Welfare Reform Bill

Lord McKenzie of Luton Excerpts

Wednesday 11th January 2012 Lords Chamber

[Baroness Morgan of Drefelin]

I just want to thank the Minister for bringing forward Amendment 43 and the other government amendments in this group, and for listening to the debates in Committee. I do not want to detain the House in any way—I know we are engaged in several critical debates this afternoon—but the noble Baroness, Lady Meacher, has explained very eloquently the challenges that the Government have in addressing the thorny, knotty and difficult problems of people facing terminal and life-shortening illness. I do not want to say more than that because her points have been made so clearly.

[Lord McKenzie of Luton]

My Lords, I start by also thanking the Minister for Amendment 43 and wishing him a happy new year. I am sure it will become happier when we get into February. That is the case for several of us. Perhaps I can comment first on some of the other amendments to which the noble Lord referred. I understand that Amendments 33 and 34 are consequential. The fact that they include references to provisions that cover 365 days or the clock for counting those days already being under way does not imply our acceptance of them. They are the subject of subsequent amendments that we are about to come to. Similarly, as we have heard, Amendments 37, 39, 40 and 41 are the formulation to confirm the intention that the limit should apply to contributory claims under the youth condition. Again, as will be clear, we do not support the 365-day limit or the future denial of claims under the third condition, and we will address this by amendments in the next group. Therefore, our not challenging these amendments should not be taken as accepting this as the final position; likewise in relation to Amendments 63, 64, 65, 66 and 67.

Amendment 43, tabled by the Minister, obviates the need for Amendment 42. It covers the same point and, as he said, goes further in that there is no time limit. This is to be welcomed. This enables someone to reconnect with contributory ESA after time-limiting should their condition deteriorate and they become eligible for the support group. It would appear that this applies equally to those with an existing youth condition claim and those accessing contributory ESA via the first and second national insurance contributions. Perhaps the Minister would just confirm that. It would appear that there is no time-limiting factor—I think that he confirmed this—so the gap between the time limiting of the contributory allowance and arrival in the support group could be five or 10 years or, in theory, even longer. I touch on this particularly because I am bound to say that this is not something to which the Minister warmed in Committee. On 8 November, at col. 33 of Hansard, he stated in relation to Amendment 71P:

“However, this could mean benefits being reinstated 10 or more years after the claimant last worked, which is not reasonable”. —[Official Report, 8/11/11; col. GC 33.]

Further, he stated that,

“people in the WRAG who have gone through their time-limited period do not then have a right to go into the support group on a contributory basis”.—[Official Report, 8/11/11; col. GC 36.]

I do not wish to be churlish about this but that is why we included the five-year limitation in Amendment 42, which sought to meet the Government at least part way. However, the Government are to be congratulated on Amendment 43, which deals with the disconnect from the national insurance contributions and also addresses the concerns powerfully expressed in Committee about people with deteriorating conditions who are initially placed in the WRAG. My noble friend Lady Morgan of Drefelin spoke about people with Parkinson’s disease, motor neurone disease and some forms of cancer. The Government will fulfil their stated intent that the time limiting of contributory ESA will not affect those in the support group.

However, as ever, I have a couple of questions. Amendment 43 states that the employment and support allowance entitlement,

“is to be regarded as a contributory allowance for the purposes of this Part”.

Why is “regarded as” used rather than “is”? Is it or is it not a contributory allowance? The requirement is that the person remains assessed as having limited capability for work. How is this to work in practice in circumstances where entitlement to the contributory allowance has lapsed and income or capital levels preclude entitlement to income-related ESA? Does it require the individual to be subject to the crediting-only arrangements? Would a claimant commitment still have to be in place? If somebody’s prognosis of limited capability for work has lapsed but there has been no reassessment because nothing is due, how does this affect the position in practice? Where someone’s reassessment has initially led to a fit-for-work designation but this has been overturned on a reconsideration or appeal, will the claimant be treated as being continuously in the WRAG and remain entitled to the benefit conferred by the government amendment? The noble Lord’s letter of 8 January, which I received yesterday, suggests that around 4,000 people will benefit from this measure by 2016-17. This may be only a small proportion of those damaged by the general time limiting. Nevertheless, I stress that it is welcome.

Amendment 42A, spoken to by the noble Baroness, Lady Meacher, and supported by my noble friend Lady Morgan and the noble Baroness, Lady Finlay, raises an extremely important point about individuals with life-threatening diseases where there is evidence that their diseases are uncontrollable or uncontrolled by a recognised therapeutic procedure. It requires them to be treated as being in the support group to obtain the benefit of the easements in the Government’s legislation. I would be interested to know how often such individuals would not be assessed as being in that group anyway. I think that we heard some examples from the noble Baroness, Lady Meacher. I await the noble Lord’s reply but I hope that he can give her a sympathetic response to this important issue.

