Thursday 19 November 2015

A paper presented to the Belper Labour branch meeting ............ Welfare Reform and Work Bill 2015-16

A discussion paper was presented at the last Belper & Duffield Labour Party branch meeting by Vickie, Nell and Cath which detailed the background and status of the Welfare Reform and Work Bill that is currently grinding its way through both houses of parliament. This is the bill that the Lords so famously voted against on the 26th October ........ voting for a delay so that the effects of these contentious measures can be fully understood.

The submitted paper was rigorously debated at the branch meeting but it was brought to my attention that in our desire to debate the meat of the matter we failed to allow the authors to highlight what it is that we can do to oppose the bill. I have therefore decided to post their report in full. The section that was not addressed is "What can you do" towards the end of the report.

The report mentions the second reading which took place 2 days ago so, after reading the report and exploring the embedded links you might like to cursor back up to here to read the: Hansard report on the second reading in the Lords 17/11/2015.

Welfare Reform and Work Bill 2015-16 - report to branch 

Welfare policymakers in the UK have been grappling with the problem of balancing depressed wages for low-income workers against conditionality in the welfare benefits system since the mid-1980s. After 1997 Labour attempted to tackle the work-welfare bargain [that being in work should always make one better off than welfare] through the extension of tax credits which supplemented low incomes, contained discretionary elements to meet the additional costs of childcare and caring for a disabled child, and which continued to be paid during brief periods of unemployment.

After the Coalition Government came to power they designed and legislated for a radical overhaul of the work-welfare bargain which will eventually involve the abolition of the current system of in-work benefits and their replacement with a Universal Credit. Universal Credit is intended to address the problem that entering and leaving employment is much riskier for people on low incomes in receipt of multiple benefits by coordinating housing, council and income benefits (such as jobseeker’s allowance or employment and support allowance) into a single payment which can simply be modified depending on level of earned income. In this way ramps into and out of employment should be smoother, with fewer perverse incentives to remain on welfare. However, there remain substantial concerns about the administration of Universal Credit and whether the rate at which benefits are tapered after someone returns to work will really leave low-income families better off in-work.

After the Conservative Government was elected in May 2015 they had to honour a manifesto commitment to make a further £12 billion cuts to the welfare budget on top of £17 billion achieved in the last parliament. The Welfare Reform and Work Bill represents an attempt to achieve this which, depending on perspective, will either accelerate the timetable for implementing Universal Credit or derail the project entirely.

The Welfare Reform and Work Bill contains proposed amendments to much existing welfare legislation, most notably the Welfare Reform Act 2012 and its provisions, once enacted, are intended to achieve several policy goals.

1. Until last week, the bill contained a provision to reduce eligibility for in-work tax credits from around 3 million households in the UK from April 2016. The controversy surrounding the removal of tax credits was not the fact that it was occurring but that it was happening so swiftly, leaving many low-income working households with little time to adjust. The House of Lords voted to delay the implementation of this proposal by a further year, but it is not certain yet what amendments to the Bill the Government will table at 2nd reading on 17th November to ensure it achieves the same cost savings.

2. The legislative changes necessary to implement Universal Credit were enacted in 2012 but the bill will remove some additional payments available to disabled people who have ‘limited capability for work’.

3. s.96 Welfare Reform Act 2012 created a benefits cap, whereby no household in receipt of out-of-work benefits can receive an annual income greater than the then median household income of £26,000pa. The object of the cap was to ensure that the government could ensure that ‘in-work households’ were consistently better off than ‘out-of-work households’ but it has also been severely criticised for having a disproportionate impact on the most vulnerable households including single parent families, families affected by disability and families affected by domestic violence. The new bill will reduce the cap further to £23,000pa from April 2016. This will be achieved either through reducing what a household can receive in housing and council tax benefit or Universal Credit in those areas where this has already been implemented.

4. The bill will have a significant impact on low-income families with more than two children as it restricts entitlement to child benefit and child tax credits to the first two children only. It also repeals almost all of the Child Poverty Act 2010 which placed an obligation upon the government to reduce child poverty as defined by four different measures by 2020. Instead the Secretary of State will have new duties to monitor social mobility, life chances and educational attainment of children in low income families.

What you can do?

All of the major unions are running campaigns related to aspects of the Welfare Reform and Work Bill. Unison which represents many low-paid workers who will be affected by the removal of tax credits is campaigning against the abolition of tax credits. The National Union of Teachers is concerned about the impact the bill will have on child poverty. Research the campaigns your union is undertaking to oppose the bill and what action they suggest members take.

In addition many major charities are running campaigns around the bill. The Child Poverty Action Group has produced some excellent (though currently not very up-to-date) briefings on the impact of the bill on children and it may be worth following them on social media.

Macmillan has been very concerned about the cuts to Employment and Support Allowance and the impact this could have on the cost of living for people diagnosed with acute illnesses such as cancer. They have produced excellent briefing materials and organised social media campaigns around the bill.

Major disability charities representing people with continuous disability have a more complex relationship with the changes to the law. They broadly welcome legislative commitment to support into employment for disabled people but they remain concerned about meeting the extra costs of disability in or out of work. A useful summary is provided in Scope’s evidence to the House of Commons

The major disability charities have collectively lobbied parliament around the bill under the umbrella of the Disability Benefits Consortium (DBC) and in the past achieved significant success in seeing earlier Welfare bills amended. If you are a disabled person who has received benefits you can support the work of the DBC by sharing your experiences with them.

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