Welfare Reform Bill

Baroness Howe of Idlicote Excerpts

Thursday 3rd November 2011 Grand Committee

[Baroness Howe of Idlicote]

My Lords, I congratulate the noble Baroness on the detailed and effective way in which she has presented the case for her amendment. I spoke firmly on the equality issue at Second Reading. I am most concerned about the extent to which the majority of second earners are women. Their very delicate position may be fine if they have a fully understanding husband, but we know that some families face situations that are far removed from this. I understand the point about mutual parenting, but if the Government put more emphasis on companies providing enough flexible working for both sexes, this situation would be much easier for families. My main concern is the vulnerability of the woman at home who, as we have heard, does not have a very good argument if she is not going to earn, as a result of her extra hours, enough to make any difference at all to the joint income. I therefore support what has been said.

[Baroness Hayter of Kentish Town]

My Lords, this amendment seeks to tackle the introduction, under UC, of a poor work incentive for second earners who, as the noble Baroness, Lady Howe, has said, are mostly women. As my noble friend Lady Lister said, 300,000 second earners will see increased marginal deduction rates as opposed to only one-third of those who will see reduced MDRs. The policy to make work pay does not appear to extend, therefore, to a third of these affected second earners. According to the impact assessment:

“It is possible that in some families, second earners may choose to reduce or rebalance their hours or to leave work. In these cases, the improved ability of the main earner to support his or her family will increase options available for families to strike their preferred work/life balance”.

As my noble friend Lady Lister has said, it is not clear how this will improve options for families who prefer to have a more equal working relationship, where both partners combine work and child rearing. It also seems to be in conflict with other bits of coalition policy, such as the BIS modern workplace consultation, which sets out options for families to share parental leave more evenly between men and women. Perhaps, in responding, the Minister can let us know what discussions he has had with BIS about whether the incentives within universal credit support the BIS policy.

The reduced incentives for second earners to work come on the heels of the April cuts in childcare and therefore, as has been said, further reduce the incentive for anyone with a child to take a job, not to mention other little things such as cuts to the baby element of the child tax credit, the health in pregnancy grant, the Sure Start maternity grant and the freeze in child benefit.

As my noble friend Lady Lister said, the pay of second earners is crucial in keeping families out of poverty. If I may be forgiven for repeating her figures, which I hope I have right, child poverty is at 19 per cent where there is one full-time earner but it drops to 5 per cent with two earners and down to 2 per cent with two full-time earners. Therefore, second earnings are absolutely key to the Government’s objective of reducing joblessness, child poverty, dependence on universal credit and increasing the tax take. I look forward to the Minister’s answer to whether it was the gross cost after taking account of tax take which led to the projected cost of this.

Childcare has already been mentioned and is clearly particularly important in two sorts of families. One is obviously lone-parent families, and the other is where there is a second earner, with both parents tending to be out of the house at certain times. The disincentive to work increases where there are child costs to be met. As has already been said, childcare will cover only 70 per cent of costs, and that leaves 30 per cent to be found from earnings, which is already a high enough take from the second earner’s pay. Therefore, without an earning disregard of their own, the second earner has a very high deduction rate where there are child costs to be met, effectively making the taking of a job financially unviable. Yet, as I have said, second earnings are crucial in keeping households out of poverty. They will be even more important if, as we read today in the Financial Times, there is any truth in the rumour that when times get tough it is the poor whom this Government will seek to make pay. According to these press reports, the Chancellor is looking at cutting further billions from benefits by scrapping inflation-linked uprates, even—this beggars belief—freezing some payments. We read in the same article:

“The Liberal Democrats will oppose anything that suggests the coalition is unfairly passing the burden of deficit reduction on to struggling families”.

We look forward to hearing whether the Minister can say whether the Financial Times is accurate. Perhaps he can also ask those sitting alongside him—maybe they could pass him a note—whether they would like to place on record their opposition to any attempt to pass on any cutbacks to struggling families. They must know that the rich can pay far easier than the poor. Are they going to use their bargaining power, such as it is, in the coalition to protect the very weakest in society?

These amendments are about reducing poverty and increasing the take-up of work, and it would be useful to know on which side the Lib Dem/Tory coalition sits on this. Later today, we shall reach Amendment 75A to Clause 51 standing in the names of the noble Lords, Lord German, Lord Stoneham and Lord Kirkwood, and the noble Baroness, Lady Thomas, which effectively asks for an earnings disregard from the second earner where the first earner is now too ill to work. We very much welcome that amendment, but it would useful to know whether the same principle could be more widely adopted, as this amendment seeks to do.

The Minister may well be forgiven for wanting to reduce the number of working women on this side of the Committee but perhaps he would make it clear that that is not the intention with universal credit by ensuring that second earners really will be better off in work.

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Moved by

[Baroness Howe of Idlicote]

55C: Clause 38, page 17, line 32, at end insert—
“(6A) Regulations under this section must provide that, for a claimant to be treated as not having limited capability for work, the claimant must be able to—
(a) reliably perform their work on a sustainable basis, for at least 26 weeks, without requiring excessive leave or absences; (b) work in open unsupported employment without requiring excessive support to perform their work.(6B) For the purposes of regulations made under this section—
“work” means work—
(a) that is for at least 16 hours per week on wages that are at or above the relevant minimum wage; and(b) that exists in the United Kingdom;“excessive support” means more than what is usually considered to be reasonable adjustments or normal supervision (or both).”

