Welfare Reform Bill

That this House do not insist on its Amendment 4 to which the Commons have disagreed for their Reason 4A. "LORDS AMENDMENT 4" That this House do not insist on its Amendment 4 to which the Commons have disagreed for their Reason 4A. "LORDS AMENDMENT 4" 4: Clause 11, page 5, line 23, at end insert— ““(4A) Regulations shall not permit any reduction of housing benefit or amounts included for accommodation in an award of universal credit in respect of under occupation, deemed or actual, where— (a) the landlord is a local authority or a registered provider of social housing, and (b) any such landlord is not able to offer suitable alternative accommodation which would not cause a person to under occupy. (4B) Regulations may make provision for determining when accommodation is suitable for the purposes of these provisions.”” COMMONS DISAGREEMENT AND REASON The Commons disagree to Lords Amendment No. 4 for the following Reason— 4A: Because it would alter the financial arrangements made by the Commons, and the Commons do not offer any further Reason, trusting that this Reason may be deemed sufficient. Motion C agreed. Motion D Moved by Moved by Lord Freud That this House do not insist on its Amendments 15 and 23 to which the Commons have disagreed for their Reasons 15A and 23A. "LORDS AMENDMENTS 15 AND 23 ""15: Clause 51, page 36, line 16, after ““2007”” insert ““, and subject to section (Condition relating to youth (No. 2)),””" COMMONS DISAGREEMENT AND REASON The Commons disagree to Lords Amendment No. 15 for the following Reason— "15A: Because Lords Amendments Nos. 15 and 23 would alter the financial arrangements made by the Commons, and the Commons do not offer any further Reason, trusting that this Reason may be deemed sufficient.""23: Clause 52, leave out Clause 52 and insert the following new Clause—""““Condition relating to youth (No. 2)""In paragraph 4 of Schedule 1 to the Welfare Reform Act 2007 (condition relating to youth), after sub-paragraph (1)(d) insert—""““(e) after the assessment phase has ended, the claimant has limited capacity for work-related activity.””””" COMMONS DISAGREEMENT AND REASON The Commons disagree to Lords Amendment No. 23 for the following Reason— "23A: Because Lords Amendments Nos. 15 and 23 would alter the financial arrangements made by the Commons, and the Commons do not offer any further Reason, trusting that this Reason may be deemed sufficient." Lord Freud: There have been considerable extensive debates in both Houses on the ESA provisions for young people. I recognise that noble Lords have pursued their concerns about this measure constructively. Our proposed changes to the condition relating to entitlement to ESA on grounds of limited capability during youth are part of our principled approach to reform. We want to modernise and simplify the current welfare system, focus support, avoid duplication of provision and redefine the contract between the state and individuals, in advance of the introduction of universal credit. I understand the point made by noble Lords on more than one occasion: that the social security system has provided a non-contributory, non-means tested incapacity or invalidity benefit for many years. However, we are trying to simplify and rationalise the support provided by the system which has been recognised as complex and difficult to understand. That is the reason for the introduction of universal credit. We do not believe that it is right, for example, that where a claimant has qualified for contributory ESA under the youth provisions and, some years later, they inherit a substantial sum, they should be able to continue to receive unlimited contributory ESA without having paid any contributions. We estimate that about 90 per cent of those who presently receive ESA on youth grounds will be eligible for income-related ESA. So just 10 per cent will not qualify and that is because they have other means available to them—either a partner in full time work or, more likely in practice, capital of more than £16,000. I know that there was confusion in the other place on this point, which I need to clear up, about when young people were entitled to its benefit. Once a young person has left education and child benefit is no longer payable, the young person is free to claim income-related ESA in their own right and their parents’ income and capital will not affect the young person’s benefit entitlement, because they are no longer regarded as dependent on their parents. Another important point is that eligibility to income-related ESA also provides automatic entitlement to passported benefits such as free NHS prescriptions. As many noble Lords will be aware, many stakeholders have called for this change, which means that the present process of separate applications will no longer be required. As noble Lords will be aware, I have asked the Social Security Advisory Committee to provide advice about how passported benefits will be provided in future. We are working with other government departments and the devolved Administrations to prepare our response to the advisory committee’s report. That response will be published alongside the final report by the end of April. In this, we are targeting the support that the Government can provide to where it is needed most. We simply do not think that someone who has independent capital or income should benefit from indefinite entitlement to contributory ESA. We