Benefit Claimants: Free Prescriptions
(1 year ago)
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The Lord Bishop of London
To ask His Majesty’s Government what impact the removal of free prescriptions for benefit claimants who fail to look for work will have on their health, and the health of the workforce.
The Lord Bishop of London
My Lords, I start by thanking your Lordships’ House for giving time for this important debate. I also thank the House of Lords Library for its very helpful briefing and the Minister for his engagement with me and for our helpful meeting earlier this week about this debate.
The measures we are discussing today relate to the announcement that the Government made in the Back to Work Plan and the Autumn Statement that people on universal credit who do not engage in activities designed to increase their skills and improve their employability after 18 months of support will have their claim terminated. With that termination, their accompanying passported benefits, including free prescriptions, will also be stopped.
Benefit claimants may disengage from Jobcentre Plus for many reasons, some of which I suspect we do not completely understand, and not solely because they have failed to look for work. I have brought this debate forward from a health perspective, and the central frame of my remarks today is around health inequalities, because the Back to Work Plan as it stands could serve to exacerbate these inequalities. There are many complexities within universal credit, and many exemptions and allowances that are made for vulnerabilities and medical conditions that are to be commended. I was grateful to hear about some of them at the meeting I had earlier in the week with the Minister and officials from DWP and DHSC. I understand that the number of people who will be affected by this is small: they are those without a vulnerability that would exempt them from having their claim ended, and who do not have an additional factor attached to their claim.
However, I also understand that those who will face this measure will have already been zero-rated for six months, for which time their prescription fee exemption will have already been removed. I believe the mitigation there is that if they have a health condition, they can access low-level prescriptions, such as an asthma pump, until the time their claim is stopped. I know that these mitigations and allowances are designed to reassure those of us scrutinising these plans and, more importantly, those who are fearful of losing the prescriptions they need. I appreciate that this measure will impact only a small number of people, whose prescriptions are likely to be of a low level, but I have some significant concerns.
First, as this House is acutely aware, we are in a cost of living crisis. The Royal Pharmaceutical Society published the results of a survey of pharmacists earlier this year. Some 51% had experienced an increase in the number of patients not collecting their prescriptions in the six months before the survey, and 52% reported an increase in patients asking for different items to be prioritised due to affordability concerns. Some 67% had seen more patients asking about cheaper, over the counter alternatives to their prescriptions. If prescriptions that were once free are no longer so, a person whose universal credit has just been stopped may not be able to afford their prescriptions. This is a serious concern, especially when in so many other ways the cost of living crisis has been an incubator of the gaping inequalities that remain.
Secondly, it is those who are unable to engage with Jobcentre Plus who are most likely to be subject to poor conditions that determine their health, or ill health. It is these people who are most likely to make up the “plus” of the Core20PLUS5. It is important that all engagement with them is not lost when their claim ends. If they struggle to engage with public services, any poor health they experience may worsen if they do not take the medication prescribed. Even if the prescription is of a low level, these prescriptions are fundamental to keeping us in good health, and our being in good health will in turn relieve pressure on the NHS. An acute asthma attack in A&E costs far more to the public purse than someone’s routine inhaler and has a far more profound impact on the person concerned.
I would be very interested to hear from the Minister how the department is working to understand the reasons for people’s disengagement from the support it offers, and what resource there might be for the department to offer the steadier relational support that I know Jobcentre Plus hopes to offer. Have they considered a way to identify those who are extremely vulnerable, and work with the health services to ensure that they do not fall off the radar, perhaps by informing the GP that their claim has ended?
Thirdly, I appreciate that this measure is a deterrent from disengagement and is designed to act as an encouragement into work. I was unaware, until meeting the Minister this week, that parliamentary legislation will be required to bring forward these changes. I have no objection to that in principle, but I am concerned that, with a limited amount of parliamentary time, there is a risk that this legislation will never appear. I am concerned that this proposed measure and the press coverage, which I acknowledge was not completely accurate or helpful, seems designed solely to deter, causing anxiety and fear. This is concerning, even given the small number of people it will impact, and when we are dealing with changes to a highly complex system, it often increases anxiety. To use, or to threaten to use, health measures in any way as a punitive consequence for disengagement is, I believe, a misuse of power and could have a significant impact on the lives of people who need to be helped, not punished. Can the Minister confirm exactly what is needed to be brought in by primary legislation—whether it is the whole Back to Work plan—and share whether he has any expectation of when it might progress?