[Baroness Howe of Idlicote]

I present the sincere apologies of my noble friend Lady Mar. She had very much hoped that this amendment would come up on Tuesday, but alas, she has an engagement that she could not possibly break. So I will inadequately move it on her behalf.

Under the Bill, a person will be deemed to have limited capacity for work if the claimant’s capacity for work is limited by their physical or mental condition and if the limitation is such that it is not reasonable to require the claimant to work. The work capability assessment is designed to assess whether a claimant has limited capacity for work or limited capability for work-related activity, but there is no definition of work either on the face of the Bill or in regulations. A group of charities that includes the MS Society, Parkinson’s UK, Arthritis Care and Forward-ME have indicated that this is a significant omission, and it is one that I certainly agree with my noble friend Lady Mar should be rectified.

Individuals must not only be capable of some very limited work; they must be capable of obtaining realistic and sustainable employment. I am sure that the Minister will acknowledge that capability for work is not a clear-cut issue. Many disabled people fit neither the “completely fit for work” nor the “completely incapable of work” categories. As the Minister knows, the main interest is in those with a fluctuating condition—an area where my noble friend Lady Mar has both experience and, indeed, considerable knowledge. They can unpredictably veer between both categories and, however much they may want to work, this group finds it particularly difficult to obtain and retain sustainable employment.

My noble friend and I strongly support the principle that all those who are able to work should be supported through the work-related activity group in ESA, which is designed particularly to identify those who have a limited capacity for work. However, those who face significant barriers to returning to the workplace require extra time and support to move back into the work environment. The WRAG is a very important provision for those with fluctuating conditions, as it asks them to undertake work-related activities that are personalised and appropriate to their needs and abilities. However, the group believes that the current work capability assessment sets too high a bar for the test of limited capability for work—the test that admits people to the WRAG. The test fails to take into account the reality of the claimant’s abilities not just to take on work but to retain and manage unsupported sustainable employment.

The Australian Social Security Act 1991 and the Australian assessment of work-related impairment for disability support pension criteria supply a sensible definition of what could be meant by the ability to carry out meaningful work. Slightly amended for the UK, as is proposed in my amendment, this could provide an important aid in determining whether a claimant actually has limited capability for work. Broadly, the amendment would specify that, in order to be capable of work, the claimant should be able to: work for at least 15 or 16 hours each week in meaningful work that pays at least the national minimum wage; reliably perform their work on a sustainable basis without requiring excessive leave or absences—the Australian system takes this to be at least 26 weeks; and, lastly, work in unsupported employment without requiring excessive support to perform their work. I beg to move.

[Lord Wigley]

My Lords, I am very pleased to support this amendment. One is very aware of the tremendous work that the noble Countess, Lady Mar, has undertaken in this area and of her expertise. There is no doubt that the fluctuating condition of many people with disabilities can be a difficult factor from whichever end you look at it: from the point of view of the disabled person, who may want to work but is uncertain whether they can carry out the work, or from the point of view of the state and the way in which these regulations apply to such people.

The one element in this amendment that I am not entirely certain about is the question of “unsupported employment”. There are times when, if a disabled person is given adequate support, they can be in full-time meaningful work on a continuous basis. I would not want this amendment to undermine that dimension, which is very important.

Turning to new subsection (6B) proposed by the amendment, can the Minister comment on paragraph (b), which refers to work,

“which exists in the United Kingdom”?

This raises some interesting questions. Is it in the Government’s mind that there might be work outside the United Kingdom, the availability of which could, if it were not taken up, lead to people being debarred from their benefits? One thinks of people living in Dover: an hour’s journey puts them into the French catchment area. If one lives in Holyhead, if the fast boats are running one could quickly be in Dublin—presuming that there is any work in Dublin these days. The Government’s intention in this matter certainly needs to be probed. If paragraph (b) is necessary, I would be interested to know what the Government’s explanation is.

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[Lord Freud]

My Lords, I will follow up the Croydon situation. I was not aware of it, even though I was brought up in south Croydon.

Let me try to make this absolutely clear. The whole point of the assessment is to judge whether someone is functionally able to do the job, which is exactly what the noble Baroness was asking for. The point is that it can be done coherently and consistently by people who are experts in that function, whereas GPs and specialists are trained in diagnosis and treatments which are entirely different; it is not their job to see people and make those judgments day in, day out on a consistent basis. But that is what we are looking for. Atos Healthcare professionals are trained in disability assessment, which is assessing the functional effects of a person’s condition or disability. That is exactly what the noble Baroness is asking for.

[Baroness Howe of Idlicote]

My Lords, this has certainly been a very wide-ranging and passionate debate on these issues, with good reason. I am certain that my noble friend Lady Mar will read it with considerable interest and will no doubt have plenty of issues to raise at a later stage of the Bill, when I hope she will be available. We obviously have to wait for Professor Harrington’s final report, which will be extremely helpful. The various questions that were raised makes one realise how complicated the way through these things will be. Above all, we will need to reassure people with these fluctuating conditions that they will be treated fairly. On my noble friend’s behalf, I thank all noble Lords who have taken part in the debate and beg leave to withdraw the amendment.

Amendment 55C withdrawn.