Pensions Bill [HL]
Baroness Browning Excerpts(13 years, 2 months ago)
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The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud)
My Lords, this set of amendments puts forward the first of two alternative routes to achieving a combined retirement age at 66. We shall discuss the second route in the next group of amendments, tabled by the noble Baroness, Lady Greengross.
I thank the noble Lord, Lord McKenzie, and the noble Baroness for giving us a further opportunity to debate the issues that the amendments in this group raise. Let me start by saying that we are not insensitive to the impact that our timetable will have on the women who will face a much steeper increase in their state pension age than they were expecting. We also appreciate that we are asking them to make this adjustment with less notice than we would provide in an ideal world. However, for reasons that I shall explain, we are not in an ideal world, as my noble friend Lord Flight has just said. We remain of the view that, although this is a genuinely difficult decision, it is still the right one.
Baroness Browning
When my noble friend explains his intentions to the House, will he include an explanation of what the practical implications would be of helping those women most affected by shifting the burden on to the wider pensioner population?
Lord Freud
Yes, I will try to address that now. If we were to look for funding by asking men and women, after their pension ages were combined at age 66, to go on for a little later than 66, the sums of the adjustment—although it is not easy to do them—would be roughly £330 million a year per month. It would depend on how many years you have. I will write to my noble friend and try to spell out the figures on making that adjustment.
Let me revert to the amendment, which is fundamentally the same proposition that the noble Lord, Lord McKenzie, made in Committee. I shall recapitulate why—notwithstanding the many concerns that we heard today and in Committee—we believe that we are taking the right course of action. It is common ground all around the House that we simply cannot go on ignoring the increases in life expectancy and the pressure that this puts on the state pension system now and in the future. Indeed, these amendments acknowledge that we need to move faster than the timetable that was set earlier. The impact of the upward revision in the life-expectancy projections is an extra £6.5 billion in state pension spending over the lifetime of just that cohort retiring in 2010.
As many noble Lords have pointed out, the amendment would cost the public purse upwards of £10 billion that would need to be found elsewhere. When the coalition Government came into power, we had not only to combat the huge financial debt the UK was in at that time, but put the country on a sound financial footing for the future.
I remind noble Lords that the financing of old age as a whole is the single biggest structural, long-term economic issue facing this country. We need to address the long-term costs of our pension system and ensure that we can deal with any wider economic problems that may appear on the horizon—a point made by my noble friends Lord Boswell and Lord German.
We expect public debt to be on a declining path by 2015-16, but it will still be well above pre-crisis levels. By the end of this Parliament, we will still have a national debt of £1.3 trillion. Waiting until 2020 to start moving to retirement at 66 would reduce the savings that we are looking for by a third—£10 billion off a total of £30 billion. That is the equivalent of reducing the education budget by 10 per cent over the spending review period, or one year’s capital budget for health. We have not yet heard a plausible alternative that would deliver those savings—with apologies, perhaps, to the noble Lord, Lord Stoddart. This is not an insignificant amount of money that we can easily pass up.
We believe it is right that those people who will benefit from recent increases in life expectancy make a contribution to the additional cost that comes from those longevity improvements. Women, no less than men, have benefited from increases in life expectancy. In three generations, projected average life expectancy at age 65 has risen by nine years for women. At the same time, women’s basic state pension outcomes have been rapidly catching up with those of men and continue to improve. In 2006, only 30 per cent of women retired on a full basic state pension. In 2010-11, that figure has increased to around 75 per cent. The projection is for it to reach 90 per cent by 2018, which is a big change-around in the support that older and retired women will get.
On the point made by the noble Baroness, Lady Howe, we have also taken action to ensure that the state continues to provide a decent income for people when they retire, with the state pension supported by the triple lock and key support elements for pensioners protected, such as free TV licences, cold-weather payments maintained at £25 and so on.
As the Chancellor has now officially announced, we will be consulting shortly on proposals for a simpler state pension, which will boost state pension outcomes further for the groups which are traditionally disadvantaged in the current system by low earnings and by interruptions, which is a point that several noble Lords have made. I have been challenged by my noble friend Lord German to talk more about the single tier. Every time we meet, I think there is more discussion on it than on anything else. A Green Paper is due shortly that contains two proposals. There is a proposal for a single-tier system, which will be looked at alongside the alternative option of accelerating the currently legislated changes to the current system—so-called flat rating.
