Parliament: Social Security: Revolt deals huge blow to welfare plans

THE GOVERNMENT suffered a serious setback to its proposals for welfare reform last night when 65 Labour backbenchers voted against cuts in disability benefits.

Its 178-strong majority was reduced to only 40 when MPs voted 310 to 270, with many abstaining, during an impassioned debate on the report stage of the Welfare Reform and Pensions Bill. To avert the rebellion, Alistair Darling, the Secretary of State for Social Security, had made last-minute concessions to backbenchers, agreeing to keep the threshold for the means-testing for those with occupational pensions under review until 2001.

"Judge us in the round and support our approach today," he pledged. "If you look at the whole package, if you look at everything this Government is doing for the disabled, on any view it is fair and it is balanced. It is right in principle and it is right in practice."

But Dr Roger Berry, the MP for Kingswood who moved the rebel amendment, insisted it was the only way to ensure a Bill all Labour MPs could be proud of. Introducing his main amendment during the Bill's resumed debate, which the Government guillotined to six hours, Dr Berry, who is also the secretary of the all-party group for disablement, insisted the Government's proposals would do "so much damage".

"I would have given anything, almost anything, to avoid this situation today," he said. He also questioned how ministers could argue they were seeking a fair deal for the disabled when at least 170,000 people would not be entitled to Incapacity Benefit under the measure because they had not paid sufficient National Insurance Contributions in the previous two years. The proposals would leave 45,000 worse off in the first year, rising to 335,000 disabled people who cannot work after 10 years, Dr Berry added.

But Tom Levitt, MP for High Peak, urged fellow Labour backbenchers to support the Government, stressing that "targeting resources on those most in need, making sure that the money goes to those who have the greatest need for it", was what "government is all about." He said: "This Bill does address the real needs of disabled people and it finances it by redirecting some of those funds from some relatively wealthy people to those who have nothing."

The Liberal Democrat's Social Security spokesman David Rendel said the Government's arguments were "illogical" because people who were becoming gradually more disabled would be encouraged to leave work as quickly as possible to ensure they had paid NICs recently enough to qualify for benefit.

Tom Clarke, Labour MP for Coatbridge and Chryston, who was a spokesman on disabled people's rights when the party was in opposition, said he felt it was his job to "get the Government back on the right lines". "The Government has failed to recognise that not all disabled people can work. While wanting to see disabled people find work I fail to see how denying benefits to those who have not made contributions in the past two years helps to achieve this objective.

"In all honesty I can't support a policy which I genuinely feel is logically flawed and, in the eyes of many, morally without justification and even at this eleventh hour I plead with the Government to think again."

Frank Field, the MP for Birkenhead and a former welfare reform minister in the present Government, said the proposals were inconsistent with the Government's policy on welfare reform. "It was a plea that we should have welfare reform, which of course would involve difficult decisions which would be tough, but it would actually build on the grain of human nature," he said. Yet the reforms would "strike at what the Prime Minister said about wanting to move us from a something for nothing society to a something for something society."

Earlier, Gerald Kaufman, the MP for Manchester Gorton had warned would- be Labour rebels that the Government would still win the vote and only the Tories and Liberal Democrats would benefit from a substantial revolt. Urging likely rebels to consider the consequences of their actions, he said: "I sat here 18 years under a Conservative Government and I don't want another." But Iain Duncan Smith, the Tory Social Security spokesmanclaimed the Government was pushing for the cuts to find savings in their welfare budget.

Accusing ministers of attacking those who had made an effort to save for retirement throughout their lives, Mr Duncan Smith added that the measures went against the Government's words and principles. "This selective and targeted process of the means test is incredibly short term and narrow minded," he said, before urging all MPs to follow their consciences and vote against the Government.