Welfare Reform Bill

Anne Begg Excerpts

Wednesday 1st February 2012 Commons Chamber

[Chris Grayling]

My hon. Friend is absolutely right that we have to have a system that is fair both to the taxpayer who pays for it and to the recipients. As a result of these reforms, we will have a system that is fairer to those receiving support and also fairer to those who are paying for that support.

Support to find work, for those people who will be affected, will be available for all ESA claimants from the outset of their claim, through Jobcentre Plus on a voluntary basis until the outcome of the work capability assessment and, following the WCA, for those claimants placed in the work-related activity group, through Jobcentre Plus or through the Work programme. Every single person who is on ESA, including those on a contributory basis, has access to the Work programme.

Some have said that the limit is arbitrary. I do not accept that. As the Minister with responsibility for welfare reform explained in the other place, it is similar to that applied by several countries around the world, including France, Ireland and Spain, and strikes an appropriate balance between the needs of sick and disabled people claiming benefit and those who have to contribute towards the cost.

[Dame Anne Begg (Aberdeen South) (Lab)]

Can the Minister clarify, for the avoidance of doubt, that someone who has been in the work-related activity group on contributory ESA for two years who subsequently gets reassessed as belonging to the support group will have their ESA reinstated even though they do not have the national insurance contributions that would allow that to happen?

[Chris Grayling]

I can indeed confirm that that is the case. We have listened very carefully on this issue, and it was a point well made by my hon. Friend the Member for Cardiff Central (Jenny Willott) in Committee. We have listened and we have taken appropriate action. It is important that we look at such details to ensure that we get them right, but that does not detract from the overall principle of what we are trying to achieve.

I believe that a time limit of one year is the correct approach. It applies the right balance between restricting access to contributory benefits and allowing those with longer term illnesses to adjust to their health condition and surrounding circumstances. There is also a very strong financial argument. If accepted, this amendment would reduce the total savings in the spending review period by around a third by 2016-17, which is £1.6 billion. Given the current fiscal climate, we cannot afford to forgo these savings and this is one of a number of very difficult decisions the Government have had to make because, as the shadow Secretary of State pointed out at the time, there was no money left.

Lords amendment 18 would mean that no time limit would be applied to contributory ESA for those claimants receiving treatment for cancer if they have or are treated as having limited capability for work, or they have or are treated as having limited capability for work as a consequence of a cancer diagnosis. The whole point of our approach on these matters is that we have always looked at the effects of a condition on an individual, rather than at the condition itself. We can all think of other cases which could equally be regarded as special cases. We are trying to be sensitive to the very real concerns of individuals suffering from cancer, and since we took office we have made significant changes to improve the protection and support that we provide to them.

Most individuals with cancer are placed in the support group at the outset of their treatment. We have increased the scope of the support group for cancer patients. We have been working closely with Macmillan Cancer Relief to improve how the WCA assesses individuals being treated for cancer. We are now consulting on our proposals, following work by Macmillan and Professor Harrington, our independent assessor of the work capability assessment.

We are clear that our proposals, which are now out to consultation, include a presumption that someone with cancer will be in the support group. What we simply do not accept is that in all circumstances, regardless of the impact of cancer on an individual’s ability to work or otherwise, they should be guaranteed a position in the support group. We have not taken that approach with any other condition and we do not believe that we should take it with cancer.

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[Chris Grayling]

No, I have already given way to the hon. Gentleman.

If amendment 18 were accepted, it is estimated that it would cost around £90 million cumulatively by 2016-17 based on a two-year time limit, or around £140 million cumulatively based on a one-year time limit. That would be a significant additional cost for the taxpayer, and would fly in the face of a principle that we have tried to bring to this whole process, which is that we do not bracket any condition into one absolute position. We look at each individual case to understand the impact of the condition on the ability to work.

The third area of focus this afternoon is our proposed changes to the condition relating to entitlement to ESA on grounds of limited capability during youth. These changes are part of our principled approach to reform. We want to modernise and simplify the current welfare system, focus support, avoid duplication of provision and redefine the contract between the state and individuals, in advance of the introduction of universal credit. It cannot be right that, for example, where a claimant has qualified for contributory ESA under the youth provisions and some years later they receive a substantial inheritance, they should be able to continue to receive unlimited contributory ESA without the need to have paid any contributions and without any condition from the state.