The expansion of the health programmes within the Back to Work plan are welcome and I know that they have been commended as part of the Autumn Statement debate. Health and work are linked, and prioritising the health of the workforce is required for a thriving economy. Part of that is to ensure that people have the option to take time off if they need it, which under the current sick pay system may not always be possible. This is especially true for those in insecure work. A report by WPI Economics, Making Statutory Sick Pay Work, highlights stories of workers coming back to work while still sick or injured because they cannot afford to take time off. Can the Minister say whether the Government have any plans to examine statutory sick pay and ensure that those who are working have the option to take time off while they are ill?
On a slightly different note, I was very surprised to read in the Lords Library briefing that the total cost to the NHS of exempt prescription charges from community pharmacies in England was £9.9 billion, while paid-for prescriptions made up only £500 million. It makes me wonder whether installing universal free prescriptions would be less costly than is sometimes assumed and whether the savings to the public purse from better public health may well be worth it.
I again thank the Minister and look forward to hearing the speeches of noble Lords participating. Worsening health inequalities is one of the worst health outcomes of recent times and it requires a multifaceted approach. It is important to consider how people’s health may be impacted by measures that are not directly health based, and I feel encouraged that the Chamber has decided to debate this.
Lord Davies of Brixton (Lab)
My Lords, I thank the right reverend Prelate the Bishop of London for securing this debate on the end of free prescriptions for certain benefit claimants. She covered, in detail, the operational effectiveness of this and how it works out in practice; I will talk about the philosophy that lies behind the proposal.
As I said in yesterday’s debate on the Autumn Statement, I am angry. I saved my anger from yesterday’s debate for today. It is unfortunate that the noble Viscount the Minister, for whom I have considerable respect, has to be the butt of my anger, but my anger exists nevertheless. I am angry about this cruel and outrageous proposal that reflects so badly on a Government that have already lost much credibility and honour—I am angry and sick to my stomach. My immediate reaction when I read this policy was to ask, “Are we back to the workhouse?”. I am angry, because we have known for almost two centuries that the policy of less eligibility simply does not work—not only does it not work; it leads to further cruelty in a race to the bottom, devoid of compassion and sense.
I will talk history. I am sorry that we have lost the noble Lord, Lord Lexden, who gave us a history lesson in the previous debate today, for which three of us were present—but here is some more history. I will talk about the Poor Law and the principle of less eligibility that played significant roles in shaping the approach to poverty and welfare in the 19th century, particularly in the United Kingdom.
The Poor Law, a system of social welfare that dated back to the 16th century, underwent significant reforms in the 1830s with the implementation of the Poor Law Amendment Act 1834. The core principle of the Poor Law was the provision a relief to the poor through workhouses, which were intended to be austere institutions to discourage dependence on state assistance. The workhouse system aimed to make poverty less desirable than the lowest paying jobs available, thus enforcing a concept of less eligibility. That meant that conditions in the workhouse were intentionally made to be harsher than the worst situations outside, creating a deterrent against seeking public assistance.
Less eligibility sought to create a clear distinction between the deserving and the undeserving poor, with the belief that the fear of destitution would drive people to seek alternative means of support. The workhouse environment was designed to be Spartan and unpleasant, reinforcing the idea that dependence on state support should be a last resort.
It became clear, however, that the Poor Law and less eligibility meant the system was dehumanising and punitive, pushing vulnerable individuals and families to the brink of despair. The workhouse conditions were often harsh, further exacerbating the emotional toll on those seeking assistance. Charles Dickens, through his literary work such as Oliver Twist, on the Poor Law and its bastard children, vividly depicted the hardships faced by the poor in workhouses, contributing to public awareness and debate. Over time, society’s attitudes shifted and the harshness of the Poor Law system began to be questioned. As the 19th century progressed, there were calls for reform and a more compassionate approach to poverty. Eventually, the Poor Law system was largely dismantled in the early 20th century, making way for the development of modern welfare programmes.
In retrospect, the Poor Law and less eligibility reflected the prevailing ideologies of the time, attempting to address poverty through deterrence rather than systemic support. The approach was rooted in a belief in self-sufficiency, but it ultimately led to widespread suffering and hardship for those already marginalised by poverty. The lessons learned from the shortcomings of the Poor Law should influence contemporary discussions on social welfare and the importance of a compassionate and inclusive approach to addressing poverty and inequality. However, it is as if the Government have forgotten these lessons.
My question to the Minister is: has he read his Dickens? Does he realise that, not as an individual but as the representative of the Government here today, he is playing the part of the villain in an up-to-date Dickens novel and that he is, in his official role, if not personally, acting as a modern-day Mr Bumble, the cruel manager of the workhouse in Oliver Twist, devoid of compassion? I was struck by the remarks of the noble Baroness, Lady Vere, in the discussions yesterday, when she complained that this was a compassionate policy. I think it is identical to Mr Bumble, the cruel manager claiming to be compassionate.
