Employment and Support Allowance (Transitional Provisions, Housing Benefit and Council Tax Benefit) (Existing Awards) Regulations 2010

Lord Freud Excerpts

Tuesday 20th July 2010 Lords Chamber

[The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud)]

My Lords, I thank the noble Baroness, Lady Thomas of Winchester, for initiating this debate and other noble Lords for their contributions. I am particularly pleased to welcome the noble Lord, Lord Knight of Weymouth, to the opposition Front Bench. I will do my best to respond to as many questions as possible, but I am under a time constraint and to answer them all would take most of the night. That pun was not deliberate.

No one denies that there is a fundamental problem with the way in which incapacity benefits have being managed. We want to improve the quality of life for the worst off in our society. That does not mean leaving people languishing on benefits which provide financial support but no way back into work. There are now 2.2 million people claiming the old-style incapacity benefits and many of these have had no contact with the department for many years. It is time to change this. We have announced plans for radical reforms of the welfare-to-work system and the implementation of the work programme. The work programme will provide the support that will help people to return to work and will be an integrated package of support, providing personalised help for people who find themselves out of work, based on their needs rather than the benefit they claim. The detail around the work programme will come out in the months to come and will answer many of the questions that the noble Lord, Lord Knight, has posed.

We will build on the strengths of the personalised support delivered through JSA so that all jobseekers with a health condition or disability, including customers converted from incapacity benefits, can access the appropriate support to help overcome their specific challenges. I make it absolutely clear that the point of introducing the work programme is to provide a service to people who are being transferred. My main concern about the previous arrangements was that there was no such national provision for those people who needed that extra support.

These regulations enable the department to reassess all those on the old-style incapacity benefits, using the work capability assessment, so that we can look at what they can do, not what they cannot do. This is a positive move and a fundamental change in the way we perceive the abilities of those who have barriers to work because of a disability or health problem. The regulations provide for the conversion of existing awards of incapacity benefit, income support on disability grounds and severe disablement allowance to employment and support allowance, and are designed to facilitate as smooth a move from incapacity benefits to employment and support allowance as possible.

Where a customer is converted to ESA, the regulations provide not only for the protection of their incapacity benefit, income support or severe disablement allowance but any housing benefit or council tax benefit which may also be in payment at the same time. I hope the House will agree that this is a generous transitional protection which will enable people on the old-style benefits to move over time to the same rate of benefit as new ESA customers. The regulations also make consequential amendments to housing benefit and council tax benefit provisions.

Before I get into the detail, I congratulate my noble friend Lord Kirkwood on his intelligence network. He has once again managed to discover that we need to highlight the fact that we have become aware of a technical legal issue relating specifically to commencement of some of the powers under which the regulations were made by the previous Administration. We will therefore be taking steps to correct the position before the Recess. However, this will not result in any changes to the wording of the regulations as laid.

Now let me turn to the concerns that have been expressed by this House and by others. The first is the capacity of Jobcentre Plus. The reassessment of 1.5 million incapacity benefit claimants will be a challenge for the department and particularly Jobcentre Plus, but is one that we are equipped to deliver. It is also one that is essential, if we are to give these claimants the help they need, and have been too long denied, to improve their chances of moving back into work.

Jobcentre Plus is well equipped to deliver incapacity benefit reassessment to the proposed timeframe. The business case has established the level of staffing required for all three arms of the business to deal with the impact of all aspects of reassessment. The business processes will predominantly be based on customer contact via the telephone, but allowance has been made to deal with the contacts expected in Jobcentre Plus offices.

Implementation planning in terms of Jobcentre Plus staff is progressing at local level to ensure that resources are in place in the run-up to the start of reassessment. Resource recruitment, capacity planning and provision for healthcare professionals continues to progress in line with delivery plans, and is on target. IT provision to support reassessment remains on target. When Jobcentre Plus is at full capacity, it will be dealing with 10,000 cases per week or 700 cases per processing site. To mitigate capacity issues, sites purposely have been selected where it is known that the required capacity can be built to undertake this work. As part of monitoring the reassessment process, Jobcentre Plus will be able to control the flow of cases and if required move cases around the network to ensure that cases are processed in good time.

My noble friend Lady Thomas talked about extending the introduction of reassessment in the context of freezing the programme. The early introduction of the reassessment programme in Burnley and Aberdeen clearly is good practice. It has been suggested that it is being conducted too close to the start of national implementation to be of any real use, but this is not the case. This is not a pilot in the normal sense, but a phased introduction, and will enable us to gain early feedback on claimant and staff experience in relation to the new processes. Valuable information will also be gathered to undertake early validation of estimates, such as the proportion found fit for work. We do not think however that we should extend this trial, as this would delay the reassessment process which is so urgently needed.

There has been criticism, which we have heard today, of the work capability assessment. In March this year, a DWP-led review of the work capability assessment found that generally it is accurately identifying individuals for the right support. That said, the review also made a number of recommendations for improving the assessment, and we announced on 29 June our intention to implement these recommendations. Among them were the mental health issues which the noble Lord, Lord Knight, referred to. We will now begin to revise the work capability assessment accordingly. Implementing the recommendations of the review will ensure that the work capability assessment is fairer, more consistent and transparent. In line with our statutory obligations, we have also commissioned an independent review of the work capability assessment which will be led by the highly respected occupational physician Professor Malcolm Harrington.

