Improving Lives: Green Paper

Debate between Lord Low of Dalston and Lord Freud

Monday 31st October 2016 Lords Chamber

[Lord Low of Dalston (CB)]

I too thank the Minister for repeating the Statement and would like to add my word of welcome for this Green Paper. The objective of halving the disability employment gap is commendable, and a lot of work and thinking have been going on in the department about how to achieve it. I commend the Minister and the department on that, and I look forward to studying the product of that activity in the Green Paper more carefully than I have had the opportunity to do so far.

Can I just make a plea for the Minister to revisit the reduction that was made to employment and support allowance going to those in the WRAG in the most recent session of Parliament? As the Minister knows, we had long discussions about this and there would be widespread agreement, even if the Minister did not share it, that although those asking the Government to revisit that cut lost the vote, they won the argument on this one. If the Government do not revisit this cut with a view to cancelling or at least ameliorating it, they will find that they have shot themselves in the foot and prevented themselves even getting to first base in the matter of halving the disability employment gap.

This cut to employment support allowance will hinder people’s ability to look for work by undermining their ability to pay for well-being activities that help recovery and enable them to consider paid work; will make people more worried and stressed, thus impacting their mental health; will have an impact on work-related activity such as travel to appointments or volunteering opportunities; and will make it harder to attend training courses and work-focused interviews if people are already struggling to meet basic needs. That is a substantial argument, which was developed in detail by the charities that produced the report on the impact of the cut to ESA. The case was well made and the deleterious impact of the cut was demonstrated beyond any doubt. Again, I ask the Minister to revisit this if he wants to attain his objectives.

[Lord Freud]

I very much regret having to say that we are not in a position to look again at that measure. The WRAG was not doing what it was designed to do. What we are now looking at in the Green Paper is how to separate the financial aspects of the benefit from the support that people require.

Unemployment: Disabled People

Debate between Lord Low of Dalston and Lord Freud

Thursday 20th October 2016 Lords Chamber

[Lord Freud]

We are moving the emphasis away from more general support programmes such as the Work Programme towards the work and health programme because many of the people who need support have disability barriers. It is right for the new emphasis to be there. I absolutely accept the noble Baroness’s point about people with learning disabilities. There are some shocking figures on this and it is a key issue. There are some 1.1 million people with learning disabilities and only around 6% of those are getting into work. Clearly, if we want to halve the gap, that is a central group for us to pay attention to.

[Lord Low of Dalston (CB)]

My Lords, there was a lot of disappointment on the part of disabled people at the Government’s response to my noble friend Lady Deech’s Select Committee. Is the Minister willing to consider coming up with a plan of action for implementing the Select Committee’s recommendations, or establishing a task force with disabled people and their organisations to come up with a plan?

Welfare

Debate between Lord Low of Dalston and Lord Freud

Monday 21st March 2016 Lords Chamber

[Lord Freud]

I take that point from the noble Lord, who is very well informed in this area, on advisement. I accept his point that George Osborne is a pussy cat compared with some previous Chancellors sitting not very far from me.

[Lord Low of Dalston (CB)]

My Lords, as the Minister has confirmed, events at the weekend have made it clear beyond any doubt that the Government’s welfare reform programme has run out of road. Its contradictions stand revealed for all to see. Since exactly the same criticisms apply to the cuts to the employment and support allowance enshrined in the Welfare Reform and Work Bill as apply to the cuts to the personal independent payment, I repeat the question asked by the noble Baroness, Lady Sherlock: will the Government now reconsider implementation of the cuts to the employment and support allowance? They may have been voted through, but it is still open to the Government to reconsider the matter, as they have with the personal independence payment.

[Lord Freud]

The welfare reform programme is massive and we are pushing ahead with it. At its heart is universal credit, which is now moving at a pace. As I speak, more than 400,000 people have made an application for universal credit. We have a lot more to do, and we have a lot to do to implement the Bill that we have just passed. I have to disappoint the noble Lord by saying that there are no plans to reconsider the changes to ESA WRAG that we put through in that Bill.

Housing Benefit (Abolition of the Family Premium and Date of Claim Amendment) Regulations 2015

Debate between Lord Low of Dalston and Lord Freud

Wednesday 3rd February 2016 Lords Chamber

[Lord Freud]

My Lords, I ask noble Lords to forgive me for not keeping up with the exact floating role of the noble Lord, Lord McKenzie, as he moves forward and back on the Benches. I thank all noble Lords for their contributions which, as one would expect, covered a number of issues.