When we look at the people who will be affected by this policy, we do not really know much about their characteristics—I think that was the point that was made—so we do not know who will be harmed by this policy. Make no mistake: the intention of this policy is to harm people. I suspect that few if any people fit the tabloid caricature of the feckless, workshy scrounger, but we do know that these people are poor. We also know that they are ill, and we know this policy is designed to make them poorer and iller. To put it at its clearest, even the feckless, workshy scrounger deserves the medical treatment they require.
I hope the Minister can hear history speaking to him, saying that this policy is a component of the failed idea of less eligibility, and it is bound to fail and create more problems than it seeks to address.
Baroness Bennett of Manor Castle (GP)
My Lords, it is a great pleasure to follow the powerful speech of the noble Lord, Lord Davies of Brixton, who has reminded us of how in many ways our society is going back to Victorian times with the level of inequality and the insecurity affecting so many people’s lives. In the times the noble Lord was talking about, the spectre of the debtors’ prison hung over so many families. We are potentially back in that situation now, except that of course the spectre now is of benefit sanctions, which hit so many people utterly unjustifiably.
As the noble Lord said, poverty is a feature of our system, not an individual failing. I thank the right reverend Prelate for securing this terribly important debate. It is a grave pity that we do not see on the speakers list any Tory Back-Benchers stepping up to defend the policy—although I note that one noble Baroness on the Tory Benches has joined us to listen to the debate. Perhaps the others will read it in Hansard later.
The right reverend Prelate talked about “significant concerns”, in the manner of her speeches. I would go much stronger: this is a disgusting piece of dog-whistle politics targeting the most vulnerable in our society and, as the right reverend Prelate said, possibly having minimal effect in saving the Government money and likely costing them money, while spreading fear in an attempt to activate some of the least desirable emotions in our society.
I am going to take a somewhat different approach from the noble Lord, Lord Davies, and look at the medical impact. The right reverend Prelate clearly and cleverly set out the debate by talking about the impact on individual health and the health of the workforce, so my speech will cover those two areas. I looked in some detail at to whom free subscriptions are available. There is a group of conditions—cancer, diabetes, hypothyroidism and epilepsy are among them—the sufferers of which automatically have the right to free prescriptions. I ask the Minister to put on the record that, if you have those conditions, even if you are affected by these rules, you will still get your cancer drugs and diabetes drugs. It is incredibly important to put that on the record for people to understand.
Let us think about some of the conditions that are not included in what I hope is an automatic exemption from prescription charges. Mental health conditions are not on that list. As the right reverend Prelate highlighted, asthma medications are not on that list. Of course, free prescriptions for everybody would be the ideal situation for our society, for the health of both individuals and the workforce—and I point out that that is Green Party policy and where the NHS started. Another group of drugs taken by huge numbers of people, particularly older members of society, is statins, which treat high levels of cholesterol that can lead to cardiovascular disease, heart attacks, coronary heart disease, angina and stroke. Can the Minister confirm that statins, asthma medication and drug treatments for mental health conditions will all be covered by these sanctions? More than that, what about counselling? Will the NHS continue to provide counselling to people who need it if they are affected by these sanctions? I am not sure I have seen that explained.
I want to put this in a broader context—and it is a great pity that none of the House’s legal experts is taking part in this debate. In the World Health Organization’s constitution, to which we are of course signed up as a member, the
“highest attainable standard of health”
is a fundamental right of every human being. More than that, I hope the Minister will acknowledge that the right to life is a fundamental human right. If we are going to deny people statins, asthma drugs and mental health treatments, how does that square with the basic right to life, let alone the best attainable standard of healthcare, which we are signed up to through the WHO?
I turn to a broader question, on which the Minister might agree with me a little. Your Lordships’ House may be aware that yesterday, under a new methodology, a survey by the Office for National Statistics suggested that the current unemployment rate is actually 3.5%. We have a labour market in which the essential problem is a shortage of medical professionals, care workers, HGV drivers and construction workers. We need to start to think about human time, energy and talents—scarce resources that need to be nurtured, cultivated and looked after. We will be having a debate later on early years, in which I will be participating. We need to give people the best possible start in life, so they can contribute best to our society.
The right reverend Prelate hinted at this: the best way we can look after people and ensure that they are fit to contribute to our society—it might be through paid work, voluntary work or caring for family members—is to offer security, which is what people need in all those situations. This is why the Green Party’s alternative Autumn Statement said, “Let’s lift the basic level of universal credit payment by £40 a week”. I put it to the Minister that giving people unconditional payments—indeed, the Green Party’s aspiration is for a universal basic income—and a universal, secure payment that meets their needs means that they can be healthy and can contribute to society through paid work and other means. We would all be richer. Making people ill and forcing them into impossible situations, even fear, is a huge problem.
