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Draft Welfare Reform (Northern Ireland) Order 2015

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Draft Welfare Reform (Northern Ireland) Order 2015 HOUSE OF LORDS Secondary Legislation Scrutiny Committee 16th Report of Session 2015‒16 Draft Welfare Reform (Northern Ireland) Order 2015 Includes 3 Information Paragraphs on 3 Instruments Ordered to be printed 1 December 2015 and published 2 December 2015 Published by the Authority of the House of Lords HL Paper 63 Secondary Legislation Scrutiny Committee (formerly Merits of Statutory Instruments Committee) Historical Note In January 2000, the Royal Commission on the Reform of the House of Lords said that there was a good case for enhanced Parliamentary scrutiny of secondary legislation and recommended establishing a “sifting” mechanism to identify those statutory instruments which merited further debate or consideration. The Merits of Statutory Instruments Committee was set up on 17 December 2003. At the start of the 2012–13 Session the Committee was renamed to reflect the widening of its responsibilities to include the scrutiny of Orders laid under the Public Bodies Act 2011. The Committee has the following terms of reference: (1) The Committee shall, with the exception of those instruments in paragraphs (3) and (4), scrutinise— (a) every instrument (whether or not a statutory instrument), or draft of an instrument, which is laid before each House of Parliament and upon which proceedings may be, or might have been, taken in either House of Parliament under an Act of Parliament; (b) every proposal which is in the form of a draft of such an instrument and is laid before each House of Parliament under an Act of Parliament, with a view to determining whether or not the special attention of the House should be drawn to it on any of the grounds specified in paragraph (2). (2) The grounds on which an instrument, draft or proposal may be drawn to the special attention of the House are— (a) that it is politically or legally important or gives rise to issues of public policy likely to be of interest to the House; (b) that it may be inappropriate in view of changed circumstances since the enactment of the parent Act; (c) that it may inappropriately implement European Union legislation; (d) that it may imperfectly achieve its policy objectives; (e) that the explanatory material laid in support provides insufficient information to gain a clear understanding about the instrument’s policy objective and intended implementation; (f) that there appear to be inadequacies in the consultation process which relates to the instrument. (3) The exceptions are— (a) remedial orders, and draft remedial orders, under section 10 of the Human Rights Act 1998; (b) draft orders under sections 14 and 18 of the Legislative and Regulatory Reform Act 2006, and subordinate provisions orders made or proposed to be made under the Regulatory Reform Act 2001; (c) Measures under the Church of England Assembly (Powers) Act 1919 and instruments made, and drafts of instruments to be made, under them. (4) The Committee shall report on draft orders and documents laid before Parliament under section 11(1) of the Public Bodies Act 2011 in accordance with the procedures set out in sections 11(5) and (6). The Committee may also consider and report on any material changes in a draft order laid under section 11(8) of the Act. (5) The Committee shall also consider such other general matters relating to the effective scrutiny of secondary legislation and arising from the performance of its functions under paragraphs (1) to (4) as the Committee considers appropriate, except matters within the orders of reference of the Joint Committee on Statutory Instruments. Members Baroness Andrews Lord Hodgson of Astley Abbots Baroness Stern Lord Bowness Baroness Humphreys Rt Hon. Lord Trefgarne (Chairman) Lord Goddard of Stockport Rt Hon. Lord Janvrin Lord Woolmer of Leeds Lord Haskel Baroness O’Loan Registered interests Information about interests of Committee Members can be found in Appendix 3. Publications The Committee’s Reports are published on the internet at www.parliament.uk/seclegpublications Information and Contacts If you have a query about the Committee’s work, or opinions on any new item of secondary legislation, please contact the Clerk of the Secondary Legislation Scrutiny Committee, Legislation Office, House of Lords, London SW1A 0PW; telephone 020–7219 8821; fax 020–7219 2571; email [email protected]. Statutory instruments The National Archives publishes statutory instruments on the internet at http://www.legislation.gov.uk/, together with a plain English explanatory memorandum. Sixteenth Report INSTRUMENTS DRAWN TO THE SPECIAL ATTENTION OF THE HOUSE Draft Welfare Reform (Northern Ireland) Order 2015 Date laid: 26 November 2015 Parliamentary procedure: affirmative Summary: This Order makes provision for Northern Ireland broadly equivalent to the Welfare Reform Act 2012 which, among other things, introduced the Universal Credit system. It includes some variations specific to Northern Ireland