have, however, as part of the process, listened to concerns and made amendments to the Bill that allow claimants to re-qualify for a further award of contributory ESA after their ESA has ceased as a result of time-limiting and they are later placed in the support group because of a deterioration in their health. That applies equally to ESA youth claimants. One of the hidden aspects that we are trying to deal with here is benefit tourism. We are trying to make sure that our benefits are paid only to people who have a legitimate link to the UK and who meet the same conditions of entitlement as those who normally live in this country. We have a strong view that the Government of the United Kingdom are responsible for determining entitlement to UK benefits. There are a number of ongoing cases where the Government are doing all they can to defend this fundamental right, which allows us to decide who should be eligible. I know that there is widespread support for this view across the House and in the country. The Stewart case is just one example of the challenges that we are facing in defending this position, and I shall touch on that in a second. We do not think it is right to distort our social security system to fit European rulings. We are defending this position in the courts, both domestically and in Luxembourg and Strasbourg. In Strasbourg, my right honourable friend the Minister for Employment has been discussing with his European counterparts whether we can find a more pragmatic and sensible approach to European regulation. Perhaps I may touch again on the Stewart judgment, given by the European Court of Justice in July. The effect of this judgment is that someone living abroad could qualify for benefit without having to satisfy the past presence test. In other words, they could get benefit where they could demonstrate a genuine and sufficient link to the United Kingdom. In relation to Ms Stewart herself, the Court determined that she could arguably demonstrate a link with the UK because she was in receipt of another UK benefit, she was dependent on her parents, who were UK pensioners, and she had spent a significant part of her life in the UK. We want people to qualify only where they have lived in the UK recently prior to the claim, but we also have to satisfy our EU obligations by taking account of the Court’s judgment with regard to where we can still operate such a past presence test. We strongly disagree with the European Court of Justice’s ruling. The effect of the judgment is that under EU law we cannot have a blanket past presence test of this kind for benefit claimants. As a result, the ESA youth provision is potentially more widely available than intended. As we are bound by EU law, there is nothing we can do by way of domestic legislation, even primary, to change its effect, short of abolition. As usual when we introduce policy changes, we will be reviewing the changes to make sure that they work as intended and do not have unintended effects. Although I recognise noble Lords’ concerns, I believe that abolition of the ESA youth provision for new claims remains the best option to close the door to people from overseas while also simplifying and modernising the support to be provided in the future. I beg to move. Motion D1 (as an amendment to Motion D) That this House do not insist on its Amendments 15 and 23 to which the Commons have disagreed for their Reasons 15A and 23A. "LORDS AMENDMENTS 15 AND 23 ""15: Clause 51, page 36, line 16, after ““2007”” insert ““, and subject to section (Condition relating to youth (No. 2)),””" COMMONS DISAGREEMENT AND REASON The Commons disagree to Lords Amendment No. 15 for the following Reason— "15A: Because Lords Amendments Nos. 15 and 23 would alter the financial arrangements made by the Commons, and the Commons do not offer any further Reason, trusting that this Reason may be deemed sufficient.""23: Clause 52, leave out Clause 52 and insert the following new Clause—""““Condition relating to youth (No. 2)""In paragraph 4 of Schedule 1 to the Welfare Reform Act 2007 (condition relating to youth), after sub-paragraph (1)(d) insert—""““(e) after the assessment phase has ended, the claimant has limited capacity for work-related activity.””””" COMMONS DISAGREEMENT AND REASON The Commons disagree to Lords Amendment No. 23 for the following Reason— "23A: Because Lords Amendments Nos. 15 and 23 would alter the financial arrangements made by the Commons, and the Commons do not offer any further Reason, trusting that this Reason may be deemed sufficient." Lord Freud: There have been considerable extensive debates in both Houses on the ESA provisions for young people. I recognise that noble Lords have pursued their concerns about this measure constructively. Our proposed changes to the condition relating to entitlement to ESA on grounds of limited capability during youth are part of our principled approach to reform. We want to modernise and simplify the current welfare system, focus support, avoid duplication of provision and redefine the contract between the state and individuals, in advance of the introduction of universal credit. I understand the point made by noble Lords on more than one occasion: that the social security system has provided a non-contributory, non-means tested incapacity or invalidity benefit for many years. However, we are trying to simplify and rationalise the support provided by the system which has been