Welfare Reform Bill passed

The government’s highly controversial Welfare Reform Bill was finally passed by the House of Lords on 27 February 2012 after peers dropped their final resistance to the controversial measures. The Bill, hailed as ‘historic’ by the Prime Minister, aims to save £18 billion from the annual welfare bill and overhauls most of the benefit system.

Key measures include:

  • the introduction of a ‘universal credit’ to replace most existing benefits
  • a £26,000 cap on benefits, a measure based on the principle that a family out of work on benefits shouldn’t be paid more than the average family in work; the cap will affect an estimated 100,000 children, with 55 per cent of families affected losing more than £50 per week
  • an ‘under occupancy’ penalty – dubbed a ‘bedroom tax’ by critics – which would see families in social housing lose some of their benefits if they live in houses with spare rooms: estimated to affect 670,000 households who will lose an average of £670 a year
  • restricting the payment of employment support allowance, a means-tested benefit for the disabled, to one year for new and existing claimants
  • replacing Disability Living Allowance for people of working age with a new benefit, Personal Independence Payment, from 2013
  • imposing strict limits on the payment of housing benefit
  • abolishing the discretionary social fund, with some of the finance transferred to local authorities, who will be entitled, but not obliged, to run a similar local scheme.

The Bill, which applies to England, Scotland and Wales, had ‘ping-ponged’ between the House of Commons and the House of Lords for several weeks. Peers had initially sought a host of concessions from the government, including exempting anyone at risk of homelessness from the overall benefit cap. But their concerns were bypassed after ministers enforced the ‘financial privilege’ of the Commons to ignore amendments made in the Lords that would have an impact on government spending.

But a report from the Joint Committee on Human Rights warned that changes to the benefits of disabled people may risk their right to independent living and that the ‘cumulative impact’ of welfare reforms could force some people out of their homes. The cross-party committee’s report criticised a number of the changes to benefits, including restrictions in local authority eligibility criteria for social care support and the replacement of the Disability Living Allowance with the Personal Independence Payment.

According to a Briefing Note from the Institute for Fiscal Studies, Child and Working-Age Poverty from 2010 to 2013, the net effect of all the government’s welfare reforms will be to increase absolute child poverty by 300,000 and relative child poverty by 200,000.

See also:

Third class rating for welfare reforms: Mike Tomlinson responds to the Welfare Reform Bill. Mike Tomlinson is a member of the ESRC PSE: UK research team and this is his response to a speech from the Secretary of State for Northern Ireland on austerity, capitalism and welfare reform delivered to an audience at Queen’s University, Belfast on 27 February 2012.

The Department for Work and Pensions website provides details of the Welfare Reform Act 2012 and a government briefing on the Welfare Reform Act 2012 and disabled people. The full text of the Act can be found on the UK Parliament website.

Further independent briefings on the proposals can be found on The Disability Law Service and The Child Poverty Action Group websites.

A wide range of comments on the Bill can be found on the Guardian website:

Will the benefits cap force more children into poverty?

‘Welfare reform has us terrified’ – families facing the worst speak out

Housing benefit cap: can you live on 62p a day?

Housing benefit cap forces families to leave central London or be homeless