The Government today suffered a defeat in the House of Lords on its controversial Welfare Reform Bill.
Peers voted by 260 to 216, majority 44, to allow young people unable to work because of disability to receive the employment and support allowance (ESA).
Putting forward the amendment, independent crossbencher Baroness Meacher said the Government's plan would mean disabled children who could never work would never be entitled to the benefit. She said it would leave them dependent on means testing and they would receive no income at all if their partner was earning.
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| Baroness Meacher: The Bill would disabled children who can not work will never be entitled to benefits |
The defeat was on the first of a series of votes expected this evening as peers also consider extending the Government's proposed one-year time limit for receiving ESA for cancer patients.
Ministers may seek to overturn the defeat, which came at report stage in the House of Lords, when the Bill returns to the House of Commons.
Lady Meacher told peers: "These young people have conditions so severe that they are entitled to be supported.
"It really puts them in a completely different category from other people who grow up, are able to earn, able to build up capital, able to gain contributions. They are surely in a category of their own.
"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?
"The second Government argument is the abolition of these entitlements will simplify the system. I ask, simplify it for who?
"It may be simplicity for the Job Centre staff but it is certainly not simplicity for the claimant.
"And how much more difficult will it be for them to find a partner if that partner not only has to cope with their own situation but will also have the financial burden of this person who will have no entitlement of their own because their partner is taxed on their earnings?
"There will be very little saving by denying these people the dignity of an entitlement to some benefit. Why remove that dignity from this particularly disadvantaged group?
"There must be some way of providing this benefit which would preclude people from abusing the benefit.
"We should not be ignoring the real entitlement, in my view, of these young people, the most disadvantaged people in our society, from an entitlement to their benefit. It would put them on means- tested benefit for the rest of their lives."
Labour shadow welfare minister Lord McKenzie of Luton backed Lady Meacher's amendment, telling peers: "The abolition of the youth condition does seem particularly spiteful."
Addressing Government concerns that a European legal ruling might enable people to come to the UK to claim the benefit, Lord McKenzie said: "Of course none of us would support 'benefit shopping'. Indeed we would work with the Government to try and make sure it doesn't occur and is stopped."
But he argued that the Government should be clearer on the issue before taking the steps they were proposing.
Welfare reform minister Lord Freud told peers: "The move from an automatic payment system, which is what we have for these youngsters, to one that is based on their income needs, which pays them effectively the same amount, depending on the position of their disability, will actually cover 90% of the same people and will leave about 10% out who have their own means of one kind or another.
"That is the solution which works in terms of the European legislation."
He argued that it was wrong, for example, for people to continue to benefit from "scarce state resources" even if they had inherited a substantial amount of money.
Later analysis of division lists showed there were three Liberal Democrat rebels - Lord Roberts of Llandudno, Lord Taylor of Goss Moor and Baroness Tonge.
The amendment was also supported by 178 Labour peers, 68 crossbenchers, four bishops and seven others.
The Government was supported by 144 Tories, 61 Liberal Democrats, 10 crossbenchers and one other.
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The Government was later defeated by 234 to 186, majority 48, over a plan to limit to one year the time people can claim ESA.
Peers agreed a move to replace the one-year cap with the ability for the Government to introduce secondary legislation specifying a limit of not less than two years.
Leading medic Lord Patel, an independent crossbench peer, introduced the amendment and 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."
Pushing his amendment to a vote, he said: "If we are going to rob the poor to pay the rich then we enter into a different form of morality."
He also spoke in favour of an amendment that would remove the time limit altogether for people while they were undergoing treatment for cancer.
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The Government suffered a third defeat when peers voted by 222 to 166, majority 56, to accept Lord Patel's second amendment, which removes the time limit on contributory ESA payments from people receiving treatment for cancer.
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Lord McKenzie attacked the Government's proposal as "fundamentally unfair" and called for a limit to be reached after "an evidence-based process" and not chosen as an "an arbitrary figure".
"Contributory ESA is a non-means-tested benefit but it is earned by having a National Insurance contribution record.
"The long-standing principle is that people pay contributions on the basis that if they fall out of work through ill-health or disability they have a degree of financial protection."
He added: "Being in receipt of a contributory benefit does not amount to having a life on benefits. The benefit is only payable for so long as someone is unfit for work.
"We have accepted with some reluctance that there could be a time limit on ESA but the time limit would have to reasonably reflect a sufficient time period for people to overcome their illness or disability, sufficient to be able to access employment."
He pointed to the "range of barriers" preventing people with cancer from returning to work.
"They are not, of course, the only ones in this position, but we should take this opportunity today to secure greater justice where we can," he said.
Lord Freud said the effect of increasing the time limit from one to two years would be £1.6 billion over five years.
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.
"Those in the support group and those claiming income-related ESA are unaffected by these proposals," he said.
"We will always provide a safety net for those with limited income and people will still be able to claim income-related ESA."
He said that other benefits such as housing benefit and council tax benefit would be available.
But he said it was right to time-limit contributory ESA in the same way that contributory Jobseeker's Allowance (JSA) was time- limited.
He said the 365-day time limit was not "arbitrary" and was similar to limits imposed in France, Ireland and Spain and struck a "reasonable balance between the needs of sick disabled people claiming benefit and those who have to contribute towards the cost".
He said one year was the right balance between restricting costs and allowing people to adapt to their changed circumstances and was double the time allowed for contributory JSA.
Lord Freud said he understood the concerns of peers on the issue of cancer patients, but two-thirds of them would be placed in the "support group" so would not be hit by the time limit.
But he said there was a lot of "misinformation" and that many oncologists agreed that not all cancer patients should be exempt from working.
He added: "Our view and policy is that the right way to address cancer diagnosis and treatment is by ensuring that the WCA (the work capability assessment) provides an accurate and effective dividing line between the support group and the work-related activity group."
Analysis of division lists showed there were two Lib Dem rebels on the second division - Baroness Doocey and Baroness Tonge.
The amendment was also backed by 167 Labour peers, 57 crossbenchers, three bishops and five others. It was opposed by 133 Tories, 51 Lib Dems, one crossbencher and one other.
©Press Association 2012
"I don't think it impinges on their daily life at all. When it does, like it did this week, how can I put this politely? I suspect many people will think: 'I am not sure this is a chamber in real touch with my everyday concerns'."