including certain top-up powers and a different sanction regime (as agreed as part of the Stormont House Agreement). It mainly contains powers to enable “catch up”, for example, it does not introduce Universal Credit immediately but gives the Northern Ireland Department for Social Development (in most cases) power to introduce the system on dates that they will set by regulations made under this Order. The Northern Ireland Executive will establish a small working group under the leadership of Professor Eileen Evason to bring forward proposals. Further information is included in the document A Fresh Start: The Stormont House Agreement and Implementation Plan, published on 17 November 2015. This Order is drawn to the special attention of the House on the ground that it gives rise to issues of public policy likely to be of interest to the House. 1. This Order is laid by the Department for Work and Pensions (DWP) under section 1 of the Northern Ireland (Welfare Reform) Act 2015, it is accompanied by an Explanatory Memorandum (EM) which refers to the Impact Assessment to the original bill. In its 14th Report1 the Delegated Powers and Regulatory Reform Committee commented on the extent and level of scrutiny of sub-delegated powers in the draft Order in Council and this Committee shares that concern. Background 2. The Order makes provision for Northern Ireland that is broadly equivalent to the Welfare Reform 2012 Act which, among other things, introduced the Universal Credit system. It includes some variations specific to Northern Ireland including certain top-up powers and a different sanction regime (as agreed as part of the Stormont House Agreement). It is normal for there to be a compatible social security system throughout the United Kingdom but the Welfare Reform Bill introduced in the Northern Ireland Assembly in October 2012 was not passed following a Petition of Concern in May 2015: this has led to some dislocation. The Northern Ireland Assembly agreed on 18 November 2015 that the Government should legislate on this devolved issue in order to implement welfare reform in Northern Ireland. 1 14th Report of the Delegated Powers Committee, session 2015–16 (HL Paper 58). 4 SECONDARY LEGISLATION SCRUTINY COMMITTEE 3. The Order allows the introduction of Universal Credit, modification of the provisions of Jobseekers Allowance and Employment and Support Allowance, in particular by enhancing the claimant commitment and work- related requirements, and the simplification of industrial injuries schemes. The Order also amends the provision of discretionary payments, allows the introduction of Personal Independence Payments (PIP), improves the collection of child support, establishes the benefit cap, strengthens sanctions for non-compliance with requirements or for fraud, enhances the exchange of information between agencies and enables the use of electronic communication in claims. 4. The table in Appendix 1 to this Report shows the main differences between this Order and the 2012 Act. Anticipated Impact 5. The benefits system in Northern Ireland has broadly continued to follow the system in force in 2012. As well as diverging from the system applied elsewhere in the UK, continuing with the former system has been expensive for the Northern Ireland Executive, with savings forgone to the Treasury of £2 million a week. 6. A number of briefings are published on the Northern Ireland Department for Social Development’s (DSD) website analysing the impact of the changes.2 Savings will come from: the introduction of a cap limiting annual benefits to a maximum of £26,000 which is expected to save £1.36 million a year, the limitation of contributory Employment and Support Allowance to one year, which is expected to save £41 million a year, and the introduction of an under-occupancy limit to Housing Benefit. Stronger sanctions are also expected to reduce the amount lost to fraud although these penalties will not exactly mirror the current levels in the UK. The introduction of Universal Credit will also save money though it will be rolled out gradually and will not be fully implemented until 2024–25. Legislation will also prevent illegal workers qualifying for contributory benefits and payments. 7. Other measures, such as changing the conditionality for Lone Parent benefit to take effect when the youngest child is five years old (rather than seven) and moving from Disability Living Allowance (DLA) to PIP, are designed to encourage claimants back into work rather than to become dependent on benefits. DLA is a particular issue in Northern Ireland where over 200,000 people are now receiving it, that is just over 1:10 of the population, which is twice as many as in Great Britain where the ratio is 1:20. It is estimated that, following testing under the PIP assessment criteria, about 25% of current DLA claimants will no longer qualify for benefit. Over the next 12 months about 16,700 DLA claimants will be reassessed under the PIP criteria and, as a result, expenditure is expected to reduce by about £21 million annually.
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