Welfare Reform Bill

My Lords, I thank the Minister for his very positive response. Like the noble Baroness, Lady Morgan, I pay tribute to the work Macmillan Cancer Support has done for cancer patients. To summarise, the Minister has been clear in accepting that the WCA assessment will be improved, that there will be a presumption that cancer patients in treatment will be in the support group, that discussions with Macmillan will continue following the consultation, and that guidance will be developed based on evidence from healthcare professionals to allow cancer patients either to remain in the WRAG or to go into the support group. He has also agreed to review guidance for patients in the WRAG so that if they deteriorate they can access the support group and to review guidance on the period of recovery following treatment. I have to say that it must be quite unusual to be content with the outcome on amendments on two successive days before two different Ministers. I thank the Minister very much for his summation. Cancer patients will be relieved. I am happy to withdraw the Motion. Motion F1, as an amendment to Motion F, withdrawn. Motion F agreed. Motion G Moved by Moved by Lord Freud That this House do not insist on its Amendment 47 to which the Commons have disagreed for their Reason 47A. "LORDS AMENDMENT 47 ""47: Clause 93, page 62, line 19, after ““benefits”” insert ““with the exclusion of child benefit””" COMMONS DISAGREEMENT AND REASON The Commons disagree to Lords Amendment No. 47 for the following Reason— "47A: 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." Lord Freud: My Lords, by now the House will be well aware of the Government’s reasons for introducing the benefit cap. It is about incentivising work and promoting fairness. Since we last debated the Bill, I have had a number of meetings with noble Lords and right reverend Prelates where concerns have been raised about the tone of the debate, and especially some of the language used in the media coverage of this issue. I would like to take the opportunity to make it clear that it is not my aim or that of the Government to demonise people who are on out-of-work benefits. I have to confess that while I seem to be responsible for quite a few things at the moment, running the press is absolutely not one of them. So let me make it clear: we agree that benefits have an important role to play in providing financial support for people who are unemployed, looking after children, are ill or who have a disability. At the same time, I think we all agree that people who can work should be expected to do so and that the benefits system should encourage, not detract from, individual responsibility. There has to be a balance between the responsibility of the state and the taxpayer and the responsibility of the individual. Members of your Lordships’ House know that the current benefits system does not have the balance right. All too often individual responsibility is undermined and, effectively, people are trapped on benefits. That is what we mean when we talk about welfare dependency—I know that ““welfare”” is not liked all around the House; we have had that discussion. This, above all, is what we are trying to achieve with the introduction of universal credit. But the benefit cap is also a key element of our reforms. We firmly believe that it is a serious flaw in the current system to pay some claimants more money when they are out of work than they could reasonably expect to earn from working full time. It is clear that the vast majority of the public believe that too. The core principle of the benefit cap is that people should not receive more on benefits than the average weekly wage for working households. That is why we have said that for families and lone parents, the cap should be set at £500 a week, £26,000 a year, equivalent to gross earnings of £35,000 a year. We estimate that this is the amount that is equivalent to the average wage for working households. The original amendment to exclude child benefit and the new amendments tabled by the noble Lord, Lord McKenzie, effectively say that £26,000 a year is not enough. At this point, I should say that I shall confine my remarks to what is in the original amendment because I am curious to learn what the new amendment really does say. By setting a clear limit through the cap, we will shift people’s expectations and change behaviour. In future, people will know what they can expect from the benefits system and take decisions accordingly. Much of the concern in our debates has been about people who have already taken decisions that they could not easily reverse, or have decisions forced upon them by circumstances beyond their control. From the outset we have been clear about the need for appropriate exemptions and transitional measures, and we recognise the importance of getting these measures right. We have taken time in our deliberations. We have listened carefully to the debates here and in the other place, and we have met individuals and organisations representing vulnerable groups to discuss their concerns. We have used departmental data to improve our understanding of the potential impacts on households and their characteristics, and those are the figures that we have set out in the revised impact assessment. On 1 February, during the Commons’ consideration of the Lords’ amendment, the Minister for Employment announced details of our proposals for a package of transitional measures and support that we believe will provide the necessary safeguards for households. We have always accepted that there are certain groups for whom it would not be appropriate to apply the cap. We had already said that we would exempt households which are in receipt of disability living allowance, personal independence payment, attendance allowance or constant attendance allowance, as well as households entitled to working tax credit and war widows and widowers. We have now announced that we will also exempt the small number of households with someone who is in receipt of the support component of employment support allowance, but not in receipt of DLA. In practice, in many cases this is probably more an issue of timing. This will ensure that the cap only affects people who, taking account of their health and any disability, can reasonably be expected to do work or work-related activity. We do not want to penalise those who are in work and are doing the right thing, and therefore we will be putting in place a nine-month grace period for those who have been in work for the previous 12 months and lose their job through no fault of their own. This will allow people time to find alternative employment or consider alternative options to avoid the cap. The grace period will also help people who have to stop work for a while because they have suffered a bereavement or have taken on kinship carer responsibilities. In the latter case, it will help the kinship carer who has to take time off work to help children settle into their new home. I know that the noble Lord, Lord McKenzie, has a specific concern about whether the grace period will apply to people who lose their job before the introduction of the cap, and in conversation he put that question to me very directly. Indeed, I think we can give credit to this House, because as a direct result we are refining these proposals. We have looked into this and we agree that it would be unfair if the cap applied immediately to those who have only been out of work for a month. In practice, therefore, we will look at the whole period, so the nine-month cap will look backwards in that way. In the case of somebody who finishes work this month, the cap would not apply until November, a full nine months later. I am sorry, let me get the dates right because I seem to be in a different year. If someone loses their job in February 2013, the cap would not apply until November 2013. An essential part of our plan is to use scans of our databases to identify cases early, give people information and help them work through the options available to them. We have details of the cases that are already in payment. Regular scans will identify new cases as they arise, enabling us to let people know when the cap will apply to them. Once identified, all cases will be closely controlled and progress monitored. From April this year, we will provide support from Jobcentre Plus and the work programme to households who might be affected by the cap. We have more than a year to work intensively with those households so that they understand the implications of the cap and are given help to move into work and so avoid the cap wherever possible. We will also engage across government, with local authorities and teams such as the Troubled Families Unit to ensure that households get the other forms of assistance that they might need. We will ensure that there is transitional support to help manage families into more appropriate accommodation. This will include additional money to enable local authorities to make discretionary housing payments to help hard cases. This mirrors the steps that we took last year to provide safeguards following the introduction of the housing benefit cap. We will ensure that resources are provided to the areas where they are most needed and are available to help families deal in the short term with a variety of challenges they might face. We are talking about up to £80 million in 2013-14 and a further £50 million in 2014-15. That is just within this SR; it does not mean that we might not look yonder. There is no presumption that it is a cliff edge. We believe that these transitional arrangements, taken as a whole, will strike the correct balance between providing people with the help they need to move into work and ensuring that hard cases get the most support while they adapt to the introduction of the cap. Finally, we have said that we will lay before the House a report on this policy’s impact after a year of its operation, which will allow a review of how successfully we have met these objectives. Given all these assurances, I hope that your Lordships will agree that the Government have listened to the concerns expressed in this House and elsewhere about the impact of the benefit cap. I hope, too, that your Lordships will agree that targeted exemptions and support are a much better way of ensuring that the cap operates fairly than structural changes that would alter its whole nature. I beg to move. Motion G1 (as an amendment to Motion G) Moved by