I circle back to the point I started with—the noble Lord, Lord Davies, also mentioned it—concerning Victorian times. Too often, poor health is seen as an individual characteristic, yet we have a deeply unhealthy society. We have terrible levels of air pollution on our streets and in our homes. We have terrible-quality homes with poor insulation, people cannot afford to heat their homes and there the problem of mould, which has been illustrated so tragically lately. To get a healthier and more productive society, as well as the kind of growth the Government are so keen on, the best thing to do is ensure that we have free prescriptions and free support for everyone who needs it. This would help everyone to contribute to our society as best as they can, rather than punitive sanctions waved at some of the most vulnerable people in our communities.
Lord Allan of Hallam (LD)
My Lords, the right reverend Prelate the Bishop of London helpfully said in her opening speech that she was in some ways surprised to see that this issue would require legislation. I fear that may actually be the point: that the whole purpose of this is to table something and invite Members on this side of the House to vote against it, so that the Government can somehow claim that we are being weak on the workshy. I must say, whenever the Government find time for something such as this—as noble Lords might expect, I think it is wrong in principle and in practice—in lieu of other legislation we have called for, such as on mental health, we have to question their priorities and whether all we are seeing now is a political agenda from a party playing out its last few months in office.
I turn to the substantive issue and why I think this is wrong in principle and in practice. On the principle, we need to understand the rationale for prescription charges. We are not paying for our drugs when we pay prescription charges; the rationale is that people who can afford to do so should make a contribution to the costs of operating the entire system of dispensing prescriptions. Those people are working-age people, in work. The whole system is based on that rationale. People who are not of working age do not pay prescription charges: 70 year-old millionaires—and, indeed, their 15 year-old children—do not pay them. The whole system is based on this, so taking a segment of people who are, by definition, not in work and magically putting them in the in-work paying bucket is entirely inconsistent with the whole scheme as it has been set up.
No deserving/undeserving judgment is made with prescription charges; otherwise, we would be testing people’s incomes and whether they had made themselves ill before getting a prescription. We do not do that because that is not the rationale. The rationale is that people who are in work and have the means to pay, such as myself, should do so. I do not speak for others, although I would have spoken for the noble Lord, Lord Markham, had he been here, because he is in a similar position, in that we are the kind of people who should be paying prescription charges. In a few years, I will stop because I will be deemed no longer of working age, so, although I will have plenty more time here, my prescription charges will cease. Being in work and being of working age are the criteria for making contributions.
In principle, we are breaking that and I see no rationale for doing so. Saying that you have not complied with a jobcentre request and therefore you lose access to the scheme is so inconsistent with everything else that has been set up. That is particularly the case where an obvious response to the sanction is that someone should seek the healthcare they need. Everything in the prescription contribution system has been carefully designed not to deter people from getting drugs. A whole bunch of exemptions are wrapped around this to do that. To undermine it seems entirely problematic.
I turn to the practical issues. The prescription charges are not a fee for the medicines. They are completely unrelated to the cost of the medicines; they are a contribution to the NHS. They are capped at £111.60 per year and the cap is set, effectively, by the prescription prepayment certificate. Anyone who needs more prescriptions than would add up to that price is entitled, whoever they are, to get a PPC. I assume that this will apply equally to the cohort we are talking about today. If the claimant has a condition that needs several prescriptions per year, we are effectively fining them £111.60 per year. This is probably one for the Minister’s DHSC colleagues but, given that we have set a cap, I am curious why, if TfL can figure out when I have travelled enough during a day to hit its daily transport cap, the prescription pricing system—which is all computerised—cannot figure out when I have hit the £111.60 cap and automatically apply it. The obvious reason is that it is hoped that people will keep paying beyond the cap. If we are to have a cap, let us help people claim within it rather than send them over it. That is particularly true here.
This £111.60 fine is now being levied as a sanction on top of all the other sanctions for this group of claimants. The first option is to pay the fine so that, if you need the medicines, you can go off and get them. The second is to keep ticking the exemption box. All sorts of people do this all the time. You run the risk of getting a £100 fine plus the cost of the prescription penalty charge notice at some point in future. Again, I am not saying that to invite it. It is a very common phenomenon. It happens all the time, so much so that the Public Accounts Committee down the other end has done a report on it, which was very critical of this whole system. It is quite expensive to administer and we spend a lot of time chasing people around for this. A rational response of someone in this category is: “Okay, here’s my choice: £111.60 or take my chances. Maybe I will end up paying about the same amount as and when they come and get me with one of these penalty charge notices”.