These proposals will not affect those in receipt of income-related ESA. We expect that around 90% of those who presently receive ESA on youth grounds will be eligible for income-related ESA. It will be a simple transition from their point of view. Only some 10% will not qualify because they have other means available to them—and I emphasise that that means a partner in full-time work or capital of more than £16,000. We are merely targeting the support the Government can provide to where it is needed most. I do not think it is right that someone with independent income or capital should be able to access state support on a long-term, ongoing and unconditional basis.

[Dame Anne Begg]

Can the Minister clarify absolutely that a 20-year-old who will never work and who lives at home with their parents will be able to get income-related ESA? Obviously it cannot be contributory as they have made no national insurance contributions. Even if they live in a household above income support levels, will they continue to get income-related ESA in their own right?

[Chris Grayling]

I cannot give an undertaking in all circumstances, because every circumstance will be different. But 90% of those who presently receive ESA on youth grounds will be eligible for income-related ESA. It will depend on the circumstances of each individual case.

We have already mentioned the fact that the Government amendments allow claimants to re-qualify for a further award of contributory ESA after their ESA has ceased as a result of time limiting, and they are later placed in the support group because of a deterioration in their health. That applies equally to ESA youth claimants.

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[Stephen Timms]

The hon. Gentleman is absolutely right—indeed, I am just going on to make that very point. It is not just cancer patients who will be affected; there are many other people in exactly the same position. That is why we have argued for a two-year limit instead of a one-year limit, because with a two-year limit there is a chance for people to get back into work. The National Aids Trust makes the point:

“Many people living with HIV who are found eligible will face significant barriers to work that cannot be overcome within 12 months.”

[Dame Anne Begg]

The other group of people who will be affected by the time-limiting are those who have slowly progressive degenerative conditions. Initially on diagnosis, they may not be able to work—or they may have fallen out of work—but their conditions will not be severe enough for them to be placed in the support group, and they could spend up to 10 years without any kind of independent income-replacement benefit.

[Stephen Timms]

My hon. Friend is absolutely right. A woman with Parkinson’s disease also makes exactly that point:

“There’s no guarantee that I’ll find a job in 12 months. It could take me much longer. I’ve worked all my life and paid for decades into the system on the understanding that there will be support if I need it. To be told that all this support could have a… time limit is…unfair and stressful.”

The charity Sense points out that for some people in the work-related activity group, once their health has stabilised, they will need to retrain to get back into work. It will be impossible for them to do that within the 12-month period that is being proposed.

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[Stephen Timms]

Those figures were quoted extensively in our debate. Our view is simply this: we should not be taking large sums of money from people who are recovering from cancer or from a stroke, and who have been told throughout their lives that if they paid into the national insurance system, they would be able to get help when they needed it. That pledge needs to be honoured, even by this Government.

Let me turn to Lords amendment 15 and the question of the youth passport. It is astonishing that the spiteful policy towards disabled young people remained in the Bill for so long. It is even more astonishing to see the Minister now trying to ram it back in today, after the other place took it out. The current principle is that people who have been disabled since birth or childhood should be passported on to a contributory benefit. In Committee, the Minister described the principle as an “oddity”, but it has been well established since the 1970s and backed by Tory Ministers throughout the 1980s and 1990s. Only now are this Government trying to scrap it. It provides an independent income for severely disabled people whose disability started before they had a chance to work. The Minister wants to deny them that. The principle that young people who are disabled from birth ought to be able to rely on a secure independent income might seem odd to him; to most people, it is simply right.

The Government’s impact assessment justifies this change, disgracefully, on the basis of simplifying the system.

[Dame Anne Begg]

The change will affect not only those who have had a disability since birth or childhood. A young person who has worked for only six months before having a major accident could also lose out and never have the chance to have an independent income-replacement benefit at any time in their life.

[Stephen Timms]

My hon. Friend is absolutely right.

The impact assessment states that the provision

“puts those previously eligible for ESA ‘youth’ on an equal footing with others who have to satisfy the relevant National Insurance conditions before they qualify for contributory ESA, which will create a simpler system”.

It will not put them on an equal footing. They have been unable to work since before they had a chance to work, or at least to build up two years of contributions, as my hon. Friend points out. They have had no chance to build up their contributions, and they are therefore at a disadvantage, compared with everybody else. Attempting to justify the proposal—in frankly Orwellian terms—as a simplification really takes the biscuit. We are talking about a small group—15,000 people—who have never had a chance to build up a contribution record. It is right that they should be treated differently. A little complexity is necessary for fairness.

