Lib Dems: taking a stand on welfare?

19 Sep 11
Claudia Wood

A motion that slipped under the radar at the Lib Dems' conference in Birmingham could make a big difference to disabled claimants' lives 

On Saturday afternoon, the first day of the Liberal Democrat conference,  a hugely significant motion slipped into party policy. It was easy to miss – coming just half an hour before a statement supporting the legalisation of civil marriages, which occupied most of the press coverage. But it could make a difference to hundreds of thousands of disabled people across the country.

The motion was 'Liberal Democrats in government to oppose an arbitrary time limit on how long claimants can claim contributory ESA'. Don’t let the slightly technical language make you doubt its importance. The time limitation on Employment and Support Allowance is one of the most unpopular proposals in the Welfare Reform Bill. It means that if you are too ill to work, given ESA and placed in the 'may work some time in the future' group, this 'some time in the future' will actually mean one year.

This includes the 13 week assessment period, during which time potential ESA claimants only receive benefits at the equivalent level of Job Seekers’ Allowance. So actually, the period you can claim the higher rate of sickness benefit is more like 9 months.

There are two fundamental and principled objections one can make to this idea. The first is that you can only qualify for contributory ESA if you have paid sufficient levels of national insurance. You can imagine a man, working all his life and paying tax and national insurance for decades, having a stroke at 50 and only being given nine months of additional financial support in recognition of his inability to work. It really takes the 'insurance' out of National Insurance.

Now, the government will say that 60% of those falling foul of the time limit for contributory ESA can claim 'income based' ESA. This is paid the same rate as 'contributory' ESA,  but it is means tested – only those on the lowest income receive it, and your partner cannot be working or claiming ESA either. So the man who has had a stroke, if his wife works, will be ineligible for income based ESA. He will have to claim Job Seeker’s Allowance, around £26 less per week and with a range of financial penalties attached if he does not attend the required number of interviews, for example.

The second objection – which is perhaps more powerful – is alluded to in the Lib Dem’s motion. The one year time limit is ‘arbitrary’. The DWP states:  'One year was selected as the best balance between providing people claiming contributory ESA ... with enough support and reducing the cost of contributory ESA.' Picked out of thin air, in other words.

I wouldn’t, in fact, be against a time limit on ESA, if it were evidence-based. Say, the average time it takes an ESA claimant to get a job. This would still be pretty strict, but at least it would be related to ESA in some way, and would rise and fall in line with the health of the job market. I can only imagine that someone randomly came up with the one year limit around a table at Caxton House because it was a nice round number . Hardly the right way to make policy. Worse still, one year is actually extremely punitive – 90% of those claiming ESA spend longer than one year out of work, so 90% will have their contributory ESA withdrawn. This equates to  400,000 people this year, rising to 700,000 by the end of parliament. Half will be in the bottom two income deciles,  and 40% will be fail the means test for income ESA and be moved to Job Seeker’s Allowance.

So it’s an extremely welcome move that the Lib Dems have rejected it. When parliament sits again and the Welfare Reform Bill continues its way through the Lords, the Liberal Democrats among them will be able to call this part of the Bill into question and vote against it, backed by party policy. Let’s just hope this spanner in the works is not too late in the day to make a difference.


CIPFA latest

Related jobs

PF jobs