Welfare Reform and Work Bill

Debate between Lord Lansley and Lord Blencathra

Monday 21st December 2015 Lords Chamber

[Lord Lansley]

The point I was answering was in relation to people in work, so that is a slightly different point. In relation to that point, too, as the noble Baroness has brought it up, the structure of the benefit cap is designed to ensure that people who are in a support group under the employment and support allowance, those in receipt of personal independence payments, and so on—there are number of exceptions—are not covered by the benefit cap. Those households are not covered by the benefit cap. We are focused, to a large extent, on those who have a capability for work even if that capability may be restricted in some ways.

I did not complete the point I was making in response to the noble Baroness, Lady Lister. Many years ago I was deputy director-general of the British Chambers of Commerce— and I do not think it has changed in the slightest—and I know that what matters to employers is that people have been in work and have all the attributes of somebody who has been in work. The longer one is out of work the less likely one is, as we know, to have those attributes. Therefore, the entry into work, even if it might not necessarily be the right job or be regarded as suitable or appropriate, will by its very nature make someone more likely to have those attributes necessary for work.

That is just one of the reasons why the benefit cap is needed. It is also needed because of a sense of the fairness between those who are in work and those who are not. The noble Baroness, Lady Sherlock, said there was a relationship with average earnings. That was true when the benefit cap was introduced, but to assert that it is some kind of mechanistic or scientific relationship is misleading. It is a judgment. A judgment was made, when there was previously no benefit cap to try and establish a benefit cap at a level that was regarded as fair.

I have to tell noble Lords—again coming from recent experience of fighting elections and being in the other place—that the public support the benefit cap. They regard it as still generous—too generous in many respects. When one looks at the relationship with those who are in work—the four in 10 households, broadly speaking, as was mentioned—who are not earning any more from their work than would be available through the benefit cap by the accumulation of benefits, they do not regard it as fair or reasonable for people to accumulate more by way of benefits than they are able to access by work.

[Lord Blencathra]

My noble friend has just said that from his recent experience in the other place he found that large numbers of the public supported the benefits cap. Can he tell us what Members of the Labour Front Bench in the other place were saying about the benefit cap, until quite recently?

[Lord Lansley]

Until recently—I do not know what the most recent experience is, but certainly until September this year—the Opposition Front Bench in the other place said that they supported the principle of the cap. I suppose they would say that they support the principle of the cap but at the level that it is currently set.

That brings me to the third reason why we have a benefit cap—namely, that we have to decide our priorities for distributing any given level of public expenditure. Of course, we know that Parliament has supported an overall cap on the welfare budget. Frankly, it is better for it to be distributed in relation to specific need than for some households to accumulate it to a greater extent.

If one were to seek to sustain the benefit cap at the level at which it currently applies, rather than apply it at the level proposed in the Bill—I hope that this House would not go down that path—that begs the question of where that money is to come from. Where else in the welfare budget can that saving be made because this step is still part of a necessary process of reducing the deficit over this Parliament? Where there is public support for this measure, where jobs are available in the economy and where there is scope to deliver an additional step towards reducing the deficit and heightening incentives for work while at the same time focusing the available resources on giving support—as we debated earlier in Committee—to those who we want to assist into work, and giving specific targeted support to the maximum extent we can where people have identified specific needs, Ministers are right to say that we should be doing that rather than allowing this benefit to be accumulated by some households to a greater extent.