Workers (Economic Affairs Committee Report)

Lord Layard Excerpts

Thursday 8th February 2024 Lords Chamber

[Lord Layard (Lab)]

My Lords, I am delighted to follow our chairman, who does such a wonderful job in leading our work.

This report is timely because everybody wants to see more economic growth. The most obvious way to achieve that is to increase employment. The central issue is how we can raise employment in the most cost-effective way. As our chairman hinted at, the most obvious way is to help the long-term sick back into work. I want to take in particular about those who have mental health problems.

Mental illness is by far the biggest illness among working-age people. People with mental health problems comprise at least half of all those on disability benefits who are unable to work. Yet mental health is treated by the NHS quite differently from physical health. Most people with physical health problems are in treatment while most people with mental health problems are not; only 40% of them get any form of help from the NHS. What is even more shocking is that, although NICE recommends that all mentally ill people should receive psychological therapy based on evidence-based methods, only 13% actually receive it.

Yet there is overwhelming evidence that these therapies more than pay for themselves in terms of the public finances. They are exceptionally cost effective; of course, this is because people with depression or anxiety disorders are often unable to work so relieving their problems helps them back into work, off benefits and into paying taxes. The evidence is clear: psychological therapy is the cheapest policy that we have for economic growth in this country. That is my central point.

For anxiety disorders or depression, a typical course of treatment costs around £1,000. If such a programme is offered to a clientele, some of whom work and some of whom do not, it needs only 5% of all those treated to move into work from not working to pay for the whole programme for the 100%, through the reduced benefits that they claim and the increased taxes that they pay. The evidence is clear: the existing programme produces at least that effect. It has now been copied in five other countries. Extraordinary evidence from Norway about a randomised trial shows that people who are treated earn four times more than the extra cost of treating them.

I want to talk about a programme that we have, NHS Talking Therapies, with which I have been associated. It now treats 700,000 people a year; half of them recover within a course of treatment, which averages eight sessions. The Chancellor has wisely given the programme another £600 million to expand over the next Parliament but this programme covers only people suffering from depression and anxiety disorders. There is another large group of people who are unable to work because they suffer from addiction to alcohol, drugs or gambling, as well as people who suffer from personality disorders that either make them anti-social or make them self-harm. Hardly any of these people receive any form of psychological therapy from the NHS yet they have very low employment rates—lower than for people with depression or anxiety disorders. They suffer and cause others to suffer, and they cost the country a lot of money. We need a programme parallel to NHS Talking Therapies to provide psychological therapy to this group too; I would like to see this as a commitment in every party’s election manifesto.

How does the programme for addiction compare with the case for other types of expenditure? Our group at the London School of Economics is analysing the relationship between benefits and costs across a whole range of public expenditures. For example, in road building, the average ratio of benefit to cost is about three to one; it is less than that for many rail projects. However, as I said, the benefits obtained by psychological therapy for anxiety and depression are zero costs, so surely the case for expansion there is absolutely overwhelming. Our calculations also suggest a cost-benefit ratio that could go up to 25 to 1 with psychological therapy for addiction and personality disorders.

Our policies for economic growth are too centred on things and not centred enough on people; that is the fundamental point I want to make. For example, we shamefully neglect the skills of people who do not go to university, although even the Department for Education estimates a cost-benefit ratio of seven to one for apprenticeship—double that in road building—because of, again, the effects on employment and earnings. We should, within five years, be guaranteeing an apprenticeship to every qualified person who wants one; in my view, this is another election pledge that every party should be considering.

When one looks at the pattern of public expenditure, the tragedy is this: the small sums needed to transform people’s lives are so difficult to raise while we splash out on physical infrastructure, which makes much less of a difference to people’s lives. Going back to mental illness, according to the OECD, it reduced GDP by at least 4%. It is mainly a disease among people of working age whereas, as we know, physical illness is mainly a disease among retired people. Yet, despite all the rhetoric over the past 20 years, the share of mental health spending in the NHS budget has not increased at all. It is time for that to change. The economics are clear: mental health should be the number one component of a strategy for growth.

