Welfare Reform Bill

Baroness Hollins Excerpts

Wednesday 11th January 2012 Lords Chamber

[Lord Low of Dalston]

My Lords, I understand that short speeches are the order of the day so that we may make progress. I shall therefore try to make a short one. I put my name to this amendment because I feel very strongly that the proposal to time limit contributory ESA to one year is one of the most retrograde features of the Bill. At Second Reading, I identified as many as five things wrong with the Government’s position. I will not repeat all those here but I will refer to a sixth, which I did not quite crystallise at Second Reading. The matter was gone into in great detail in Committee, although I was unable to be present. However, I have carefully read the debate twice, most recently through the long watches of last night as I travelled back from Bangkok on an overnight flight with an active two year-old for company.

In any case, the argument emerges most starkly if one sticks to its bald outlines, which have to do with the basic unfairness of the proposal. This was incisively encapsulated by the Disability Benefits Consortium in the words of a woman with Parkinson’s disease. She said,

“There’s no guarantee that I’ll find a job in 12 months. It could take me much longer”.

At this point, one might interpolate, “especially in current economic conditions”.

She continued,

“I’ve worked all my life and paid for decades into the system on the understanding that there will be support if I need it. To be told that all this support could have an arbitrary time limit is both unfair and stressful”.

There are two aspects to this unfairness besides the one which I have just interpolated. First, the condition of sick and disabled people in the WRAG is such that their likelihood of being able to get into work within a year is remote in the extreme, especially in present conditions. As my noble friend Lord Patel has told us, the Government’s figures show that 94 per cent of people in the WRAG need support for longer than a year and a DWP research report entitled Routes onto Employment and Support Allowance, which was published last September, revealed that, despite its name, after 18 months, only 9 per cent of claimants who had previously been out of work on incapacity benefit had found work and still only 25 per cent of those who had entered ESA from work had found new employment. In these circumstances, as the lady quoted by the Disability Benefits Consortium said, to limit ESA to just one year is both arbitrary and unfair. It is in no way evidence-based and is simply cost-driven. The DWP estimates that by 2015-16, 700,000 people will lose their entitlement, of which 280,000 will lose it entirely, which will mean a loss of £94.25 a week.

The second unfairness resides in the breach of the contributory principle that the noble Baroness, Lady Lister, was so concerned about in Committee; that is, the breach of faith of citizens who have paid their national insurance contributions perhaps for 30 or 40 years in the belief that the support would be there if needed. A correspondent who wrote to me said:

“I believe it is totally wrong that people who have worked and paid tax plus national insurance for many years—36 in my case—should have their entitlement to state support time limited in this manner. It seems that the state is breaking its side of the contract at a time when people are most vulnerable”.

The Minister dismissed this in Committee. He said that national insurance contributions were to cover a wide range of contingencies, including the state pension and the NHS. He argued that a year was a reasonable amount of support to give someone when they got into difficulty. In a letter dated 10 January 2012 addressed to Cross-Bench Peers, to which my noble friend Lord Patel has referred, the Minister said that it strikes a reasonable balance between the needs of sick and disabled people claiming benefit and those who have to contribute towards the cost. But you might as well say that it was enough to give someone a pension for, say, three years to help them with the adjustment to retirement, after which they are on their own. Perhaps that will come to be the Government’s position: who knows? Anything is possible. Who would have thought that we would be reducing ESA support for which people have been contributing all their working lives to just one year?

Finally, I come to my sixth point, which I failed to develop at Second Reading. Ministers are constantly pointing to the unprecedented amount of support that they are putting in place to help people back or in to work. Only last night a statement was read out on the radio from a DWP spokesperson, which said:

“We are absolutely committed to supporting more disabled people into work. That is why this Government has protected the budget for specialist disability employment services. Aside from our disability employment advisers, we also have specialist teams at Jobcentre Plus who actively work with businesses to encourage them to interview disabled people with the right skills. Work Choice is expected to support more disabled people into employment each year than any of its predecessor government programmes”.

As regards specialist teams, Ministers have little idea of the reality. No Minister could go on the programme and this statement was read out in response to a blind woman—an able person with a lifetime of successful, professional employment, who had been made redundant last May. She told a woeful tale of the poor advice and lack of support that she had received. She received none of the interviews or training that had been promised. She is very eager to find a new job but few, if any, openings have been drawn to her attention. Despite repeated requests, no information has been provided in an accessible form. Her adviser seemed to have had little training. I know the woman concerned and on one occasion she told me that she felt she could do the adviser’s job better than the adviser.

