Welfare reform: The coalition’s next train crash

Shadow employment minister Stephen Timms MP writes on the failures that lie at the heart of Iain Duncan Smith's Welfare Reform Bill - the coalition's next train crash.

Stephen Timms MP (Labour, East Ham) is the shadow employment minister

NHS reform is in a mess. Now the Welfare Reform Bill is about to return to the chamber of the House of Commons after its committee stage – and it’s in trouble too.

When the Bill was due to be published in January, it was rumoured it would be delayed for key policy decisions to be made. In fact, it was only a couple of weeks late. But it was published without the key decisions. And, almost five months later, the decisions have still not been made.

Ministers boasted their Bill would solve the problems in the benefit system; it would always pay to be in work, the system would be far simpler, thousands would be better off and nobody worse off, the benefits bill would be cut…

But they hadn’t actually worked out how to deliver on their boasts.

We still have no idea how the costs of childcare will be supported in the new system. Effective support for childcare in tax credits was key to the big jump in lone parent employment under Labour. To qualify, you have to work more than 16 hours per week.

Iain Duncan Smith wants to remove the hours threshold and support childcare even for those in so-called ‘mini-jobs’ – but the Treasury won’t allow him to spend a penny more than the old system. So those getting help with childcare costs now will have to have their support cut – for many making work no longer affordable.

Mr Duncan Smith told the Welfare Reform Bill committee in February his proposals for childcare support would be available before the committee wound up in May. They weren’t. In the end, all he was able to do was host a seminar for committee members to discuss the options.

That’s not the only major gap in the policy. At the moment, families receiving means tested Income Support or Jobseeker’s Allowance are eligible for free school meals – but Income Support and Jobseeker’s Allowance are being abolished, and ministers haven’t worked out who should be eligible for free school meals in the new system – nor other so-called passported benefits like free prescriptions and mortgage interest support.

The answers to these questions will decide whether people are better off in work or not – the central goal of the bill. But, as the Bill is about to leave the Commons, we still don’t know the government’s plans. And neither does the government.

The central proposal in the Bill is to merge out of work benefits (Income Support, Jobseeker’s Allowance, Incapacity Benefit) with in work benefits (Tax Credits, Housing Benefit) into a single Universal Credit. In principle this is a good idea – it has the potential to greatly simplify the system.

But the Bill also introduces a benefit cap, to limit the total benefit a household receives to the average wage, £25,000 per year. The interaction between the cap and Universal Credit puts all the complexity straight back in.

The Liberal Democrats don’t like the benefit cap. In Committee, they spoke against it. But they didn’t vote against it. At one point they even voted against amendments to the cap they had themselves tabled. It is hinted concessions will be extracted behind the scenes.

The Conservatives often used to condemn couples’ penalties, but, with the benefit cap, they are introducing the biggest ever. The cap will be particularly hard for larger families who rent their home privately. With child benefit, child tax credits etc, it has been calculated that the cap will not leave enough to rent any four-bedroomed house in the UK. If, however, a couple with four children was to separate, the two separate households could be entitled to £25,000 per year each.

With key policy decisions still undecided, the chances of the IT to deliver Universal Credit being ready on time by October 2013 are remote. It will require that every employer in the country starts sending salary data electronically every month for every employee to Her Majesty’s Revenue and Customs.  HMRC will pass it on to the Department for Work and Pensions, for Universal Credit to be calculated. We still have no idea how this will all work for self-employed people.

This will be hugely challenging. It doesn’t augur well when the Green Paper last summer blithely informed its readers this vast undertaking “would not constitute a major IT project”!

And, in addition, there is serious trouble brewing for the government’s rushed efforts to cut disability benefits.

Ministers have simply failed to grasp the difficulties in delivering their grandiose boasts. They will find out soon enough. But it will be people who depend on the benefit system who will really have to pay the price.