It is worth looking at how much money the Government will save by overturning this amendment. It involves a fair amount of contributory ESA —Ministers in the other place said £70 million. However, many of those young people—the Minister said it would be 90%—will be entitled to income-related benefit if they lose their contributory benefit. Furthermore, the amendment from the other place is very narrow. It applies only to the support group—that is, those who the Government accept should be protected from ESA time-limiting. The net annual saving from this spiteful cut will be about a quarter of the amount that the state-owned Royal Bank of Scotland will hand out in executive bonuses this year. It will be less than £10 million a year.

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[Dame Anne Begg]

What has just been illustrated is the assumption that people are out of work in order to get benefit. We know—well, we hope, unless the Government are proposing to change the new personal independence payment—that there will be no capital rules, so someone with a million pound inheritance will, if they qualify and meet the criteria, continue to get benefit. That has always been in our system.

[Stephen Timms]

My hon. Friend is absolutely right. The number of people who have a million pounds can be counted on the fingers of one hand.

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[Paul Maynard]

I thank the Minister for that helpful clarification.

Secondly, I want to reflect on the comments pre-empted by what was said by the hon. Member for Makerfield (Yvonne Fovargue) and perhaps go beyond the implementation of this system to look at the wider impact on the ability of individuals to form independent relationships.

As the right hon. Member for Birkenhead (Mr Field) has recognised, we are talking largely about the impact on human behaviour. I am concerned—it is possibly a mistaken fear—that if people were to enter into a relationship and cease to be an independent household, they might become dependent on their partner’s income. That could be a deterrent to forming a meaningful relationship. I may be a simple Member of Parliament who fails to understand this complex issue, but the all-party parliamentary group for young disabled people, which I chair, has asked me expressly to raise this issue, which is at the heart of its concerns about this amendment. I would welcome some clarification of how the Government think people will behave in real life as opposed to in the benefit system.

I shall not detain the House any longer. The Government have my full support on these amendments, but I would like more clarity about how they view their implementation.

[Dame Anne Begg]

Let me say from the outset that I support the Lords amendments and do not agree with the Government’s motion to disagree. I shall talk about two main aspects: one is the time limitation and the second is the can of worms that I have managed to open this afternoon about the youth rate.

The time limit is unfair to people who have worked all their lives, done the right thing and thought that part of their payment of national insurance would provide them with some kind of insurance scheme so that if an unfortunate accident or ill health befell them, they would qualify for an income replacement benefit—in this case, employment support allowance—regardless of their actual income. People believed that it would work like any other insurance policy and would pay out if the unfortunate happened. The Government are breaking that link between the concept of an insurance policy and how much and for how long it will pay.

People suffering from cancer are often used as an example of a group that will fall into the work-related activity category of ESA: cancer patients will often not be well enough to go back to work within the year. Other groups of people have fluctuating conditions and some have slowly progressive neurological conditions. From everything the Minister said today, the assumption seems to be that people in the work-related activity group will move towards work, but some will be on the opposite journey, moving further and further away from work as their condition deteriorates.

Because we assess people not on their condition but on how their condition affects them when they go through the assessment, someone with multiple sclerosis or in the early stages of Huntington’s disease might not qualify for the ESA group, might end up in the WRA group and might qualify only some time in the future. They are likely to be a group that has already been in work and will have fallen out of work precisely because they have been diagnosed with these conditions. Although many of us—and probably those people, too—want to be in work, we live in the real world where employers will often not take the risk of employing someone with that type of condition, especially if the person has already lost one job precisely because of it.

I think the time limit is arbitrary and unfair, and I wish the Government would look at it again. The two-year provision is arbitrary as well—[Interruption.] In fact, I do not agree with time-limited provisions at all, but this is the best we have; it is twice as good as the Government’s proposal. [Interruption.] I am sorry that some Conservative Members at the back of the Chamber find this so funny. The people with Parkinson’s disease and MS do not find it funny. It is their lives that are being undermined, and it is they who will not have an independent income. It is my constituents—and, indeed, those of Government Members sitting at the back of the Chamber—who, because they have saved all their lives, will not qualify for income-related ESA and will suffer as a result. They will lose their independent incomes, and their household incomes, although they may have been cataclysmically affected, may still be too high for them to qualify for income support. Despite what those Government Members sitting at the back may think, income support levels are very low, and the actual level of income on which such households will have to live will therefore not be what they may have expected.

