Welfare Reform and Work Bill Committee

Written evidence submitted by the Equality and Human Rights Commission (EHRC) (WRW 85)

Welfare Reform and Work Bill

Public Bill Committee

Response to call for written evidence

The Equality and Human Rights Commission is pleased to respond to the Public Bill Committee’s request for written evidence. We welcome the policy aim of the Welfare Reform and Work Bill which is to encourage and help more people in to work (where they can, and are able to), and acknowledge the Government's commitment to reduce the deficit and reform the welfare system. However, we have some concerns that some of the Bill's clauses could exacerbate existing inequalities.

Summary of key points

The scope of the Bill is broad, and the Commission has decided to focus its written evidence on the following areas:

1. Assessing equality and human rights impact

The Commission is concerned that the impact assessments and human rights memorandum which accompany the Bill do not fully assess the impact on equality and human rights. This may make it difficult for parliamentarians to properly consider the implications of the measures in the Bill.

2. Reporting

We welcome the Conservative Party's manifesto commitment to halving the disability employment gap and encourage the Government to use the Bill to measure progress against this commendable aim.

3. Social Mobility

We welcome measures that aim to reduce child poverty and the Bill’s proposals to use indicators that take into account causal risks that contribute to the perpetuation of poverty. However, we consider that measures of relative and absolute income poverty as well as measures of material deprivation, as set out in the Child Poverty Act 2010, are necessary to give a clear picture of child poverty in the UK, and should be included in any new set of measures.

4. Welfare Benefits

The Bill has significant relevance to the UK's legal obligations under national and international human rights enactments . The Commission recommends that some of the measures in the Bill relating to welfare benefit reform are reviewed in the context of the Government's international obligations under the UN treaties that it has ratified.

This applies in particular to the proposals to lower the benefit cap, impose a four year freeze on certain benefits, Child Benefit rates and child tax credits , and the proposal to lower the level of Employment Support Allowance (ESA) available to future claimants placed in the Work-Related Activity Group (WRAG) to that of Job Seekers Allowance.

5. Loans for mortgage interest

The Bill proposes to replace the Support for Mortgage Interest Scheme with interest bearing loans. Currently, of the 156,000 recipients of this scheme, 33% are in receipt of Employment Support Allowance. We are concerned that requiring ESA claimants to pay interest and administrative fees on top of loan payments, when they have already been assessed as unwell and unable to work, will cause undue hardship and anxiety.

6. Devolved context

Parliament is considering major changes to reserved welfare powers at the same time as it considers significant devolution of legislative and executive competence on welfare to the devolved institutions in Scotland in the Scotland Bill. We encourage the Government to maintain a close dialogue with its Scottish and Welsh counterparts to ensure that equality and human rights considerations are addressed consistently across Britain.

The Commission's Analysis

1. Assessing equality and human rights impact

Domestic context:

1.1 Section 149 of the Equality Act 2010 requires those carrying out public functions, including Government departments and Ministers of the Crown, to have due regard to the need to eliminate unlawful discrimination, advance equality of opportunity and foster good relations. This is an ongoing duty which applies throughout the policy-making process, from the development of options and draft proposals through to legislation and implementation.

1.2 There are six impact assessments which accompany the Bill and cover a number of the proposals [1] . Assessments need to include sufficient detail and analysis to demonstrate that draft proposals have been adequately considered for their potential impact on equality. The Commission is concerned that these assessments do not examine equality impact in the depth required by section149 and are therefore unlikely to help Parliamentarians fully understand and debate the different provisions contained within the Bill. This may limit Parliamentarians’ ability to consider alternative options and possible mitigation where required.

1.3 The Commission is in correspondence with the Secretary of State to ensure that the assessments of equality impact are sufficiently rigorous to support proper scrutiny of the Bill in the context of the Government’s equality and human rights legal obligations.

International context:

1. 4 T he Bill also has significant relevance to the UK's legal obligations under national and international human rights enactments. R ecently (and since we wrote to the Secretary of State) the DWP produced a human rights memorandum [2] to assess compatibility of the Bill with the European Convention on Human Rights. The memorandum also addresses the Bill’s impact on the implementation of the UK’s international human rights obligations .

