Welfare Benefits Up-rating Bill

Baroness Hollis of Heigham Excerpts

Monday 25th February 2013 Lords Chamber

[Lord Low of Dalston]

My Lords, I am very surprised to see the need for this amendment. Usually, when benefit changes are introduced, it is standard practice not to take them away from those who are currently in receipt of them. If the Government go ahead with the provisions in the way that is currently envisaged, it is clear that they will effectively be depriving people of a benefit which they currently enjoy, because what is a Motability car if not a benefit? It is every bit as valuable as a cash benefit and I find it difficult to imagine that the Government seriously intend to strip people of benefits which they currently enjoy.

I am very sorry that I missed the first couple of minutes of the speech by the noble Lord, Lord Alton. I do not know whether he referred to the numbers but he cited the figures given by the noble Lord, Lord Freud: that in a steady state the number of disabled people with mobility difficulties in receipt of personal independence payment will reduce from about 1,000,000 to 600,000. I am given to understand that of those, it is estimated that 27% might have a Motability car. I believe this equates to about 200 Motability cars per constituency. That is a large number of people who are likely to be beating a path to their MP’s surgery with a very real grievance. I hope that the Government will take that into their calculations when considering whether to press ahead with this provision.

I remember several occasions when Lord Newton, who is sadly no longer with us, would taunt the Government when we came to debate provisions of this sort—the bedroom tax was an example and others could be thought of—with the fact that changes of this character would not survive five minutes once they had been introduced and aggrieved constituents were beating a path to their MP’s surgery. That is the situation which the Government are facing with this provision, if they press ahead with it.

I cannot believe that the Government seriously intend to proceed with a measure which will take Motability cars out of the hands of disabled people who currently rely on them for their mobility and without which they will effectively be rendered prisoners in their own house. I will be interested to see what the sense of this Committee is as we listen to the debate but I would be very surprised if there was not widespread sympathy for this amendment right across the House. I beg the Government to take this one seriously and to make a constructive response to the very full case set out by my noble friend Lord Alton and the noble Baroness, Lady Grey-Thompson.

[Baroness Hollis of Heigham]

My Lords, I also support the intention behind the amendment. I declare an interest as a vice-patron of Motability, while two members of my extended family—though not my immediate family—enjoy the use of Motability cars.

A number of us at first welcomed and were appreciative of the amount of consultation that the department engaged in concerning the new regulations for PIP, only to learn that, at the very last moment and without consultation, the Government had made two amendments, one of which was to withdraw the magic words “safely”, “reliably” and so on, while the other allegedly clarified what was meant by “virtually unable to walk” by confining it, as of right, to a territory of 20 metres, as opposed to the original territory of 20 to 50 metres that had informed previous decisions.

The Government, rightly and sensibly, moved on the first of these amendments and reinstated the test for the higher-rate DLA mobility component by introducing the key words “reliably”, “regularly”, “accessible” and so on, but failed to move on the second on the issue of 20 to 50 metres, assuring us that it made no difference in practice. When they were pressed on the statistics, however, the “no difference in practice” turned out to be a very real difference. Although the noble Lord, Lord Freud, suggested that of the 1 million, 600,000 would retain it and 400,000 would lose it, that was not the complete figure because 200,000 people who are currently on the lower-rate mobility allowance—needing psychological supervision and so on—would move up into the higher group, so there was a net loss of 400,000 but a gross loss of 600,000 people in higher-rate DLA who would now lose it, although to some extent that would be compensated for by the further 200,000 coming in from the lower group. Still, the gross figure is something like 600,000.

Like the noble Lord, Lord Alton, I am delighted to acknowledge that I am drawing on the Oxford Economics report that came out in December 2010, which is full of very valuable figures on this. We know from that report that about 28% of people on higher-rate DLA turn that mobility component into a Motability car. There are currently around 543,000 people driving a Motability car on the basis of three-year leases, and around 185,000 new cars are bought each year by Motability. It is the largest purchaser of new cars in the country, accounting for about 10% of them. This will have serious ramifications for jobs and the car industry, which Motability does so much to support.