I start with the family premium, which will align housing benefit with universal credit, which does not have this process. As noble Lords will be well aware, it applies to new cases only. It will therefore not affect people in receipt of family premium on 30 April this year. They will continue to receive the family premium until they are no longer responsible for any children or young people under 20 or make a new claim for housing benefit. To avoid people dying at the stake for the sake of these premiums, I remind noble Lords of their very complicated history which started in 1988. With the reform of tax credits, they were removed from income support but not from housing benefit. I know there is a lot of historical nostalgia for bits of the benefit system, but this one reminds me more of an appendix than of anything else: it had a purpose at one time, but it is pretty odd to remember what it was and it can cause you problems, as I am discovering.

On the linking rules, where claimants are in receipt of housing benefit and subsequently move house into a different local authority, they are required to make a new claim for housing benefit. That has always been the case and the policy does not seek to change it. If the claimants were in receipt of the family premium before their move and they move after 30 April, they will no longer receive the family premium in their new housing benefit claim from their new local authority. That responds to the question from the noble Baroness, Lady Sherlock. I know that the noble Baroness likes to stretch out the period for which this will last, but universal credit will be coming in for new cases reasonably soon. It is simply not feasible to introduce linking rules for these cases because that really would introduce a level of complexity and cost.

I regret that I cannot answer the precise question from the noble Lord, Lord McKenzie, on the administration costs saved. When you go through the sums of how you reach that family premium amount and then do the taper with it, and you have to do that differently through every local authority, I have to believe that it genuinely saves some money. However, I cannot put any amount on that.

On the point about work incentives made by the noble Baroness, Lady Sherlock, the loss of family premium would be one factor among many others, including the financial gain and development prospects that would come from entering work. It is important to mention the likely behavioural change that could result from this policy, as the potential reduction in benefit may make claimants more likely to find work or increase their hours. Indeed, you see evidence of that in some of our welfare reforms already.

I turn to the issue of backdating, which noble Lords touched on. This change introduces equality for working-age claimants by aligning housing benefit rules with those in universal credit. Under current rules, as noble Lords have pointed out, the working-age housing benefit claimants may have their claim treated as made from a date up to six months before they actually make the claim. The backdating period will apply from the date of claim and is not dependent on the time that it takes to process claims. Our rationale is that the one month provides a reasonable period to seek assistance or to get claimant affairs in order for those who can demonstrate good reason as to why they did not claim more promptly. While claimants still receive legacy benefits before migration to UC, there is sense in preparing them for the transition to UC by, so far as practicable, equalising how they are treated. The other factor that is useful when we look at this is that our administrative data show that more than two-thirds of backdating claims for housing benefit are awarded for one month or less.

The noble Lords, Lord Kirkwood and Lord Low, asked why we rejected the three-month recommendation —although, interestingly, the numbers between the one-month figure and the three-month figure are actually not very great. We are aiming to change behaviours. If people want to claim benefits, one month allows sufficient time for them to register a claim in the first instance. It does not matter if it is a more complicated process, because the processing and getting the detail does not change the date of entitlement, which is established on the initial claim.

To respond to the noble Lord, Lord McKenzie, who as usual has excruciating detail at his fingertips, I confirm—and I am impressed that he has looked at this—that where a claim for housing benefit is linked to a claim for one of the legacy income-related benefits that applies the three-month backdating rule, entitlement to housing benefit will be linked back for the full three months if it is made within one month of the award for legacy benefit. So he got that spot on.

On the point from the noble Lords, Lord Kirkwood and Lord Low, we do not anticipate pressures on the homelessness front. I am slightly influenced by the fact that every time we make such a change we are warned about that but so far it has not come through.

[Lord Low of Dalston]

Does the Minister not agree that I gave some concrete and tangible examples where people might be justified in needing to have their claim backdated for longer than a month, through no fault of their own—for example, where forms have gone missing or where they have been sanctioned in error? Would it really mean any skin off the Government’s nose to include an element of flexibility to take account of those cases? If someone has lost a form or they have been sanctioned in error, those are not instances of behaviour that can be changed by limiting the backdating rules to one month.

[Lord Freud]

I listened very carefully to the noble Lord on those points. My response to that is, if the claim was made on that date and it was lost but it was made then, the issue is whether the bureaucracy accepts the claim that it is lost. The date is established then, and would be established in both of those cases. A lot of the problems may be through legacy benefits, where, as I just explained, the situation has not changed.

