The Guardian November 17, 1999

Labour rebellion over benefit cuts

by Daphne Liddle

Forty backbench Labour MPs on November 3 voted against Social Security 
Secretary Alistair Darling's Bill to means-test the Incapacity Benefit paid 
to disabled people. The Bill passed nevertheless because Labour has such a 
huge majority.

The Labour leadership had expected a revolt and curiously even welcomed it. 
One of the inner circle is reported to have said that it suited the 
Government to have a revolt because: "It would show we had the bottle, that 
we would do what the Tories failed to do  reform the welfare state."

The Tories themselves recently accused the Government of lacking 
originality and merely picking up policies they themselves had "left on the 
cutting room floor". The idea of making the Incapacity Benefit means-tested 
had been introduced by Michael Portillo in 1993 under the Tory regime.

The new Bill would have started to cut Incapacity Benefits paid to those 
with occupational pensions above L50 a week, but Alistair Darling made two 
concessions that he hoped would take the wind out of the rebellion.

He raised the pension threshold to L85 a week (about one fifth of the value 
of the average male wage) and extended eligibility of new claimants from 
anyone disabled who had made a National Insurance payment within the last 
two years to anyone who had made a payment in the last three years.

The Disability Benefits Consortium responded: "The compromises are minimal. 
There is a huge gap between these and the real needs of disabled people."

Alistair Darling, in his Commons speech, painted a picture of Incapacity 
Benefit claimants enjoying private pensions of around L400 a week. Prime 
Minister Tony Blair claimed that making the Benefit means-tested would 
allow the government to give more "to those who really need it"  as if 
most did not.

His remarks revealed yet another instance of the Government trying to get 
the poor to fund benefits to the even poorer.

Professor Peter Townsend, speaking for the Disability Alliance, said: "The 
growth of poverty and structural inequality, which has become a marked 
feature of Britain in the last two decades, is not going to be stopped by 
getting the near-poor to pay for the poor, by reducing many benefits 
relative to earnings and by trying to offset public alarm by increasing the 
level of benefits only for a select few.

"Means-testing benefits, and forcing people into making private 
arrangements, are both costly to administer and miss millions who are 
theoretically to be included."

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