Mr Grayling, is the Welfare Reform Bill really affordable?

By Savi Hensman
January 12, 2012

The UK government will press ahead with controversial welfare reforms, according to employment minister Chris Grayling. As a result of powerful evidence from disabled people and their supporters, including the ‘Responsible Reform’ report, several aspects of the Welfare Reform Bill were defeated in the House of Lords on 11 January 2012.

“The British public do not accept the idea that the banks screw up and very disabled people pay the bill,” commented Baroness Meacher, a cross-bencher (independent of any political party). "I am sympathetic to cutting the deficit, but I am highly sympathetic to sick and vulnerable people not being subjected to something that will make their lives even more miserable," said Lord Patel, another cross-bencher. But the government has indicated that it will seek to overturn the Lords amendments.

The Bill is due to return to the House of Lords on 17 January, for debate on further clauses of the Bill. Some of these too might be amended in the Lords in an attempt to protect the poor and vulnerable, but the government might continue to push for harsher treatment of the poor and disadvantaged.

The ruling Coalition may claim that softening the blow is unaffordable. But, setting aside the human cost, it is not even clear that the reforms will lower the welfare bill in the short and longer term.

For instance, at present, if the main breadwinner of a family, whose wife is in a low-paid job, is diagnosed with cancer and becomes so ill that he can no longer work, he may have to rely on Employment and Support Allowance (ESA). Family income will drop greatly, quite apart from the anxiety and sorrow faced by both adults and children and the sick man’s pain and discomfort. Under the Welfare Reform Bill before it was amended in the House of Lords, income would probably fall still further after a year as his ESA was withdrawn, plunging the family into dire poverty.

To protect the children, the couple might then divorce – distressing for the family and probably more expensive for the public purse, especially as his condition deteriorated. Or the wife (trying to hold down a job while coping with her husband’s illness and mounting debts) might become so stressed that she too could no longer work. Whether or not the parents stayed together, the children’s educational performance and future health and employment prospects might well be affected, with long-term costs to society.

There is also an economic cost when income in the poorer groups – which tends to go quickly back into the UK economy, since most is spent on necessities – falls. If, in many localities, there is less to spend on food, clothing and so forth, shops and other businesses will sell less. In turn, if some of their workers are laid off, they will spend less, and so forth. The wealthy may accumulate savings, or even speculate with their income, so redistributing money upwards will not help the economy in the same way.

If the government is wise, at least for public relations purposes it will drop the most obviously unjust aspect of the Welfare Reform Bill which are overturned by the House of Lords. Even a watered-down version of the Bill will cause enough damage, and perhaps some of the savings will help Prime Minister David Cameron to achieve his goal of cutting the income tax rate for the super-rich. But if the Coalition presses ahead with even the most brutal clauses of the original Bill, in addition the human and possibly economic cost, it may turn out to be a grave political mistake.

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© Savi Hensman works in the care and equalities sector. She is a regular commentator and political and religious issues, and an Ekklesia associate.

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