Social Security

Priti Patel Excerpts

Tuesday 1st December 2015 Commons Chamber

[The Minister for Employment (Priti Patel)]

I beg to move,

That the draft Welfare Reform (Northern Ireland) Order 2015, which was laid before this House on 26 November, be approved.

The order will ensure that the people of Northern Ireland can benefit from the radical programme of welfare reforms enabled by the Welfare Reform Act 2012 in Great Britain. That landmark act ushered in a new welfare contract with the British people. It said to those who are able to work, “Work will always pay.” It said to the most vulnerable in society, “We will continue to provide you with the support you need”, and it said to the taxpayer, “Your hard-earned money will be spent responsibly.”

This new contract reflects principles which continue to guide our welfare reform programme—that work is the best route out of poverty, that spending on welfare should be sustainable, that people on benefits should face the same choices as those in work, and that the most vulnerable should be protected. Those are the principles that underpin the Welfare Reform Act 2012, and they are the principles that underpin the Order in Council before the House today.

Before I turn to the specifics of the order, I want to remind the House of the desperate need for welfare reform in Great Britain and Northern Ireland. When we took office in 2010 nearly 1 in 5 households had no one working, the number of households in which no one had ever worked had nearly doubled, and nearly 1.5 million people had been on benefits for most of the previous decade. The welfare system, with its byzantine complexity and perverse incentives, had allowed people to become detached from the rest of society, trapped in worklessness and dependency.

Over the past five years, we have stuck to our economic plan, delivered welfare reform and seen great progress: employment is up over 2 million; there are over 680,000 fewer workless households; and the number of people claiming the main out-of-work benefits has fallen by 1 million. In Northern Ireland, too, there have been improvements in the labour market, with 33,000 more people in employment than in 2010 and the claimant count down nearly 30% over the same period, but there is still much more to do. Northern Ireland has a lower proportion of its working age population in work than any other country or region of the UK; 130,000 households have no one in work; and 5% of those claiming the main out-of-work benefits across the UK as a whole are in Northern Ireland, which is well above its share of the UK working-age population.

In rebalancing Northern Ireland’s economy to meet the challenges of today’s global economy, we are tackling these challenges and creating jobs. Economic reforms, such as the proposed corporation tax reduction, will be vital, but economic reforms alone will not create a more prosperous society or improve the life chances of people trapped in dependency. As my right hon. Friend the Secretary of State for Work and Pensions has said many times in this House, economic reform must be complemented by social reform. We must ensure that people are supported and incentivised to take advantage of the opportunities that economic growth can create, and that is what the order does.

Improved incentives are at the heart of universal credit. The single taper rate ensures that work will always pay, and the stronger conditionality framework encourages claimants to do everything they reasonably can to find or prepare for work.

[Lady Hermon (North Down) (Ind)]

The Minister will know that the Belfast agreement created two statutory organisations: the Northern Ireland Human Rights Commission and the Equality Commission for Northern Ireland. What consultation have the Government conducted with them on these welfare reforms?

[Priti Patel]

Full and public consultation has taken place, and all the information has been made available repeatedly.

Early evidence suggests that universal credit is making a difference. Compared to current jobseeker’s allowance claimants, universal credit claimants look for work more, enter work faster and earn more. The benefit cap is also having a positive impact in Great Britain, with capped households 41% more likely to go into work than similar uncapped households. It must be right that the people of Northern Ireland benefit from these reforms, so the order provides the legislative framework to implement them in Northern Ireland, as well as replacing disability living allowance with the personal independence payment, which helps towards additional living costs associated with 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 through the introduction of a claimant commitment as a condition of entitlement; time limiting employment support allowance to underline the principle that with the right support claimants are expected to return to work; and introducing tougher penalties for benefit fraud.

The transitional provisions in the order allow the Secretary of State to exercise the vast majority of regulation-making powers in the first instance, and our intention is to introduce the regulations in the early new year, working with colleagues in Northern Ireland. It will be for the Northern Ireland Executive, however, to implement the changes, and regulations relating to the top-ups outlined in the Stormont House and fresh start agreements will be taken forward by the relevant Northern Ireland Department in the Assembly.

It is important to remember what the order is about and what it is not about. It is not intended to diminish Northern Ireland’s devolution settlement. As my right hon. Friend the Secretary of State for Northern Ireland has made clear, the legislative approach we are taking has arisen at the request of the Northern Ireland parties, and the Assembly has given its consent. The order also 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.

This order is about building and 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 both right for the UK and right for Northern Ireland. I commend the order to the House.