The third option is for them to stop taking the drugs that they need. That is the worst option, disastrous for all possible outcomes. I am looking at the noble Viscount the Minister—from the point of view of the benefits system, what possible interest is there in having someone stop taking their drugs if the goal is to get them back to work? I cannot see any circumstance in which someone who needs the medicine for a physical or mental health problem would be more fit for work if they stopped taking the drugs than if they continued taking them. Therefore, I assume the hope is that everyone will pay the fine and treat it as just another financial sanction.
On the point made by the noble Lord, Lord Davies, the reality is that we have seen this lots of times in previous economic cycles. When there is a serious downturn in the economy, significant numbers of people—this will vary geographically according to where the downturn hits hardest—will move first to out-of-work benefits and then to sickness benefits. I was brought up in a posh bit of Sheffield but when my communities in South Yorkshire lost the steel and then the coal in the 1970s and 1980s, you saw entire communities moving from work to sickness benefit. What they had really lost was hope. Hope had gone and the community was devastated. People were sick in the sense that they felt terrible. That expressed itself in all sorts of physical and mental problems and they moved on to sickness benefit.
If you are in one of those communities, the solution is not fining you £111.60. That will not give you back your hope or encourage you to go out and take a job. I really fail to understand why the Government think it will. We have seen this play out before—it is politics. The Government must be seen to be doing something; they are trying to artificially create some kind of conflict where they are tough on the work-shy and people who question this are somehow championing them. I think this is completely the wrong target. I know politics must react to things, but in this case it is reacting incredibly clumsily.
I am very grateful to the right reverend Prelate for the opportunity to debate this issue. I leave the Minister with the following questions. First, have the Government assessed how affected people will split into those three categories? In category one, they pay their £111.60 for a prepayment certificate; in category two, they keep ticking the exemption box and risk a fine; in category three, they stop taking the drugs. For a policy of this significance, we need to understand—I assume the Government have some data as they are proposing this—how those people will split. If the numbers in category three are significant, that is the most important area of concern. Secondly, have the Government made any assessment of this measure versus a financial sanction of the same value? If the intention is to fine people for not going back to work, have they considered a straight cash fine rather than this clumsy prepayment certificate method? Thirdly, what measures will the Government take to make people aware of the prepayment certificate option, particularly if they move ahead with this? I hope they will tell everyone not to keep paying the individual prescriptions and to get a certificate as the cheapest option.
Baroness Sherlock (Lab)
My Lords, I thank all noble Lords for their contributions to this short debate, especially the right reverend Prelate the Bishop of London for making it possible and for her introduction. I remain grateful for her continued commitment to the health and well-being of the nation, especially the most vulnerable within it, and I thank her for all she does in this respect.
Before I speak on the Motion, I would like to record my sadness at the news that Lord Darling has died. Before becoming a valued Member of this House, he was Chancellor during the global financial crash. The country was fortunate to be in the hands of someone of such ability and integrity. But as this is a DWP debate, he was also a fine DWP Secretary of State, with whom I had the privilege of working when I was a special adviser to Gordon Brown. Our country is the poorer for his passing.
As we have heard, the trigger for this debate is the Government’s proposal to close the universal credit claims of some people who fail to meet employment-related requirements. As a result, they would cease to have access to passported benefits, including free prescriptions. The noble Lord, Lord Allan, explained the rationale for a prescription charging policy, but the problem is that this is not a health policy. It is a policy that would try to use access to healthcare as a tool to enforce conditionality in the welfare state. The right reverend Prelate the Bishop of London has highlighted some of the real challenges of such an approach. As she, the noble Baroness, Lady Bennett, and others, have said, this clearly risks putting the health of some individuals at risk. It will clearly not make them any more likely to work—less likely, if anything—and it will probably end up costing the NHS more in the long run, as the right reverend Prelate’s example of asthma inhalers versus asthma attack treatment has shown.
The noble Lord, Lord Allan, is on to something on the point of this policy. I am sorry to say that I think there is an attempt to create dividing lines and say, “You do not really want to do X”. To avoid jumping into that trap, I will say for the record that we believe everyone who can work, should work. That has been the basis of Labour’s policy in the past and will be again. The welfare state was created to support those who could not support themselves, and conditionality has been part of it from the start. If people refuse to engage with the system, there must of course be consequences, but not like this. The quid pro quo is that the state should provide the help people need to get into proper, sustainable jobs, and I have real questions about how well it is doing that right now. Although that is a problem, I do not think anyone really believes that this proposal is the solution, and I think Ministers know that.
The OBR forecasts, after taking account of the Government’s plans, suggest that the employment rate will remain static, there will be 600,000 more people on sickness and disability benefits and that that will put spending up 75%. That does not sound like a plan that is likely to be effective in addressing its ostensible objective. It is hard to understand what the Government want to do with this.