1. 5 The Commission’s analysis of the memorandum suggests it could be strengthened in a number of ways . One example is the Government’s position that "refocusing government action from tackling the symptoms of child poverty (low income) to tackling the root causes of poverty ( worklessness , poor educational attainment)" would " make a real and lasting difference to children’s lives" [3] and therefore demonstrate compliance with Article 3 of the UNCRC . In SG v Secretary of State for Work and Pensions, three of the five Supreme Court judges raised serious concerns as to whether the decision to lower the household benefit cap had been taken on the basis of an adequate consideration of the best interests of the child. As Lady Hale stated , the Government’s argument "misunderstand[s] what article 3(1) of the UNCRC requires. It requires that first consideration be given to the best interests, not only of children in general, but also of the particular child or children directly affected by the decision in question. It cannot possibly be in the best interests of the children affected by the cap to deprive them of the means to provide them with adequate food, clothing, warmth and housing, the basic necessities of life. It is not enough that children in general, now or in the future, may benefit by a shift in welfare culture if these are also the consequences. Insofar as the Secretary of State relies upon this as an answer to article 3(1), he has misdirected himself." [4]

1. 6 A proper consideration of the best interests of the child, as required by Article 3(1) of the CRC is therefore necessary, and a failure to complete such as assessment could leave aspects of the Bill vulnerable to legal challenge in the future. If a case is brought in which the claimant directly affected is a child and not his or her parent, as in the SG case, then Article 3(1) of the CRC could be considered by the Court to interpret the UK Government’s duties under the Human Rights Act 1998.

1.7 in a Written Statement to Parliament on 6 December 2010 [5] , the Minister of State for Children and Families made

"a clear commitment that the Government will give due consideration to the UNCRC articles when making new policy and legislation. In doing so, we will always consider the UN Committee on the Rights of the Child’s recommendations but recognise that, like other state signatories, the UK Government and the UN Committee may at times disagree on what compliance with certain articles entails."

This commitment is repeated in the Cabinet Office Guide to Making Legislation (July 2013, para 11.30).

1.8 This position has not yet been translated into law. The Joint Committee on Human Rights, in its scrutiny of the Welfare Reform Bill in 2012, regretted that the Government had failed to carry out any detailed analysis of the compatibility of the Bill with the UNCRC (Session 2010-2012, 21st Report, Legislative Scrutiny: Welfare Reform Bill, para 1.35).

1. 9 The Commission notes and commends a ctions of the Government to mitigate the impact of the Bill on w omen’s rights under the Convention on the Elimination of Discrimination against Women (CEDAW) , with a focus on improving access to the labour market and increasing free childcare provision . However, in the Commission's view these steps do not fully address the prohibition on discrimination against women in economic and social life. [6]

1. 10 Similarly, the UK’s obligations under the International Covenant on Economic, Social and Cultural Rights (ICESCR) are not limited to the right to work. Addressing poverty and the right to an adequate standard of living cannot be achieved by improving access to work alone. Fulfilment of the right to social security [7] should form an integral part of poverty reduction strategies, and in order to fulfil its obligations under ICESCR, policy adjustments in times of economic crisis must be demonstrated to be temporary, necessary and proportionate, non-discriminatory and must not undercut a core minimum level of protection. [8] The level of analysis in the DWP’s impact assessment and human rights memorandum is not sufficient to demonstrate that this requirement has been met .

1. 11 It would also be helpful if the Government could explain how the Bill’s proposals align with the UN Convention on the Rights of People with Disabilities [9] (CRPD), in particular Article 27 (work and employment) and Article 28 (adequate standard of living and social protection). As with ICESCR (above), an effective approach requires joined-up policy, in order to move individuals off benefits and into work, involving measures such as positive action, incentives, access to training and removing the barriers to access to work for disabled people.

1. 12 The Commission’s shadow reports on the UK's performance against the UNCRC [10] and the ICE SCR [11] highlight concerns about the impact of social security reform s on disabled people , and whether there is still sufficient support available to enable participation in education, training or employment. Our reports also flag concerns about the proposed changes in the measurement of child poverty and the impact of benefit caps on women and children.