The noble Lords, Lord Knight and Lord German, both asked why we do not have a list of conditions exempt from the assessment. We want everyone to have the opportunity to engage in work and the support needed to enable them to do so. It is important that we assess someone’s capability for work not on the nature of their health conditions or disabilities but on how severely those conditions impact on each individual’s ability to function. Having a list of exempt conditions was entirely the wrong approach. It led to people being written off and parked on benefit.

The primary aim of the employment and support allowance is to enable as many people as possible to engage in work by offering them the right support, and to ensure that benefits are paid to the right people until they are able to engage in work. This applies just as much to people with severe conditions who may still be capable of work, given the right support. We know that being out of work is harmful to health and that being in work is generally good for health. We want as many people as possible to engage in work. It is important that individuals who are keen to work, despite the severity of their condition, have the opportunity to work and are not automatically parked on benefit. As I said, we want everyone to have the opportunity to engage in work and to have the support needed to enable them to do so. We recognise that there will always be some people for whom that is not possible because of their severe level of disability. That is why a support group was developed for people with limited capability for work-related activity, who should not be required to engage in that activity as a condition of getting benefit—and who will not be so required.

My noble friend Lord German and the noble Lord, Lord Knight, raised the matter of appeals. Joint work is under way across the DWP and the Tribunals Service to mitigate the impact of increasing workloads by focusing on four key areas: streamlining processes within both DWP and the Tribunals Service, including an end-to-end review of the appeals process; reducing the number of appeals by looking at the messaging we use to manage customer expectations and in particular the language in the disallowance letter; increasing capacity in the Tribunals Service through increasing administrative, judicial and medical resources; and strengthening the working relationship between DWP and the Tribunals Service. We believe that this will lead to an improved appeals service for our customers in due course.

My noble friend Lady Thomas raised the communications strategy issue. We will be developing additional sources of information for the reassessment process, focusing on how we will support our vulnerable customers in consultation with customer representative groups and advisory bodies. Details of these measures will be in place for the trials in October this year. We are also committed to engaging with customer representative groups so that they can support their customers through the migration journey. We have already consulted with national stakeholders over the development of key products for our customers. We also recognise the importance of working with local groups to support our customers through this process and are proactively engaging with third-party organisations in the trial locations.

Taxation has been raised by the Merits Committee and the Social Security Advisory Committee as a point of particular concern; it was raised again today, particularly by my noble friends Lady Thomas and Lord German. Currently, people who have been on IB and severe disablement allowance are exempt from liability for income tax. This provision was introduced in 1995 and has continued ever since. It means that, unlike all other IB claims and new contributory ESA claims, this diminishing number of claimants have never had to pay tax on their benefit if their income reaches the level at which tax becomes payable. We recognise that individuals in this position, especially if they also receive tax credits, could experience a significant reduction in their overall income, even if their benefit income is maintained by the regulations that we are debating today. On the other hand, they have received transitional protection for more than 15 years, which does not apply to more recent claimants, who have to pay tax on the same amount of income.

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[Baroness Thomas of Winchester]

My Lords, I am grateful to all noble Lords who have spoken in this debate. I think that it has been valuable and I particularly welcome my noble friend Lord German to the DWP brief. He knows that the Chamber is not as full as it is on some matters it deals with, but all the better for that.

I was grateful to the noble Lord, Lord Knight, for explaining that we are in an Alice-through-the-looking-glass situation: my noble friend was the architect of his Government’s plans and now everything is reversed. This debate has brought out some of the real problems. We understand that the medical reports are not disease-specific, as it were; they look at what the person can do rather than what he cannot do.

However, the other side of the coin is the fact that there are an enormous number of appeals and a lot of them are successful, so something is going wrong. I was glad to hear him mention Professor Harrington's review—I remember that I have read it before. Presumably, if he suggests changes to the work capability assessment, that will be factored into my noble friend’s plans for legislation later in the year. Will it be dealt with then?

[Lord Freud]

I am pleased to clarify. Clearly, we will have Professor Harrington’s report later in the year. Timing depends on the exact nature of any recommendations that he may make. Obviously, we would like as many of those recommendations to be included as we can.

[Baroness Thomas of Winchester]

I was interested when the Minister said that the programme would be a challenge for Jobcentre Plus offices. That is probably the understatement of the year. I was a bit worried when he said that they will move cases around the network. I hope that that will not be done quite as it sounds—it sounds a rather curious thing to do—and that there will be a lot of telephone recruitment. I hope that it will all work.

I end by saying that my noble friend Lord German had the right phrase when he said, “It ain't what you do, it's the way that you do it”. That should be applied to the regulations. I am most grateful to all noble Lords who have spoken in this debate; I look forward to the Minister’s reply by letter, if he has not been able to answer some of the questions.