In opening, the right reverend Prelate the Bishop of London said that, in her conversations with the Minister, she realised that very few people would be affected and that the media may have misreported this. To be fair, I think they were meant to report it in the way they had. I would not expect the right reverend Prelate to engage in the politics, but I simply quote from the speech made to the Conservative Party conference by the Chancellor of the Exchequer Jeremy Hunt. He said:
“It isn’t fair that someone who refuses to look seriously for a job gets the same as someone trying their best”.
It was then briefed out that the intention was to signal this as a crackdown on those who do not try very hard. The job of the Minister, for whom we all have great respect, is to say that this is one of two things: it is either a major crackdown, which potentially risks the health of many people, or it does not make much difference. I would like to know which it is, so could the Minister explain that?
The most obvious question is how many people will be affected. Has the DWP done a formal assessment of that? If so, please could the Minister share it? If it has not, why not? Secondly, as my noble friend Lord Davies asked, do we know which people will be affected? Are they young or old? Do they have children? Could they be single parents or carers? Who are they? Free prescriptions are just one of the benefits passported from universal credit. Others include dental treatment, help with travel to hospital to get NHS treatment, free school meals for kids and Sure Start maternity grants. Are those included in the same policy?
The right reverend Prelate mentioned that the Minister had indicated that most of these people will be on a nil universal credit payment and therefore would not qualify anyway. Either nobody in this position would be affected or some will be. What is the process to distinguish between them? Will that action be automatic, will a case be closed at a certain point, or will an individual assessment be made? What safeguards will be put in place to check whether people were failing to engage because of health problems, whether physical or mental? Will this need extra staff and, if so, what will that cost?
I cannot help but conclude that this policy is born of failure. Britain remains the only country in the G7 where the employment rate is still not back to pre-pandemic levels. Some 2.6 million people are now shut out of work due to long-term sickness—the highest number since records began. It is hard not to conclude that a major contributory factor is that the Government have let the NHS lurch from crisis to crisis, when waiting lists have soared to 7.8 million. More and more people over 50 are out of work due to long-term sickness. We all know that large numbers are stranded on NHS waiting lists, who are desperate for treatment or in pain. Many of those are mothers caring for older relatives or other people who are sick or disabled, and they are getting precious little help from the social care system, which still goes unreformed, despite 13 years of promises.
The right reverend Prelate said that health and work are linked, and she is absolutely right. It is quite right that health and employment policies need to be considered together, especially when we have these inactivity rates, but we need to do this in a positive, strategic way. Labour has said that we would invest £1.1 billion in the NHS to provide more appointments and get the backlog down. We would recruit 8,500 more mental health staff. We would also overhaul jobcentres, so that they can provide personalised help and work in partnership with the NHS, employers and others that can help people back into proper, well-paid, sustainable jobs. We would create technical excellence colleges, so that people get the skills that would help them get jobs in their area and then bring the skills that are needed into those areas.
That is the way forward—not a policy that grabs a few headlines but probably will not make much difference anyway. We want a proper, strategic approach to the labour market, working with the health service to help get our country back to work. The social security system is there to support those who cannot work and to help those who can work get back into work. Does the Minister not agree?
The Parliamentary Under-Secretary of State, Department for Work and Pensions (Viscount Younger of Leckie) (Con)
My Lords, I begin by expressing my own condolences at the loss of the noble Lord, Lord Darling. I was shocked and greatly saddened when I heard the news earlier today. He was a giant of a man, and he was extremely helpful, indeed instrumental, in helping the country through the financial crisis back in 2008 and onwards.
It is a pleasure to close this important debate which, at its heart, is about ensuring that more people who can work are supported to do so and benefit from all the rewards of work. I start by thanking all noble Lords for their valuable contributions, in particular the right reverend Prelate the Bishop of London for initiating this debate. I also thank her for our meeting earlier this week, which was greatly appreciated. Getting into work and ensuring that work pays remains a key government priority. Building on the £7 billion employment package announced in the Spring Budget, the Autumn Statement set out a further £2.5 billion investment in employment support over the next five years. This support will ensure that no claimant reaches 18 months of unemployment if they have taken every reasonable step to comply with the jobcentre support offered to them.
I will cover two or three points upfront. I was interested in the very hard-hitting speeches from the noble Lord, Lord Davies of Brixton, and the noble Baroness, Lady Bennett. They both opined about the issues of sanctions more broadly. It is fair to say that the right reverend Prelate the Bishop of London alluded to some misrepresentation in the press. I can think only that the noble Lord and noble Baroness have maybe been reading too much in the papers, but their questions were fair.