Welfare Reform and Work Bill

Lord Layard Excerpts

Wednesday 27th January 2016 Lords Chamber

[Baroness Hollis of Heigham]

My Lords, I strongly support the amendment moved so ably by the noble Baroness, Lady Meacher. This is a real problem. The previous proposals that we were given, and the previous explanations that we wanted to model on the world of work, frankly belonged to a different planet. Those tenants, particularly in social housing, who need housing benefit are not those, for the most part, who are paid monthly. They very often are on ZHCs, have insecure or short-time jobs, or have fluctuating incomes week by week. That is topped up by universal credit. They want and need the security of a home in order to continue often to be able to find the jobs that they want, which would give them greater security. If they seek direct payments to the landlord, why does the Minister think that the Government and the DWP can second-guess what is in their best interest? Why not treat them as moral adults who can make their own judgment? The result that we are already seeing and beginning to worry about is, given the refusal to give alternative payment methods until after six to eight weeks’ arrears, and the time of processing that, we can be talking about debts of more than £1,000, from which tenants never recover.

The alternative is to try to help tenants to find ways to bypass the rigidity of DWP. So we are busy setting up jam-jar accounts and other friends are busy trying to use credit unions in order to bypass the total universal credit going into the bank account where the bank then takes payments for any other outstanding debts or anything else. As a result, HB becomes the last thing to be paid to the landlord. Many are already experiencing those problems. Certainly, one local authority tenant said to me, “Well, I won’t worry about that because that will be the last thing that gets paid. The local authority won’t evict me. It costs them more to send me into temporary housing and, given that I’ve got kids, I can run that risk”. That is the mental framework. She said, “I would be perfectly willing if they took it at the beginning of the month. But if I put it in the bank, it will be gone by the end of the month before I pay the rent”.

I suggest that the Minister responds very positively to this amendment. Where the tenant seeks it, the department should agree that alternative payment arrangement and stop all the futile effort that so many of us are making trying to find ways to loop around the system, to overcome the rigidities of the department, to help tenants avoid what will probably be debts from which they will never recover. I hope that the Minister will take the words of the noble Baroness and the noble Earl very seriously. It is a real problem on the ground.

[Lord Layard (Lab)]

My Lords, the Government are great believers in the principle of “nudge” and have greatly expanded the nudge unit. The fundamental principle of nudge is that, by quite small differences in institutional arrangements, you can produce big differences in outcomes. One principle of nudge is to give people an opportunity to protect themselves against their worse natures. That is exactly what this is about: offering people an opportunity to protect themselves against their own weakness. It is difficult for me to understand why the Government are not willing to use this elementary psychological principle. Would the Minister consider consulting the nudge unit before insisting that this ideological line that is being pursued is consistent with modern psychology?

Welfare Reform and Work Bill

Lord Layard Excerpts

Wednesday 9th December 2015 Lords Chamber

[Baroness Howe of Idlicote (CB)]

My Lords, my Amendment 51 would amend the Welfare Reform Act 2007 to include people with mental health problems in the ESA work-related activity group on the list of those exempt from the higher levels of conditionality introduced in the Welfare Reform Act 2012.

Research shows that people with mental health problems have a high “want-to-work” rate yet a high unemployment rate. Almost two-thirds of people with severe mental health problems are unemployed. Conditionality—that is, mandating people to take part in generic work-related activity such as CV-writing classes—has become an undisputed part of back-to-work support. Yet the use of the conditionality for this cohort of 250,000 people who are unwell because of a mental health problem is based on no evidence at all. The current schemes are clearly not working for people with mental health problems and the use of conditionality is not balanced with effective support. Less than 9% of people with mental health problems have been supported into work through the Government’s flagship back-to-work scheme. The evaluation and report by the Department for Work and Pensions, as well as much independent research, shows that support is not tailored or personalised, and people with mental health problems are not supported as they should be. As well as being ineffective in helping people back to work, these mandated schemes make people’s mental health worse. Mind’s survey of more than 400 people with mental health problems showed that 83% on the Work Programme or with Jobcentre Plus said that it made their mental health worse or much worse.

My amendment would take away the conditionality part of support for people with mental health problems which requires them, under threat of sanction, to attend support whether or not it is effective or appropriate. Removing this pressure would mean that providers and Jobcentre Plus must give better support, relationships between claimants and advisers—so vital for successful back-to-work programmes—would improve and those with mental health problems would feel less pressure, which ultimately helps in their recovery.

Some may question how by removing the conditionality regime from people with mental health problems their employment outcomes will improve. The rationale here is that schemes which are voluntary for people with mental health problems have far better success rates at supporting them into work than the generic back-to-work schemes. If we want to halve the disability employment gap, we should create systems that work. To take one example, there is WorkPlace Leeds, which is part of Leeds Mind. It works solely with people with mental health problems. No conditionality is used and the support is linked with people’s health as well as employment outcomes. Crucially, the advisers have a real understanding of mental health, the type of symptoms people experience and their specific barriers to work. In 2014-15, the programme secured paid employment for 32% of its clients, some of whom had not been in work for many years before starting the scheme. That is a far higher rate than the 9% achieved through the Work Programme nationally.

