Welfare Reform Bill

My Lords, these amendments seek to provide exemptions on the face of the Bill from the application of the benefit cap for a wide range of different groups. I would like to start by repeating what I said on Monday. We have always been clear that we will look at ways of easing the transition for families and providing assistance in hard cases. We are very aware of concerns about the impact of the cap in specific scenarios. We have always said that we will take account of the sort of issues raised in this debate when preparing the regulations next year. The clause has been drafted to give us powers to set a cap that achieves its purpose in the fairest way possible. Let me take this early opportunity to assure the noble Baroness, Lady Lister, that I have considered the requirements of the Human Rights Act and the European Convention on Human Rights in respect of this policy. I am content that the way in which we will implement these clauses will meet those requirements. Let me also clarify early on the point about behavioural change and the logic of applying the cap to people with reduced conditionality—a question raised by the noble Lord, Lord McKenzie. Our policy aim is to achieve a range of positive effects through changing attitudes and expectations. Clearly, we intend in particular to improve work incentives and reinforce the expectation that people of working age should work. However, it is perfectly reasonable to encourage and help people towards employment even if they are not currently expected to work. I said on Monday that our original estimate was that only about 10 per cent of the households that might be capped would be subject to full conditionality, through the JSA regime. However, it is wrong to say that the remainder will have no work-related requirements. A significant proportion will be people subject to work-focused interviews or work preparation and who will be building towards work. I said on Monday that I would provide the Committee with a breakdown of the caseload of households which might be capped. I also said that we are in the process of updating our figures. These indicate that a higher proportion, about a third, will be subject to full conditionality. I will provide the full set of figures as soon as they become available. The key point is that if we are to tackle the negative effects of the current system then it makes no sense to exempt people from the cap simply because they are not currently subject to full work-related conditionality. That would not change attitudes and would be very likely to further entrench the problems of worklessness and dependency that we are trying to address. We have therefore been very careful in providing exemptions and deliberately kept the list short. We have always said that we will exempt households that are entitled to working tax credit and that there will be an exemption for working households on universal credit. I have already explained that I am not yet in a position to provide details of this, but I can assure the noble Baroness, Lady Lister, that we are very conscious of the issue of cliff edges and the need to consider the impact of thresholds on households whose earnings fall. We have always said that we will exempt war widows and widowers and that we will exempt households with someone in receipt of DLA or constant attendance allowance completely from the effects of the cap. I can confirm that this exemption will also extend to those in receipt of attendance allowance and PIP when it is introduced. I am aware of representations already made that recipients of industrial injuries disablement benefit should be exempt from the cap in the same way as recipients of DLA. However, I do not think that these groups are in exactly the same position. DLA is paid to people to help with the extra costs arising from their disability. Other than through constant attendance allowance, industrial injuries disablement benefits do not reflect whether the recipient’s disability or illness necessarily brings extra financial costs. We will be exempting people who are in receipt of constant attendance allowance because it serves the same purpose as DLA, but that does not apply to other industrial injuries payments. I welcome the remarks of the noble Baroness, Lady Hollins, on the important issue of carers. The DLA exemption will mean that the cap does not affect a carer in a case where, as she said, the person being cared for is a partner or dependent child. Households where a member receives carer’s allowance but no members receive DLA or PIP will however not be exempt. In cases where the recipient of DLA is not deemed to be in the same household as the recipient of carer’s allowance both will be looked at separately and for benefit cap purposes their individual entitlements will be assessed independently. We have also said that we will look at ways to ease the transition for families and provide assistance in hard cases. On the passport, as I said, I will seek to set out our intention for the passporting arrangements for PIP to carer’s allowance before the start of Report stage. I hope that that is adequate assurance for the noble Baroness, Lady Hollis.