Darling makes dramatic concessions on welfare reform to avert backbench revolt

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DRAMATIC CONCESSIONS will be made today by Alistair Darling, the Secretary of State for Social Security, in a last-ditch effort to avert the most serious backbench revolt since Labour came to power in May 1997.

Mr Darling will table a parliamentary amendment to raise from pounds 50 a week to pounds 85 the occupational pension that recipients of incapacity benefit may take before they have their benefits cut.

And in a further move to save the Government's flagship Welfare Reform and Pensions Bill when it returns to the Commons on Wednesday, Mr Darling will also amend it to ensure that claimants who stopped paying National Insurance contributions as long ago as 1995 will now be able to continue receiving incapacity benefit.

Government whips will be applying concerted pressure on party dissidents between now and Wednesday.

The new concessions follow May's backbench rebellion against the Bill by 67 MPs - the biggest revolt yet faced by Blair's Government - and the subsequent mangling of the Bill in the Lords in a revolt led by Lord Ashley, a Labour campaigner on disability rights, and Lord Morris, a former Labour minister for the disabled.

The secretary of state was writing to all Labour MPs last night, claiming that the new concessions would improve the Bill but warning that he was determined to stand by the Bill's central principle: to concentrate help on those who most needed it, while updating the welfare system to take account of changing circumstances since its basic elements were designed in the 1940s. Mr Darling will also argue that a successful revolt against the Bill would jeopardise elements widely welcomed by Labour MPs, including the new stakeholder pension.

Although the biggest change - that in the occupational pension threshold - does not go as far as Lord Ashley's proposal for one of pounds 128 per week, it is pounds 10 more than some MPs expected and means that all those on an average occupational pension of around pounds 11,000 a year or less will now qualify for full incapacity benefit; those on an early-retirement pension of up to pounds 218.50 a week will still receive half their incapacity benefit. Such benefit already stops when the recipient qualifies for an old-age pension.

The one-year extension of the original Bill's two-year period during which a claimant need not have paid National Insurance contributions to qualify for the benefit means that claimants need only have worked and paid contributions for four weeks at any time after spring 1995 to receive the benefit.