Wednesday, 11 January 2012

Welfare bill in tatters after Lords’ savaging

Ministers have been humiliated in the House of Lords over their plans for sweeping changes to the benefit system, suffering three defeats in a single evening in a concerted rebellion that leaves the government’s bill in tatters.

Peers voted decisively to exempt people who have been disabled from a young age and people recovering from cancer from key parts of the government reforms. And in a result that had not been predicted, they also voted to extend the length of time people could continue to claim employment support allowance without being means tested. Government officials claim the move to extend the limit from one year to two would cost £1.6bn over five years.

Liam Byrne, Labour’s shadow work and pensions secretary, said: “The government have been defeated tonight because, quite simply, they tried to cross the basic line of British decency. For months, Labour has been determined to stop this cruel attack on cancer patients in its tracks. And today the House of Lords agreed. The government’s proposal to cut paid-for benefits for people still in chemotherapy crosses the basic test of fairness.”

Ministers had planned to place stricter limits on who can claim employment and support allowance, which is paid to people who are too sick or disabled to work. They planned to limit the amount of time people could claim ESA without being means tested to one year, but by voting for exemptions for cancer patients, young disabled people and an overall extension of the time limit, peers have set back those plans significantly.

Lord Mackenzie, the Labour work and pensions spokesman in the Lords said: “We have accepted with some reluctance that there could be a time limit on ESA, but the time limit would have to reasonably reflect a sufficient time period for people to overcome their illness or disability, sufficient to be able to access employment.” He said the one-year time limit was an “arbitrary figure”.

David Cameron had previously been tripped up in the Commons over the government’s refusal to exempt those recovering from cancer from the reforms, measures Ed Miliband, the Labour leader, claimed would cost 7,000 cancer patients £94 per week. 

Wednesday’s rebellions mean the government has now been defeated four times on its welfare bill in the Lords, after Labour joined 13 Liberal Democrat rebels before Christmas to reject a plan to reduce housing benefit for families with spare bedrooms in their homes. Officials in the department for work and pensions will now have to come to a compromise with peers to avoid the legislation becoming bogged down or bouncing constantly between the two chambers.

The scale of the defeat particularly surprised government insiders. The exemption for young disabled people was carried with a majority of 44, that for people receiving treatment for cancer gained a majority of 56 and the overall time limit on ESA was defeated by 48 votes. A DWP spokesman said: “The time-limit of one year strikes the best balance between recognising that some people need extra help to enter the workplace and that the taxpayer cannot afford to support people indefinitely who could be in employment.”

Kiran Stacey, Financial Times