1. 13 The Welfare Reform and Work Bill and the steps that have been taken to understand its equality and human rights implications will be important considerations for the UN Committees on the Rights of the Child and on Economic, Social and Cultural Rights (CESCR) . These committees are currently meeting to consider their lists of issues on the UK's performance.

2. Reporting

2.1. Clause 1 of the Bill puts a duty on the Secretary of State to report on the Government’s progress towards full employment.

2.2 In 2009, the Committee on Economic, Social and Cultural Rights (CESCR) recommended the UK "reinforce its measures aimed at ensuring that persons with disabilities, including those with learning disabilities, have equal opportunities for productive and gainful employment, equal pay for work of equal value, and provide them with improved, expanded and equal opportunities to gain the necessary qualifications, in line with its general comment no. 5 (1994) on persons with disabilities." In 2013, the CEDAW Committee expressed "concern at high unemployment rates amongst women with disabilities and recommended that "the State Party…create greater opportunities for women with disabilities to gain access to employment."

2.3 Only half of disabled people in Britain are in work compared to four-fifths of non-disabled people. Between 2008 and 2013 the unemployment rate for disabled people increased by 3.2 per cent compared to an increase of 1.8 per cent for non-disabled people.

2.4 During the general election campaign, the Conservative Party made a commitment to halving the disability employment gap [12] . We endorse and support this goal, and encourage the Government to expand this new duty to include measurement and reporting on progress towards closing the disability employment gap.

3. Social Mobility

3.1. Clause 6 of the Bill proposes the repeal of the Child Poverty Act 2010 (CPA).

3.2 We welcome measures that aim to reduce child poverty and the Bill’s proposals to use indicators that take into account causal risks that contribute to the perpetuation of poverty. However, we consider that measures of relative and absolute income poverty as well as measures of material deprivation, as set out in the CPA, are necessary to give a clear picture of child poverty in the UK, and should be included in any new set of measures.

3.3 The Commission is concerned that the changes to these measurements highlight the emphasis of the UK Government’s strategy on work as a route out of poverty, but do not address concerns as to whether conditions of work are just and favourable, in line with Article 7 ICESCR.

3.4 We agree with the assessment of the Social Mobility and Child Poverty Commission that the key issue is 'less how child poverty is measured and more how it is tackled'. [13] While relative and absolute child poverty and the proportion of children living in low income and material deprivation have seen some reduction between 2007/08 and 2013/14, the proportion of children living in poverty by these measures continues to be some way from the targets set in the CPA. [14] Also, after housing cost figures are used, relative child poverty levels remain comparatively higher and absolute child poverty levels have actually increased in the same period. [15]

3.5 Using indicators that comprehensively capture child poverty, including measures of relative and absolute income poverty, will also assist in the Government’s compliance with the s149 of the Equality Act which requires ongoing assessment of equality impact.

4. Welfare Benefits

4.1. Clauses 7 to 15 propose a number of changes to benefits which are likely to impact on children, women and disabled people.

4.2 Clause 7 proposes to lower the cap on the total amount of benefit that a household can receive. The original cap on total household benefits was introduced as part of the Welfare Reform Act 2012 and has been in place since the end of September 2013. The cap is calculated by adding together all the included benefits to which an individual, their partner, and any children for whom they are responsible are entitled and takes into account Severe Disablement Allowance and the Work Related Activity component of ESA. Claimants in the Support Group for ESA payments and those who receive DLA/ PIP payments are exempt from the cap.

4.3 The impact on children of lowering the household benefit cap

4.3.1 We recommend the Government specifically reviews the Bill in the context of its international obligations under the CRC. While capped households may be more likely to go into work than uncapped households, 35% of the respondents to a survey conducted by the DWP reported that they spent less on household essentials as a result of the household benefit cap. [16] This raises concerns as to whether a further reduction in the benefit cap would prevent a greater number of households from meeting their basic needs, which would run contrary to the UK Government’s duty to use its available resources to progressively realise the right to an adequate standard of living, as set out by the UN Committee on Economic Social and Cultural Rights. [17] It would also present a risk that Article 27 of the CRC on children’s right to an adequate standard of living will not be implemented.

