Welfare Reform Bill

Baroness Meacher Excerpts

Tuesday 8th November 2011 Grand Committee

[Baroness Lister of Burtersett]

I was just quoting from a letter I received from a 50 year-old woman with complex mental health problems. She wrote that,

“my life revolves around trying to be as well as possible. I cannot stress enough how frightening it is to feel that you are not able to work, will not be put into the support group”,

she fears,

“and will be left to use up everything you have until eligible for means-tested benefits … My medicine prescription has been increased 4-fold and been supplemented with extra medication since the time limit was announced”.

As someone who has campaigned and argued for a more inclusive social security system for 40 years, I feel that I have to use the luxury of being a Back-Bencher to oppose this clause on principle. My noble friends on the Front Bench know and understand my position. However, if time-limiting goes ahead, it must be done on the fairest possible basis. Therefore, I hope that the Minister will look favourably on the proposed amendments in the name of the noble Lord, Lord Patel, which would aim to achieve that in three main ways.

First, I hope that action will be taken so as not to penalise people with fluctuating conditions who go on to the support group after the contributory ESA has expired. I know that that is a particular concern of Macmillan Cancer Support. Secondly, I could not believe at first that the rule would be applied retrospectively. The case against that has been made extremely eloquently by the noble Baroness, Lady Thomas of Winchester. As a result of this, the letter has gone out to existing recipients. According to one who wrote to me, far from providing the reassurance mentioned by the Minister in his opening remarks at Second Reading, that will, she warns, “strike fear” into the hearts of those affected. Could the Minister state whether there is a precedent for such a letter to go out before Parliament has agreed such a controversial change?

Thirdly, I was also dismayed when I realised that the 13-week assessment phase is included in the one-year time limit, which in effect means that full contributory ESA will last for a year minus 13 weeks. In Committee in the other place, the Minister of State agreed to look again at this issue in response to concerns expressed by a Liberal Democrat MP. What was the outcome of this further look? According to a Written Answer that I received, if the assessment phase were excluded it would reduce the savings by £100 million in 2012-13, rising to £120 million by 2014-15, but falling to only £40 million by 2016-17. Here is the nub: this clause is not about making social security fairer; it is about saving money, as my noble friend Lord McKenzie has already stated.

I have some sympathy with the Minister. He is extolling the virtues of universal credit at every opportunity, yet universal credit is in danger of being contaminated by sharing a Bill with unfair, cost-cutting measures such as this one. I hope, therefore, at the very least, that the Minister will think very hard about how to mitigate this unfairness through the kind of amendments before us.

[Baroness Meacher]

I rise to speak to Amendments 71M, 71N, 71P, 72A and 73. First, I thank the noble Lord, Lord German, for kindly allowing me to speak a little earlier than I had planned because I have to leave the Committee briefly at 5 pm. I apologise to the Minister and the Bill team that I have not been able to attend the briefing sessions. They are a wonderful idea and I had hoped and assumed that I would attend every one, but life has not been quite like that.

I also apologise for not having had quite the time I would have wished to prepare for this debate. Having said that, I have major concerns about the plan to limit entitlement to contributory ESA to one year. I understand from the CAB service that the DWP has estimated that, of those on contributory ESA and in the work-related activity group, 94 per cent will remain on the benefit from more than a year, so it is estimated that by 2015-16 700,000 people will be affected by limiting contributory ESA. Some will lose their entire benefit payment, currently worth £94.25 a week. I know that the Minister will correct me if that is wrong. It sounds astonishing. The rationale for this change is, I suppose, twofold. First, it is to give maximum incentive to people to return to work and, secondly, it is to save taxpayers’ money. I will refer to those two points briefly.

It is particularly difficult to support the employment incentive argument at present, when even able-bodied people and remarkably highly skilled people are finding it very difficult to find work. As we said, we think that about 94 per cent of those with disabilities will remain on this benefit beyond their contributory entitlement. I would welcome the Minister’s views on the fairness of this provision in relation to an individual with—obviously in terms of my own concerns—ongoing and fluctuating symptoms. He is very keen to work and does not need any incentive, but no doubt he will be given lots of incentives through the mechanics of the work-related activity group. But the fact is that he cannot persuade an employer to take him on. I know that the Minister is aware that there are very large numbers of people on ESA who want to work and cannot persuade an employer to take them. In other words, these people are very much the deserving unemployed. They used to be called the deserving poor. I happen to know hundreds of people personally who fall into that category. I would be grateful for the Minister's views on that.

