The Liberal Democrat stance on the Labour Government’s Welfare Reform Bill
by simongalton on 24 March, 2009
The privatisation of the employment service and social fund: The Liberal Democrats are not opposed to contracting out employment services per se, but examples from abroad suggest that private companies tend to cream the easier-to-help clients off the top and ‘park’ the most challenging cases, so that the people most in need of support do not receive it.We are also concerned that the process does not involve a level playing field: Jobcentre Plus itself is not allowed to bid, and smaller voluntary and third-sector organisations, who often understand the clients’ needs very well, are crowded out by big multinational private organisations.These organisations tend to pay lower wages to their staff and experience higher rates of staff turnover, which in turn has a detrimental effect on those that they are supposed to be supporting into work.On the subject of the Social Fund, it is far from certain that any company would wish to take it on in the current economic environment.
Work for your benefit schemes:‘Work for your benefit’ involves people working for up to £4 less than the minimum wage, which is completely unacceptable.This measure will not effectively target ‘scroungers’ but will hurt those who already face the most significant barriers to work, such as those with disabilities or mental health issues. The Government’s own research into similar ‘workfare’ schemes in the USA, Canada and Australia found little evidence that it increased the likelihood of finding work, and that it is least effective within weak labour markets with high unemployment; a situation that we are increasingly facing in theUK.
The abolition of income support:We support the introduction of a single working-age benefit but this is not the way to do it.Such a benefit needs it needs designing, modelling and piloting.The Government claims that its reforms will simplify the system but simply moving people from one benefit to another, or changing the name of a benefit, just adds to the complexity and confusion, and we have concerns that people will lose out under these changes.
Cutting the benefits of single parents, carers and those with long-term illness:The Bill would abolish all new claims for adult dependency additions on Maternity and Carer’s Allowance.It would also phase out the additions for those already receiving Carer’s Allowance.We are concerned that some of the most vulnerable people will see their incomes fall, and we have tried to remove these provisions from the Bill.
Requiring all parents of young children to seek work:We do not support measures to compel lone parents with children under school age to undertake ‘work-related activity’. The Government clearly regards raising young children as a second class activity and these measures would place decisions about child care and child rearing into the hands of Jobcentre Advisers rather than the parents.We tabled an amendment to the Bill that would have ensured that parents with children under the age of 7 would not have to carry out any work-related activity.We would also want an assurance that appropriate and affordable childcare was made available across the country before the Government makes work-related activity a condition for lone parents to receive benefit.
 Estimate used by Citizens Advice and CPAG is that people may be forced to work for as little as £1.73 per hour, compared with the minimum wage of £5.73 per hour