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.
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49 Responses to “Welfare reform: The coalition’s next train crash”
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: http://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: http://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: http://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: http://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.
Sue Marsh
RT @leftfootfwd: Welfare reform: The coalition’s next train crash http://t.co/0DBjjBe << Oh good lord yes.
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.
Angela Elniff-Larsen
RT @leftfootfwd: Welfare reform: The coalition’s next train crash http://t.co/0DBjjBe << Oh good lord yes.
DarkestAngel
RT @leftfootfwd: Welfare reform: The coalition’s next train crash http://t.co/0DBjjBe << Oh good lord yes.