The Work Programme is not working. In these circumstances it is not only unfair but downright cruel to time-limit contributory ESA to one year. At present it is unlimited. To reduce the level of support to just one year at a stroke is draconian in the extreme. I would drop Clause 51 entirely but I am a realist and recognise that, to have any prospect of success, compromise will be necessary. The amendment proposed by my noble friend Lord Patel is surely the least one could make to ameliorate the draconian nature of the Government’s proposal. I very much hope, too, that in the light of their conference’s decision to oppose the time-limiting of contributory ESA last September, Liberal Democrat colleagues will search their consciences and also give my noble friend’s amendment their support.

[Baroness Hollins]

My Lords, local health charities and services are also very concerned about the impact of time-limiting ESA. They are well aware of how difficult it is for people with severe and enduring mental illness to obtain and to sustain employment, especially at a time of deficit. My postbag is full of angry letters. One correspondent wrote to say that her brother took his own life largely due to difficulties in his working environment. She wrote:

“I personally have only ever managed a very chequered career due to living with complex mental health conditions and welcome any effort on the part of our Government to encourage a mental-health friendly workplace and specialist schemes to support people with mental health conditions into work, but”—

and here is the rub—

“on a voluntary basis because I am deeply concerned that any system built on a backdrop of conditionality, sanctions and time limits will prove to be totally counterproductive, leading to fear, anger and disengagement”.

I could speak at great length about some of the many issues that have been raised with me and I support this amendment.

[Baroness Thomas of Winchester]

My Lords, the time-limiting of ESA is one of the most emotive issues in the Bill, as we have heard. As the noble Lord, Lord Low, said, people affected by severe illness in their working lives who have paid national insurance for many years expect to be protected by the state.

As I said in Grand Committee, by bringing in this change in policy, the Government are acting like a private insurance company that changes the rules when a person makes a claim. However, as we know, the comforting words “national insurance” are really a myth, as many are about to find out when those in the WRAG who have been receiving ESA for a year by this April will have their money stopped immediately. Of course, some will go straight on to income-based ESA, but according to the impact assessment, about 40 per cent will find their income dropping by a staggering £90 a week if they have modest savings or a partner earning only about £148 a week.

The key question is whether it is fair to cut the benefits of those too ill to work, in this time of austerity, when the highest spending department in Whitehall has to take its share of deep cuts in expenditure. As we know, the change to universal credit, which we discussed at the beginning of the Bill, is going to be very expensive initially before savings will be made. Presumably the Treasury demanded this measure as a quid pro quo for finding the money to pay for universal credit.

What troubles many people, and certainly troubled the Lib Dem conference last year, is the arbitrary nature of the one-year cut-off. As we have heard, the DWP’s own figures show that 94 per cent of longer-term claimants were on ESA for more than a year. The many briefings that we have all received tell us that most people with severe but not necessarily rapidly deteriorating conditions struggle to be well enough after a year. I welcome the Government’s amendment, which would mean that those with deteriorating conditions will have a reassessment with a view to them migrating from the WRAG to the support group after a year.

What about the others? Will everyone be entitled to ask for a reassessment at the end of the year or only those with deteriorating conditions? For example, what about people who have had quite severe strokes? Their condition may not be deteriorating but they may be a very long way from the jobs market although that will be their eventual destination. If reassessments are to be allowed, at what point will people be asked to be reassessed? If it is too near the one-year cut-off point, I can envisage such a backlog that it may be many months before the reassessment is carried out.

Is the answer Amendment 38 tabled by the noble Lord, Lord Patel, to allow two years in the WRAG instead of one—another arbitrary time limit? I understand that this would be prohibitively expensive. The figure of £1 billion over the next few years has been mentioned. If this amendment is successful, the House of Commons will almost certainly claim financial privilege, which will mean that this House cannot even debate it again. A vote for Amendment 38 might lead to ping-pong, if it were to be won, but only to ping, not to pong. It would therefore be a merely Pyrrhic victory as the amendment would not go any further.

The work capability assessment is at the heart of this debate, and Professor Harrington’s reviews of it are most welcome and instructive. He advises patience, saying that the changes he has asked for and which the Government have accepted are taking time to bed down. I quite understand that, which is why I am so opposed to what I still wish to call the retrospective nature of this part of the Bill, even if strictly speaking it is not retrospective as it is not actually clawing money back from people. However, stopping someone’s claim the minute the ink is dry on the statute book, having warned them in a round robin letter, is pretty sharp practice. The Government maintain that people have been given enough notice of the April 2012 cut-off date because they could have read about the proposal in the small print of the comprehensive spending review in October 2010. How incredible is that?