The single-tier system would be around £140 a week and its main benefit would be much greater simplicity for individuals, which would give them a much clearer idea of how to plan ahead. It is also cost-neutral, a factor that is particularly valuable in the current climate, as I have pointed out. However, this is a complicated thing to do, and it is important that the reforms fit in with the programme of automatic enrolment and we will actively consult on the proposals. I take to heart the point about information made by my noble friend Lord German. I will take that back to the department and see how much clarity I can get.
Women retiring at 66 in 2020 should receive their state pension for 24 years on average. That is the same amount of time that we expected this group of women to receive their state pension for at the time that the pensions commission reported in 2005, when they were due to retire at 64.
Of the 2.6 million women affected by the change in state pension age, around 12 per cent face an increase of 18 months or more, and 1 per cent face the maximum increase of two years. That point was made by the noble Baroness, Lady Bakewell. Survey data show that 70 per cent of these women are still in employment. While I accept that we are asking these women to work longer, they will benefit from additional income and a potential boost to their pension savings and entitlements. In response to the point made by the right reverend Prelate the Bishop of Ripon and Leeds, data show that only 4 per cent of the women affected by these proposals have already retired.
The noble Baroness, Lady Hollins, raised the issue of carers. Clearly, they are a most valuable group in society, and we acknowledge them as such. There has been a downward trend in the proportion of women who say that they are not in the labour market because of caring or domestic responsibilities—the figure fell from 10.7 per cent in 1998 to 6.9 per cent in 2010.
The data show that employment rates decline as people approach the state pension age. Currently, the average age at which women leave the labour market is two years below that of men, although it is still two years above the current state pension age for women. The noble Lord, Lord McKenzie, made the point that women are less able to cushion the impact of any change. Current employment patterns for women in their early 60s are not a reliable indicator of future trends, as those women will already have started getting their state pension. It is difficult to predict with certainty how women will respond to the changes in the state pension age. I recognise that women are more likely than men to face competing demands in the form of caring and other responsibilities. Despite this, the figures show that the age at which women exit the labour market has risen steadily, from sixty-one and a half in 2004 to sixty-two and a half in 2010.
We had to act quickly to reduce the increasing costs imposed on the state pension system by the increase in longevity. It has not been possible to give a notice period similar to those given for previous increases in the pension age, but these women will still have between five and a half and six and a half years’ notice of an increase in their state pension age, enabling them in many cases to change their retirement plans.
In order to get to 66 by 2020, we have had to make some hard decisions. The noble Baroness, Lady Hollis, talked about our coalition plans. I point out to her in reply that the single-tier pension was also not in the government programme. Clearly, the new timetable creates a pension age gap between women born in March 1953 and March 1954, which increases from one to three years, but that is the most extreme contrast and applies only to women born in that month.
Employment and Support Allowance (Limited Capability for Work and Limited Capability for Work-Related Activity) (Amendment) Regulations 2011
Baroness Browning Excerpts(13 years, 3 months ago)
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Baroness Browning
My Lords, I begin by declaring an interest as the named carer of an adult in receipt of severe disablement allowance. I also associate myself with the words of my noble friend Lord Kirkwood of Kirkhope. I concur both with his concerns and with his support for the need to enable as many people with a disability as possible who have not worked or have not worked for a long time to be assisted into appropriate work through an appropriate process that takes account not just of what they cannot do but of what they can do.
Among the many disability charities which consider this statutory instrument to be premature due to the as yet incomplete recommendations of the Harrington report is, as the noble Lord, Lord McKenzie of Luton, has mentioned, the National Autistic Society, of which I am a vice-president. I would like to focus on the concerns for people on the autistic spectrum. In order to qualify for the ESA in a work-related activity group, people have to be assessed to have gained more than 15 points. The way in which it is currently proposed to change the descriptors, as we have already heard, has a detrimental impact on people on the autistic spectrum. I remind the Minister that it was only last Thursday at Oral Questions that I asked him to confirm that the Government accept that autism is a communication disorder.
The descriptors take no account of communication difficulties, verbal or non-verbal, due to mental impairment. This is a major omission. Communication and comprehension are essential in the workplace, and it is a critical area of impairment for people with autism. Making oneself understood is covered only by a physical descriptor, descriptor 6. Unless guidance clearly states that this covers people who find it difficult to communicate due to a non-physical disability such as autism or a learning disability, these needs will not be recognised in the assessment. Noble Lords will understand my concern that already I am looking at areas where autistic people should be given a point on that descriptor scale, but getting them to reach the 15 points, if appropriate, is already excluding those areas where they will be in some considerable difficulty. Understanding and comprehension impairments are covered only due to a sensory impairment under descriptor 7, where the emphasis is on aids used by those with hearing or visual impairment.
