Welfare Reform Bill

If I may, I shall deal first with amendments 17B to 17D and 19B, on employment and support allowance time-limiting, and amendment 73BA, on child maintenance. The Government wish to accept these amendments. Amendments 17B to 17D and 19B do not change the Government's existing policy on the time-limiting of contributory ESA. The limit will remain at 365 days for those in the work-related activity group and will take effect from April 2012. I believe that the limit strikes an appropriate balance between the needs of sick and disabled people and the interests of taxpayers who contribute towards the cost. It will make a significant contribution to reducing the fiscal deficit, which I remind hon. Members once again is the most pressing priority facing the coalition Government. We estimate that the one-year time limit will reduce expenditure by £1 billion a year by 2014-15. We have listened carefully over the course of the debate, however. The amendments would allow a future Government, if they could identify an appropriate funding source, to increase the length of the time limit by order rather than further primary legislation. We have considered that and decided that it is a sensible and appropriate use of an order-making power and we are happy to accept the amendments. Amendment 73BA clarifies some of the powers introduced by the previous Government under the Child Maintenance and Other Payments Act 2008 and gives examples of the provisions that may be made under regulations. I should stress again that it does not imply any change to our proposed policies on charging. Specifically, I highlight the fact that we maintain our commitment to a maximum application charge of £20 and to collection charges within the ranges set out in the January 2011 Green Paper. On Report in the Lords, we committed to undertake a review of the charging policy 30 months after the implementation of the powers, to understand their effect and impact. The amendment clarifies that if changes to our approach are required following that review, we will have the ability to make them. Although our core proposals on charging remain the same, the amendment ensures that in future—particularly following our review—we will be able to change the charging regime, with specific reference to apportionment and waivers, if we deem such changes to be necessary. I deal now with housing, where I am afraid we do not agree with Lords amendments 3B and 26B. As you indicated, Mr Speaker, the amendments infringe the financial privileges of this House, and if they are rejected that will be the reason given to the House of Lords. Let me first ensure that the House is clear about the financial implications of the amendments. We know about the big financial challenges we face. Since we last debated the Bill, Moody's has placed the UK's triple A credit rating on negative outlook and made it clear that the Government's strategy is necessary to retain the credibility of our nation in the international financial arena. That is not a context in which we can relax public spending. We made it perfectly clear on 1 February, when we last considered Lords amendments, that the earlier amendments, which could cost around £300 million a year, were unaffordable. The Government's response to amendments costing £100 million, as these new amendments would, is no different.