recognised as complex and difficult to understand. That is the reason for the introduction of universal credit. We do not believe that it is right, for example, that where a claimant has qualified for contributory ESA under the youth provisions and, some years later, they inherit a substantial sum, they should be able to continue to receive unlimited contributory ESA without having paid any contributions. We estimate that about 90 per cent of those who presently receive ESA on youth grounds will be eligible for income-related ESA. So just 10 per cent will not qualify and that is because they have other means available to them—either a partner in full time work or, more likely in practice, capital of more than £16,000. I know that there was confusion in the other place on this point, which I need to clear up, about when young people were entitled to its benefit. Once a young person has left education and child benefit is no longer payable, the young person is free to claim income-related ESA in their own right and their parents’ income and capital will not affect the young person’s benefit entitlement, because they are no longer regarded as dependent on their parents. Another important point is that eligibility to income-related ESA also provides automatic entitlement to passported benefits such as free NHS prescriptions. As many noble Lords will be aware, many stakeholders have called for this change, which means that the present process of separate applications will no longer be required. As noble Lords will be aware, I have asked the Social Security Advisory Committee to provide advice about how passported benefits will be provided in future. We are working with other government departments and the devolved Administrations to prepare our response to the advisory committee’s report. That response will be published alongside the final report by the end of April. In this, we are targeting the support that the Government can provide to where it is needed most. We simply do not think that someone who has independent capital or income should benefit from indefinite entitlement to contributory ESA. We have, however, as part of the process, listened to concerns and made amendments to the Bill that allow claimants to re-qualify for a further award of contributory ESA after their ESA has ceased as a result of time-limiting and they are later placed in the support group because of a deterioration in their health. That applies equally to ESA youth claimants. One of the hidden aspects that we are trying to deal with here is benefit tourism. We are trying to make sure that our benefits are paid only to people who have a legitimate link to the UK and who meet the same conditions of entitlement as those who normally live in this country. We have a strong view that the Government of the United Kingdom are responsible for determining entitlement to UK benefits. There are a number of ongoing cases where the Government are doing all they can to defend this fundamental right, which allows us to decide who should be eligible. I know that there is widespread support for this view across the House and in the country. The Stewart case is just one example of the challenges that we are facing in defending this position, and I shall touch on that in a second. We do not think it is right to distort our social security system to fit European rulings. We are defending this position in the courts, both domestically and in Luxembourg and Strasbourg. In Strasbourg, my right honourable friend the Minister for Employment has been discussing with his European counterparts whether we can find a more pragmatic and sensible approach to European regulation. Perhaps I may touch again on the Stewart judgment, given by the European Court of Justice in July. The effect of this judgment is that someone living abroad could qualify for benefit without having to satisfy the past presence test. In other words, they could get benefit where they could demonstrate a genuine and sufficient link to the United Kingdom. In relation to Ms Stewart herself, the Court determined that she could arguably demonstrate a link with the UK because she was in receipt of another UK benefit, she was dependent on her parents, who were UK pensioners, and she had spent a significant part of her life in the UK. We want people to qualify only where they have lived in the UK recently prior to the claim, but we also have to satisfy our EU obligations by taking account of the Court’s judgment with regard to where we can still operate such a past presence test. We strongly disagree with the European Court of Justice’s ruling. The effect of the judgment is that under EU law we cannot have a blanket past presence test of this kind for benefit claimants. As a result, the ESA youth provision is potentially more widely available than intended. As we are bound by EU law, there is nothing we can do by way of domestic legislation, even primary, to change its effect, short of abolition. As usual when we introduce policy changes, we will be reviewing the changes to make sure that they work as intended and do not have unintended effects. Although I recognise noble Lords’ concerns, I believe that abolition of the ESA youth provision for new claims remains the best option to close the door to people from overseas while also simplifying and modernising the support to be provided in the future. I beg to move. Motion D1 (as an amendment to Motion D) Moved by