4.4 The impact on women of lowering the household benefit cap

4.4.1 DWP have recently reported that 58,700 households have experienced a reduction in their housing benefits as a result of the cap since its introduction and that 63% of capped households constituted a single parent with one or more child dependants. [18] After the first year of implementation, the DWP stated that 95% of capped households contained children and 61% of capped households were single females. [19]

4.4.2 The changes in behaviour demonstrated by those respondents who reduce expenditure on household essentials, are exacerbated by the fact that around two-thirds of respondents affected by the benefit cap experience considerable barriers to employment, including costs of childcare, health and caring responsibilities. [20]

4.4.3 The DWP emphasises efforts to increase female participation in the labour market and the increases in childcare support provided by the Government. [21] While these changes are welcome, they may not fully mitigate the potential adverse impact that the further reduction of the household benefit cap may have on women. The Commission has raised concerns about low pay in the home care and cleaning sectors, in which the workforce is predominantly female. [22] In addition to this, the gender pay gap stood at 19.1% when part-time workers are taken into account. [23]

4.4.4 With regards to the proposed increased provision of free childcare for 3-4 year olds, concerns have recently been raised that "some providers are threatening to leave the scheme through under-funding" [24] which will lead to a lack of availability or suitable, flexible childcare provision that will meet the requirements of working parents.

4.4.5 We recommend the Government specifically reviews the Bill in the context of its international obligations under ICESCR and the other UN treaties that it has ratified.

4.5 Clauses 9 and 10 propose a four year freeze on certain social security benefits, Child Benefit rates and tax credit elements.

4.5.1 The Commission is pleased to see that "Extra costs" disability benefits including Attendance Allowance, DLA/PIP, the ESA Support Component and the corresponding Universal Credit Limited Capability for Work-Related Activity are not part of the freeze. The Child Tax Credit disabled or severely disabled child element and the disabled and severely disabled elements of Working Tax Credit are also not included. [25] However, the main rates of ESA and the ESA Work Related Activity component will be frozen as will the lower rate disabled child addition in Universal Credit.

4.5.2 In the context of discharging its legal duty under section 149 of the Equality Act, we recommend that the Government reconsider its decision to freeze the main rates of ESA, the ESA Work Related Activity component and the lower rate disabled child addition in Universal Credit. This will help lessen adverse impact on some disabled people, disabled children, other children and their families.

4.6 The Commission is also concerned that Clauses 11 and 12 which propose changes to child tax credit and to the child element of Universal Credit may impact on the living standards of poor families with more than two children. This approach could raise concerns about the UK Government’s implementation of Articles 3, 26 and 27 of the CRC, and Articles 2, 3 and 9 of ICESCR. We are currently assessing the proposals in detail and will closely monitor the debate on these Clauses.

4.7 The Commission is also particularly concerned about Clause 13 which proposes to lower the level of Employment Support Allowance (ESA) available to future claimants placed in the Work-Related Activity Group (WRAG) to that of Job Seekers Allowance. This means a cut of nearly £30 per week.

4.7.1 ESA is the main benefit for people who are unable to work because of illness or disability [1] and replaced incapacity benefits for new claims in October 2008.

4.7.2 The Bill proposes changes in the benefits provided to ESA claimants who are assessed as belonging to the WRAG, currently around 490,000 people. [2] From April 2017, they will only receive the same in benefit payments as those on Job Seekers Allowance, which is the main benefit for non-disabled people who are out of work. There will be additional support measures to help them move into work, but no additional financial support. The majority of those affected are in families where someone describes themselves as disabled. [3]

4.7.3 In November 2014, nearly half of the 490,000 ESA claimants in Britain placed in the WRAG, were suffering from mental and behavioural conditions (a further 529,000 ESA claimants were in the assessment phase). The number of ESA claimants in the WRAG is expected to increase to 537,000 by 2019-20. [4]

4.7.4 The Work Capability Assessment (WCA) is the test used by the DWP to determine whether claimants should be placed in the ‘Support Group’, or the WRAG. There is some evidence that disabled people are being assessed incorrectly as being fit for work and this may be a particular problem for those with mental health problems. [5] According to figures provided by DWP, around 40 per cent of WCA are challenged, and of these challenges, between 33 to 47 per cent result in decisions being overturned. [6]

5. Loans for mortgage interest:

5.1 Clause 16 of the Bill proposes replacing the Support for Mortgage Interest (SMI) Scheme with interest bearing loans, which will be repaid upon the sale of the property, or when claimants return to work. Payments accrue interest at a rate tied to the Office for Budget Responsibility’s forecast of gilts. The proposals also include increasing the waiting period for mortgage interest help from 13 to 39 weeks.