[Mark Durkan]

My hon. Friend may recall that, in an intervention on the Minister, the hon. Member for Shipley (Philip Davies) pledged his support to the Government on the basis that, in rejecting the Lords amendments, they were removing from the system people who had been abusing it as a “lifestyle choice”. The people we are discussing are people who are suffering from life-impacting conditions such as cancer, Parkinson’s and AIDS, or young people who have had disabilities since their birth or childhood. Where does the issue of lifestyle choices come in for those people?

[Dame Anne Begg]

I could not agree more with my hon. Friend. It is not a lifestyle choice to be diagnosed with a progressive, debilitating condition. It is hard. It is difficult. Individuals in that position face enough prejudice in society already, probably from the employers who told them that they could no longer do their jobs. That is why they need to apply for and claim benefit: because they have already faced that prejudice, which the Government may be making even worse. It is hard for those people, and we are making it harder.

[Sammy Wilson]

To a certain extent I agree with what the hon. Member for Shipley (Philip Davies) said about lifestyle choices, but surely, in this instance, people who have decided to save, make provision and do the right thing are being penalised for making a lifestyle choice. It is the kind of lifestyle choice of which I imagine the hon. Gentleman would approve, but the measures that we are discussing will punish people for making what he and many other Members would presumably describe as a good lifestyle choice.

[Dame Anne Begg]

Indeed. As I said earlier, the people who will be punished most are those who have done the right thing. They are the ones who have been in work, the ones who have saved, and the ones who have partners who have been in work and remain in work. It would be much easier for their partners to drop out of work as well, because they and their partners would then, as a household, qualify for the benefit. That would probably be the wrong thing to do from the point of view of the family, but given such a benefits system—I was going to say “a benefits system that would make them better off”, but it might not do that—it will become a logical choice for a working partner in those circumstances to give up work. Although it would probably be wrong, it would be logical.

[Gordon Henderson (Sittingbourne and Sheppey) (Con)]

Does the hon. Lady accept the principle of means-testing? That is my first question. If so, what level would she set?

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[Dame Anne Begg]

I do accept the principle of means-testing, but I am not sure why that is relevant.

[Gordon Henderson]

rose—

[Dame Anne Begg]

Will the hon. Gentleman sit down while I answer his question? The whole point of contributory ESA is that it is based on national insurance contributions. These are people who may have worked for 30 or 40 years, paying into what they thought was an insurance scheme. Does the hon. Gentleman, if he has insurance, expect the insurers not to pay out at the point at which the money is due to be paid?

[Gordon Henderson]

I thank the hon. Lady for giving way to me again. I have been made redundant twice in my life, and on both occasions, because I had capital, I was not entitled to any employment relief. I was given no benefits at all, because I had about £20,000 in the bank, and although I had been paying into the system since I was 16, I had to accept that.

[Hon. Members]

What was your illness?

[Dame Anne Begg]

I think—[Interruption.]

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. The hon. Member for Sittingbourne and Sheppey (Gordon Henderson) has asked a question, Dame Anne Begg wants to answer it, and I am sure that other hon. Members would love to hear the answer as well. They may wish to intervene later.

[Dame Anne Begg]

Thank you, Mr Deputy Speaker.

I think that the hon. Gentleman’s intervention illustrates some of the confusion that exists. Some Members seem to believe that losing a job because of ill health is exactly the same as losing a job by being made redundant, but it is not. As was pointed out by my right hon. Friend the Member for East Ham (Stephen Timms), the chance of obtaining another job is far, far higher for someone who has been made redundant than for someone who has lost his job because he has received a diagnosis of multiple sclerosis, or because he has had a major road accident which means that he is now dependent on a wheelchair to survive. Those conditions are different, and they should therefore be treated differently in the national insurance and, indeed, the benefits system.

[Mel Stride (Central Devon) (Con)]

Does the hon. Lady accept that any responsible policy must be fully costed? If so, will she answer the question that the shadow Minister failed to answer, and tell us how much it would cost for the one-year period to be increased to two years, as the amendment proposes?

