Welfare Benefits Up-rating Bill

Baroness Stowell of Beeston Excerpts

Monday 25th February 2013 Lords Chamber

Not only do the Government seem to be in a difficult position if we are to have wholesale repossession of Motability vehicles—I cannot believe, as others have said, that the Government really want to face that—but, as the noble Baroness, Lady Grey-Thompson, said, we do not know what scale of appeals will be driven by these arrangements and all that that will entail for the department. It is incumbent on the Government, at the very least, to commit to take this issue away tonight, to seriously address how they can help those tens of thousands of people who are at risk of losing their Motability vehicle in short order, the effect of which would be really quite devastating on lots of individual lives. I do not believe that the Government want that. Undertaking to address this issue and the transitional arrangements tonight would go some way to alleviating the concerns that many people have.

[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.

[Lord Alton of Liverpool]

I am sorry that the Minister feels that that impression is being given. It is certainly not the intention of myself or, I think, anyone else who has spoken in debates to suggest that everybody is going to lose Motability. But one problem that we face is that we are all debating in the dark, because the Government have not been able to provide figures to tell us how many people are likely to lose Motability. It would be extremely helpful for us to know that. Perhaps the noble Baroness could also confirm that in this year’s annual report Motability said that about £17 million was given by way of government aid, and that the Government will support the scheme by about the same amount during the next 12-month period. By what amount will it be reduced in the next four or five years? That will give us some hint of the reduction in the number of vehicles that will be available.

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[Baroness Stowell of Beeston]

I will have to write to the noble Lord on that question. I do not have that information in front of me.

I was going on to say that we are continuing to work closely with Motability to understand what impact PIP might have on the number of people who use the service and ensure that they are well placed to manage the introduction of the new benefit. Because Motability is based on an individual’s choice, it is difficult to predict the impact on Motability customer numbers from the introduction of PIP. Noble Lords have referred several times to what my noble friend Lord Freud said in response to other debates on this topic. I am not in a position to add to what he said at that time.

I understand that it would not be the noble Lord’s intention in pressing this amendment, but it is worth pointing out that one effect would be to give some kind of different treatment to those who had chosen to use Motability versus those who have not. We need to be careful that we do not run a risk of discriminating against those who have chosen not to use Motability. I am sure that that is not what the noble Lord intends, but it is worth making the point that there is a risk in that.

I move on to issues around Motability itself. As noble Lords have acknowledged there has been recently—only last week—an extensive debate in the House about the new regulations introducing PIP. The amendment does not address the issue of those eligible for PIP or the higher rate, once the transition is made from DLA to PIP. The amendment refers to the steps that the Secretary of State must take if someone who is a Motability leaseholder finds that they do not have sufficient sums to meet their obligations under the lease. In the case of someone who does not receive the enhanced rate of PIP, the amendment would not have an impact, as the person in question would not be eligible for a lease. That is an obvious point but it is worth mentioning.

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[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.

[Lord Alton of Liverpool]

I thank the noble Baroness, Lady Stowell, for her reply, and especially her assurance that she will ponder on some of the things that have been said in your Lordships’ House this evening and discuss them with officials and come back to us in writing. I also thank my noble friends Lady Grey-Thompson and Lord Low, the noble Lord, Lord McKenzie, and the noble Baroness, Lady Hollis, for their contributions to this evening’s debate.

The Minister is quite right that this would not be the ideal vehicle; it is not the ideal amendment. No pun is intended. But you have to take what you can in parliamentary life and this is the only Bill that is before Parliament at the present time that is capable of amendment on this crucial issue. I felt that it was incredibly unsatisfactory when we debated this issue last, when it was lumped in with a number of other unamendable regulations that we took one after another. As the noble Lord, Lord McKenzie, rightly said, this is not an issue that has been given sufficient attention in either House during the progress of all the Bills and regulations that have been proceeding, yet it is one that causes great anxiety outside your Lordships’ House. If the estimate that the noble Baroness, Lady Hollis, has given is correct—that 185,000 vehicles could be affected—that should give us all pause for thought. We should all stop and think about the implications for the owners and users of those vehicles. It will place limitations on their freedom of travel and their ability to get to work, schools, health appointments, shops, engage in social life, and all the other issues that have been raised during the debate.

It is also extraordinarily unfair on Motability, particularly on the noble Lord, Lord Sterling, who does such important work on behalf of disabled people throughout the country and who is held in such high esteem here in your Lordships’ House. It is unfair to expect people to operate in the unknown. I was surprised, therefore, that the noble Baroness was unable to confirm whether the £17 million mentioned in the annual report of Motability will be the figure for the following years. I am grateful to her for saying that she will establish what the figures are. That will give us some idea of where the balance of responsibility then truly lies. Obviously, we cannot make a silk purse out of a sow’s ear. If Motability has not been given adequate resources, it will not be its fault if vehicles then come to be repatriated.

I was struck by what the noble Lord, Lord McKenzie, said about the appeals process. I tabled some Written Questions just a week or so ago involving that issue, among others. I tabled four Questions and got eight lines by way of reply in which the noble Lord, Lord Freud, said that the Government have no plans to fast-track appeals to Motability customers or provide financial support to the Motability scheme to help those people who lose their vehicle through personal independence payments reassessment. It could not be clearer that not only will there be no resources made available if this position continues to apply but there will be no plans to fast-track appeals from Motability customers. As the noble Baroness, Lady Hollis, rightly told us, in the 28-day period that people will have it will simply not be possible to deal with the avalanche of appeals that will arrive.

The noble Baroness also said that there had never previously been a need to protect Motability users in the way that is set out in the amendment. However, never previously were there circumstances in which people’s Motability vehicles were going to be taken away from them. Never before were we confronted with the sequestration or repatriation of vehicles that were awarded to people as a result of a properly established process created by the department and indeed by Parliament.

The noble Baroness also said that the amendment discriminates in favour of those who have opted into the scheme. Of course, that is true. I would rather that everybody who will find their mobility allowance limited as a result of the changes will be assisted. However, simply because we cannot help every group, that is not a reason for not helping any of them. Not being able to solve the problems of the entire world is not a reason for not helping anyone.

My modest amendment simply sets out to help users of the scheme at the moment as they stand to lose their vehicles. I hope that we will address what will effectively be an even worse form of discrimination should that proceed. The amendment simply seeks to create what the noble Baroness referred to as a period of grace—the time in which the issue can be resolved. Nobody should be placed in the invidious position of being told that if they cannot afford to buy their vehicle—we are talking about vast numbers of people who by definition are living below the poverty line and so will not be in a position to buy, maintain and continue to run their vehicle—it will be taken away from them.

I do not believe that the Ministers who are sitting on the Front Bench are the sort of people who would happily or willingly see such a set of circumstances occur. That is why I hope that between now and Report it will not be left to my noble friend Lady Grey-Thompson, me or others to bring forward an amendment that by definition the Government will say does not do this or that. I hope that the noble Baroness will use the Bill as an opportunity to put right something that will otherwise come back to haunt many people, including the Government, in ways that I do not believe they would wish. I beg leave to withdraw the amendment.