Why would my amendment work? Being placed under pressure and burdened by the fear of sanctions has a negative impact on people with mental health problems. When we think about the types of symptoms such people experience—intrusive thoughts, fear, distress, hearing voices, low mood—it is clear that the additional pressure and stress of being mandated to attend certain activities is particularly difficult, especially when these activities do not address the individual’s mental health condition, as is often the case. By removing conditionality, people with mental health problems will gain more choice and control over the back-to-work support they receive. This is one of the most basic principles of supporting people with mental health problems, as outlined in NICE’s guidelines, which say that shared decision-making should be a key part of any service. It does not seem to make sense to have guidelines based on evidence about how best to support people with mental health problems but then ignore them and look to something else.

As I said earlier, people with mental health problems have a high want-to-work rate and there is no evidence to show that conditionality achieves success at supporting them into work. We all want the same thing: to help more people into work. This amendment would provide a real opportunity to transform realistically the support into work offered to people with mental health problems. I hope that the Minister and the Government can accept my amendment.

[Lord Layard (Lab)]

My Lords, I speak to Amendment 52, the purpose of which is to remedy an extraordinary anomaly. We have nearly a million people on ESA due to depression or anxiety disorders, which are extremely treatable conditions. However, only about half these people are in any form of treatment. Most of them have never even had a diagnosis. None of this makes sense and the solution is obvious: we must help these claimants into treatment if we possibly can.

The key services here are those belonging to the national system of Improving Access to Psychological Therapies, otherwise known as IAPT. Last year, these services saw and assessed 900,000 people and roughly half of those treated recovered during treatment. The average cost of treatment was about £1,000, which compares strikingly with the cost to the Exchequer of a person being on ESA for a year rather than working, which is £8,000. Obviously, we want as many as possible of these claimants to enter into treatment with IAPT, for both their sake and that of the taxpayer.

Amendment 52 proposes that as soon as claimants are awarded ESA by virtue of mental illness, they should immediately be referred by the jobcentre to the local IAPT service for assessment and treatment—unless they are so ill that they need to be referred to step 4 care, in which case they should be referred to secondary services. The proposal does not involve compulsion. It says that the claimant should be offered assessment and treatment. However, if this is organised in a friendly way which assumes that this is simply what happens next, most claimants would accept it—though they should be offered the opportunity to say no.

Let me review a number of possible problems that have arisen in the discussion of this proposal—the proposal is not new. First, why is the referral to a psychological service rather than to something else? The answer comes of course straight from the NICE guidelines. Those say that all people with depression and anxiety disorders, which are the most common forms of mental disorder, should be offered modern, evidence-based psychological therapy. Clearly, that is what we need to bring about. The secondary mental health services are too busy with people who are more severely ill to be able to provide that to the vast body of people suffering from depression and anxiety disorders. That is the reason why IAPT was created and why it should have a key role in helping mentally ill people to get better and back into work. People can self-refer into IAPT, so there is no problem in having the jobcentre facilitate that without delay.

Welfare Reform and Work Bill

Lord Layard Excerpts

Tuesday 17th November 2015 Lords Chamber

[Lord Layard (Lab)]

My Lords, I will make just one, completely simple, point. If you are on ESA because of mental illness, you are sick. If you are sick, you ought to be in treatment. It is an astonishing fact than under half of the people on ESA by virtue of mental illness are in any form of treatment: a crazy situation. If we really want to get these people back into work, the most important thing would be to help them get better. They should be in treatment and the purpose of the Bill should include the effort to get them into it.

So how can this be done? The vast majority of mentally ill people on ESA are suffering from depression or anxiety disorders. For all these conditions, NICE recommends the offer of psychological therapy. For severe depression and some anxiety disorders, it also recommends medication, but we know from the evidence that most patients would prefer psychological therapy. However, until 2008, NICE-recommended psychological therapy was hardly available at all on the NHS to this group of patients. Since then, however, the Improving Access to Psychological Therapies services have become available nationwide—partly due to the efforts of the noble Lord, Lord Lansley—and in the past 12 months these services saw nearly a million people.

Incidentally, the services have different names, and your Lordships may not always realise that what they are talking about and seeing is an IAPT service—I will just use the term IAPT. The key step, therefore, is to ensure that every person with depression or an anxiety disorder who is awarded ESA is referred to an IAPT service. I am planning to move an amendment—I hope in agreement with the Minister—to ensure that this happens. It should happen as automatically as possible, although we should allow the claimant to decline. We should make sure that this is an automatic part of the procedure.

