Welfare Reform and Work Bill — Second Reading — 20 Jul 2015 at 21:50

The majority of MPs voted to support the Welfare Reform and Work Bill at its second reading, allowing it to continue on its path to becoming law.

MPs were considering the Welfare Reform and Work Bill^[1]

The Bill provides for:

• Reducing the household benefit cap from £26,000 to £20,000 (£23,000 in London).
• Freezing the rate of many major benefits and tax credits for four years; excluding pensioner benefits and many benefits related to disability.
• Limiting the child element of universal credit to a maximum of two children.
• Reducing rents in social housing in England by 1% a year for 4 years from April 2016
• Stopping those on certain benefits being able to claim additional help towards their mortgage payments; replacing the scheme with a loan.
• Requiring a series of reports to be produced by the Secretary of State on employment, apprenticeships and troubled families.

The motion being debated was:

• That the Bill be now read a Second time.

Impact on Public Spending on Welfare Benefits

The Bill seeks to implement elements of the summer 2015 budget^[3]. The budget document states the working age benefit and tax credit freezes were forecast to save £4 billion a year by 2019. The benefit cap reduction was forecast to save £100m in 2016-17 increasing to £495m in 2020-21. The reduction in social sector rents also reduces the spend on welfare benefits via a saving in Housing Benefit. The changes to tax credits in respect of children were forecast to save £1.3bn by 2020-21.

The Bill also removes the work-related activity component in employment and support allowance and the limited capability for work element in universal credit^[2].

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• [1] Parliament's webpage on the Welfare Reform and Work Bill
• [2] Overview of the Welfare Reform and Work Bill from explanatory notes prepared by the Department for Work and Pensions
• [3] Summer 2015 Budget Documents

Debate in Parliament | Source |