Lord German writes… A benefits system that works: the Welfare Reform Bill in the House of Lords

As Co-Chair of the Parliamentary Party Committee on Work and Pensions the Welfare Reform Bill has absorbed most of the past year. It is now in the final stages of passage through the House of Lords. There has been some negative press surrounding the Bill, which is clouding aspects that have been long term goals of the Liberal Democrats.

A big first step is being taken towards our long term ambition of merging tax and benefits. Our benefit system is the most complex and cumbersome system in the developed world. It requires an annual book to be published which explains the system and is the size of the Bible! This bill is radically changing the culture surrounding welfare in this country, creating a simple, fair system that encourages individual responsibility whilst targeting resources at those who need them most. This single working age benefit parallels our own policies on welfare and will improve the current complex system.

Universal Credit is the single means-tested benefit for working age persons that will replace the multitude of in and out of work benefits that are currently available. While the current system has the perverse effects of trapping individuals into poverty and fosters welfare dependency, UC will encourage the move into work allowing claimants to keep more of their earnings. Increasing the incentive for people to work, ‘making work pay’, will release people from the current fear of moving into employment or increasing their work hours. It is estimated that Universal Credit will get 300,000 households into work and an extra £2 billion of new injected investment will ensure this. The integration of benefits and tax will also ensure that people receive all the money they are entitled to through automatic passporting, meaning that they will be automatically enrolled for whatever their eligibility entitles them to. A new, ‘real-time’ system will account for earnings on a month to month basis allowing your UC to fluctuate as your working hours may fluctuate to prevent overpayment claims at the end of the year. This will have a significant impact on child poverty in the UK and an estimated 350,000 children will be lifted from poverty.

In these tough times streamlining the welfare system which helps Department of Work and Pensions reach its large budget reduction.

The DWP has the largest budget of all government departments – far larger than health, education and defence. As a result, the deficit reduction plan has left the DWP with the highest required cut. We have been trying to make savings by restricting budget growth over the next few years rather than cutting support immediately. Spending on Housing Benefit at the start of this Parliament was £22billion and at the end of this Parliament it will be £22 billion. The same applies to Disability Living Allowance (to be renamed Personal Independence Payment), which at the start of Parliament was £12.3 billion and at the end of Parliament will be £12.3 billion. Liberal Democrats have been working to ensure that those most in need will still get the help they deserve, even under the austerity regime of the coming years. There will still be increases in benefits for many of the most vulnerable households, with an estimated 2.7 million households being better off as a result.

In the Lords the Liberal Democrats have been working hard to ensure poorest and most vulnerable are protected, because we understand that we cannot balance the books on the backs of the poorest. We have pressed hard to make sure that people with degenerative illnesses can be reassessed to guarantee they keep their ESA. We have had substantial concessions on childcare and we are working on making sure disabled people, foster carers and other groups are not affected by the government’s new under occupancy housing changes.

The principles of Universal Credit are fundamentally Liberal Democrat and will continue to protect those who need protecting and support those who can move into work, encouraging a fair and responsible system. We have much to be proud of in always making work pay and meeting the challenge of lifting more people out of poverty than the last government did in its whole term.

There are tough decisions to make elsewhere in the benefit system but we should never lose sight of the need to reduce poverty in our country.

Mike German is Co-Chair of the Parliamentary Party Committee on Work and Pensions.

* Mike German is a Liberal Democrat member of the House of Lords. He was Party Treasurer from 2015-2021.

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  • mike cobley 6th Jan '12 - 12:34pm

    There a number of unsupported assertions in this piece which strain credulity. Like “It is estimated that Universal Credit will get 300,000 households into work…” – which seems odd given the death spiral that the jobs market is currently in. Also it seems that the proposed Universal Credit system will “have a significant impact on child poverty in the UK and an estimated 350,000 children will be lifted from poverty.”

    Really? Does that include the children of those 100s of 1000s of public sector workers that have lost and will lose their jobs under the rolling campaign of public sector budget cuts? Given these undoubted and ominous facts, Lord German’s upbeat hoopla can only be regarded with hard-headed skepticism.