[Lord Freud]

My Lords, picking up the point of the noble Lord, Lord McKenzie, about the discrepancy between Amendments 42 and 43, sometimes when a powerful argument is made in Committee, it succeeds even more than do the proponents of that argument. In this case we went back, thought about the measure and said, “If we are going to do it, let us do it properly”. That is why the measure is indefinite and not for five years. The noble Lord asked whether Section 1B on further entitlement after time-limiting covered contributory ESA under the first and second contribution conditions and the ESA youth awards. The answer is yes

Let me turn to Amendment 42A. I very much understand noble Lords’ concerns on this, but the amendment would not achieve the stated aims of placing in the support group individuals with conditions that reduce life expectancy to two or three years. Substantial provision is already available to ensure that individuals with life-limiting diseases are provided with appropriate support. The amendment seeks to ensure that individuals with uncontrollable diseases who do not meet the support group criteria of the WCA, set out in regulations, are treated as having limited capability for work-related activity. Under the current system, individuals who meet this provision and are treated only as having limited capability for work will have a condition that does not significantly limit their functional ability such that it would be reasonable to expect them to undertake work-related activity. However, anyone who has an uncontrollable condition may still meet the current support group criteria if, as a result of their condition, there would be a substantial risk to their health if they were held to be capable of work-related activity. A large number of protections are therefore built in.

Perhaps I may provide an example of how that might work—and does work. Consider an individual with extremely severe uncontrolled hypertension, who has little or no symptoms or functional impairment. This individual will not meet the test of limited capability for work-related activity necessary to go into the support group, or even the test of limited capability for work to go into the WRAG. As a result of their condition, work-related activity is likely to pose a substantial risk to their health.

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[Baroness Howe of Idlicote]

My Lords, those of us who sat through the entire Committee stage and have listened to and contributed to these arguments are now hearing it all again. We are hearing the horrific details about the suffering of children and their families and carers, and indeed of grandparents who are often involved in the care needs of these children and young students. All this must help to persuade the Minister, who we know has tried his very best in a number of respects, and has succeeded in a number of areas in which we had considerable concerns. In this case, however, with the numbers so small and the need to look elsewhere to make savings if that is necessary, why should we continue to penalise this group? Surely we can get around the European inhibition confronting us, and we have even had suggestions about that. Some brilliant speeches have been made today and I hope that they have had the desired effect.

[Lord McKenzie of Luton]

My Lords, I speak in support of Amendments 45 and 46. As the noble Baroness, Lady Howe, has just said, we have heard very powerful presentations by my noble friend Lady Lister, the noble Lord, Lord Patel, the noble Earl, Lord Listowel, the noble Baroness, Lady Finlay, as well as from the noble Baroness herself. I do not plan to repeat all the key issues associated with why I support these amendments. We have gone over them in Committee and we have heard them again today.

Society imposes significant challenges on young disabled people, especially so far as employment is concerned. These challenges will be particularly acute in the next few years as unemployment soars, particularly youth unemployment, which is now more than 1 million. Given the determination to place a time limit—we have yet to settle whether it should be one or two years—on contributory ESA for those in the WRAG, the abolition of the youth condition seems particularly spiteful.

The amendment of the noble Earl, Lord Listowel, would preserve the third condition, but only in circumstances where the claimant was and remained in the support group, thus focusing the support on those with the highest needs. The amendment would not appear to add any further benefits to existing claimants who qualify for ESA as a result of the third condition, because that is now covered by the government amendment. However, it would preserve the third condition for new claimants who fell within the support group. As such, I suggest that it is absolutely consistent with the Government’s Amendment 43, which was so widely praised earlier. I would hope that it was readily acceptable.

Just to be clear: the effect of government Amendment 43 is to provide among other things for those with an existing claim which relies on the third condition, the youth condition, to remain entitled after time- limiting if they have moved into the support group. Amendment 46 would allow the third contribution condition still to be applicable for new claimants but only where they would go directly into the support group. So there is a parallel in enabling young people with the most severe needs, existing and new claimants, to make use of the third condition. It is unlikely to have any significant cost, but doubtless the Minister will advise on that.

The letter sent by the Minister to the Cross Benches, and perhaps more widely, states that a “recent” European Court of Justice ruling limited the circumstances. How recent is “recent”? I do not believe that we debated or touched on this issue in Committee—if I am wrong, the Minister again will correct me. The letter goes on to say that the judgment further weakens the ESA youth provision, making it potentially much more widely available than intended. Of course, none of us would support benefit shopping if that is what is behind the concerns felt and we would work with the Government to try to make sure that it did not recur and was stopped, but until we have a much clearer idea of what is involved here, it would seem wrong to throw out now, on the basis of this potential issue, the prospects before us in the Bill to deal with the third condition and people entering the support group. If we do that now on the basis of the judgment, we close it off because we are coming to the end of the primary legislation.