However, I am not even going to argue about that. I am arguing on behalf of what Motability does for people’s independence. I remember being struck many years ago, back in the late 1990s when I first met the noble Baroness, Lady Campbell, by what she said about the Independent Living Foundation. She said, and for me this was a mind-changing moment, that the ILF, which gave people what we now call personal budgets—generous, or at least adequately generous, sums of money to enable them to employ their own carers and so on—put that disabled person at the centre of the care system, not as a recipient at the end of that system, so that people could determine what time they went to bed and so on. The same is true of a Motability car; it puts the person who is enabled to drive it at the centre of their mobility, not dependent on the charity, good will, altruism, convenience and so on of other people. Of those people who have a Motability car, something like 76% of them drive it themselves, so it becomes their means of movement. The result of that is that it frees not only them to be mobile but their informal carer as well, because without that transport they are totally dependent on someone else to take them to places where they need to go. As one person quoted in the Oxford Economics study said, if they are housebound—that is, without that car—it makes their informal carers housebound too. Removing the car locks two parties into immobility.

The report goes on to show us how effective the Motability car has been in enlarging the horizons of people’s lives. It shows that, for example, most of the recipients had cars in the past that they could no longer use by virtue of their arthritis or their heart problems. Whereas before their disability two-thirds of the recipients of cars were in work, subsequently only 16% were able to hold down paid employment. The Motability car helped 12,500 of them get a job and 56,000 to keep their job. It was crucial for those who needed specially adapted cars that they could not provide for themselves or for people in rural areas, such as my county of Norfolk where, frankly, public transport is non-existent and a complete myth. That car took some of them—16%—to work; it took younger ones into education and training, allowing them, in due course, to get work; it took them to their medical appointments, the shops, their children’s schools and to see their families. It allowed them, as one of them said, to access life. This is what the Government are apparently proposing to take away.

We all accept that people’s disability needs can diminish over time, or may increase over time, but for the most part, those who have reached the threshold of higher-rate DLA continue to have very real and substantial mobility problems wherever that line is to be drawn, whether at 20 metres or 50 metres. Therefore, like the noble Lord, Lord Alton, I urge the Government before Report to hold discussions with the noble Lords, Lord Sterling and Lord Alton, and the noble Baroness, Lady Grey-Thompson, and come up with a way forward on this. We have to have a transitional period—a period of grace—on this, either to the end of the lease or for a two-year period, whichever comes last, which would, at the very least, allow adequate time for the appeals procedure to go through without people losing a car in the mean time and then having to go through the routine that the noble Lord, Lord Alton, and the noble Baroness, Lady Grey-Thompson, described to regain it.

We had a similar discussion with the noble Lord, Lord Freud, about adapted houses. At one stage, if people were underoccupying a house that had had £20,000 spent on adapting it, they were to move from there, go somewhere smaller and have all the adaptation put in again, but good sense prevailed. The Minister agreed that where such money had been invested it was wise for those people to be allowed to stay. That argument makes sense for the home, and it makes sense for the agency of mobility which is the Motability car. That transitional period of grace, whether it is to the end of the lease or for a two-year period, whichever comes last, would prevent the awful situation of cars being taken back in and piled up in scrapyards because nobody would want that supply of used cars on the market when there will not be the purchasing power to buy them. We would not see Ford and the rest of them finding that they suddenly had closed order books, and we would not see people losing their cars, appealing, regaining them and having to go through all the trauma of these arrangements.

At the very least, there is a huge moral, legal, practical and economic obligation on the Government to provide a way forward to allow that transitional period—that period of grace—to allow those who feel that they should keep their car to appeal and, I hope, to retain it and to allow those whom it is deemed must lose their car time to adapt. Without it, I warn the Minister that she has seen nothing yet.

[Lord McKenzie of Luton]

My Lords, I shall start by setting out our position. We certainly support the thrust of this amendment and the intention behind it. We certainly support the concept that there needs to be consultation between the Secretary of State and Motability. The precise formulation of proposed new subsection (2) of the amendment needs careful consideration of the idea of benefits being on an individual basis rather than more generally, but I do not think that particularly concerns the noble Lord, Lord Alton. I think the idea is to press the Government to come forward with some transitional arrangements.

