Welfare Reform (Disabled People and Carers)

(Limited Text - Ministerial Extracts only)

Tuesday 18th December 2012 Westminster Hall

[The Parliamentary Under-Secretary of State for Work and Pensions (Esther McVey)]

It is a pleasure to serve under your chairmanship, Mr Chope. I thank the hon. Member for Gateshead (Ian Mearns) for securing this debate on such an important issue, and I welcome all contributions to the debate about how our welfare reforms will better support disabled people, their carers and their families.

The UK has a proud history of furthering the rights of disabled people and I am pleased to say that, even in these very tough economic times, the Government continue to spend around £50 billion a year on disabled people and their services, to enable those who face the greatest barriers to participate fully in society. That compares well internationally. We spend almost double the OECD average, as a percentage of our gross domestic product, with only Norway and Iceland out of the 34 OECD countries spending more, and we spend a fifth more than the European average. More money will be spent on disability living allowance and the personal independence payment in every year up to 2015-16 than was spent in 2009-10.

We are world leaders in dealing with people with disabilities, but we should not be complacent, because disabled people are not a static group and we have to support them every which way we can. Some 3.2 million disabled people are on DLA and, over a year, the impairments of a third of them will change. Some people might get worse, and some will stay the same, but some will improve and get better and will no longer get the benefit as they will not be entitled to it. We will, however, support those who need support, or more support. The Government are committed to enabling disabled people to fulfil their potential and play a full part in society, but money needs to be targeted more effectively to ensure that support continues to be available to those who need it most, that there is a lasting impact, and that interventions provide a fair deal for the taxpayer.

Nearly half of disabled people are in work. Only 9% of working-age disabled people, and only 5% of those over the age of 25, have never worked. If we want to make a sustainable difference, we must do all we can to help more disabled people who can work to get into mainstream employment, and support them to stay in work. We know that many disabled people want to work but feel that the risk of losing their benefits is too great. By simplifying the benefits system and ensuring that work pays, universal credit will remove the financial risks involved in taking the first steps back into employment, and will increase the incentives of working, even if that work is for just a few hours a week. Universal credit will provide unconditional support to disabled people who are not expected to do any work.

Disability living allowance is an outdated benefit that has not been fundamentally reformed since it was introduced in 1992, and both sides of the House agreed that a change was needed. The reforms present an opportunity to start afresh, keeping the best elements of DLA that disabled people value, but bringing the benefit up to date and making it fit for the 21st century.

[Debbie Abrahams]

Does the Minister think that articles 19 and 20 of the United Nations convention on the rights of persons with disabilities are compromised by what the Government are doing in, for example, removing the Motability allowance from about 500,000 people?

[Esther McVey]

Of course we do not believe that the rights of disabled people are compromised. As I said at the start of my speech, we aim to strengthen and support them in every way we can.

The personal independence payment will be easier to understand and administer, and will be financially sustainable and more objective—the payment has not been so to date. It will be better targeted at those in most need. Throughout the development of the payment, we have consulted widely with disabled people and have used their views to inform policy design. It has taken more than two years of intense consultation, of listening and of working to adjust the criteria and the assessment, to get it right. We listened to people’s concerns about the speed of reassessments and, as I announced last week, we will now carry out a slower reassessment timetable to ensure that we get it right. The peak period of reassessments will not start until October 2015. Furthermore, the Government confirmed in last week’s autumn statement that disability benefits will continue to be uprated in line with inflation.

Carers provide an invaluable service to some of the most vulnerable people in our communities, and we want to ensure that they continue to get the support they need. We have committed to linking carer’s allowance to receipt of either rate of the daily living component of PIP, which is an important safeguard for carers. Our earlier analysis indicated that the link to PIP would result in broadly the same number of carers being entitled to carer’s allowance, even though there would be some churn between those who are newly entitled and others losing entitlement. Now that we have finalised the PIP assessment criteria we are, of course, considering that, and our objective remains to ensure that people caring for those with the greatest need get the right level of support.

