Welfare Benefits Up-rating Bill — Committee (1st Day) (Continued)

Part of the debate – in the House of Lords at 5:15 pm on 25 February 2013.

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Photo of Baroness Stowell of Beeston Baroness Stowell of Beeston Lords Spokesperson (Department for Work and Pensions), Lords Spokesperson (Women & Equalities), Baroness in Waiting (HM Household) (Whip) 5:15, 25 February 2013

The point I am making, which the noble Lord is clear about, is that the Bill still provides annual increases in benefits, but at a reduced rate for some elements of those benefits. We are doing this in the way that we propose because it adds to the certainty. As I told the noble Lord when we were outside the Chamber, the IMF was very clear that to anchor market expectations, policymakers need to specify adequately detailed medium-term plans for lowering debt ratios, which must be backed by binding legislation or fiscal frameworks. This is part of what we are doing, and why it is important.

As I have said, despite the economic situation, which we have already discussed today at some length, we have found the resources to fund a 1% increase in working-age benefits and, in doing so, protected the incomes of disabled people as far as we can-especially those elements which are provided to cover the additional costs of disabled people.

The noble Lord, Lord McKenzie, said that it would not be hugely expensive to accept these amendments and to make this change. It is important that I make it clear to the Committee that accepting these amendments would mean a loss of £340 million in savings, which we would have to find elsewhere. Those in the work-related activity group are deemed able to prepare for work and, as such, are better placed to be able to improve their income levels. Therefore, we believe it right that the component is also within the scope of the Bill.

Personal allowance rates are common across the working-age benefit system, as I have already said, reflecting the fact that they perform the same function: to provide basic support for everyday needs. Accepting these amendments would therefore break away from that model and would create additional complexity in the benefits system. Our proposals are proportionate. Although I understand the concerns and points that have been raised in the debate-please believe me, I do-what is being proposed here is fair. I therefore ask the noble Lord to withdraw his amendment.