Welfare Reform and Work Bill — House of Lords, 2015-12-21
Topic: Social Welfare
Zahida Manzoor (Liberal Democrats, Centre to centre-left): My Lords, I shall speak to Amendments 72 and 92 in the names of the noble Baroness, Lady Sherlock, and the noble Lord, Lord McKenzie, which I support. As I said at Second Reading, although we on these Benches agree on the need for a cap, we do not see the logic in reducing it to £23,000 a year for households in Greater London and to £20,000 for those in the rest of the country. Nor do we see the logic behind breaking the link between average earnings and the cap, as has already been said. I agree with the Child Poverty Action Group, which states that: "The reduction in the level of the benefit cap severs the link with median earnings, and instead is based on an arbitrary figure, leaving it unclear what the fairness test is now" The Government’s rationale is that the benefit cap will deliver strong work incentives. However, the real concern here is that the requirement to find housing at an affordable level may force families away from areas where there are high levels of work opportunities, such as in London, to places of high unemployment. This would undermine the ultimate aim of getting people off benefits Although the Government demonstrate that the existing benefit cap successfully strengthens work incentives, as evidenced by the greater proportion of those capped moving into employment as compared to those under the cap, in-depth interviews conducted by DWP itself in 2014 show that many households responded to the cap by, "being willing to accept low-skilled, low-paid jobs, rather than pursuing further qualifications which they hoped would help them get a better job in the future" As the noble Baroness, Lady Sherlock, has already said, the Institute for Fiscal Studies, which undertook a peer review of the DWP research, concluded that its analysis told us: "that the large majority of affected claimants responded neither by moving into work nor by moving house". Forfeiting further education and training for low-skilled, low-paid jobs limits an individual’s long-term human capital and earning prospects, which lowers potential tax revenues paid to the Government and, on an aggregated level, hinders economic productivity and potential output Long-term reductions in welfare spending will be realised only by increasing people’s income through employment and by reducing their outgoings, primarily through improving access to affordable housing. I urge the Minister to maintain the benefit cap as currently set At Second Reading, I asked whether the Government intended to undertake a distribution analysis of the levels of housing benefit that the average person hit by the benefit cap would receive and where they might be able to secure suitable housing. I wonder whether the Minister is in a position to answer this question more fully on this occasion. Will he also say what impact the further lowering of the benefit cap will have on single parents and how the rights of children will be protected? This has been very clearly highlighted by the noble Baroness, Lady Lister. Gingerbread quite rightly is concerned. Lowering the benefit cap will continue disproportionately to affect single parents, of which as many as 70%—I think that the noble Baroness, Lady Lister, quoted 69%—will have a child under the age of five. That cannot be acceptable.