Social Security: Labour faces Lords revolt over benefits

ALISTAIR DARLING was warned last night by former Labour ministers that the Government will be defeated in the House of Lords unless he makes concessions on a Bill to cut payments of incapacity benefits. A coalition of Labour, Conservative and crossbench peers gave the Secretary of State for Social Security three months to make the concessions or they will knock out two of the Bill's key clauses.

In May, the Government suffered its biggest backbench revolt of this Parliament, when more than 80 Labour MPs refused to support the Welfare Reform and Pensions Bill or voted against it.

Mr Darling was refusing to give way last night. "We believe the principle of the Bill is right," said a spokesman. Some of the rebel Labour peers who criticised the Bill during its committee stage last night in the Lords believe Mr Darling is digging in for a defeat in the Lords in the autumn, with the intention of using Labour's Commons majority to drive the Bill through. Mr Darling has been individually meeting MPs who voted against the Bill in May to win them over.

"It is an admission of defeat in the Lords because he is clearly preparing for it to come back to the Commons," a Labour peer said. "He should back down now."

The rebels, led by Lord Ashley of Stoke, the veteran Labour campaigner for the handicapped, were encouraged in their threats to knock out the two clauses by Labour MPs who voted against the Government in the Commons and are urging them not to bow to pressure from the whips.

Lord Morris of Manchester, who became Labour's first minister for the disabled in 1974 and was the architect of invalidity benefit, was among the most outspoken critics of the Government's cuts, accusing it of "piling handicap upon handicap for thousands of severely disabled people". He said Tony Blair's claims that benefit fraud amounted to pounds 4bn a year were "entirely bogus" and had been dismissed by Baroness Hollis of Heigham, the Social Security minister in the Lords, as being "based on old information from the previous government".

Disabled people were failing to claim benefits because they feared being branded as scroungers. "The real story is not that disabled people are abusing the system but that the system is abusing them," Lord Morris said, as peers debated the committee stage of the Bill in the Lords. He added that the disabled regarded the cut of 50 per cent of any personal pension above pounds 50 as especially mean.

The Government's 176 majority was slashed to 40 in the Commons rebellion. Sixty-seven Labour MPs, including Frank Field and several other former ministers, voted against the Government. At least 15 more remained in their seats to abstain in person, and several others stayed away.