The wording of the descriptor itself is vague; it is based on an ability to complete “two sequential personal actions” in the context of planning, organisation, and problem-solving. People on the autistic spectrum—even those with honours degrees and high IQs—always struggle with planning, organisation and problem-solving. It is too broad to be meaningful and leaves too much scope for interpretation to accompanying guidance. For people with autism, this may vary from turning on the tap and wetting their hands within the process of washing their hands, or getting ready for work and then making their own way to the workplace. For many, doing that unassisted will be a major challenge.
The National Autistic Society is also very concerned about changes to descriptor 17. It has been simplified to make the wording clearer, but it has become overly simplistic. Someone who frequently has uncontrollable episodes of aggressive or disinhibited behaviour, particularly when under pressure or in an environment with which they are really not familiar—that sort of behaviour would be unreasonable in any workplace due to cognitive impairment or mental disorder—cannot realistically be assessed as not having limited capability for work. As the proposals stand, we do not believe that employers would accept as employees people who the descriptors would deem as capable for work, but showed those sorts of behavioural problems in the workplace.
People with autism may exhibit behaviour which does not meet the minimum criteria set out in this new descriptor 17, but which would cause disruption in the workplace. For example, people will flap, hum or spin. I know of one person who, in a stressful situation in the workplace, would make cat noises as a sort of comforter in order to exclude the distress going around him. There is a limit to how long those working with people like that will put up with somebody making cat noises on a continuous basis in a busy office. These are all regarded as individual or rather quirky, but they are very real parts of their disability.
I say to my noble friend that there is genuine concern about the speed with which these changes are being brought in, ahead of what Professor Harrington is saying.
I mentioned that I am the named carer for a person on severe disablement allowance. This allowance, which comes within this legislation, is a very old disability benefit; it was something often given to young adults and adolescents who, having come out of full-time education, were at that time assessed and deemed not able to apply for paid employment. I would not even want to exclude them from the new opportunities for employment as disabled people, but—and I particularly refer to learning disability, mental health and autism—many of them are now getting on a bit because they were awarded this some years ago. Some of them will be in their 30s and 40s or even older and for many of them, getting the support they have been given to date to enable them to live as independently as possible or to be as socially integrated as possible has not been an easy journey. It has been a long journey and there has been a lot of input to get these people where they are today. But their situation is always going to be fragile, and there is nothing that I can see in the way these assessments are made to take account of what is at the moment a sustainable situation, as far as independent living is concerned. We must not put too many demands on them, however, and ensure that the process associated with it does not give them some form of detriment as a result. As my noble friend Lord Kirkwood mentioned, they might lose money, which is a very important part of their life and allows them to be able to plan and be secure with their finances.
There is another form of detriment. People may find that their self-confidence is shattered after it has taken years to build up; they may find that they can no longer cope with independent living of one sort of another as a result of being put through a process which undermines that stability. You cannot put a price on that detriment. I say cautiously to my noble friend who I know is sympathetic to these issues, please do not let this Government cause detriment to those vulnerable people.
Baroness Hollins
My Lords, I am very pleased to follow the noble Baroness, Lady Browning. I, too, will begin by declaring a personal interest. My 38 year-old son, who has a learning disability, was well described by the noble Baroness towards the end of her speech. He is always being assessed for what he cannot do and not for what he can do, which is incredibly demoralising for him. We his family spend our time trying to help him succeed and he would really like a job.
Some years ago, when I was consulted as president of the Royal College of Psychiatrists on the development of a work capability test, I suggested that the focus should be on capability, not lack of capability, from the point of view of the person being assessed. Although this is called a work capability assessment, it is an assessment of incapability.
I understand that, as my son is in receipt of severe disablement allowance, he may be required to undergo a work capability assessment. I tried out the online work capability self-assessment to see how he would fare. I will not go into the details but, of the three possible outcomes that we have heard about, he fell into the third category and would not be required, according to my assessment, to undertake any work-related activity. Perhaps that is a relief to me, in that his finances might not change, but I am sure that it would be a huge disappointment to him if that was the case.
So far that might be fine, except that the assessor may come to a different decision, in part perhaps because of my son’s lack of insight or understanding of his difficulties. He might then have to undergo an appeal and not everyone has the stomach for, or the capability for, an appeal. My reaction to trying out the test was that there is some sensitivity in the mental, intellectual and cognitive descriptors but probably insufficient sensitivity in the questions which relate to the type of complex difficulties that my son faces in his wish to be part of the workforce. They are difficulties which would require focused and sustained support to enable him to obtain work-related activity. The last thing that I or any parent in my position wants is for my son to fail yet another assessment, especially one which emphasises what he cannot do.