  • Mike German Caron Lindsay 6th Jan '12 - 12:40pm

    I agree, Mike, that there are many good, solid, Liberal Democrat principles, that we’ve been supporting for decades, in this Bill. The current system just throws people on the scrap heap and forgets about them. The new system should give people more help and support and incentive to get into work.

    While I’m happy to support, write about and commend the Universal Credit stuff, I can’t, however, support the time limiting of contributory ESA for those in WRAG to one year. It seems wrong for someone to have worked and paid NI for decades and only get one year of support when they most need it. I spoke at an RNIB Scotland Fringe meeting at the Scottish Liberal Democrat Conference on this and their incoming chair, Ken Reed, asked us all to imagine losing our sight in an accident today. He said it would take a year just to get used to being blind, let alone being expected to have found a job.

    In this economic climate particularly, to be taking close on £100 a week from sick people is absolutely wrong. Entitlement should be needs based and should cover more than one spell of illness.

    Our Autumn Conference was very clear in the motion that it passed on ESA – that Lib Dems should oppose arbitrary time limits. I think we as members have a right to expect our parliamentarians to support that policy and I hope that our members of the House of Lords will oppose that part of the Bill.

    I would like to see you address this particular issue given that the motion was very clearly supported by all but a few of those present at the conference.

  • I fully agree with the previous statements condemning you for your spin on the benefits fiasco, I worked for over 25 years before I became too disabled to continue working, I paid for my ESA in my own right, I expected that safety net to be there for me for as long as I needed it and that need is more than 1 year.
    I am appalled at the stress and anxiety that sick/vulnerable people are being put under daily by these badly thought out, blatantly lied about and poorly reported benefit changes.

  • Lots of ra ra ra look what a good job we are doing – sitting on dodgy assertations, incorrect facts, dubious use of statistics and expecting a pat on the back for working so hard. Meanwhile back in the real world…..

    Bitter that may sound but if this is what being in power does I truly despair for the party’s future.

  • Sore and Angry 7th Jan '12 - 1:00am

    as someone suffering from a disability, i have to tell you that you couldn’t be more wrong. i dread the day that questionnaire comes through the door, as i know, despite being under the guidance of specialists, and according to the doctor that has been treating me for the last five years, that i am incapable of working currently unless the workplace could accomodate my needs (SPOILER: employers do not provide beds when a disabled employee literally cannot stand or stay awake anymore) an unqualified ATOS shill is likely to inform me that i’m perfectly capable. these people are not doctors. i am not going to wake up after twelve months and be miraculously cured. the company performing these tests are wholly unqualified to do so, and furthermore the descriptors in the test have already been declared not fit for purpose for the fact that they preclude far too many people from benefits who sorely need them.

    you, sir, should be ashamed of yourself. the liberal democrats have joined in the bullying of disabled and sick people the country over, just like the tories and labour. we may be an easy target for the privileged to punish but we refuse to sit back and accept it. if you’re looking for somewhere to gain money, maybe your coalition should concentrate on closing the loopholes in the economy that allow the rich to get richer and the poor and sick to be forgotten about and left to rot.

    these misdeeds will not be forgotten, lord german – and mark my words, the lib dems better enjoy this small piece of power they are wielding now. after your outright support and sitting idly by while you let the ideology of the tory party to try and destroy the ‘little people’, destroy the NHS that so many of us rely on… you will NEVER hold that power over us again.

  • “In the Lords the Liberal Democrats have been working hard to ensure poorest and most vulnerable are protected”

    Could you tell us how Lord German? We don’t see much evidence of that so far.

    I agree with George W Potter – I know you spoke against the ESA motion at Conference, but the fact is the LD’s are member led and the membership almost unanimously voted for it – therefore parliamentarians should be upholding it.

  • To have a benefit system that works, you require a department that is fit for purpose – Alas the DWP is far from that criteria.

