Welfare Reform and Work Bill

Debate between Lord Low of Dalston and Lord Lansley

Wednesday 9th December 2015 Lords Chamber

[Lord Lansley (Con)]

My Lords, I rise briefly to contribute to this debate. I am pleased to have the opportunity to do so and especially to follow the noble Lord, Lord Layard. At Second Reading, he kindly made a favourable reference to the work we did together in the previous Parliament to undertake the national rollout of improving access to psychological therapies. It was very important to do so and he has just eloquently explained to the Committee why it is particularly important in this context of giving people with mental health problems who want to work the opportunity to access treatment that takes them closer to work and gives them opportunities to return to work. I remember visiting just such a centre in Reading and seeing the success it achieved in enabling people with mental health problems to access treatment and get back to work much faster than would otherwise have been the case.

I confess to the Committee that I do not exactly support Amendment 52. There must be very limited circumstances in which we seek statutorily to provide for when the NHS should give treatment to particular individuals or sets of individuals; we have to be extremely careful. I applauded otherwise pretty much everything the noble Lord had to say. I was glad he was able to reference the support in the spending review for increasing access to talking therapies. I thought we had already established the fact, but further evidence has shown that talking therapies are at least as effective, as treatment, as access to medication. It has been reported that medication is no more effective than talking therapies, but I would put it the other way round—namely, we have discovered that talking therapies are at least as effective as medication, and often without the drawbacks associated with the dependence on medication that can emerge. I am very pleased that we were able to work together on the national rollout for the IAPT programme that was announced, if I recall correctly, in February 2011. That was published alongside the first national strategy for mental health, No Health without Mental Health.

I also want to speak to Clauses 13 and 14 stand part, which I very much support. As I said at Second Reading, one issue we need to focus on is helping people with disabilities into employment. Though I mean in no sense to be patronising, I think the report published yesterday, Halving the Gap?, is an extremely helpful contribution by the noble Lord, Lord Low and the noble Baronesses, Lady Meacher and Lady Grey-Thompson. It is an extremely good report, very clearly set out. Its focus is absolutely right—namely, how do we reduce the gap between employment for disabled people and the access to employment that is being achieved by those without disabilities? We are doing this in the context that this country is an economy creating jobs as fast as the rest of Europe put together. Not only are we creating jobs and bringing down unemployment and the claimant count, but we are doing so with a record level of vacancies in the economy. We have the opportunity for employment, therefore, to a degree that we can be proud of; the question is whether we are giving people the appropriate support into work and creating the right incentive structure. I make no apology for saying that all three are important: opportunities for work, which I believe are there; support into work; and incentives for work.

I do not want to go on at length, but this is important. There is a great deal of material in the Halving the Gap? review that sets out some of the ways in which support for people getting closer to employment and taking it up can be improved. It is important never to think about legislation without understanding that, from the Government’s point of view, it is often conducted with legislation on the one hand and administrative action on the other. This is very much one of the areas where the administrative changes are potentially at least as important as the legislative changes. In that context, the Work Programme has worked very well in some respects, but not so well in others—though it is of course a payment-by-results programme, and it was important that it was. Together with the evidence on work choices—which, although small in scale, had some benefits, as has been referred to—it is important to look at those examples, the work in jobcentres and all the other evidence, to see how, in particular, we can design the health and work programme from 2017, which will coincide with the changes proposed in this legislation, to ensure that it helps people in the work-related activity group into employment.

I listened with great care to the noble Lord, Lord Patel. I completely understand his point about giving time. We have to be very careful to understand that we are talking about people in the work-related activity group who may need more time than would customarily be true for those on JSA, but this is not a situation in which the more time is taken, the better it is—far from it. We are looking for people on a part of employment and support allowance to move towards employment and for progress to be made in that respect. That is where we need to focus and why the support that we give is extremely important. The reshaping of that support, which I know is contemplated alongside these legislative and benefit changes, has to happen.

I also mentioned incentives, which are important. It has been said that there is no evidence. One tends to think that the absence of evidence is not evidence of absence, but in this instance the reports from the OECD 10 years ago and from the Barr and others study refer to evidence of a relationship between the generosity of benefits and the employment implications. I do not think we should be surprised by that. The disparity between people’s income out of work and in work is an essential part of understanding the incentive structure. Where that disparity is small, the incentive to work will be less. Where the disparity is greater, the incentive to work will be greater. We have to be clear that that is prima facie. It is not a matter of looking for evidence; we know that it is demonstrably true and there is plenty of evidence of it.

I completely understand that we also need to understand this in the context of people with disabilities and disability employment, but understanding that people with disabilities have special requirements and special constraints should not constrain our understanding that incentives must be aligned with support and opportunities. If the incentives are wrong—if they do not align with the support that we give in encouraging people to be in work or to be continuously moving towards work where they are capable of doing work-related activity—the system will not succeed.

The review was absolutely honest. It said that unemployment and economic inactivity have been stubbornly high for many years, so this is not a situation where we should simply say that what is happening now is good enough. We want to achieve change, and strengthening the incentive structure, alongside the support structure, is an essential part of the overall policy. Therefore, we need to keep the legislative change and the support changes administratively.

I shall make one final point. I was listening carefully to the noble Lord, Lord Low. While the review said that there is no evidence that the generosity of benefits has an incentive effect in relation to employment, there is something of a contradiction within the terms of the review. It is said in the review that there is a difficulty associated with current claimants—they will not be new claimants necessarily moved off accessing the additional support under WRAG in future—who go into employment and might then come back on to the WRAG element of ESA. Logically, because people asserted to the review that they would be disincentivised from taking jobs because they would not be able to go back on to the ESA WRAG element on their previous basis, by implication people were saying that the level of financial support under ESA is in itself a disincentive to taking work. We have to be clear that, within the review itself, there is a sense in which people are openly acknowledging that the level of benefits relative to work is an issue in terms of incentives.

[Lord Low of Dalston]

I understand the point the noble Lord is making, but I put it to him that the contradiction he points to arises only if you decide to remove the extra ESA WRAG component for new claimants. If the benefit remains the same, there is no disincentive in moving off work and moving back again.