Welfare Reform Bill

My Lords, Amendment 99ZC is by way of an interval in the big picture, but I hope that noble Lords will not go out and get an ice-cream while I am speaking. This is a probing amendment to ensure that industrial injuries disablement benefit is not counted towards the benefit cap. At present, industrial injuries will be among the benefits that count towards total benefit income for benefit cap purposes. The Government have indicated that the constant attendance allowance under the industrial injuries scheme will be exempted in the same way as disability living allowance, and I shall say a little more about constant attendance allowance later. Benefits under the industrial injuries scheme are different in character from the rest of the benefits system. Whereas other benefits are designed to prevent or ameliorate poverty, to help people to cope with extra costs or to substitute for lost income, the industrial injuries scheme is a system of no-fault compensation. In November last year, the Industrial Injuries Advisory Council wrote to the Minister to argue that IIDB should not count towards the cap for just this reason. Employers and unions both support the industrial injuries scheme, which eliminates the need for an adversarial approach to compensating for a large number of injuries and diseases that are agreed to be a risk to employment. Damages won through civil litigation are a closer parallel to the industrial injuries scheme than disability or other benefits. Including damages awarded by the courts in the total that is subject to the cap would plainly be unfair, but industrial injuries disablement benefit is also a form of compensation and including it is just as unfair. Payments under the vaccine damages payment scheme are not to count towards the cap but they, too, are a form of compensation. On 10 November in this Committee, my noble friend Lady Hayter took the opportunity to raise a number of questions and she put the issue very well. She said, "““it seems that to include these payments, which are compensation for injuries at work, within a calculation of the total support that a family could receive from the state would be somewhat unfair. It would mean that for a young person living with their family, any such support would be taken away from the total family entitlement, which would effectively turn the benefit into a means-tested benefit””." The Minister replied: "““We can discuss that entire area when we look at the whole range of benefits””. —[Official Report, 10/11/11; col.112.]" Well, my Lords, the time is now. The Government have put forward three reasons for introducing the benefit cap. All these reasons are weak when one looks at the industrial injuries disablement benefit. The Government have said that they are introducing the benefit cap partly to reduce benefit expenditure but IIDB accounts for a very small amount of social security expenditure. It stood at 0.58 per cent of DWP annually managed expenditure in 2010-11. However, IIDB will account for an even smaller proportion of benefit cap savings, most of which will affect large, younger families, especially those in receipt of housing benefit. Claimants of benefits from the industrial injuries scheme tend to be older—50.9 per cent of expenditure is on people who are over pension age—and will therefore count for significantly less than the 0.58 per cent. It is unlikely that counting IIDB towards the benefit cap would save as much as £1 million a year, but I appreciate that I am really talking about an issue of principle here and not just expenditure. The Government’s equality impact assessment also indicated that a further purpose is to improve working incentives for those on benefits. It must be emphasised that IIDB does not create a work disincentive. Half of all spending on it is accounted for by pensioners, and working-age claimants can continue to receive the benefit if they stay in work or find work. Ministers have given great prominence to the argument that it is not fair for a workless family to receive more in benefits than an average family would receive in wages. In last year’s spending review, the Treasury listed the benefit cap under the heading of ““Fairness … Reducing the deficit fairly while protecting the vulnerable””. However, a working family, one of whose members has suffered an industrial disease or injury, would not be in a worse position than a workless family. They would have the same right to IIDB. The Government have not said a great deal about why it should count towards the cap. The Minister has made a distinction between recipients of disability living allowance and IIDB claimants. People do not get industrial injuries benefit to meet extra costs, which can be dealt with by an award of DLA if necessary, and the Minister has used this difference to justify excluding DLA but not IIDB. This argument is not a sufficient rebuttal because it fails to address the point that I made about the nature of the industrial injuries scheme. Furthermore, if having extra costs were to be the reason for excluding the benefit, how would we explain the decision to exclude retirement pension and pension credit? Informally, officials sometimes argue that excluding IIDB would open the floodgates for a long list of special cases, which would complicate the benefit cap. I hope that tidiness is never the deciding factor in matters like this and that simplicity is not a sufficient reason for proceeding with an unfair change. The Government’s decision to exclude constant attendance allowance is of course welcome. It is worth remembering, however, that this is one of the industrial injury scheme benefits abolished by the previous Conservative Government and there are now comparatively few claimants. In fact, the cost of the constant attendance allowance is just 1 per cent of the industrial injuries scheme. I hope that the Government will agree with me that the industrial injuries disablement benefit should not be counted towards the benefit cap.