    IMHO, the same situation of an overly cumbersome and unwieldy benefit system will prevail even with UC – You are trying to ‘shoe-horn’ the new system, into a department that is not fit for purpose. Taking up the issues raised, concerning ESA – Trying to contact the DWP, regular waits in excess of 20 minutes before anyone answers your call, periods in excess of 5 weeks, before you hear anything, 11 weeks to re-assess claims, 22+ weeks waiting for an appeals hearing (source: http://www.publications.parliament.uk/pa/cm201011/cmhansrd/cm111019/text/111019w0002.htm ) And this is the department that is supposed help and assist those in need!

    I fear that in a couple of years, there will be a wringing of hands and a call of ‘What are we to do about welfare’ being made yet again, because at the moment the symptom is being dealt with, but not the cause!

    I suspect that once the dust has settled, and the money counted there will be little difference, as what ‘savings’ may have been made, will be countered by the additional costs the DWP will have speant, trying to implement the changes, resulting in those who need support, being consigned to the gutters and labelled ‘Workshy Scroungers’!

  • Simon Bamonte 7th Jan '12 - 3:53pm

    The article above is nothing but pure PR/spin rubbish.

    But, on the other hand, sick and disabled posters are telling it like it is here in the comments. From the heartfelt contributions of sick/disabled people in this thread, I think a very clear message has been sent. We have (and when I say ‘we’ I mean our MPs and Peers, not our grassroots), since the Coalition formed, been standing quietly by while the Tories not only attack and smear them in the press, but quietly letting them get on with cutting support for our most vulnerable members of society while we shout “Pupil Premium!! 75% of our manifesto!! blah blah.”

    Someone rightly posts above that pensions make up the large majority of welfare benefits in the UK. But we’re not going after them, we’re going after people who are sick and disabled. We’re not screaming about “scrounging pensioners” even though we KNOW there are many very wealthy pensioners receiving state benefits. As if people like being sick or disabled! As if any of them asked for this! This arbitrary time limit is cruel nonsense. We don’t cut off pensioners benefits if they don’t die by, say, 90. We don’t send pensioners to humiliating assessments with incompetent strangers like ATOS so they can prove their age. And we all say how appalling it is when pensioners die from poverty (lack of heating, etc.), but we are purposely putting sick/disabled people in this exact same position. Our reforms, which our MPs support with glee, have been directly responsible for several suicides and early deaths. We should all be ashamed. Hell, even Boris Johnson has come out in opposition to Coalition policy on welfare.

    I think the sick and disabled people above deserve more respect, more support and a better life. We should not be making them face the largest cuts because of the stupidity of the capitalists in the city who ran out of other peoples’ money and then had to be bailed out with more of other peoples’ money.

    We have a chance to do something right for our vulnerable citizens. We have a chance to do something decent. The worst parts of this bill need to be dropped and our MPs need to get out there, say “sorry” for letting the Tories demonise them and we must promise to never let this happen again.

    Whatever happened to Cameron’s promise made in the election debates of “sick and disabled people have nothing to fear from a Tory government”? Bear in mind that Cameron is worth some £30,000,000 and claimed DLA for his sadly deceased son when he could have afforded not to. An honourable man, who knows how hard raising a disabled child is does not make promises to disabled people and then break said promises once in power. But this is exactly what Dodgy Dave has done…

    Otherwise it’s just another step down towards electoral oblivion. I get the feeling that, like pensioners, sick and disabled people do vote en mess. Tell me, fellow Lib Dems, is this power worth what we are doing to sick and disabled people? Is the ability of our MPs to fit in 2 taxicabs after the next election worth crushing sick and disabled people into the dirt as we have since the ink on the coalition agreement was signed?

    I think not.

  • @ simon bamonte –

    you have brought tears to my eyes. thank you. thank you.

    do you know how rare it is to read something decent and kind about ourselves these days?

    actually, I hate having to write ‘ourselves’ – as if ‘we’ are some different species from the rest of you. Yes, I am sick. Yes, I am disabled. I am also a human being just like all of you!

    we are living in fear every day. trying to withstand the constant bashing and stigma and hatred from the government and the press has taken a massive toll on our health and self esteem and alienated us from society.

    attitudes towards the disabled have been put back decades. disability hate crime has risen sharply.

    we are used to living with pain and exhaustion and adverse conditions, we try to make the most of our lives and do what we can when we can given our limitations. But to beaten down every day, by the very people who promised that it was “their proud duty” to look after us, is utterly demoralising. we are being treated as sub-human. there is no other way to describe it.