The first step would be to get the claimant an assessment of his health problem. Your Lordships may not be aware of the extraordinary situation that, when people come on to ESA with depression or anxiety disorders, the vast majority will never have received a diagnosis of what is wrong with them and will have no specialist assessment of what their problem really is. They will have seen their GP, but for most of them that will be all, unless they have been referred to an IAPT service. What we need is a mechanism whereby all those coming on to ESA are automatically offered an assessment by the IAPT service locally and, following that, suitable psychological therapy. Ideally, this could all be arranged on the first day after the award of ESA, when the claimant is called to the jobcentre to be allocated to the Work Programme. Next they would be invited to go along the corridor to see Mrs or Mr So-and-so. This has to be the way to go.

By contrast, it has sometimes been suggested that we should create a separate system of psychological therapy for people whose mental health problems are affecting their employment. However, it would be extremely costly to build up a separate system; and when we have one system that is working well, that is what we should build on and use. But of course it needs improving. In particular, it needs to include professional employment support for those looking for work or at risk of job loss. This was a central feature of the original design for IAPT, which, in fact, prescribed one employment support worker for every eight therapists. Unfortunately, the Department for Work and Pensions objected to this suggestion by the Department of Health and said it was its own job to do it, but then it failed to get the money and the job did not get done at all. This is, roughly speaking, what has continued to the present day.

Fortunately, the Government—led by the Minister—have now piloted a system of individual placement and support, which will be introduced within the IAPT services. That is excellent news. Obviously, the best location for employment support workers is within the therapeutic team so that they can exchange their understanding of the claimants’ problems. However, for any of this to work, the claimants must first be referred to an IAPT service. As I said, half of them are not referred to anything and are in no treatment of any sort, so the key issue is to make that happen. But could the IAPT services cope with the extra numbers of people? The answer is yes, if the resources are provided. Of course, no alternative system could cope either without the resources being provided.

Where we are now is that the IAPT services are seeing 15% of all the adults in the community with depression and anxiety disorders. The Department of Health has proposed to the spending review that this should rise to 25% by 2020. In my view, expansion on that scale is vital, on the grounds of parity of esteem for the claimant and of simple, common-sense economics. When people recover from depression and anxiety disorders, there are massive savings in reduced welfare payments, increased tax receipts and reduced costs of physical healthcare. Our calculations are that if the proposed expansion from 15% to 25% is allowed to happen over the next five years, the public debt in Britain in 2020 will be £1 billion lower than if we did not have the expansion that we need to have. This is because clinicians recognise employment issues as an indicator of clinical priority. Work can be a major therapeutic agent. We can confidently say that the IAPT services would respond if they were given the job of treating this group of patients. The bigger doubt is about the willingness of the jobcentres to refer people; we have had a lot of trouble trying to make that happen. That is why we need legislation to ensure that a rational system of referral is put in place.

I know that the Minister is very interested in this issue and I hope that he can help us to devise a practical solution for the present absurd situation. What we have is taxpayers paying billions of pounds to people who are unable to work due to a treatable condition, for which they are not being treated. This cannot make any sense. It makes no sense for the people themselves, for whom it results in terrible hardship, or for the Exchequer. It is time that these people got the treatment that they desperately need.

Apprenticeships

Lord Layard Excerpts

Wednesday 26th March 2014 Lords Chamber

[Lord Layard (Lab)]

My Lords, I apologise for having missed the deadline, but I would like to ask one simple question. In 2009, the previous Government’s apprenticeship Act guaranteed that, by 2015, there would be an apprenticeship for almost every 16 to 18 year-old who wanted one. That was a clear statement of priorities and a marching order to the National Apprenticeship Service. Unfortunately, the present Government repealed the guarantee and focused the biggest development in apprenticeships, as many noble Lords have said, on the older age group. Was that not a massive error and will the Government now revert to the priority for 16 to 18 year-olds that was embodied in the previous strategy?

There are many Cassandras, probably on both sides, who say that we will not get employers to be interested in young people under 19. Suppose we accepted that argument: what would follow? It would be catastrophic because there would be permanently high youth unemployment and millions of people who would probably never get a real skill. The top priority has to be getting people off to a good start at the very beginning of their working lives. The best evidence for that was mentioned by the noble Baroness, Lady Sharp: a number of OECD studies show that the countries with the lowest youth unemployment and the best level of skills in the lower-skilled parts of the workforce are those countries with the largest number of apprenticeships for school leavers.

