11 January 2012 Last updated at 21:14 Share this pageEmailPrint
Government suffers Lords defeats over welfare cuts
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Welfare plans pass Commons test
Welfare change 'to make work pay'
Q&A: Benefits overhaul
The government has lost three votes in the House of Lords over its plans to cut the welfare bill.
Peers voted by 260 to 216 to protect up to 15,000 young disabled people from cuts to employment support allowance.
They voted 234 to 186 for a two-year limit on claims, rather than the proposed one year, and by 222 to 166 to exempt cancer sufferers from a limit.
Critics said the plan had meant disabled children who could never work would never be entitled to the benefit.
The employment support allowance (ESA) has replaced incapacity benefit.
Ministers also suffered a defeat last month over elements of their plans to overhaul housing benefit.
As part of their drive to cut spending on welfare, the government wants to remove the so-called "youth provision" that allows some young people to receive contributory employment and support allowance (ESA) even though - due to disability or illness - they have not been able to work and build up National Insurance.
Opponents of the coalition's plans said they would mean disabled children who could never work would never be entitled to the benefit.
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Is there anyone more vulnerable than a severely disabled young person who will never have the chance of earning a living?
Welfare Minister Lord Freud said it was unfair for a young person to continue to get a contributory benefit without having "paid in" - even if they were to inherit a lot of money.
He estimated that 90% of those affected by the change would still get the income-related part of ESA.
But peers, led by crossbencher Baroness Meacher, argued it would have a "devastating" effect on young people with disabilities or long-term illnesses, depriving them of £25 a week.
She told the Lords: "These young people have conditions so severe that they are entitled to be supported.
"It really puts them in a completely different category from other people who grow up, are able to earn, able to build up capital, able to gain contributions.
"The government said they will protect the most vulnerable. The prime minister himself made a very personal commitment to help these people.
"Is there anyone more vulnerable than a severely disabled young person who has never and will never have the chance of earning a living?"
In the second defeat on Wednesday evening, peers agreed a move to replace the one-year cap with the ability for the government to legislate for a limit of not less than two years.
"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, who introduced the amendment.
His second amendment removed the time limit on contributory ESA payments for people receiving treatment for cancer.
"Being in receipt of a contributory benefit does not amount to having a life on benefits," said Lord McKenzie. "The benefit is only payable for so long as someone is unfit for work.
"We have accepted with some reluctance that there could be a time limit on ESA but the time limit would have to reasonably reflect a sufficient time period for people to overcome their illness or disability, sufficient to be able to access employment."
The measures will now be removed from the government's flagship welfare reform bill, being considered by peers.
Ministers say the proposed legislation will increase incentives for people on benefits to work while making welfare expenditure more sustainable.