If we consider for a moment the need to protect taxpayers’ money, I happen to believe that taxpayers would recognise that this group—people who are disabled and sick on benefits—should be entitled to their benefit, having contributed, many of them, for decades. Politically, I do not believe that this is something that one can possibly justify. It is very hard to argue that savings to taxpayers’ money should be made with this particular group—sick and disabled people—rather than at the expense of other groups in society with much broader shoulders. There are all sorts of cuts that a Government could make that would seem much fairer than this one.

Amendment 71M, tabled by the noble Lord, Lord McKenzie, would at least be a great deal fairer. In a sense you could say that it is all rather arbitrary— 365 days or some other number of days. Really, it is just not justified to cut contributory benefit at any stage for many of these people, but I suppose that that would be better than the alternative.

--- Later in debate ---

[Lord Freud]

Moving swiftly on—Amendments 72A and 73 exclude from time-limiting any days contributory ESA claimants in the WRAG have received ESA for before this clause comes into effect. We expect that around 100,000 people will have been in receipt of contributory ESA in the WRAG for more than 12 months by April 2012, plus an additional 100,000 who will reach 12 months’ duration in the WRAG during the rest of 2012-13.

On the issue raised by my noble friend Lady Thomas on retrospection, a benefit claimant has no right to receive ESA indefinitely if the conditions of entitlement change or their circumstances change and they no longer meet the conditions of entitlement. Through the amendments made by the Bill, we are changing the conditions of entitlement for the future so that entitlement will not end until Clauses 51 and 52 is commenced. This will not affect any entitlement that has already arisen. I assure noble Lords that we are not seeking to recover past ESA payments that claimants have received correctly, but merely defining their future entitlement to ESA on the basis of whether at the time the clause is commenced they have had ESA already and if so for how long, and whether they are in the WRAG. We took the decision to issue 115,000 notification letters to all claimants potentially affected by this change to ensure that they were given sufficient notice. This generated around 4,200 inquiries from claimants in response.

We wish to strike a balance between fairness of treatment for all those affected and complexity. We do not think that it is reasonable that people in the WRAG who have already received contributory ESA before Clause 51 comes into force should continue to do so for an additional year after the clause is commenced. This would be unfair to new claimants; we want as many people as possible to receive benefit for the same period of time. Given the very difficult financial position that we inherited from the previous Administration, this is another difficult decision that we have had to make to ensure that the economic well-being of our country is protected.

[Baroness Meacher]

Can I just raise a question? The Minister talks about the unfairness about those in the future and those in the past, but that issue exists anyway. People who started claiming 18 months or two years ago, or whatever, clearly had a different length of contributory ESA to those people who claimed any time from 1 April last year in the Government’s terms. What I was suggesting was that the conditions are changing as of 1 April next year, and it is retrospective to suggest that the conditions change from 12 months previously. That is what is retrospective. Of course, you will always have unfairnesses between the past and the future when you change laws. It is not logical to suggest that there is some sort of inequity between past and future and, therefore, there is no retrospection. I think that the Minister has to accept that there is retrospection here.

[Baroness Hollis of Heigham]

My Lords, perhaps I may add to the Minister’s woes. He will no doubt be aware that previous Administrations faced this difficulty when we moved from IVB—invalidity benefit—to incapacity benefit. What happened was that people on invalidity benefit remained on that benefit and only new entrants went onto incapacity benefit. That is one path. I can quite see that allowing long-term claimants to have two or three different paths is technically complicated and administratively undesirable, but it is what is most supportive and decent to the individuals concerned. Their expectations are not suddenly changed part-way through their later years.

The second path that the noble Lord could adopt would be to say that from now on, at a certain date, this will be a common rule for all new and existing applicants. That would be the middle path. What would clearly be wrong would be to say that this will apply only to new applicants and that we will knock off existing claimants who have come up to the time barrier. I have never known that in social security before—ever.

[Lord Freud]

My Lords, the accepted convention on retrospection is that it applies from the announcement of a measure. When the price of petrol goes up in the Budget, it goes up that night or the next night and then the Finance Bill becomes an Act four or five months later. That is the convention—you go from the date of announcement. We announced this move from October 2010.

[Baroness Meacher]

Perhaps I may suggest that the Budget is a completely different kettle of fish, because you absolutely have to implement financial changes on the day of the announcement—otherwise all sorts of people will play games and use the delay to do all sorts of things. However, social security is completely different. You are talking about vulnerable people dependent on benefits, and that is why the convention in the social security field is totally different from the convention regarding the Budget.

[Lord Kirkwood of Kirkhope]

Can I just make a point? As to the Minister’s explanation of when things start from, this announcement was made in 2010. If logic is to stay on his side, implementation should have started in 2010.