium and severe disability premium will not be replicated within universal credit. As a result, disabled people living alone without a carer will be worse off; without the disability addition, so will parents with disabled children who are out of work. Research by the think tank Demos has shown that, far from being protected from the worst of the cuts, disabled families face losses of £2,000 to £3,000 over the course of this Parliament. Overall, it estimates that disabled people will lose £9 billion in welfare support.

The Government propose that the range of premia will be replaced by two additions reflecting the ESA components, and it is intended that the weekly rate of the support component equivalent will rise in stages from £13.40 today to £74.50. But the Disability Benefits Consortium estimates that if, instead of this, the severe disability premium and the disability addition were retained, a higher proportion of the childcare costs of disabled children were met and disregards payable to certain groups were made additive—so that, for example, someone who is both a lone parent and disabled was entitled to two disregards—the losers could be protected without resulting in extra cost.

However, this would undermine the entire logic of the scheme. Incentivising work means penalising the condition of not working, and making it, in the language of the Poor Law, less eligible. The most flagrant example of this is the proposal to time-limit contributory ESA to claimants in the work related activity group to one year. The DWP estimates that, by 2015-16, around 700,000 people will lose their entitlement to contributory ESA. On average, their income is expected to drop by £36 a week. About 60 per cent of these will be able to receive income-based ESA, but the rest will lose their benefit entirely if they do not meet the means test. Indeed, 400,000 will have to lose their benefit if the Treasury is to make the planned savings of £2 billion. The loss will be more for some than others, but it is estimated that 280,000 will lose their entire benefit, currently worth £94.25 a week.

There are five things wrong with this. First, in the great majority of cases, the people we are talking about do not want to be dependent on welfare. They do not choose economic inactivity; they are not the “undeserving poor”; they want to work. Secondly, their impairments often make it very difficult for them to do so. Thirdly, where this is not the case, or the difficulties can be overcome, prejudices, or sometimes just the reasonable apprehensions of employers, can present an insuperable barrier. Fourthly, in the current state of the economy, there just are not the jobs. In all these circumstances it can be quite unrealistic to expect people to find a job within a year.

The DWP has estimated that of those on contributory ESA and in the work related activity group, 94 per cent will take longer than a year to find work. Cutting off the enhanced level of support after a year is a breach of faith with people, many of whom will only have become disabled towards the end of their working life and will have paid their national insurance contributions for perhaps 30 or 40 years. Add to this the indignity of ever more draconian assessments by people who palpably do not understand the realities of disability—highlighted so graphically and eloquently by the noble Baronesses, Lady Campbell and Lady Wilkins—and it is not difficult to understand the fear and anxiety being expressed by disabled people at the present time.

The Disability Benefits Consortium quotes a disabled person who trenchantly articulates this complex of interacting issues:

“I don’t want to be declared not fit to work as I know there is work I can do despite the problems that Parkinson’s can cause. But there is no guarantee that I will find a job in 12 months. It could take me much longer. I’ve worked all my life and have paid for decades into the system on the understanding that there will be support if I need it. To be told that all of this support could have an arbitrary time limit is both unfair and stressful”.

There are many aspects of this complex Bill that it has not been possible even to touch on. Others have and will speak about them. I am afraid that I will have to disappoint my noble friend Lord Rix for today, until my review of the funding of mobility for people in residential care is further advanced.

I have concentrated on ESA because it is so emblematic of the approach that this Government are taking toward welfare. Ministers appear oblivious to what is happening at the coal face; instead, they proceed with all the messianic zeal of Poor Law commissioners, careless of who gets rolled over by the juggernaut of reform. Indeed, the casualties are a necessary part of the reform. We will need to see many changes before this Bill is fit for purpose, but nowhere more than in relation to contributory ESA.

The Liberal Democrats have a motion before their conference next week which opposes the time-limiting of ESA. I hope that our Lib Dem colleagues will be taking note and realising that there is more about this coalition’s programme which needs eviscerating than its reforms of the NHS. I hope, too, that Ministers will be listening so that we do not have to regard the Conservative Party, this time with its Lib Dem accomplices, as the nasty party once again.