[Barbara Keeley]

The Minister is right to comment on carers, but does she see how deeply unfair it is to apply the benefit cap to them? They will lose £105 a week. This stuff about households and the way in which they are defined is just nonsense; 5,000 carers should not lose out.

[Esther McVey]

I will explain to the hon. Lady why the changes have to be brought about. At the moment, there are 1 million spare bedrooms, 250,000 households living in overcrowded conditions and 1.8 million households on the waiting list, so we have a size criterion in the private sector, and we must get this right. We have to support people. We have to work with what we have, and we will introduce the changes because we have to get this right—it has not been right, and the previous Government left it to get into this predicament.

[Barbara Keeley]

rose—

[Esther McVey]

I will not give way.

Work must always pay more than benefits, and that is why we are introducing the cap on the amount of benefits that working-age people can receive. It is not reasonable or fair that people out of work can get an income from benefits that is greater than the average weekly wage for working households. We understand, however, that disabled people face extra costs, and that is why we are exempting from the cap households receiving DLA, PIP or the support component of the employment and support allowance.

It is fair that the benefits system should support people in public housing in the same way as it does those in private housing, but we have made changes to the housing benefit regulations, in recognition of the fact that some people need an additional room for an overnight carer who lives elsewhere. We have also listened to concerns about disabled people living in significantly adapted accommodation, and have announced additional discretionary housing payment funding of £30 million for 2013-14, to cover both that group and foster carers.

Instead of simply cutting money from everyone, we chose the more difficult but principled option of modernising the benefit and focusing support where it is needed most. PIP will be awarded on the basis of fair, consistent and objective assessments, and such assessments are not in place at the moment. The assessments have taken two years to develop. We consulted with disabled people and made key changes as we received their feedback.

Although they are different assessments that will work in different ways, we have learned from the experiences of the work capability assessment—something that the Opposition brought in—and we had to introduce Professor Harrington, who produced recommendations that we are still working through, to get this right. That will enable us more accurately and consistently to ensure that support is targeted at those who face the greatest barriers to leading independent lives. More than a fifth of PIP recipients will get both of the highest rates, worth £134.40 a week, compared with only 16% of those who are on DLA at the moment.

[Julie Hilling (Bolton West) (Lab)]

I thank the Minister for giving way when time is so short. I have listened carefully to everything she has said, and what I do not understand, at the end of it, is this: why will disabled people be financially worse off, when she says that everything in the garden is rosy? I truly do not understand how she can say that, when every day on which we have a surgery we face people coming in to say how they are suffering under the Government’s policies. I do not understand—

[Mr Christopher Chope (in the Chair)]

Order. That is enough.

[Esther McVey]

Once universal credit has been introduced, many disabled families will receive more support than they do now, with the higher rate of support for all disabled children who are registered blind, for example. Households with one or more disabled adults will keep up to £647 a month—some £7,000 a year—of their earnings before seeing any reduction. Universal credit also offers a more flexible system for people whose condition and ability to work fluctuate. No one whose circumstances remain the same will lose out in cash terms as a direct result of the move to universal credit—there will be protection.

As we have talked about the cumulative impact, I will say that we have published impact assessments on reforms to workplace pensions, the child support regulations, automatic enrolment, PIP, universal credit and the benefit cap—the list continues. Labour embarked on a number of reforms, including moving from incapacity benefit to employment and support allowance, the introduction of local housing, and changes for lone parents, on which no cumulative impact assessments were done, as the hon. Member for Edinburgh East (Sheila Gilmore) and the right hon. Member for Stirling (Mrs McGuire) said. It would have been far simpler to do a cumulative impact assessment, but because of the shift and the fact that the measures will not be in place until 2017-18 we have taken the advice that such an assessment would not be possible in its entirety. These are principled reforms, and we should all be proud that we are delivering them.