Welfare Reform (Northern Ireland) Order 2015

Lord McAvoy Excerpts

Thursday 3rd December 2015 Lords Chamber

[The Minister of State, Department for Work and Pensions (Lord Freud) (Con)]

My Lords, the order will ensure that the people of Northern Ireland, at the request of their Executive, can benefit from the welfare reforms enabled by the Welfare Reform Act 2012 in Great Britain.

The UK Government have no intention or desire to legislate on an ongoing basis for welfare in Northern Ireland. Welfare is devolved to Northern Ireland and will remain so. The enabling Act time-limits the Government’s power to legislate so that an order cannot be made after 31 December 2016.

The legislative approach we are taking has arisen at the request of the Northern Ireland Executive and the Assembly has granted its consent. The content of the Order in Council broadly corresponds to the 2012 Welfare Reform Act, which was debated at length and in great detail in this House. It introduced a number of changes to ensure that work pays, that the most vulnerable in society continue to receive the support they need, and that taxpayers’ hard-earned money is spent responsibly. These principles underpin the Welfare Reform Act 2012 and are the same principles that underpin the Order in Council before the House today.

The Order in Council is based largely on the Assembly’s Welfare Reform Bill that fell at its final stage in May of this year. It includes the reforms made in Great Britain by the Welfare Reform Act 2012; the various flexibilities agreed between the Northern Ireland Department for Social Development and the Department for Work and Pensions; the amendments agreed during the passage of the Assembly Welfare Reform Bill; and provisions that allow for Northern Ireland Executive-funded top-ups.

This order is a fundamental part of the agreement reached last month. As part of that agreement, the Government are committed to delivering welfare reform in Northern Ireland. We would, of course, have preferred not to take this approach. I assure noble Lords that the Government are taking only the action necessary to ensure that welfare reform is no longer an issue undermining the political process in Northern Ireland. We believe that this is the only way to resolve the welfare reform impasse in Northern Ireland.

As I have said, welfare is a devolved matter in Northern Ireland. However, it has in principle maintained parity with Great Britain, meaning that benefit claimants have been able to avail themselves of the same rates of benefit as those in the rest of the United Kingdom. However, as a result of the failure to implement welfare reform, the system in Northern Ireland is becoming increasingly different from that operating in the rest of the United Kingdom. This difference is not sustainable and will cause particular problems in the delivery of people’s benefits. Once Great Britain moves entirely to the new system based around universal credit, Northern Ireland will need to create and maintain its own, separate system and meet the significant costs of the IT needed to support it.

The order means that Northern Ireland’s welfare system will be placed back on track. A legacy welfare system that makes people dependent on benefits is no more sustainable in Northern Ireland than it was in Great Britain. The order will provide real benefits to people in Northern Ireland by helping to tackle worklessness and delivering real economic benefits.

The order provides the legislative framework to implement these reforms in Northern Ireland, including: replacing DLA with the PIP, which helps towards additional living costs caused by a long-term health condition or disability and is based on how a person’s condition affects them, not on the condition they have; reforming contributory benefits so that they align with universal credit conditionality, including introducing a claimant commitment as a condition of entitlement; time-limiting ESA to underline the principle that, with the right support, claimants are expected to return to work; introducing tougher penalties for benefit fraud; and bringing in a benefit cap to ensure that those on benefits face the same choices as people in work. It reflects the agreements with the Northern Ireland Executive to make provision for agreed Northern Ireland-specific welfare-related administrative flexibilities and top-ups.

It is important to remember why the order is necessary. It is not intended to diminish Northern Ireland’s devolution settlement. The legislative approach that we are taking has arisen at the request of the Northern Ireland parties, and the Assembly has given its consent. The order reflects the draft Northern Ireland (Welfare Reform) Bill, which has been debated at great length in the Assembly over the past three years. Accordingly, the order includes a number of amendments that reflect the will of the Assembly, including an 18-month limit for higher-level sanctions and discretionary payments.

The order is about delivering the fresh start agreement. It is about supporting hard work and aspiration, and creating the right incentives for people to fulfil their potential and create a safe, secure and self-sufficient life, supported by, but independent from, the state. It is about making sure that spending on welfare is sustainable and fair to the taxpayer, while at the same time protecting the most vulnerable. Building an economy based on higher pay, lower taxes and lower welfare is right for the UK and right for Northern Ireland. I commend the order to the House.

[Lord McAvoy (Lab)]

My Lords, I am grateful to the Minister for outlining the order to the House and for his brevity. Before we get to the order, it is important to be mindful of the events that have led up to this point and the context of this debate.

It is now almost a year since the Stormont House agreement was finalised. Those negotiations made substantial progress on some of the most contentious issues, including flags and parades, while also seeking a way forward on matters such as welfare reform and the devolution of corporation tax. The agreement marked a turning point but, as your Lordships will be all too aware, during the last year, particularly in the past 12 weeks, it appeared that there was a genuine risk not just that the devolution settlement might collapse but that we might see a return to direct rule for the first time in almost a decade. It is to the Government’s credit that they have worked hard to come up with this agreement and, in doing so, they have our full support in bringing it forward.