DHPs are designed to give additional support to claimants who need it. It is technically possible for DHPs to meet a historic need, although in practice we suspect that it is rather unlikely that a local authority would make this award for that reason, as the regulations state that a claimant should need further financial assistance with housing costs to receive a DHP. As the time period that they are applying for would have passed, it would be difficult to argue that there was a need for financial assistance with housing costs. Therefore it is unlikely but not impossible.

Welfare Reform and Work Bill

Debate between Lord Low of Dalston and Lord Freud

Wednesday 27th January 2016 Lords Chamber

[Lord Freud]

My Lords, these amendments seek to remove Clauses 13 and 14 in order to prevent the proposed changes to the ESA work-related activity component and the universal credit limited capability for work element. Clause 13 amends existing legislation to remove this additional payment for new claims to ESA and aligns the amount of benefit paid to claimants with limited capability for work with that paid to jobseeker’s allowance claimants. I think I need to clarify that although some Peers have mentioned a loss of £60, the work-related activity component is just under £30 a week. Clause 14 is designed to introduce a similar outcome for UC claimants. The measure will save £640 million over the long term but in 2017-18, it will save £55 million while we will invest £60 million into additional practical support.

This change does not affect the support group component, the UC equivalent or the premiums which form part of income-related ESA. Existing claimants in the support group will be entitled to the work-related activity component if they are reassessed into the WRAG. We aim to protect existing ESA claimants who temporarily leave the benefit to try out work and then return to ESA, an issue which the noble Baroness, Lady Meacher, was concerned about.

ESA was set up by a previous Government to support people with health conditions and disabilities into work but it has unfortunately failed the very people who it was designed to help. Despite spending £2.7 billion this year on the WRAG, currently only 1% of people in this group actually move off the benefit every month. As a Government, we want to ensure that we spend money responsibly in a way that improves individuals’ life chances and helps them to achieve their ambitions, rather than paying for a lifetime wasted on benefits.

Currently, those in the WRAG are given additional cash payments but very little employment support. As the Prime Minister recently stated, this fixation on welfare treats the symptoms and not the causes of poverty. Over time, it traps people in dependency. That is why we are proposing to recycle some of the money currently spent on cash payments, which are not achieving the desired effect of helping people to move closer to the labour market, into practical support that will make a genuine difference to people in these groups.

The additional practical support is part of a real-terms increase that was announced at the Autumn Statement. How the £60 million to £100 million of support originally set out in the Budget will be spent is going to be influenced not only by Whitehall but by a task force of representatives from disability charities, disabled people’s user-led organisations, employers, think tanks, provider representatives and local authorities. I thank the noble Lord, Lord Low, and the noble Baronesses, Lady Grey-Thompson and Lady Meacher, for their work during Committee in this area.

The new work and health programme will provide specialist support for the very long-term unemployed. We are committed to supporting everyone who is able to work to do so. The forthcoming White Paper is aimed at ensuring that we offer the best possible support to those with health conditions or disabilities, a point raised by the noble Baroness, Lady Campbell, and the right reverend Prelate the Bishop of St Albans.

There have been ongoing discussions with the noble Baroness, Lady Hollins, about learning difficulties. Mencap’s website points out that despite the fact that research shows that 65% of people with a learning difficulty want to work, and the fact that with the right support they make highly-valued employees, only one in 10 people with a learning disability known to social services is currently in paid work. The Autumn Statement announced a real-terms increase in funding of almost 15% for those with health conditions and disabilities.

In Committee, some noble Lords raised concerns that we are expecting claimants who have been found “not fit for work” to be able to work. Although this was discussed then, it is important to stress once again that claimants in the work-related activity group have been found to have “limited capability for work”, which is very different to being unfit for any work. That is an important distinction, as this misconception helps drive people further away from the labour market and perpetuates the benefit trap.

As for returning to work and improved mental health, this Government are committed to ensuring that people with mental health conditions receive effective support to return to and remain in work. The noble Baroness, Lady Meacher, was concerned about this issue. We are investing £43 million over the next three years in trialling ways to provide specialist support for people with common mental health conditions. I have trawled the international evidence, and I know that we are going to build up a very substantial body of knowledge in this key area.

The noble Baroness, Lady Meacher, also raised the issue of deteriorating conditions. People with Parkinson’s who are currently getting the work-related activity component will not lose it, and will continue to receive ESA at the same rate, but any claimant who reports a deterioration in their condition can request a WCA to assess whether they may be eligible for the support group. As all Peers in the Chamber will acknowledge, some of these conditions can take a very long time indeed to develop, and there are times when people in the early period of those conditions are able to work, and indeed really want to.

