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Welfare Bill: Changes to continue despite Lords defeats Welfare Bill: Changes to continue despite Lords defeats
(about 2 hours later)
  
The government has insisted it will continue with changes to the welfare system despite defeats in the Lords. The government says it will press ahead with changes to the welfare system, despite defeats in the Lords.
Labour peers and independent crossbenchers rejected proposals to means test the benefits of young disabled people and cancer patients. Labour and independent peers, and some Lib Dems, voted down restrictions on benefits for cancer patients and young disabled people.
Employment minister Chris Grayling said the welfare state should be focused on supporting those with the most need. Employment minister Chris Grayling said the welfare state would support those in "genuine need" but "tough decisions" had to be taken to tackle the deficit.
Labour said the coalition was defeated for trying to "cross the basic line of British decency". Labour said ministers had crossed "the basic line of British decency".
Mr Grayling said the government would "look carefully" at what peers had said, but ministers would seek to reverse the amendments in the Lords when they came back into the Commons. The government says its controversial Welfare Reform Bill, which applies to England, Scotland and Wales, is the biggest shake-up of the welfare system in 60 years.
He said those with genuine need would continue to receive support from the welfare state, but the government "can't provide everything to everyone", particularly in difficult financial times. Among its plans are proposals to pay out "contributory" employment and support allowance (ESA) - which is currently not means-tested - for one year only, after which some claimants would be means tested.
"What we can't do is provide support for people who have other financial means," he said. But it suffered defeats on three issues in the Lords on Wednesday night.
On Wednesday, peers voted by 260 to 216 to protect up to 15,000 young disabled people from cuts to employment support allowance (ESA), which has replaced incapacity benefit.
  • Peers voted down plans that would have meant some cancer patients receiving contributory ESA would have been means tested for the benefit after 12 months. Instead they voted to make it two years to give them longer to recover.
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  • They also rejected the 12-month limit for ESA claimants who are judged capable of working at some stage in the future.
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  • And they rejected moves to stop disabled young people who have never worked, due to illness or disability, from receiving contributory ESA - usually paid to those who have been paying National Insurance.
They voted 234 to 186 for a two-year limit on claims, rather than the proposed one year, and by 222 to 166 to exempt cancer sufferers from a limit. Mr Grayling told the BBC the government would "look carefully" at what peers had said, but ministers would seek to reverse the amendments in the Lords when they came back into the Commons.
Critics said the plan meant disabled children who could never work would never be entitled to the benefit. He said: "We are not taking away benefits from people who've got no other form of income, we're not taking away from people who are going to be sick and disabled and unable to work for the rest of their lives.
As part of their drive to cut spending on welfare, the government wants to remove the so-called "youth provision" that allows some young people to receive contributory employment and support allowance (ESA) even though - due to disability or illness - they have not been able to work and build up National Insurance.
Welfare Minister Lord Freud said it was unfair for a young person to continue to get a contributory benefit without having "paid in" - even if they were to inherit a lot of money.
Evidence of tension between the coalition parties has emerged in the wake of the government's defeats in the House of Lords.Evidence of tension between the coalition parties has emerged in the wake of the government's defeats in the House of Lords.
The government lost three votes over its welfare reforms after Labour and independent crossbench peers united to oppose the plans to cut employment support allowance.The government lost three votes over its welfare reforms after Labour and independent crossbench peers united to oppose the plans to cut employment support allowance.
But they were helped by a substantial number of Liberal Democrat peers who either rebelled or abstained.But they were helped by a substantial number of Liberal Democrat peers who either rebelled or abstained.
For example, in the last vote - on plans to exempt cancer sufferers from cuts to the ESA - more than half of all Lib Dem peers failed to support the government.For example, in the last vote - on plans to exempt cancer sufferers from cuts to the ESA - more than half of all Lib Dem peers failed to support the government.
In all, five Lib Dem peers rebelled and voted against their government. A further 44 did not vote.In all, five Lib Dem peers rebelled and voted against their government. A further 44 did not vote.
In contrast, just 42 Lib Dem peers voted for the government.In contrast, just 42 Lib Dem peers voted for the government.
This suggests that while the Lib Dem leadership may be signed up to the coalition's spending cuts, many of their peers are less keen to wield the axe.This suggests that while the Lib Dem leadership may be signed up to the coalition's spending cuts, many of their peers are less keen to wield the axe.
He estimated that 90% of those affected by the change would still get the income-related part of ESA. "What we're doing is for people who are on the path back to the workplace and who have got other financial means... [we are saying] we will give you something back, you will receive benefits for a period of time, but you can't receive benefits indefinitely, paid for by people on low incomes in work elsewhere."
The effect of increasing the time limit from one to two years would be £1.6bn over five years, he said. He said the government had increased "the number of cancer patients who receive long-term unconditional support from the state".
He said the proposal to time-limit contributory ESA only applied to people in the "work-related activity group" and not those in the "support group" who were deemed incapable of work. Deputy PM Nick Clegg said the government would "look in detail at some of their reservations and objections".
"We will always provide a safety net for those with limited income and people will still be able to claim income-related ESA." Five of his peers voted against the government to exempt cancer patients from being means-tested for employment and support allowance - and many more abstained.
He said that other benefits such as housing benefit and council tax benefit would be available. Mr Clegg said he "respected" that many peers wanted to make sure welfare reform was handled "fairly and sensitively": "We think we're getting the balance right, of course we're prepared to enter into a discussion, but does the welfare system as a whole need to be reformed? Yes it does."
In the second defeat on Wednesday evening, peers agreed a move to replace the one-year cap with the ability for the government to legislate for a limit of not less than two years. But Baroness Meacher, who moved the amendment protecting young people from cuts, told the BBC: "Very severely disabled children, coming into adulthood, they've been disabled probably all their lives and will be disabled all their lives, will never have a chance to earn, to build up capital to build up insurance contributions or anything of that sort.
"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," said the crossbencher and doctor Lord Patel, who introduced the amendment. "These people would have that benefit withdrawn from them under the bill - our amendment made sure that those people will continue to have the benefit as of right - and therefore a degree of dignity."
His second amendment removed the time limit on contributory ESA payments for people receiving treatment for cancer. And crossbencher Lord Patel, a doctor, who moved the amendment relating to cancer patients, 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 defeats mean the measures will be removed for the time being from the government's Welfare Reform Bill, pending a decision by ministers on how to respond.
The BBC's deputy political editor James Landale said that if the proposals were dropped entirely, the government would lose an estimated £2bn in savings.The BBC's deputy political editor James Landale said that if the proposals were dropped entirely, the government would lose an estimated £2bn in savings.
The government also suffered a defeat last month over elements of its plans to overhaul housing benefit.
Shadow work and pensions secretary Liam Byrne said the coalition had been defeated for trying to "cross the basic line of British decency".Shadow work and pensions secretary Liam Byrne said the coalition had been defeated for trying to "cross the basic line of British decency".
He urged ministers not to try to reinstate the measures in the Commons.He urged ministers not to try to reinstate the measures in the Commons.
"For months Labour has been determined to stop this cruel attack on cancer patients in its tracks. And today the House of Lords agreed," he said."For months Labour has been determined to stop this cruel attack on cancer patients in its tracks. And today the House of Lords agreed," he said.
"The government's proposal to cut paid-for benefits for people still in chemotherapy crosses the basic test of fairness.""The government's proposal to cut paid-for benefits for people still in chemotherapy crosses the basic test of fairness."