5.1.1 The Support for Mortgage Interest (SMI) scheme is a benefit and provides help with mortgage interest payments to claimants of certain means-tested benefits, including income-related ESA. There are currently around 167,000 SMI recipients in Britain of whom 56,000 are disabled people claiming ESA (33 per cent).

5.1.2 We are concerned that requiring ESA claimants to pay interest and administrative fees on top of loan payments, when they have already been assessed as unwell and unable to work, will cause undue hardship and anxiety. We recommend that the Government excludes ESA claimants from Clause 16.

6. Devolved Context

6.1. The Bill should also be read against the significant shifts in legislative and executive competence in respect of welfare contained in the Scotland Bill, which has provisions to devolve responsibility for most disability, industrial injury and carers’ benefits (e.g. PIP and Attendance Allowance), as well as conferring powers to make concessionary top-up payments to reserved benefits, and powers to vary the timings and eligibility criteria for Universal Credit payments. It also allows for discretionary housing payments and new powers in relation to employment schemes for the long-term unemployed and other groups, such as disabled people.

6.2. Parliament is therefore considering major changes to reserved welfare powers at the same time as it considers significant devolution of legislative and executive competence on welfare to the devolved institutions in Scotland. The Scottish Ministers are subject to separate, distinctive regulation under the PSEDs, and have demonstrated willingness under existing powers to take steps to mitigate the impact of current welfare changes, such as the creation of the Scottish Welfare Fund, or the commitment to maintain a Scottish Independent Living Fund, following the closure of the UK ILF.

6.3 We encourage the Government to continue dialogue with Scottish and Welsh colleagues to ensure that the intricate detail of devolved welfare powers is worked out thoroughly and consistently, and addresses our domestic and international equality and human rights obligations.

7. Conclusion

In addition to the recommendations on specific Clauses outlined above, the Commission is concerned that the Government has not provided sufficient evidence and analysis to demonstrate the equality and human rights impact of the Bill’s provisions. We seek assurance from the Government that they will reassess the provisions outlined above. This will assist Parliamentarians to fulfil their vital role in scrutinising and challenging the legislation, so that domestic and international equality and human rights obligations are met, existing inequalities are addressed and resolved and Government policy can be successfully implemented

About the Equality and Human Right Commission

The Equality and Human Rights Commission is a statutory body established under the Equality Act 2006. It operates independently to encourage equality and diversity, eliminate unlawful discrimination, and protect and promote human rights. It contributes to making and keeping Britain a fair society in which everyone, regardless of background, has an equal opportunity to fulfil their potential. The Commission enforces equality legislation on age, disability, gender reassignment, marriage and civil partnership, pregnancy and maternity, race, religion or belief, sex and sexual orientation. It encourages compliance with the Human Rights Act 1998 and is accredited by the UN as an ‘A status’ National Human Rights Institution.

Find out more about the Commission’s work at: www.equalityhumanrights.com


[1] http://services.parliament.uk/bills/2015-16/welfarereformandwork/documents.html

[2] https://www.gov.uk/government/publications/welfare-reform-and-work-bill-2015-human-rights-memorandum

[3] https://www.gov.uk/government/publications/welfare-reform-and-work-bill-2015-human-rights-memorandum para 76

[4] https://www.supremecourt.uk/decided-cases/docs/UKSC_2014_0079_Judgment.pdf para 226.