    I truly hope there are more LD’s like you out there who have had enough of this cruel behaviour, and like you, have the courage and integrity to speak out about it and take action to stop it continuing.

    you have my respect.

  • martin sweetland 7th Jan '12 - 11:42pm

    What an absolute disgrace you and your party have become. My wife suffered a stroke 3 years ago at the age of 56.
    Her life changed irrevocably overnight. She has worked most of her life since leaving school and has become a shadow of her former self . Because of our ridiculous benefit structure she was placed in the Contributions ESA BACK TO WORK GROUP . This despite the fact that 2 hospital consultants, the head physio at the hospital, our G.P. , and 2 stroke nurses have all stated that she will never be fit to work again. From April she will lose £400 a month.Our mortgage will now not be paid by the time we are 65 (as planned ) , as this £400 pays for such luxuries as food and household bills. Yet , had she never worked and paid National INSURANCE (Perhaps you could define insurance for me , we understood this was for just such an event as illness), she would get , and continue to get benefits. If you do not support changes to clause 51 you shou7ld hang your head in shame.
    Martin Sweetland , Weston-super-Mare.

  • Simon Bamonte 8th Jan '12 - 12:02am

    Thank you, @Sam, that is very kind of you to say that. But the truth is I am no longer officially a LibDem. I had been a LibDem supporter since the early 80s and the days of the SDP. I voted LibDem/Alliance/SDP in every election since 1983, spent much free time knocking on doors and delivering Focus and I supported the coalition at the start, but when I saw our MPs not only defending Tory policy that most LDs would never support, but doing so with glee, I realised the party had changed too much, too soon, for too little power, and decided I can’t, in good conscience, continue to pay my subs when the party was enacting so much policy I could never agree to. Let’s be honest: the Tories are just using us to get a workable majority and will stab us in the back as soon as they can. From tuition fees, to benefits, to the horrible NHS reforms, to the way we are cutting the deficit on the backs of the weakest, this is not a government I can support. And for voicing this, I have been called a “Labour troll” when opposing certain policy on this site. I have been accused of living in an “ivory tower” because I don’t want to make “tough decisions” and I have also been accused of being “too emotional” because I got pissed off that fellow LibDems now support policy that is driving some sick/disabled people to commit suicide. I genuinely thought we’d temper Tory policy, especially in economic areas, but the little good influence we have simply outweighs the bad. I cannot give any of my money to support a party that is acting in direct opposition to the interests of decent working and middle class people such as myself and my wife while it becomes ever more clear by the day that we are in no way, shape or form “all in this together.” Making the sick and disabled pay for the sins of international finance and failed Labour politicians is simply beyond the pale and something any decent human being should be against. Alas there are many LibDems like Danny Alexander who, in opposition and on the campaign trail, wanted the disabled to have MORE support, but suddenly changed their tune when the Tories decided it would be the disabled who payed for the deficit. Me? I have principles and people can say I live in an ivory tower or don’t want to make “tough decisions” but I refuse to believe that taxing the uber rich some more is more damaging than cutting from the disabled. Our country is hideously unequal as it is and instead of trying to emulate more prosperous, equitable nations like Germany, Norway or Sweden, we seem to be on a one-way trip to the social Darwinism of the US. And fellow LibDems seem to think this is liberal!

    Again, thank you for your kind words. But if you are looking for a party who will support you, don’t look here. Don’t look to the Tories or Labour, either. The disabled are expendable in the eyes of all three main parties and need their own party it seems.

    Or maybe there just needs to be one party who will always put the needs of human beings before the needs of international finance capital and “the markets”.

  • I don’t know how the country is supposed to have faith in this government and coalition to be fair and too and support sick and disabled people.

