Welfare Reform Bill

Baroness Turner of Camden Excerpts

Tuesday 13th September 2011 Lords Chamber

[Baroness Turner of Camden]

My Lords, this is a very complicated Bill. It is not very easy to understand since so much detail is left to regulations or to decisions by the Minister. What is clear, however, is that the Government are intent upon utilising the so-called reforms to get people into work rather than living on benefits. It is therefore not possible to consider welfare reform without reference to the economic environment in which it has to operate.

Ministers seem to find it surprising that some people find it more lucrative to live off benefits—which are not exactly large—than to take one of the jobs on offer. That indicates to me that we have a low-wage economy in this country. Small employers—and often larger ones—will often complain about employment law, but these employers are benefiting from low wages, and the taxpayer is subsidising employers who do not pay a living wage. I would make employers pay higher wages—after all, better-paid employees would spend more money and thus stimulate the economy, and there would be less reliance on benefits. I speak as a former trade union official of course, and I do not expect this Government to agree with that.

A civilised society does its best to provide support for vulnerable citizens and for those who from time to time in a working life require some form of assistance. Our present system originated with the Beveridge report following the Second World War, and subsequent Governments have generally supported that system. It does, however, need simplifying. Far too many people do not claim benefits to which they are entitled: there are said to be unclaimed benefits of around £16 billion a year. Nevertheless, the present Government claim that there is too much fraud, saying that only 7 per cent of people claiming ESA are too sick to work—therefore, they say, the welfare system is broken. This is hotly disputed by the Disability Benefits Consortium, and it points to the very large number of appeals which have been successful.

The Government seek to replace a range of benefits, as we know, with a universal credit, and there will be additions for disability. The work capability assessment will be used to assess eligibility for disability additions. Disability organisations have expressed concern at the proposed use of the WCA to assess disability additions. They say it is a blunt tool with which to measure barriers to work; it often inaccurately assesses disabled people as fit to work when they are not able to do so.

There is however a particular issue here, which requires a response from the Government. As we know, the Government clearly want people to work if they are capable of undertaking it. However, I have recently been informed that the Remploy factories which exist to provide work for hundreds of disabled people are being threatened with closure. There was a crisis meeting about this in Scotland last week, but this does not only apply in Scotland: Remploy factories throughout the UK are apparently threatened with closure. These factories provide a supportive environment in which disabled people are able to cope and to earn a living. So on the one hand we have this Bill, with the clearly expressed intention of getting disabled people into suitable work, and at the same time there is the closure of the main and highly respected employers in an era of low employment. These employers offer precisely what one would expect the Government would want to maintain. It is therefore hardly surprising that the unions—including my own, because we organise the Remploy staff—are very angry. Can we have a statement from the Minister about the Government’s intentions here?

I return to the issue of universal credit. I understand that it will be accompanied by new conditionality regulations and stricter sanctions. Claimants will have to comply with these in order to receive benefits. The fear on the part of many of the people who are disabled and have written to me is that this will result in a worsening of their conditions. The Government also intend to replace the disability living allowance with the personal independence payment. Again, there appears to be provision for a six-month qualifying period, which could leave many struggling to survive financially until accepted, and again, much of the detail is apparently to be in regulations.

A part of the Bill which has led to much correspondence is that related to housing costs. The Bill gives the Government a new power to introduce cuts to the amount of benefit people can receive if they are deemed to have additional space in their council or housing association home. For many, a spare room is a necessity. Moving to a smaller flat or house may simply not be possible. It will do nothing to cope with overcrowding—a particular problem in London—and this could hit many disabled people, some of whom have had adaptations made because of their disability. It is badly targeted, and in my opinion it should be dropped from this Bill.

It is similar to the other policy to which the Government are attracted, under which housing benefit is related to the market rate for the area concerned. This would result in large areas of London becoming places where only the very well-off could live. In my area, for example, the rent in a housing association home or a council flat is in the region of £150 a month. Similar sized accommodation in the private sector will cost £500 a week—clearly beyond most low-paid working families. This section of the Bill must be thoroughly examined.

There are many other aspects of the Bill to which we must pay attention—benefits for single and separated mothers; child benefits; benefits for the young—but I am sure that there will be the opportunity in Committee and at Report to deal with the issues about which many of us will have received detailed briefings from many organisations.