[5] http://www.publications.parliament.uk/pa/jt201415/jtselect/jtrights/144/14405.htm

[6] Article 13, Convention on the Elimination of Discrimination against Women

[7] The right to social security is the right to access and maintain benefits, whether in cash or in kind, without discrimination in order to secure protection, inter alia, from (a) lack of work-related income caused by sickness, disability, maternity, employment injury, unemployment, old age, or death of a family member; (b) unaffordable access to health care; (c) insufficient family support, particularly for children and adult dependents . – Committee on the Economic, Social and Cultural Rights, General Comment 19

[8] Pillay, A., Chairperson, Committee on Economic, Social and Cultural Rights, Letter to States Parties on ICESCR in times of economic crises, CESCR/48th/SP/MAB/SW, available at: http://www2.ohchr.org/english/bodies/cescr/docs/LetterCESCRtoSP16.05.12.pdf

[9] http://www.un.org/disabilities/convention/conventionfull.shtml

[10] EHRC, Children’s rights in the UK, p. 30/31, July 2015, available at: http://www.equalityhumanrights.com/sites/default/files/uploads/Pdfs/UNtreaty/Childrens%20rights%20in%20the%20UK%20Sept%202015.pdf

[11] EHRC, Socio-economic rights in the UK, Forthcoming.

[12] https://www.conservatives.com/manifesto Page 19

[13] Social Mobility and Child Poverty Commission, Press release, Response to government child poverty statement, 1 July 2015, available at: https://www.gov.uk/government/news/response-to-government-child-poverty-statement

[14] EHRC, Children’s Rights in the UK, 30/31, July 2015, available at: http://www.equalityhumanrights.com/sites/default/files/uploads/Pdfs/UNtreaty/Childrens%20rights%20in%20the%20UK%20Sept%202015.pdf

[15] EHRC, Children’s Rights in the UK, 30/31, July 2015, available at:

[16] DWP, The benefit cap: a review of the first year, December 2014, p. 19, available at: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/386911/benefit-cap-review-of-the-first-year.pdf

[17] See for example, UN Committee on Economic Social and Cultural Rights, General Comment 12, the right to adequate food, E/C.12/1999/5, para. 13, available at: http://tbinternet.ohchr.org/_layouts/treatybodyexternal/Download.aspx?symbolno=E%2fC.12%2f1999%2f5&Lang=en

[18] DWP, Benefit Cap Quarterly Statistics: GB households capped to February 2015, available at: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/426846/benefit-cap-statistics-to-feb-2015.pdf

[19] House of Commons Library, Briefing paper: the benefit cap, June 2015, p. 32, available at: http://researchbriefings.files.parliament.uk/documents/SN06294/SN06294.pdf

[20] DWP, The benefit cap: a review of the first year, December 2014, p. 20, available at: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/386911/benefit-cap-review-of-the-first-year.pdf

[21] DWP, Memorandum to the Joint Committee on Human Rights: The Welfare Reform and Work Bill 2015, available at: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/458886/welfare-reform-and-work-bill-2015-human-rights.pdf

[22] EHRC, Socio-economic rights in the UK, p. 57

[23] ONS, 2014, Annual Survey of Hours and Earnings, 2014 Provisional Results, p.10, available at:

[23] http://www.ons.gov.uk/ons/dcp171778_385428.pdf

[24] Social Security Advisory Committee, Universal Credit: Priorities for action, July 2015, p. 26, available at: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/446891/universal-credit-priorities-for-action-ssac-july-2015.pdf

[25] House of Commons Library (16 July 2015) Briefing Paper Number 07252, p67, see note 67

[1] The Work Capability Assessment was introduced by the Welfare Reform Act 2007

[2] UK Government, Summer 2015 Budget (8 July 2015) p41, available at: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/443232/50325_Summer_Budget_15_Web_Accessible.pdf

[3] DWP (July 2015) Welfare Reform and Work Bill: Impact Assessment to remove the ESA Work-Related Activity Component and the UC Limited Capability for Work Element for new claims p6 http://www.parliament.uk/documents/impact-assessments/IA15-006B.pdf

[4] House of Commons Library (16 July 2015) Briefing Paper Number 07252, p83, see note 67

[5] See, for example R (MM & DM) v Secretary of State for Work and Pensions [2013] EWCA Civ.1565.

[6] Department for Work and Pensions (June 2014) ‘Employment Support Allowance: outcomes of Work Capability Assessments, Great Britain’ Quarterly official statistics bulletin, fig 3, p7, available at https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/385578/esa_wca_summary_Dec14_final.pdf

Prepared 20th October 2015