What is the problem? In spite of some things that have been said this evening, the problem is not mainly with the aspirations of young people; it is with our employers and the way in which they are approached by the apprenticeship service. More than half of all large employers still have no apprentices. By contrast, in 2012-13, 800,000 young people aged between 16 and 18 registered as applicants for apprenticeships. How many got an apprenticeship? It was one in seven. That is the problem—the supply of apprenticeships is not there and that is a terrible reflection on the record of the National Apprenticeship Service as a generator of apprenticeships. It has simply failed, I suspect partly because it has not been told that that is what the service is meant to be doing for that age group.

What is the Government’s priority? Is it 16 to 18 years-olds or not? If it is, will the Government tell the National Apprenticeship Service very clearly that that is the top priority?

Atheists and Humanists: Contribution to Society

Lord Layard Excerpts

Thursday 25th July 2013 Lords Chamber

[Lord Layard]

My Lords, I, too, greatly welcome this debate. I have to admit that I was a founder member of the Cambridge Humanists in the 1950s when I had great hopes for humanism, but which I think have been only partly fulfilled. Humanism has done very well on the negative side in rebutting unreasonable beliefs and unreasonable laws but much less well on the positive side in providing a thriving and flourishing secular morality, which is what many of us had hoped it would do. I believe that that failure has had quite serious effects on our society because more and more people have abandoned a morality based on religion. It has not been replaced with anything as powerful or with the same emotional force as that provided through the churches, so the way has been left open for the increasing growth of a “me first” philosophy of life.

How can we reverse that? Two things are needed. First, there has to be a much clearer, more powerful expression of what humanists positively believe in—not what they do not believe in. Secondly, there have to be institutions which embody those beliefs. As the right reverend Prelate said, the churches provide the social support for religious belief. It is not easy to lead a good life on your own without social support. You are much more likely to do so if part of your identity is that you are a member of an institution committed to ethical living. We desperately need more such institutions of a secular kind that can support the majority of our citizens who are not practising members of a religion.

It is unclear to me exactly how these new institutions will develop and what they will look like. I am involved in an attempt to create one such institution, Action for Happiness, and I shall tell the House a little about it. We now have 30,000 members. The first thing a member has to do is pledge to live so as to create as much happiness and as little misery in the world as they can. The movement provides them with materials that can help in that endeavour. Increasingly, it aims to create real face-to-face communities that are more like the churches in their physical expression, or perhaps the early Christian cells, in order to help people to live in this way.

Action for Happiness’s ethical stance is very simple. It is really important that humanism develops a very simple ethical creed which can generate people’s energy, loyalty and commitment. It says, first, that everyone matters equally and, secondly, what matters about them is their quality of life as they experience it—in other words, their happiness. If you put the two together, you arrive at an obligation on each of us to try to produce as much happiness and as little misery as we can in the world. This is the most obvious foundation for a humanist secular morality which could carry our society forward.

Of course, it has much in common with the golden rule that we should do unto others as we would like them to do unto us. When it comes to what we should not do, both principles are very much in line. We certainly should not do what we would not like others to do to us. However, there is a difference in relation to what we should do; that is, how we should conduct our lives in a positive way to make the world a better place, as was just said. There are some problems about the golden rule and whether we should do to others what we want them to do to us. We may want them to give us a job but that does not mean we should give them jobs: it might not be practical. We need a more practical expression of how you can live positively. I cannot think of a better or more inspiring expression than that we should live to increase the happiness of those around us and reduce their misery.

Secular morality is not anti-religious, it is areligious. Of course, the areligious increasingly are the majority of adults in our country. When I have spoken to educators who have insisted that the view I put forward is contrary to two millennia of Christian education, I find myself saying something like, “If you want to teach morality on the basis that it is conformity to the will of God and you know that three-quarters of the people you are teaching will lose their faith in God by the time they are 20, how are you expecting them to lead moral lives? What support do they have for leading moral lives in their adult life?”.

As humanists, we need a firm view of what we believe and we absolutely need institutions. We need to see that our views are taught in schools and featured in “Thought for the Day”. However, much the most important remaining task is to build institutions which inspire and uplift people, and enhance their commitment to ethical living. I urge all humanists to turn their minds to building institutions for the promotion of secular morality. Obviously, they should be modelled to an extent on the experience of the churches and people should meet regularly. Through that they would uplift their spirits and strengthen their resolve to live well.