I say at the outset that conditionality supported by sanctions has been a long-standing feature of benefit entitlement and a policy of past Governments, including past Labour Governments. Claimants on work-related benefits are generally expected to take responsibility for meeting the conditionality requirements that they have agreed to with their work coach. Where a claimant fails to attend a mandatory appointment or fails to comply with specific work-related activities without good reason, an open-ended sanction is applied. Open-ended sanctions are applied from the date of the failure up until the date that the claimant complies with the agreed requirement—I will say more about this later. I am grateful to the noble Baroness, Lady Sherlock, for her general acknowledgment of this policy.
The right reverend Prelate the Bishop of London understandably asked about continued disengagement and whether the policies we are taking forward are a bit harsh—I think that is the general principle of what she said. Perhaps I can be helpful by saying that claimants are set mandatory work-related requirements based on the benefit regime that they are in. All mandatory requirements are tailored to the claimant’s circumstances and are discussed with them beforehand, as are the consequences of failing to comply. We have also hugely increased the training that job coaches have. I reassure the House that the quality of job coaches is increasing the whole time, and there is a great deal of sensitivity involved, as the House will imagine.
Following a failure to comply, the claimant has the opportunity to provide good reason. Additionally, a pre-referral quality check is in place to check for known vulnerabilities before a sanction referral is made. Following a referral, cases are reviewed to ensure that the mandatory requirement was fairly set in the first place and to check whether a conditionality easement should have been applied. Claimants will be contacted through the normal channels from the point of sanction decision. These include a digital nudge at six weeks following the decision. Where a claimant remains disengaged following an open-ended sanction, they will receive a notification at month five that will inform them of the claimant closure intention and prompt them to re-engage or to inform us of any new circumstances that may impact this.
The right reverend Prelate asked, reasonably, about the cost of living. We remain very aware of the pressures that people are facing with the cost of living. That is why we have provided £94 billion of support across last year and this year, 2023-24, to help households and individuals with the rising cost of bills. In addition, subject to parliamentary approval, working-age benefits will rise by 6.7% from April 2024, in line with inflation. The House is well aware of the Autumn Statement announcement on the local housing allowance rates, which I know will make a considerable difference.
The right reverend Prelate asked about statutory sick pay. There is a very short answer: we will absolutely continue to keep it under review. She also asked about primary legislation and timing. Although I cannot give her any precise information on the timing, I can say that it is very unlikely that we will be able to bring this forward during this Parliament. That helps perhaps to answer a question from the noble Lord, Lord Allan of Hallam.
Turning to the issue of disengagement, I should explain that for the quarter ending August 2023, 95.3% of sanctions were for universal credit claimants failing to attend a mandatory appointment with their work coach, as opposed to refusing a job interview. These sanctions are typically open-ended, as mentioned earlier, meaning that they can easily be ended at any time by the claimant re-engaging with their work coach. We know that the majority of people who have open-ended sanctions do re-engage with the support on offer within six months. However, there is still a growing number who are choosing not to engage with employment support, despite support being available to them.
It is important to place this area in the context of the Government’s wider Back to Work plan. A key part of this is about ensuring that a short spell out of work does not turn into a period of longer-term unemployment. I am sure that we all agree with that, because the longer someone remains unemployed, the harder it is for them to return to the labour market. This can have detrimental impacts on the individual, as well as the wider economy. That is why, as part of our plan, we are bringing in much more intensive back to work support earlier on in someone’s claim. This includes upskilling, job search support, practical work experience and tailored advice to support claimants. Those claimants who remain unemployed after 18 months of intensive support will undergo a review by a work coach and will be expected to either take up a job or mandatory work placement, or engage in a programme of intensive activity.
To ensure fairness to the taxpayer, it is right that there are consequences for those who refuse to engage with the support on offer. It comes back to my initial comments at the beginning of my remarks. As a result of this new approach, no claimant should reach 18 months of unemployment in receipt of their full benefits if they have not taken every reasonable step to comply with jobcentre support. The noble Baroness, Lady Bennett of Manor Castle, asked about the additional jobcentre support—the AJS. She asked whether this was even proven to work. Perhaps I can reassure her that there is good evidence to show that work is generally good for physical and mental health and well-being, whereas worklessness is associated with poorer physical and mental health and well-being. Work can be therapeutic and can reverse the adverse health effects of unemployment. This is why the AJS aims to support those closest to the labour market to return to work as quickly as possible and prevent long-term unemployment. So we do think this is a very worthwhile project. It will send a clear message to claimants who can work about engaging properly with support.
