Welfare reform plans face £1.6bn black hole after Lords reject measures to limit sickness benefits

By
Jason Groves

Last updated at 4:52 AM on 12th January 2012

Lord Freud warned peers that extending the cap on ESA payments to two years alone would be expensive for the taxpayer

Lord Freud warned peers that extending the cap on ESA payments to two years alone would be expensive for the taxpayer

Ministers were facing a £1.6billion black hole in their welfare reform plans last night – following a triple defeat in the House of Lords over measures to limit sickness benefits.

In a shock defeat peers rejected plans to limit eligibility for Employment and Support Allowance – paid to those deemed too sick to work – to just 12 months in cases where individuals have enough money to support themselves.

Government sources last night acknowledged there was now a real risk that the flagship plan to cap the maximum amount of benefits a family can receive to £26,000 a year will also be thrown out when it is debated next week.

The price tag on defeats over the
Welfare Reform Bill now stands at more than £2.2billion. A Government
source last night described the defeats as ‘disappointing’ but said the
measures would be reintroduced in the Commons.

The sums of money are so large that ministers are confident they can force peers to back down.

Welfare Reform Minister Lord Freud
warned peers that extending the cap on ESA payments to two years alone
would cost the taxpayer £1.6billion over five years.

But leading medic Lord Patel, an independent crossbench peer who led last night’ s rebellion, said the proposals were unacceptable.

He said: ‘I am sympathetic to cutting the deficit, but I am highly sympathetic to sick and vulnerable people not being subjected to something that will make their lives even more miserable.’

The Government was defeated by 234 to 186, majority 48, over the one-year cap.

Ministers are believed to fear the plan to cap the maximum amount of benefits payouts a family can receive to £26,000 a year will be thrown out

Ministers are believed to fear the plan to cap the maximum amount of benefits payouts a family can receive to £26,000 a year will be thrown out

Peers also voted through an amendment that will allow young people unable to work because of disability to receive ESA, even if they have substantial means.

Independent peer Baroness Meacher said: ‘The Government has said they will protect the most vulnerable. The Prime Minister himself made a very personal commitment to help these people. Is there anyone more vulnerable than a severely disabled young person who has never and will never have the chance of earning a living?’

In a third defeat, peers also threw out a proposed time limit on ESA claims by cancer patients receiving treatment.

The defeats came after Labour teamed up with Crossbench peers and a small number of Liberal Democrats to outnumber the Government.

A spokesman for the Department for Work and Pensions last night insisted the Government’s plans were fair to both the sick and the taxpayer.

The spokesman added: ‘Our plans are about returning the welfare state to its original purpose of supporting those with the most need. But we need to ensure that taxpayer’s money is spent on those with the most need – those who are too sick or disabled to work and those with the least money.

‘ESA for people who could be expected to get back into work, was never intended to be a long term benefit. ‘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.’

But Shadow Work and Pensions Secretary Liam Byrne called on ministers to now abandon the proposals. Mr Byrne said: ‘The Government has been defeated tonight because quite simply they tried to cross the basic line of British decency.’

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It’s little compared to what the last government friitered away and squandered on useless schemes and handouts for all.

Why don’t the government force Vodafone to pay back its $8billion in tax, and subtract the £1.6billion from that? That will still leave £6.4billion with the treasury, and terminally ill people won’t need to go to work assessments.

How can sick people who thier illness have lasted many years. How can they get better again in two years. Or disablied people even. Who is going to employ them especailly British born disablied people.

£2.2. billion, compared to the billions owed in tax to the treasury? Compared to the Olympics, HS2? In Government terms this is loose change. And it amounts to a £34 premium a week, from a Government that believes its ministers “need” a food allowance that far, far exceeds this amount.
– CR, UK, 12/1/2012 02:33——————–Absolutely spot on. Couldn’t agree more.

They wanted to cut ESA, after a year, for those that had paid in for it, whilst continuing to pay for those who had never paid in for anything.
For those who have paid in, sickness benefits should continue for as long as someone is genuinely sick/disabled.
Moneywise, this is a sheer drop in the ocean, compared to the trivia this government continues to waste money on, including thne Olympics and the Jubilee, and the amounts lost when rich individuals sre allowed to aviod their tax liabilities.
Good for the Lords.

Im all for giving money to the genuinely sick so stop giving ESA to drug addicts and the homeless. Why do they deserve £91 a week? Im talking as one of these cancer patients that is recieveing treatment. I had to appeal twice just to get this complicated benefit.

The Country has lost it’s backbone Spend, spend ,spend.

£2.2. billion, compared to the billions owed in tax to the treasury?
Compared to the Olympics, HS2? In Government terms this is loose change. And it amounts to a £34 premium a week, from a Government that believes its ministers “need” a food allowance that far, far exceeds this amount.

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