49 Responses to “Welfare reform: The coalition’s next train crash”

  1. David Marsden

    Welfare reform: The coalition’s next train crash: //bit.ly/ki5cL6 writes shadow employment minister @StephenCTimms

  2. Lescromps

    Welfare reform: The coalition’s next train crash | Left Foot Forward: //t.co/dHsuQvd via @addthis #UKuncut

  3. Shaun5446

    Typically no mention of sick & disabled from Labour! RT @leftfootfwd: Welfare reform: The coalition’s next train crash //t.co/B8J38jr

  4. Michael

    Welfare reform: The coalition’s next train crash I Stephen Timms – //j.mp/j2UNVg

  5. Emma Donaldson

    Welfare reform: The coalition’s next train crash: //bit.ly/ki5cL6 writes shadow employment minister @StephenCTimms

  6. yorkierosie

    Welfare reform: The coalition’s next train crash I Stephen Timms – //j.mp/j2UNVg

  7. Tim Swift

    Welfare reform: The coalition’s next train crash I Stephen Timms – //j.mp/j2UNVg

  8. Robert Sprigge

    RT @leftfootfwd: Welfare reform: The coalition’s next train crash: //bit.ly/ki5cL6 writes shadow employment minister @stephenctimms

  9. Ros Davis

    Migration to ESA was planned under labour – was it not? People are desperate straits. I work in Maerdy in the Rhondda doing community development work. I am seeing more and more people in desperate straits. NO Food NO Money No Phone credits. No bus fares to go and sign on. People told they should be working when they can barely walk and there are very no frakin jobs anyway. Uk needs to wake up to the reality of many peoples lives. Labour needs to stand for social just, inclusion and food and shelter as a right

  10. Theresa White

    It’s not just the new bills that are headed for disaster in the making. There are personal tragedies already taking place directly related to the new benefit Employment and Support Allowance being rolled out across the country to all Incapacity Benefit claiments. People have already died due to the nature of the system and more will as long it is allowed to continue in it’s present form. I’m in the process of going through the assesment and I’m blogging about the experience and keeping my MP informed at the same time. For a worms eye view of the current welfare reforms come visit me @

    //lifeintheunderclass.blogspot.com/2011/06/all-that-is-necessary-for-evil-to.html

    //www.facebook.com/notes/teejay-dyslexickid/dear-mr-johnson-alan-that-is/175017849222022

    i think it’s important to ask how much cost in human misery is worth the saving on fraud – it will not stop error – especially when you factor in the additional cost of repeated assesment (sometimes every three months even in cases of cancer, MS and genetic life long conditions) and appeals being won at 40%.

  11. DavidG

    Stephen Timms might be a slightly more convincing warrior in the fight against the attacks on disabled benefit claimants if he hadn’t been so eager to support Cameron’s attack on claimants whose disabilities lead to obesity or addiction: “I think a lot of people would agree with that” to quote his own words in the interview here: //www.bbc.co.uk/news/uk-politics-13152349 Equally he still supports the Labour ‘reforms’, as also made clear in that interview, which gave us the horrors of ESA and the Work Capability Assessment and the savagery with which ATOS implements them, which we are now seeing deployed for the ethnic cleansing of Incapacity Benefit and which are wreaking widespread terror throughout the disability community.

    My personal experiences of the WCA can be seen here: //wheresthebenefit.blogspot.com/2011/04/wca-sick-joke-or-national-disgrace.html I passed, in spite of everything the Labour-designed system threw at me, but so many tens of thousands of disabled people in the same situation would not have been able to argue their case as forcibly as I was.

    And my experience on JSA, the supposed safety net for those tossed contemptuously aside by ESA, can be read here: //wheresthebenefit.blogspot.com/2011/01/inept-leading-clueless-jcp-jsa-and.html The edited highlights are that it took a complaint to the Minister for Disabled People (Jonathan Shaw at the time) to get DWP to acknowledge that they couldn’t treat me as non-disabled, and the only way they could do that was to migrate me to ESA.

    We desperately need Labour to stand up and fight for us, disabled people are fighting not just the harshest cuts of any sector, but a campaign of DWP-sponsored vilification in the Tory rags (a campaign that sadly started under Labour), the latest round disfiguring the tabloids with its hatred just today, that is demonising disabled people as universally benefit scroungers and leaving us subject to attacks in the street from complete strangers simply for being disabled: //wheresthebenefit.blogspot.com/2011/02/hate-from-government-hate-on-street.html

    But protecting us from this disablist assault means that Labour will have to dig deep and find the collective courage and ethics to say: We were wrong. Getting disabled people back into the workplace is not simply a case of putting them under pressure, disability is complex and real and it causes all kinds of problems which we in government should have worked to minimise, rather than listening to false prophets who proclaimed that ‘the disabled’ were simply workshy and that a system like ESA and the WCA, designed to be deliberately onerous and to discount many of the most disabling factors of all would drive them back into work.