Having covered that area, I will now focus on the important points that were raised about claim closure. I would like to, I hope, give some reassurance, and dispel a few myths which were put about. I listened carefully to the remarks made by the noble Lord, Lord Davies, whom I have much respect for. However, I am afraid that I just did not agree with much of what he said in this respect. It is important to underline that not everyone who fails to meet with their work coach is subject to a sanction. If you have good reason, you will not be sanctioned, nor will your claim be closed. The examples of “acceptable good reasons” include new or worsening illnesses, health condition flare-ups and periods of mental ill-health—which answers a question raised by another noble Lord. They also include working or attending an interview, unexpected childcare, attending the funeral of a close family member or friend, or transport failures.
Even if there is no evidence of good reason, work coaches can also apply discretionary easements, as mentioned earlier, such as domestic emergencies. When an easement is in place, we relax our requirements so that individuals will not be sanctioned, nor will the claim be closed. Still, if you do not have a good reason for a failure but you take corrective action and re-engage with the support on offer within six months, your sanction will end and your claim will not be closed.
The noble Baroness, Lady Sherlock, asked who these people were, and I hope I can help to answer that. There is a rapidly growing group of disengaged claimants, as the right reverend Prelate acknowledged, on nil award, who have had a failure without good reason and have failed to re-engage for more than six months. They have no housing or child elements attached to their claim. Crucially, this means that claimants who do have housing costs or children can rest assured that they will not be at risk of losing the income that they have come to depend on.
In addition, the people in the impacted group have not declared that they are homeless or, because they have no housing element, they are likely living with family, possibly including their parents, or their friends. We also exclude any claimant with a health condition that impedes their ability to look for or carry out work—which might play into the questions raised by the noble Baroness, Lady Bennett. It is therefore only right that we close the loophole that allows people to continue to maintain a claim without complying with any commitments.
In the remaining time, I will focus particularly on free prescriptions. This was another theme raised by the right reverend Prelate. Not everyone who is subject to a claim closure will lose access to free prescriptions. There is a variety of exemption criteria beyond receiving universal credit that would qualify an individual for free prescriptions. Claimants are entitled to help with health costs, including free prescriptions, only if they are in receipt of a monetary award of universal credit that is above zero and if their earnings in their last assessment period were below the income thresholds. Many will have stopped receiving access to free prescriptions when their claims were fully reduced by the sanction.
As always, if entitlement to other benefits is reliant solely on a universal credit claim to establish eligibility, that eligibility will cease if the claim is closed. By excluding the claimants who have more severe health conditions and vulnerabilities from sanctions, we believe that the claim closure group would likely be claiming prescriptions for only minor health conditions. I think the right reverend Prelate acknowledged this in her remarks.
There were a number of questions, particularly from the noble Lord, Lord Davies of Brixton, pressing me on the lack of support for the most vulnerable. I hope I can be a bit more helpful. A well-established system of hardship payments is available as a safeguard if a claimant demonstrates that they cannot meet their immediate and most essential needs, including accommodation, heating, food and hygiene, as a result of their sanction. In universal credit, claimants are able to apply for a hardship payment from the first assessment period the sanction reduction is applied.
The noble Lord, Lord Davies, asked about work being the best route out of poverty. He knows what my reply will be, which is that the Government are committed to a sustainable long-term approach to tackling poverty and supporting people on lower incomes. He is well aware of the expenditure that the Government are making in this area and we believe that the best route out of poverty is through work. The Government remain committed to a sustainable, long-term approach in this respect.
The noble Baroness, Lady Bennett, asked about abolishing the prescription charge. I say very briefly that the Government have no plans to abolish the prescription charge in England or to review the medical exemption qualifying list. Our policy remains to help those whose need is greatest through the rules we currently have in place.
I really ought to finish. There are a number of questions that I will most certainly answer—
Baroness Sherlock (Lab)
I am sure that the Minister will write, but I will ask one simple question before we are timed out: how many people could be affected by this policy?
Viscount Younger of Leckie (Con)
I have asked about that figure. I will need to check whether I can give it to the noble Baroness, as it is not in the public domain. It is substantial. I will write to her to give her whatever answer I can. It is a very fair question, which was also raised by the right reverend Prelate the Bishop of London. However, that is as far as I am able to go.
Baroness Bennett of Manor Castle (GP)
Could the noble Viscount put that in the Library and share it with everyone in this debate?
Viscount Younger of Leckie (Con)
I will most certainly do that.
I will conclude briefly, because time has run out. I have not had a chance to focus on safeguards, which the noble Baroness, Lady Sherlock, raised. I will write to her on that as there is quite a lot to say. I close by saying that our Back to Work plan is about putting fairness at the heart of our welfare system: fairness for claimants who play by the rules and try their best, and fairness for taxpayers who contribute to the welfare system. Above all, it is about helping those who can work to move into jobs, which will grow our economy, change lives and, indeed, change their own lives.