Another concern is that, if the assessment finds that he is capable, he is then given insufficient support, which would do terrible things to his self-worth and self-esteem. I question whether this assessment has been adequately road-tested and would want to avoid even one disabled person and his or her family having to face unnecessary appeals or loss of income through being unwilling to face yet another appeal. Even participating in the process of this assessment could be detrimental to the person’s mental heath.
My noble friend Lord Rix shares my concerns and has asked me to express his support to the noble Lord, Lord Kirkwood, today and to give his apologies as he is unable to contribute to this debate owing to family illness. He believes that many people with a learning disability will be denied vital support to help get them into work if they are not found eligible for employment and support allowance. That mirrors my concern. My noble friend believes that the crude indicators used in the regulations must be changed to more accurately reflect an individual’s capabilities.
For example, my noble friend is deeply concerned about the merging of the three descriptors—“memory and concentration”, “execution of tasks” and “initiating and sustaining personal action”—into one. They have been replaced with just one descriptor, “Initiating and completing personal action”. According to the regulations, this,
“means planning, organisation, problem solving, prioritising or switching tasks”.
The removal of the descriptor titled “execution of tasks” means that the time taken to complete a task will not be included as part of the assessment. This is particularly relevant to people with a learning disability and is likely to be a significant barrier to employment.
The current system already fails to meet the needs of people with a learning disability. My noble friend Lord Rix suggests that these regulations do not effectively assess limited capability for work, which means that the additional barriers and support needs of people with a learning disability are not being fully recognised in the assessment.
With less than 7 per cent of people with a learning disability who are known to social services being in any form of paid employment, the barriers to finding a job, combined with deep-rooted prejudice and discrimination, are already significant. Is it too much to ask that a coalition Government who claim to put fairness at the heart of their decisions should seek to tackle some of these barriers instead of perhaps making them even more difficult to overcome? For this reason alone, I and my noble friend Lord Rix, call for these regulations to be annulled.
Autism: Disability Living Allowance
Baroness Browning Excerpts(13 years, 3 months ago)
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Baroness Browning
To ask Her Majesty’s Government what impact changes to the disability living allowance will have on people with autism.
The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud)
My Lords, we are still designing the personal independence payment assessment so it is not yet possible to comment on its impact on people with autism spectrum disorders. However, we are committed to ensuring that it reflects the needs of all individuals effectively. We recognise that the current assessment criteria for disability living allowance can favour physical impairments and do not always fully reflect the needs of disabled people with mental, intellectual, cognitive and development impairments, including autism.
Baroness Browning
My Lords, I declare an interest as the main carer for an autistic adult in receipt of DLA. I am grateful to my noble friend for that Answer. Do the Government accept that autism is a communication disorder, and that a face-to-face interview with a stranger should be carried out only in the presence of a professional or carer who knows the autistic person? Otherwise, autistic people will not turn up at all and so lose their benefit, or the assessment will result in them losing the benefit on which they rely.
Lord Freud
My Lords, I thank my noble friend for bringing up this really important matter. As I say, we are designing the personal independence payment now. One of the things that we want to get absolutely right is how we look after the most vulnerable. The default position is that we would like to see people face to face, but where that is not realistic, helpful or appropriate we will not be doing so. We will also encourage people, autistic people as well as others, to bring a carer, a family member or a professional with them so that we get the best evidence-based result that we possibly can.
Benefits
Baroness Browning Excerpts(13 years, 6 months ago)
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Lord Freud
My Lords, the noble Lord will accept that I beg to differ on part of that question. The universal credit will have a powerful effect on poverty and will at least balance some of the other effects of the reforms. One needs to see all the reforms in their entirety.
Baroness Browning
Does my noble friend accept that people on the autistic spectrum and those with learning disabilities will find it very difficult to respond to a letter requiring them to attend an assessment or for somebody to visit their home without preparation being done, so that they are comfortable and supported and know exactly what to expect?
Lord Freud
My Lords, I thank my noble friend for that. One of Professor Harrington’s recommendations was to make the whole process far more empathetic and to work with people rather than, if you like, doing things in a more hostile way. Looking after people who have autism is one thing that we want to make sure that we do. In my view, people who are autistic could benefit more than virtually anyone else from the package of measures in the work programme that we are introducing. These are people who can work if they are helped to do so.