Welfare Reform

Baroness Meacher Excerpts

Monday 11th October 2010 Lords Chamber

[Lord Freud]

I thank the noble Baroness, Lady Hollis. Again, I take comfort from her general support for the universal credit. The point I would like to emphasise is that because we have two systems, an out-of-work benefit system and an in-work tax credit system, the risk of moving from one to the other is enormous. One has only to experience doing a job which does not work out, having to fall back into out-of-work benefits with perhaps a delay of three months as the bureaucracy is sorted out and thus not being able to afford the baked beans mentioned by the noble Baroness, to realise that that kind of risk is highly unattractive. We have created a very conservative group of people who should be prepared to take that risk, by which I mean conservative with a small “c”. On child benefit, we have not made a full announcement of what is going to be in the spending review on 20 October, at which point the detail will be revealed, so I am not in a position to answer.

On the second point made by the noble Baroness, noble Lords will be aware that what we are looking at in the numbers is flows. Any work programme tries to balance the disadvantage experienced by people who have been out of the job market for a period and what it takes to get them back into work against those who have only just lost their jobs. Effectively, that is what all programmes try to do. Clearly, we need to ramp up the speed with which we can get people back into work, and this is one measure that is designed to encourage and put pressure on them.

[Baroness Meacher]

My Lords, one of the Government’s aims is to reduce the number of employment support claimants by around half a million. I respect the Minister’s expertise in this area and, indeed, his commitment to produce a more efficient system. However, can he assure the House that he will not introduce, for example, the time-limiting of benefits to six months or a year, as has been mooted, for people with severe and enduring mental health problems and other long-term disabilities? Has he made it clear to the Chancellor of the Exchequer that the cost of long-term hospitalisation of these people if their benefits are removed will be a great deal higher than maintaining them on benefits? Finally, will he delay the introduction of the new medical tests until the evidence makes it abundantly clear that they are fit for purpose for all, including for people with fluctuating and long-term disorders, most particularly of course for those with severe and enduring mental health disorders?

[Lord Freud]

I thank the noble Baroness for those questions. We do not have a target for the transfer of IB claimants into JSA, but we estimate that 23 per cent will move straight over. However, it is an estimate and one point of the trials that have been launched today is to find out what the figure might be. The process by which we move people over from IB to ESA means that a substantial proportion will move on to unconditional support allowance so that they are fully supported. However, we would like to make sure that the work-related activity group within ESA moves through the process so that it does not become another place to park people. We are therefore looking at ways to ensure that those in the work-related activity group move through so that they go into JSA as fast as possible. The worst thing is for people to remain inactive for a week longer than necessary.