[Dame Anne Begg]

At present, those on incapacity benefit—the existing benefit, which the Government are to replace—who have made the necessary national insurance contributions will keep that benefit until they return to work. Is the hon. Gentleman saying the costing should be done on any other basis? Obviously, the reason the Government are introducing the time limit is to save money: there can be no other reason, as the hon. Gentleman has effectively admitted. This is the result of a money-saving decision by the Government. It is not about being fair; it is about saving money to deal with the debt and the deficit, which were not caused by the people—and their partners, wives and husbands—who have tried throughout their lives to do the right thing.

I am conscious of the time, but I now want to say something about the youth rate. When I intervened on the Minister, I was genuinely trying to obtain some clarification, but I have ended up even more confused than before about how the youth rate will work and which groups of young people will no longer receive an independent—that word is important—income replacement benefit. They may receive non-means-tested benefits and, for instance, disability living allowance or the new personal independence payment, but they will not have any income.

Let me give an example of someone I think will be caught by that, someone who came to my constituency office a number of years ago. He was a young lad of 20 who had been in work for six months when he was diagnosed with a virulent condition. I cannot remember what it was, but it meant that he would be unlikely to work again, and indeed his condition was going to deteriorate. This young man lived with his girlfriend, who earned about £15,000 or £16,000 a year, just over the income support level. Under the measures proposed by the Government, he would not qualify for any income at all. He would be wholly dependent on his girlfriend, and the household income would consist only of her income. That does not strike me as right, and it does not strike me as fair. I should be grateful if, before we vote on the amendment, the Minister would tell us exactly which group of people will lose out as a result of the abolition of the contributory youth rate.

[Jenny Willott (Cardiff Central) (LD)]

Does the hon. Lady accept that that young man would probably qualify for disability living allowance? He would therefore have some income, even if he did not receive means-tested ESA.

[Dame Anne Begg]

The household might possibly get housing benefit, but that goes on paying the rent. The young man might get disability living allowance, but that is paid because he has extra expenses due to his disability. What he does not have is an income. He has no money to go to the pub for a pint, to buy clothes, or to do anything that the rest of us, disabled or not, take for granted. He has no independent income. It is totally different if someone is out of work and unemployed. I am disappointed that those on the Government Benches cannot see that distinction, and cannot see that those who are long-term ill or disabled, and who have no prospect of improving their financial circumstances themselves because of the level of their disability, are being penalised by the Government. That is partly why I most certainly will support the Lords amendments this afternoon, and I encourage right hon. and hon. Members to do so, too.

[Jenny Willott]

Returning to the issue of the time-limited employment and support allowance, there is real concern about an arbitrary time limit. As was kindly pointed out by the right hon. Member for East Ham (Stephen Timms), at a party conference the Liberal Democrats showed their concern by passing a motion against arbitrary time limits. However, the amendment from the Lords and the Government’s original proposal both set arbitrary time limits; it is just that one is longer than the other. Neither of the options in front of us would get rid of an arbitrary time limit, as a number of Members have highlighted.

One way to make the system less arbitrary is to ensure that people are in the right category in the first place, with those in the greatest need in the support group, so that they are not affected by a time limit. My colleagues and I have looked long and hard at the issue, and the important thing is to get the assessment right in the first place and make sure that people are in the right category, as those in the support group are exempt from the time limit. We need to make sure that people who need long-term, indefinite support are in the support group and can get that. That is a more effective way to protect those who need the most help than changing one arbitrary time limit for another.

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[Mr Nuttall]

I do not agree. We have to ask why people save. They save for a rainy day. They save in case they lose their job or have an illness. The changes will still mean that the most needy in our society will be looked after. There will still be a safety net that will help those who most need help in our society.

[Dame Anne Begg]

Will the hon. Gentleman be advising his constituents to take out private insurance to protect against unemployment or ill health? After all, he is supporting the limiting of the state’s role in that respect.

[Mr Nuttall]

Some constituents might choose to do that, but that is a matter for them. I am not going to recommend whether that is the right or wrong thing to do because it is a decision they have to take for themselves. It is about personal responsibility. Hon. Members should be in no doubt that at a time when the welfare bill is spiralling out of control and this country has run out of money—we are essentially bankrupt; we are having to borrow money every single day to pay our way—it is essential that we bring the welfare benefits bill under control. It is only by taking tough decisions that that will ever be done.