We have heard from the noble Lord, Lord Alton, a comprehensive and passionate argument in favour of the amendment. Indeed, he has been assiduous in following this issue and has been leading on it now for some months. It is probably fair to say that, in all the discussion, the to-ing and fro-ing and all the consultation that was undertaken on the move from DLA to PIP, this did not originally have the prominence that it should have had. The efforts now to ensure that it is properly focused on are very important.

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[Baroness Stowell of Beeston]

My Lords, I am grateful to all noble Lords who have contributed to this debate. In responding, first, I will address the points that I have put under the heading of “uprating” and then come to issues linked specifically to Motability and PIP. I want to make it clear, as I think the noble Lord, Lord Alton, acknowledged, that this Bill, which is about capping the annual increases of certain benefits to 1%, does not include DLA or personal independence payments. It is really important that that is properly understood by everyone when we are discussing this matter.

If I understood the noble Lord, Lord Alton, correctly, having acknowledged that PIP is not part of this Bill, his amendment would seek to require the Secretary of State to consult Motability every year before he sets the annual rate of increase on PIP. However, I do not think that that is necessary. As I have said, PIP is excluded from this Bill and would be subject to a CPI increase. If there were any shortfall in the benefits over the course of a three-year lease and if the PIP annual uprating was to affect the level of benefit that a person was due to receive, any change in the rate of the enhanced mobility component would not impact on a claimant with a Motability lease directly because that would be borne by Motability as part of the risk to it of operating the lease.

Governments have worked with Motability for more than 30 years and, as I understand it, thus far we have never required protection for Motability leaseholders in the way that the amendment suggests. As noble Lords are well aware, the Motability lease is a private agreement between the claimant and Motability. It is entered into without any influence from the department. As the noble Baroness, Lady Hollis, said, just under one-third of eligible claimants uses Motability.

That being said, I absolutely understand the points made in this debate about how those who take advantage of the Motability scheme value the vehicle provided. Therefore, it is essential that Motability remains available to those deemed eligible to receive it. Sometimes, as regards the way in which noble Lords talk about the changes that are being made, the impression could be given that the Motability scheme is coming to an end for everyone. We absolutely understand the importance of Motability. It is an important scheme and people must continue to have access to it, albeit that fewer numbers will have access than up to now.

[Baroness Hollis of Heigham]

This is the Committee stage, not Report. The Minister said that we were suggesting in the way we talked about the numbers that this was in some sense a catastrophic activity—that the Motability scheme might come to a close, and so on. But on the figures that she has more or less confirmed for us, something like 600,000 people currently getting a higher rate of DLA will not get the enhanced rate of PIP. Just under 30% of all those on higher rate DLA turn that into a vehicle; that is just under one-third. So of the 600,000 people who lose the benefit, something like 185,000 or thereabouts of people who currently have a car will lose their car. That is not small beer.

[Baroness Stowell of Beeston]

I do not think that the noble Baroness heard me say that it was small beer. That is not the point that I am making at all; I am making the point that Motability is incredibly important to people, but it will still continue. Yes, some people will not be eligible for it in future, and I know that those who will be affected will feel it very strongly. However, I want to make the point that sometimes in the way in which this is talked about the impression can be given that we are removing Motability from everyone. That is clearly not what is happening.

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[Lord Alton of Liverpool]

The noble Baroness made two points. The first was that the vehicles will be offered for sale to existing users rather than them necessarily being repatriated. Will she explain to the House what research has been done by the department and by Motability to establish how many people would be in a position to afford to buy their own vehicle? What work has been done to look at the maintenance costs of those vehicles, should they purchase them?

The noble Baroness went on to describe the circumstances in which people would be able to keep the vehicles if an appeal was pending. Surely that is precisely what this amendment is seeking to do: that is, to find transitional arrangements in all those circumstances. Would it not therefore be sensible for the Government to take the amendment away and to come forward with an amendment that does all the things that it seems to me we are agreed we need to address?

[Baroness Hollis of Heigham]

On the point about the cost of purchasing, all the evidence suggests that a Motability car in effect acquires through its VAT exemptions and tax exemptions something like a 40% discount on what it would cost to hire a similar car in the private market, and that is before any adaptations. Given the level of income of disabled people and the poverty that we know so many of them face by being out of the labour market and having the additional costs of heating and so on associated with their disability, I cannot see how that would be a realistic option for all but a very few of them.