    There is an opportunity for Labour here, the employers openly pat themselves on the back that under 30% of them would consider employing a disabled person, even though it is illegal for 100% of them to even consider it. They’re handing us the ammunition we need to shoot them with, simultaneously opening the way for disabled people to at least have the same chance of work as anyone else. But it needs Labour to step up and take one for the common good by saying: We got it wrong, and that’s not good enough, and from now on we intend to be a party that fights for the disabled people of this country, and not against them.

  12. Sue Marsh

    RT @leftfootfwd: Welfare reform: The coalition’s next train crash //t.co/0DBjjBe << Oh good lord yes.

  13. Jennie Kermode

    Speaking as a working disabled person whose limited options and ill partner mean benefits are still needed to make ends meet, one of the most frustrating aspects of depending on them is having them routinely miscalculated and mismanaged by incompetents – people who get paid far more than I do despite their inability to do their jobs, just because they enjoy the luxury of being well enough to work away from home. There has always been mismanagement at a government level too, but at this stage it really is beyond a joke. With unemployment as high as it now is in the UK, there must be people available who can structure policy more effectively than this.

    We know the figures for fraud. We know the figures for underpayment, and it’s clear that claimats, not taxpayers, are the ones being ripped off (the fact some claimants also pay tax is another example of incompetent policy making). What we need is a government with the balls to stop using claimants as scapegoats and the will to invest money now in making the practical changes that really can both increase opportunity and reduce long term costs.

  14. Angela Elniff-Larsen

    RT @leftfootfwd: Welfare reform: The coalition’s next train crash //t.co/0DBjjBe << Oh good lord yes.

  15. DarkestAngel

    RT @leftfootfwd: Welfare reform: The coalition’s next train crash //t.co/0DBjjBe << Oh good lord yes.

  16. Jill Hayward

    RT @leftfootfwd: Welfare reform: The coalition’s next train crash //t.co/0DBjjBe << Oh good lord yes.

  17. joe kane

    For the record –
    ‘Shadow Employment Minister Stephen Timms said “a lot of people” would agree with Mr Cameron’s argument that IB benefits should be paid to those incapacitated “through no fault of their own”.’
    PM vows action to get addicts on benefits into work
    BBC News Politics
    21 April 2011

    Also see Tony Greenstein –
    ‘Welfare Reform’ is Literally Killing People
    Tony Greenstein’s Blog
    25 May 2011

    But we should not forget that New Labour has been wholeheartedly behind the government’s ‘welfare reform’. Not surprising given that ‘welfare reform’ was begun by New Labour. Shadow Minister for Welfare, Stephen Timms has made clear his support for the principle behind the Government’s savage attack on Welfare. As he says on his own website, ‘The Bill’s basic idea is good….. Disabled people are particularly worried. I support reform of Disability Living Allowance (DLA).’

  18. Broken OfBritain

    Welfare reform: The coalition’s next train crash I Stephen Timms – //j.mp/j2UNVg

  19. Margo Milne

    Welfare reform: The coalition’s next train crash I Stephen Timms – //j.mp/j2UNVg

  20. Arwen Woods

    Welfare reform: The coalition’s next train crash I Stephen Timms – //j.mp/j2UNVg

  21. Rosemary

    RT @leftfootfwd: #Welfarereform: The coalition’s next train crash //t.co/IgLVDtX

  22. DarkestAngel

    Welfare reform: The coalition’s next train crash I Stephen Timms – //j.mp/j2UNVg

  23. Parveen Akram

    RT @leftfootfwd: Welfare reform: The coalition’s next train crash //t.co/Qm197qq

  24. Plymouth City UNISON

    Welfare reform: The coalition’s next train crash I Stephen Timms – //j.mp/j2UNVg

  25. Kim Blake

    RT @leftfootfwd: Welfare reform: The coalition’s next train crash //t.co/781DPQs *sigh* This

  26. BendyGirl

    RT @leftfootfwd: Welfare reform: The coalition’s next train crash //t.co/qQYgFsE

  27. claire williams

    Welfare reform: The coalition’s next train crash: //bit.ly/ki5cL6 writes shadow employment minister @StephenCTimms

  28. paulstpancras

    Welfare Reform: The Coalitions next train crash //bit.ly/knxN0r

  29. Raymondillo

    RT @leftfootfwd: Welfare reform: The coalition’s next train crash //t.co/qQYgFsE

  30. Rosa Edwards

    Welfare Reform: The Coalitions next train crash //bit.ly/knxN0r

  31. Alec Speight

    Welfare reform: The coalition’s next train crash | Left Foot Forward //t.co/axJ5ERc

  32. Kayte Lawton

    Interesting @leftfootfwd piece from @StephenCTimms on big unanswered questions in Welfare Reform Bill //bit.ly/jWeKcQ

  33. Matt Harwood

    Welfare reform: The coalition’s next train crash //is.gd/23ykRg

  34. Pete James

    Stephen Timms: The coalition's next train crash //t.co/J1GJ6UC

  35. Casdok

    One of the problems is the Ministers do not know what the problems are.

