This House of Commons Briefing Paper provides background to the Welfare Reform and Work Bill’s provisions; summarises the key measures; and includes relevant comment. The Bill is scheduled to receive its Second Reading on 20 July 2015.
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The Welfare Reform and Work Bill will implement some, but not all, of the measures announced in the Chancellor’s Summer Budget 2015 on 8 July. The overriding aim of the welfare benefit measures in the Bill, including changes to Support for Mortgage Interest and reductions in social housing rents, is to reduce expenditure and “help to achieve a more sustainable welfare system.” A related aim is to support efforts to increase employment and “support the policy of rewarding hard work while increasing fairness with working households.”
It is essentially a Bill of three parts. First, it will introduce a duty to report to Parliament on:
- Progress towards achieving full employment.
- Progress towards achieving 3 million apprenticeships in England.
- Progress with the Troubled Families programme (England).
Second, it will repeal almost all of the Child Poverty Act 2010 and introduce a new duty for the Secretary of State to report annually on “life chances”: children living in workless households and educational attainment at age 16, in England. The name and remit of the Social Mobility and Child Poverty Commission is changed so that it becomes the Social Mobility Commission.
Finally, the Bill allows for the introduction of extensive changes to welfare benefits, tax credits and social housing rent levels. These will account for around 70% of the £12-13 billion in welfare savings identified in the Summer Budget 2015. The welfare/housing measures include:
- Lowering the benefit cap threshold and varying it between London and the rest of the UK.
- A four year benefits freeze.
- Limiting support through Child Tax Credits/Universal Credit.
- The abolition of Employment and Support Allowance Work-Related Activity Component.
- Changes to conditionality for responsible carers under Universal Credit.
- Replacing Support for Mortgage Interest with Loans for Mortgage Interest.
- Reducing social housing rent levels by 1% in each year for four years from 2016-17.
Some of the measures in the Bill had been widely trailed, such as the reduction in the benefit cap to £23,000, while others, including the social housing rent provisions, were unexpected.
Some of the provisions in the Bill apply across the UK while others apply in England, Wales and Scotland only. Some provisions apply in England only. The territorial extent of each clause in the Bill is summarised in section 11 of this paper.