Welfare Benefits Up-rating Bill

Debate between Lord Low of Dalston and Baroness Meacher

Monday 25th February 2013 Lords Chamber

[Lord Low of Dalston]

My Lords, I support the amendment moved by the noble Lord, Lord McKenzie, to which I have added my name, but I rise principally to speak to Amendment 3, which is in my name alone and provides that the 1% uprating should not apply to benefits paid to claimants in the work-related activity group.

The amendment is essential if the Government are to fulfil their pledge to protect disabled people from the 1% uprating cap. Only disabled people are in the work-related activity group. The assessment process ensures that non-disabled people do not qualify. A recent DWP study tracking those receiving ESA over 18 months revealed that three-quarters of recipients were undergoing regular treatment for a health condition, including a stay in hospital for some. ESA for those in the work-related activity group is paid in two parts—the main component, which is equivalent to jobseeker’s allowance and worth about two-thirds of the total benefit, and the work-related activity group component, which is worth the other third. Many disabled people are being placed in the work-related activity group. Capping increases in their benefit at 1% will mean that households receiving ESA in the work-related activity group will be £87.65 a year worse off. The Government’s proposals to exempt from the 1% cap the support group component for those placed in the support group mean that less than a third of ESA payments for less than half of disabled people receiving ESA will be protected. That is what the amendment of the noble Lord, Lord McKenzie, would achieve, but it would address the shortfall only for the quarter of a million disabled people in the support group.

The most recent DWP figures show that there are 360,000 disabled people in the work-related activity group who also need protection. This amendment would achieve that. One third of disabled people in the UK were found to be living in poverty before the global economic crisis. Disabled people routinely experience higher living costs associated with their disability on things such as equipment, personal assistants and special diets. Disabled people experience the same increases in general living costs as everyone else: food inflation is running at 4.5% and travel inflation at 7%. Unfortunately, disabled people were not able to catch up financially during better economic times. We should not allow them to slip further behind as a result of this Bill; rather, we should ensure that the Government’s objective of protecting disabled people is fully delivered.

[Baroness Meacher]

My Lords, I support Amendment 2, moved by the noble Lord, Lord McKenzie, to which I added my name, and Amendment 3, spoken to by the noble Lord, Lord Low. The Minister, the noble Lord, Lord Freud, consistently argued during the passage of the Welfare Reform Bill that there were two fundamental principles to the Government’s welfare reform provisions. One was to make sure that people in work had an incentive to remain in work and that those out of work had an incentive to move into work. The second principle was that the money available, however much there was available, should be focused as far as possible on those in greatest need. Throughout the debates on the previous Bill, I found myself very much in agreement with those two principles. It seemed to me that if money is short, at least one should abide by those two principles. That seemed very reasonable.

I find myself therefore confused that in this Bill those two principles appear to be breached. It does not seem that you are focusing on those in greatest need if there is an impact that reduces in real terms the living standards of people who are severely disabled. You are certainly not increasing the incentive to work if you reduce the benefit of people who have not a chance in hell of returning to work. We know that a lot of people who in any normal view of things would not really be able to work have been put into benefit categories such as jobseeker’s allowance, where they are expected to work, although they would regard this as being beyond their wildest dreams, much as they might like to. That is not the point that I wanted to make; I simply want to ask the Minister how she squares the provisions of this Bill with the principles so eloquently and consistently laid out by the noble Lord, Lord Freud.