  36. Chris Salter

    RT @leftfootfwd: Welfare reform: The coalition’s next train crash //t.co/YA2qakN #ppnuk

  37. Robert

    I decided some time ago not to worry about it, If they find me fit to work I suspect they will, I have a lesion of the spinal cord causing paraplegic and have been looking for work for longer then Labour came to power, and to be honest have had lots of unpaid jobs from helping out others less able then my self, to helping out government, but once I asked to be paid I was let go, I was fine while I worked for free, but payment they needed as I was told many times a fit and healthy person who would not be away from work, yet out of the two years i worked for one employer I did not lose a day, but once a job became available i was told it had to go to a fit person.

    Ten years of going to the job center each week, to be handed jobs like painting decorating from a wheelchair, scaffolding, window cleaning, they gave up. and so did I.

    So once the day comes that I’m told I’m fit I have enough pain killers to end it.

  38. mr. Sensible

    Agreed, Stephen.

    Of course if people can work, they should. However, firstly there have to be jobs available, and secondly the rhetoric we read in the right-wing press is unhelpful to this debate.

    I was concerned to read a letter in last week’s Guardian which gave an insight in to how the new assessments were effecting people, to the extent that some people had attempted souicide.

  39. Eleanor Besley

    RT @leftfootfwd: Welfare reform: The coalition’s next train crash //t.co/owXu7Ij

  40. DarkestAngel

    RT @leftfootfwd: Welfare reform: The coalition’s next train crash //t.co/owXu7Ij

  41. Pindeckoo

    RT @leftfootfwd: Welfare reform: The coalition’s next train crash //t.co/owXu7Ij

  42. DavidG

    @Mr Sensible: I believe you’ll find not just several attempts, but several successful suicides attributed to the new assessments, and just a couple of weeks ago a fatal heart attack the night before an assessment. When I blog on WTB about the campaign against us I regularly get replies from people discussing how they are hoarding pills or whatever for the day they fail the WCA, because they see no prospect of surviving the JSA regime. There is something very wrong with the system when we need to put a link to the Samaritans alongside our blog posts about a benefit ‘reform’ Labour introduced and which Ed Miliband, Stephen Timms and the parliamentary party continue to support.

  43. Thomas Hemingford

    Interesting @leftfootfwd piece from @StephenCTimms on big unanswered questions in Welfare Reform Bill //bit.ly/jWeKcQ

  44. TiddK

    Considering that it was New Labour who brought in ‘banned-in-the-USA’ Atos Healthcare to supervise the cuts in Incapacity Benefit (the raison d’etre for the change to ESA, not the needs of the sick and disabled) – Mr Timms seems strangely silent on this topic. Everything else in the Welfare Reform Bill is wrong, but the laissez-faire persecution of the disabled is fine, Stephen?

    Why not seize hold of your courage, defy your leader, and stand up for those of us who are too weak, too ill, too disabled to put up much of a fight anymore? Never forget the ‘motto’ over the gates of Auschwitz, Stephen : ARBEIT MACHT FREI. It still applies, especially now that we the disabled have become the ‘new Jews’. Are you a resistance fighter, or a concentration camp guard, ‘obeying orders’? Run your colours up the mast, and let us judge for ourselves.

  45. RightsAdviceScotland

    "As the Bill is about to leave the Commons, we still don’t know the government’s plans. And neither does the… //fb.me/14mo7GDDl

  46. Stephen Timms

    Welfare reform. The Coalition's next train crash. //tinyurl.com/5unfzyz

  47. Alexis Cleveland

    Welfare reform. The Coalition's next train crash. //tinyurl.com/5unfzyz

  48. Life in the Lords logjam may be death for the health bill | Left Foot Forward

    […] to means-test the disabled-from-youth, cost cancer patients up to £94 a week, and introduce a cap on total household benefits, just to […]

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