    David Cameron’s Interview with the telegraph

    “In his interview, Mr Cameron said his shadow had his “sympathy” because it was a “miserable job”. But he criticised Ed Balls, the shadow chancellor, saying that his heckling at Prime Minister’s Questions was “like having someone with Tourette’s sitting opposite you”

    I think it is outrageous that the Prime Minister would make this reference to a “disabled” group of people to use as a pathetic insult aimed at Edd Balls and it showed just how completely out of touch this government is.

    Disabled hate crime is on the increase, and here we have the leader of the country engaging in using disability as an insult

  • Even more worrying is the fact that not only are the Coalition cutting our benefits and support systems, they are also trying taking aeway Legal Aid for all welfare benefit matters so we will not be able to appeal against wrong decisions.

    And according to the Green Paper on Justice and Security, there will be more secret hearings in both civil court cases and inquests so that ordinary people won’t have the right to challenge evidence against them. They will make it far more difficult to call government agencies to account.

    Lawyers say the sort of thing that could be concealed could be national security, policing, relations with foreign governments, and government commercial contracts. In most cases, the Minister exercising this power would also be a party to the case – meaning a conflict of interest, which breaches a Common Law principle, that ‘no one shall be a judge in his own cause.

    The Green paper says that in cases where this ‘closed material procedure’ was invoked, the only person apart from the judge and the lawyers representing the Government who would be allowed to see the secret evidence would be a ‘Special Advocate’.

    What has happened? This really frightens me.

    When he launched the Coalition back in 2010, David Cameron promised it would be ‘committed to civil liberties and curbing the power of the state’.

    Nick Clegg said that after years of Labour authoritarianism, theirs would be a government ‘that hands you back your liberties’.

    Yet another broken promise. And an extremely worrying one at that.

  • martin sweetland 8th Jan '12 - 2:42pm

    I am afraid that after the next election this forum will disappear , along with the Liberal Democrat Party. Simon Bamonte is just one of an ever growing number of people disillusioned with the stark reality that many M.P..s are more enamoured with “power” than fairness , truth or justice. Hopes that a coalition would bring some form of balance have been rapidly eroded and as Simon stated , leaves many people wondering where to cast their votes.
    Rather than progress , this coalition has seen the Lib-Dems move from being a sound alternative , to a party fit only for a political wilderness. I do not live in an ivory tower , and worry that if the welfare reform bill is passed without amendment to clause 51 , my wife and i will be forced to sell our house. We are a working class couple in our late 50s and typical of those that will lose out under the new legislation . The only part of “we are all in this together ” that we face, is an anagram of “this”.
    Broken Britain is now entering another stage of bankruptcy , moral bankruptcy , because we are seeing that if given a chance , just about any politician will shaft you if they can gain favour from their masters.I would love to be proved wrong , but somehow , i am not feeling lucky. As one gets older you expect to find deterioration in your vision , but i now find that the colours red,blue and yellow are all merging into one myopic blur. There is only one hue in politics today , and thats very, very bland. The emperors new clothes are , after all . the same.

  • I lack the specific expertise of others, but I regard the universal benefit and citizens pension as positive steps that will reduce the overall burden and damage to our labour and retirement savings markets caused by means-testing. I think it is unfair to criticise Lord Gorman and the other leaders for wanting to celebrate this, and in particular to accuse them of buying into social darwinism. Far from it.

    Of course, I wish we could get rid of means-testing altogether and introduce an honest and proportionate tax-and-benefits system where the tax rate is what you pay on your extra income, and benefits are based on need, not means. Above all, we should not be penalising people who choose to go to work, especially if they have a disability.

    To be fair, neither Labour nor the Tories would ever accept this. They prefer to divide the country into tribal ‘haves’ and ‘have nots’ whom they expect to vote accordingly. Universal benefit will help stop this tendency. But we have had to make compromises, and we need to keep up the fight against socially divisive means-testing.