Another area discussed at length in Committee was the evidence to support the Government’s view that the work-related activity component, in some cases, acts as a financial incentive to remain on benefit. I went through that evidence in some detail then but will summarise the points now. The findings of the OECD report, which we have touched on today, covered the whole population. Although the report does not specifically focus on the disabled population, it does not indicate the incentives would not apply there. We have the paper by Barr et al in 2010, which found that,

“eight out of 11 studies reported that benefit levels had a significant negative association with employment”.

It also noted that, “The most robust study”—by Hesselius and Persson—

“demonstrated a small but significant negative association”.

I have already mentioned the Norwegian study of the impact of financial incentives.

It is important to also recognise that the changes to ESA and universal credit work together and cannot be taken forward in isolation. Universal credit will replace income-related employment and support allowance once fully rolled out. We want to ensure that we build on what is working in universal credit to help those with health conditions and disabilities move into work. We have invested a lot in universal credit to make sure that we keep people connected to the labour market from the outset of their claim. Unlike under ESA, UC claimants with a health condition or disability are offered labour market support, where it is appropriate to do so, at the very start of their claim. This helps them to remain closer to the labour market, even if they are not immediately able to return to work.

The noble Baroness, Lady Lister, said that about 116,000 people in the whole country benefit from the disability element of tax credits. The smallness of that number illustrates how the current system is not working. That is why universal credit gets rid of the hours rules that stop people entering the labour market. It makes every hour—every fluctuating hour—pay and gives people the work coach support they need to find and then retain work. I have to say that some of figures from the noble Baroness, Lady Grey-Thompson, do not accurately reflect the situation. The point is that universal credit will make smaller, regular hours pay. Rather than dealing with a lot of very complicated sums, I will write to her and set out our response.

The findings from Universal Credit at Work show that universal credit is making a real difference in getting people closer to the labour market. It is easier to understand. People are earning more, they say they have better incentives to work and, indeed, they are working more. Universal credit is a step towards modernising the welfare system into one that improves individuals’ life chances, but we intend to go a lot further than that. We will publish a White Paper in the new year that will set out reforms to improve support for people with health conditions and disabilities, including exploring the role of employers, to further reduce the disability employment gap—which we are committed to doing —and promote integration across health and employment.

As for the impact of another budget, I should point out to the noble Lord, Lord Low, what we spend on disability benefit: it went up by £2 billion in real terms over the last Parliament. We spend £50 billion every year on benefits to support people with disabilities or health conditions, which is rather more than we spend on defence and police combined—6% of government spending.

Clauses 13 and 14, together with the additional practical support announced in the Budget, provide the right support and incentives to help people with limited capability for work move closer to the labour market and, when ready, into work. I therefore urge the noble Lord to withdraw his amendment.

[Lord Low of Dalston]

My Lords, I thank the Minister for his very full and careful reply. I knew that it was too much to hope that his generous spending spree would continue into this group of amendments, so we will deal with the case that has been made on its merits. I also thank all those noble Lords who have spoken. The amendment has attracted support from right across the House: I made it 10 speeches in all and 9:1 in favour of the amendment.

Welfare Reform and Work Bill

Debate between Lord Low of Dalston and Lord Freud

Wednesday 9th December 2015 Lords Chamber

[Lord Freud]

I am not now looking at recommendations for action. I am just looking at what evidence we have that incentives either way work for the disabled community because that is the issue that noble Lords are querying. Let me go on. A paper by Barr et al, published by the Journal of Epidemiology and Community Health in 2010, asks:

“To what extent have relaxed eligibility requirements and increased generosity of disability benefits acted as disincentives for employment?”.

It finds that eight out of 11 studies reported that benefit levels had a significant negative association with employment. To pick up the point made by the noble Lord, Lord Low, about the level of the evidence, while they state that they cannot quantify the size of the effect, they conclude that there definitely is one. The most robust study in that paper, by Hesselius and Persson from 2007, demonstrated a small but significant negative association. The final paper, by Kostøl and Mogstad from 2012, is about evidence from Norway regarding a positive incentive structure allowing disabled claimants to retain more of their benefits when moving into work, which resulted in more claimants starting work. The study shows the impact of financial incentives on disabled people able to undertake preparation for work or work itself, which is a group synonymous with our WRAG population.

[Lord Low of Dalston]

I am sorry to have been a little slow in coming back to the Minister; it took me a little while to find the reference. With regard to the Barr study, the Minister will recall that I pointed out that Barr et al said that, with regard to whether there was a negative association between benefits and employment rates, there was insufficient evidence of a high enough quality to determine the extent of that effect.