Welfare Reform and Work Bill

Baroness Evans of Bowes Park Excerpts

Monday 21st December 2015 Lords Chamber

[The Lord Bishop of Durham]

My friend, the right reverend Prelate the Bishop of St Albans, cannot be here this evening. Therefore, I will speak largely on his behalf about Amendment 101, tabled by the noble Lord, Lord MacKenzie.

In the run-up to the general election, the Prime Minister was quick to stress that,

“the most disabled should always be protected”.

He was, of course, quite right to do so. We might be operating in a time of limited resources but that does not negate our moral duty to ensure that the most severely disabled people in our society are protected from financial hardship. Those whom we cannot reasonably expect to support themselves financially should not be expected to shoulder the burden of austerity. They already face enough burdens of their own.

For example, motor neurone disease is a condition that progresses so rapidly and so violently that there is little time for contingency planning. Jobs are lost and circumstances change so quickly that those suffering from the disease are often forced into debt. In practice, this means ensuring that the most severely disabled people in the UK—those in the ESA support group—are protected from cuts such as those in the Bill. This, of course, is exactly what the Government promised to do in their manifesto in promising to exempt disability benefits from the freeze to working-age benefits.

I recognise that Her Majesty’s Government have opted to exempt the ESA support group component from the freeze, but that component forms less than a third of the total provision made to the support group through ESA. The basic rate of ESA has not been exempted, meaning that those in the ESA support group, just like those in ESA WRAG and on JSA, will lose more than £250 a year in real terms by 2020.

The amendment tabled by the noble Lord, Lord MacKenzie, is an attempt to rectify this situation with regard to those in the support group. I realise that it is not a simple amendment. The Government cannot exempt certain groups from the freeze to the basic rate, for then it would cease to be a basic rate. The amendment therefore seeks to compensate the freeze through an uprating of the ESA support group component. Should the Government desire a simpler method, a commitment to uprate the ESA support group component by around 3% plus CPI would negate most of the effect of the basic rate freeze, while preserving the integrity of the basic rate.

The amendment would simply protect the most vulnerable—those who will never be able to go back to work—from the impact of the benefits freeze. If the Government want to be taken seriously when they claim to be protecting the most vulnerable disabled people in our society from financial hardship, support for this amendment, or one like it, should be a bare minimum. I hope that the Minister will give the matter serious consideration.

[Baroness Evans of Bowes Park (Con)]

My Lords, I have already set out why we believe the freeze of benefits is necessary so I will move directly to the amendments.

Amendment 101, tabled by the noble Lord, Lord MacKenzie, seeks to place into legislation a requirement for the support group component of employment and support allowance to be uprated by an additional amount above the amount it would otherwise be uprated by. This additional amount would be equal to the difference between the current main rate of employment and support allowance and that rate if it were uprated by inflation.

I understand the motivation behind the amendment, and the comments of the right reverend Prelate, but I will explain why we have included the personal allowance rate in the freeze. Personal allowance rates are aligned across all income-related benefits, including ESA, and are designed to provide a basic standard of living to those who are not in work but at a level that does not disincentivise moving into work. Those in the support group also already receive an additional amount, the support group component, which we have specifically exempted from the freeze. This additional amount is in recognition of the fact that this group of people is further from the labour market. In addition, many of those in the ESA support group who are being targeted with this amendment will be in receipt of disability living allowance or personal independence payment, which we have also exempted from the freeze. Again, these benefits are specifically aimed at contributing to the additional costs of disability, and will continue to increase in line with inflation. While I agree with the right reverend Prelate that we absolutely must provide suitable protections for disabled people, we do not support this amendment because the clause already sets out appropriate exemptions.

Amendment 97, tabled by the noble Baroness, Lady Pitkeathley, seeks to exempt carers from the freeze by ensuring that any of the relevant sums of working-age benefits are increased in line with inflation if they are claimed by persons who are regularly and substantially engaged in caring. As my noble friend and I have said, we share in and completely agree with the noble Baroness’s words about the great and vital contribution made by carers. That is why we have exempted carer’s allowance from the freeze, as well as carer’s premiums within other working-age benefits. We have ensured that carers are central to the Government’s reform to care and support, with strong rights for carers in the Care Act 2014. Since 2010, the rate of carer’s allowance has increased from £53.90 to £62.10 and we have further increased the earnings threshold for carers by 8%, to £110 a week net of certain expenses.

Amendments 98 and 99, tabled by the noble Baroness, Lady Lister, and the noble Lord, Lord Kirkwood, would remove the uprating freeze for child benefit which the Bill seeks to introduce. Further, Amendment 99 would instead place child benefit under a triple lock, meaning that it would rise by whichever was highest: the rise in prices or earnings, or 2.5% each year. This would go beyond existing legislation and create an unfunded spending commitment. The noble Baroness, Lady Lister, mentioned the CPAG research on the loss of value in child benefit. However, its methodology assumes that child benefit is uprated by RPI, which is obviously now an updated measure. Indeed, since 2008 child benefit has risen by more than 10%.

There is a parallel between Amendment 99 and the triple lock that the Government have in place for pensioners. In 2008, the basic state pension was at its lowest level relative to average earnings since the 1970s. The triple lock has turned this around and it is now one of the highest levels relative to average earnings in two decades. We believe it is right to continue to protect pensioners, who are often on fixed incomes and have paid into the system throughout their working lives. However, as I have said, it is important to make savings on welfare, including on child benefit. The freeze makes a contribution to forecast savings, given the annual spend on this benefit, so I am afraid that we cannot support these amendments.

The noble Baroness, Lady Sherlock, asked about a cumulative impact assessment. We have already provided detail on the impacts of the various measures and the Treasury published an extensive analysis alongside the Budget. A cumulative analysis for the Bill alone would take the measures out of the context of the wider Budget package, where analysis has shown that a typical family working full-time on the national living wage will be better off by the end of the Parliament.

I believe that we have ensured that we have in place protections for the most vulnerable, balanced against the need to make welfare savings. I once again thank noble Lords for bringing forward these amendments but we do not believe that they are necessary and I urge noble Lords to withdraw or not press them.

[Baroness Pitkeathley]

My Lords, I thank all noble Lords who have spoken in this short debate. As my noble friend on the Front Bench reminded the House, I have a long history in bringing carers’ issues before Parliament. In the course of that long history, I have learned that however little progress you seem to be making you have to keep going. I will keep going, as we all will, but I ask again that the Government think before Report about the effects of these policies—unintended consequences, perhaps, on the most vulnerable in our society. If, for example, we make carers so impoverished and oppressed that they give up caring, where is the gain in that for either society or the individuals? I am struck, as I have been so many times during the course of the Bill, by the parallel universes that we appear to be inhabiting. People from all around the House say that this is what is going to happen to vulnerable people and that here is the reality of the situation, as we hear it; and the Government say, “It’s all fine and we’ve done this to ensure that it is”. I am depressed but I beg leave to withdraw the amendment.