  • Compromise is an essential part of a liberal democracy. You either compromise with whoever is in power and get part of what you want, or you compromise with the status quo by avoiding power and you get nothing of what you want. I know which I would rather our MPs and peers went for.

    There is a lot in the welfare reform bill which I could not support. Like many people commenting here, my own family is personally affected (adversely) by the changes which gives me an added reason for resenting them. But I can also see that in the midst of it there is some good stuff which Mike German is right to point out, like Universal Credit. And I have no doubt that a Liberal Democrat influence has been a moderating force on Tory instincts. I dread to think what an unrestrained George Osborne would have done to the sickest and most vulnerable in society is he was left to his own devices. Just one example is the fact that Liberal Democrats were responsible for benefits being uprated this coming April by the full 5.4% – it was widely reported that the Chancellor wanted to freeze them.

  • This > “We have been trying to make savings by restricting budget growth over the next few years rather than cutting support immediately. Spending on Housing Benefit at the start of this Parliament was £22billion and at the end of this Parliament it will be £22 billion.”

    Is misleading, the overall spend is predicted to remain static because the caseload will continue to rise, while individuals will have their HB cut. Individuals have experienced cuts in support, you can’t claim credit for spreading the same pot around more people.

  • I have supported a lot of the government’s more controversial deficit cutting measures simply because I believed they would need to be done whoever was in power but the attack on disabled people through the changes to DLA is simply unacceptable. The government and fellow Lib Dems need to think again.

  • The concept of Universal Benefit is a good one, but as always the devil is in the detail. Curtailing consultation periods, and then ignoring the results of that so-called consultation is a good way to get a bad bill written. The Spartacus Report, trending on twitter, shows exactly how the wool is being pulled over well meaning liberal eyes. Read the press report here http://tinyurl.com/86h82gb and the full report, backed by MIND, Scope, the Disability Alliance and many many other disabled groups countrywide here http://tinyurl.com/78erjru

    * 98 per cent of respondents (to the consultation process on DLA/PIP) objected to the qualifying period for benefits being raised from 3 months to 6 months

    * 99 per cent of respondents objected to Disability Living Allowance no longer being used as a qualification for other benefits

    * 92% opposed removing the lowest rate of support for disabled people

    I was a liberal voter once too. The party can still draw a clear line between itself and the Tories. It is not too late.

  • The liberal democrat’s support for this bill (thankfully being voted against by a large number of Labour and principled cross-bench peers in the Lords this evening) is what finally killed any prospect of my ever voting LD again, this is having voted Liberal Democrat for my entire voting life and having felt in the past that I agreed with most of the party’s supposed values and objectives as an alternative to the increasingly similar Labour and conservative parties. However the measures proposed targetting the sick and disabled are inhumane and unworthy of a civilised society and the support of the majority of the liberal democrat parliamentary party and peers is nothing short of disgusting, as is the piece of transparent coalition spin above. The fact that they are prepared to vote for measures such as this should kill once and for all the argument that the Liberal Democrats form a useful check on the conservatives. I note that even in this evening’s 3 defeats in the Lords there was a tiny ‘rebellion’ from the liberal democrats and only one LD peer voted against all 3 amendments. When the Liberal Democrats get hammered at the next election they will deserve it. It’s what comes of throwing away most of your principles in the blind pursuit of power.

  • Oh dear, methinks he doth protest too much. Or, maybe, just not enough.

  • James Sandbach 12th Jan '12 - 1:09pm

    I think the Government have a bit of explaining to do after last night..


    a bit of humility from Lord German that these are sensitive issues touching every aspect of lives of the most vulnerable in the community would not go amis.. ” We have pressed hard to make sure that people with degenerative illnesses can be reassessed to guarantee they keep their ESA”….except that when it came to the crunch our peers voted against reasonable cross-bench amendments which would ensure this is the case, despite having a free vote…and then tried to reverse the amendments as passed once the cross-benchers had retired to bed

  • I see the Liberal Lords voted with the Govt last night (17th Jan). I have voted LibDem in the last 3 elections. I won’t vote for them again. They repulse me. It looks like I’m left only with the Greens.

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