[Baroness Stowell of Beeston]

All I am able to add to what I have already said is that the department is continuing its discussions with Motability to see what arrangements can be put in place to ease this burden on people as the process of replacing DLA with PIP comes on board. We expect Motability to have some measures in place by the autumn of this year. However, on the basis of this debate, I will certainly go back to the department and obtain further information about where we are with those discussions and what evidence is being examined as part of that process.

The noble Baroness, Lady Grey-Thompson, asked about advance payments that people make when leasing an expensive car with specialist adaptations and whether they lose that money if they lose eligibility, even if they are successful on appeal, as they will have lost the car. If someone loses their car as a result of PIP reassessment, any advance payment outstanding will be returned on a pro rata basis. I realise that that does not address the whole point, but I hope that it goes at least some way to addressing it.

The noble Lord, Lord McKenzie, and the noble Baroness, Lady Grey-Thompson, asked about the use of Motability cars for work and whether people who might not have access to a Motability car might be affected by this and lose their jobs. The noble Lord, Lord McKenzie, said that in any case he thought that what my noble friend Lord Freud had said about the possibility of the use of access to work as a way of addressing some of these measures might not be an adequate response.

Although my noble friend had said that discussions were going on to see whether access to work was one way of addressing the concerns of some people who would lose Motability under PIP but who might be able to use access to work as a way of funding a car for use for work, if I understood the noble Lord, Lord McKenzie correctly I think he said that this was not satisfactory because it would not address social issues. I understand what he is saying, but I think that none the less while not addressing all the issues he has raised this is an important facility that is available to disabled people to apply for. If there is a way of using that facility to help people to fund their Motability vehicles in the future, I hope it could be made possible. I would not want it to be diminished just because it does not address everything.

Finally, my noble friend Lady Grey-Thompson, if I may call her my noble friend, also raised the issue of public transport, particularly outside London. I will not go into any great detail, but I am aware that the Department for Transport as recently as December published an accessibility action plan for public transport, particularly focusing on transport outside of London, and outlined what measures could be taken to improve facilities on public transport. If she would like more information on that, I will happily give it to her and put her in direct contact with the Department for Transport if she would find that helpful. I am sure the department would welcome hearing about the experiences she faces regularly on her extensive travel up and down the country.

I absolutely appreciate the concern that has been raised by noble Lords in the debate tonight that people want to see Motability remaining available for disabled people as an affordable scheme. The benefits in question are not part of this Bill, as I have already said, and I do not believe that there will be a shortfall between these benefit rates and the obligations that people have as part of an outstanding lease in the years in question. However, even if such a shortfall were to arise, Motability would absorb the cost, so the impact would not fall on the claimant. I hope that the noble Lord and the noble Baroness feel able not to press their amendments.

[Baroness Hollis of Heigham]

As we are in Committee, we can come back to the Minister as many times as we wish on this. I just want to pick her up on this, if I may. She has said nothing at all—unless I am being unfair to her, and I certainly do not mean to be—about the main thrust of all the arguments put by my noble friend Lord McKenzie, myself, the noble Baroness, Lady Grey-Thompson, the noble Lord, Lord Low, and, above all, the noble Lord, Lord Alton: that what is needed, at the very least, is a decent transitional period of grace. All that the noble Baroness has offered is the existing 28 days. That applies now, so there is no change. What movement, if any, is the Minister willing to offer us on the key point about having a transitional period of grace for those who will lose? Some 100,000 people—or 185,000, which is my crude estimate—could lose their cars in a relatively small space of time. Without a transitional period, there will be huge problems. What can the Minister tell us about that transitional period?

[Baroness Stowell of Beeston]

I regret that in the context of this Bill I am not in a position to be able to offer the noble Baroness the kind of response that I know she is looking for. I will, as I have promised, go back to the department and discuss further with colleagues and Ministers the issues that have been raised in the debate tonight. They are clearly important issues. I can see why people wanted to raise these concerns in the context of this Bill and I do not have any problem with the fact that this has been debated and discussed tonight. However, I am not in a position to offer the kind of assurance that the noble Baroness is looking for, but I will go back to the department and follow up in writing with further information, as I am able to, after I have had those discussions.