At the very least, I hope that the Minister will be able to give a clear assurance to the House today that there will be an opportunity to come back to this issue at Third Reading and for us to have more detail, and that he will facilitate that. I would urge him also, because it would be consistent with that, not to press his Amendment 45A, because it would cut off the opportunity for people to make use of the youth condition for employment and support allowance. If noble Lords who have tabled these amendments are going to withhold pressing them on the basis that this issue requires further input, I hope that the Minister will undertake to do the same when he responds.

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[Lord Freud]

My Lords, we have had a pretty good Socratic debate on the welfare Bill for some time. I hope that I can get over to noble Lords that the move from an automatic payment system, which is what we have for these youngsters, to one based on their income needs will pay them effectively the same amount depending on the position of their disability, will cover 90 per cent of the same people and will leave out the last 10 per cent who have their own means of one kind or another. That is the solution that works best in terms of the European legislation.

[Lord McKenzie of Luton]

Before the Minister sits down, is the ruling in question a concern only in relation to the youth condition that we are discussing today, or does it have a wider implication? If the latter, how are the Government proposing to address that?

[Lord Freud]

My Lords, I am being dragged a long way away from my brief. This is a widespread concern that runs to benefit tourism. We are currently challenging the Commission in the Court on one of its findings and trying to build a constituency with other European countries that are also enormously concerned at the implications of this. As I say, though, the principles are that these automatic payments leave us far more vulnerable than income support in this area.

I know that noble Lords are listening very hard to this, because it is an important concern that we all have. I hope that I have been as clear as I possibly could have been on this issue. It is a moving target and changing all the time. It is not settled at all, so I cannot lay it out absolutely—I can talk only about the risks involved.

[Lord McKenzie of Luton]

I think that we all understand that, but the Minister is praying this EU ruling in aid of his desire to stop the youth condition continuing in future. He has already said that that ruling has much wider implications, and that there will be a wider need to look at how it can be fully addressed. In those circumstances, is it not unfair of him simply to target this particular benefit and say, “This can be dealt with by stopping it”, rather than addressing a wider solution in due course?

[Lord Freud]

My Lords, not really. This is a prime area in which we have automaticity without any payment system. This is one of the areas where we are very vulnerable so it makes enormous sense to look at it now and as it comes up. Therefore, I would not agree with that point. Shall I rattle along?

Amendment 46 would create considerable and unwanted uncertainty for claimants and operational difficulties for the department. A claimant would need to claim ESA and go through the assessment phase without any entitlement to ESA at all until the question of limited capability for work-related activity was determined at their WCA. This is because, under Amendment 46, only claimants who were found to have limited capability for work-related activity at the end of the assessment phase would be entitled to ESA on the grounds of youth. As I have already said, the amendment would save rather less—£17 million until 2016-17. The discrepancy is in the SAR, which is covered by a very similar amendment, to pick up the point of the noble Baroness, Lady Lister.

I confirm that the Government see Amendment 46 as linked to Amendment 36A, but none of the amendments in this group is consequential on any other. We would expect the House to make a decision on each individually. In due course I will move the amendment in my name, Amendment 45A, and I urge noble Lords not to press theirs.

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[Lord May of Oxford]

My Lords, I suspect that others might share my feeling that in some of the last exchanges the discussion has taken on a curious additional aspect. The exchange about whether whatever we do will ultimately be nullified by the Parliament Act speaks to me not as an argument for doing one thing or another but in support of the distinctive character of this Chamber. Particularly from the Cross Benches, the Chamber brings to debates that in the lower House would be basically political in nature a degree of expertise and knowledge of the impact on the ground of the things that we do. That is often missing, particularly in the upper chambers of parliaments in other countries with which I am familiar. I shall mention the acquaintance with uncomfortable facts, and again we have here an echo of what we heard a moment ago.

I have every sympathy for the Minister, who has quite properly to tackle questions of fiscal responsibility. At the same time, powerful points are being made about individuals and how this is going to play out in the system by people who really know it. That is something distinctive which we add to the debate, and I hope that it is taken into account when things go back to the Commons.

[Lord McKenzie of Luton]

My Lords, we support each of the amendments tabled in the name of the noble Lord, Lord Patel. As we have heard, the first would amend the Bill’s 365-day limit on the contributory employment and support allowance and proposes to replace that with an order-making power for setting a limit, but with the proviso that it should be not less than two years. The proposal that any limit should be set by order opens up the opportunity, sadly missed in the Government’s formulation, for any time limit to be evidence based. The 365-day limit currently in the Bill is supported by scant evidence, apart from some references to “international practice”, which did not bear scrutiny in Committee.