State Pension Reform

Anne Begg Excerpts

Monday 14th January 2013 Commons Chamber

[Steve Webb]

My hon. Friend is right. In every interview I have done today, we have had to spend about 20 minutes explaining how the current system works before we deal with the change. I welcome the fact that consumer organisations such as Age UK, although it has questions about the details, has warmly welcomed the principles of our reform.

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

I thank the Minister for his statement and for listening to the most recent report on pensions by the Work and Pensions Committee. When we looked at auto-enrolment, we said that a flat-rate state pension was important. On behalf of the Committee, I accept his invitation to conduct pre-legislative scrutiny.

The final outcome of the pension reform will, we hope, be a simple and easy-to-understand state pension, but already, from this afternoon’s exchange, it sounds as though getting there will be incredibly complicated. Will the Minister give us an idea of how long the transitional arrangements will be in place? I suspect that the Committee will spend a great deal of time analysing those arrangements to ensure that they are fair.

[Steve Webb]

I am grateful to the hon. Lady both for her Committee’s report calling for the state pension to be sorted out and for her willingness to undertake the scrutiny. We will work closely with, and support, her Committee in doing that. She is absolutely right: transition is the messy bit. With pension reform, it would be lovely to start with no history and a blank sheet of paper, but we cannot do that. The straight answer to her question, however, is that transition is particularly important for those closest to pension age, who will have a complex history and rights built up. For younger workers, it is straightforward: they will do the 35 years and get the £144. Transition is complicated and messy in the early years, but it quickly works its way through the system, and we have worked hard on the statements we will send to people. They will be clear and say, as it were, “Under the bonnet, the workings might be complicated, but you’ve got this so far. Do this many years, and you’ll get £144.”

Welfare Benefits Up-rating Bill

Anne Begg Excerpts

Tuesday 8th January 2013 Commons Chamber

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

I have sat through a lot of annual debates on benefits uprating, but I have never seen a turnout quite like this. Very often the number of hon. Members in the Chamber is less than double figures. I hope today’s turnout reflects the importance of the debate. The votes tonight will have a profound effect on many of the most vulnerable and poorest people in our society, whether they are in or out of work. Based on the decisions we take tonight, for some families it will not be a case of whether to eat or heat. Towards the end of the two weeks or the month when universal credit is introduced, some families might have a few days when the children get neither food nor heating, unless food banks, which are increasing, come to the rescue. We should not wish that on our society in the 21st century.

[Mrs Moon]

An additional problem is that low-income families—some working, some not—will be faced with a decision when their housing benefit is paid directly to them of whether to pay their landlord or feed their children. Does my hon. Friend accept that we are facing a potential explosion in homelessness?

[Dame Anne Begg]

I thank my hon. Friend, because she sets up my point on how the proposals undermine the Government’s flagship policy of introducing universal credit. Universal credit will create problems—she alludes to the fact that it will be paid monthly, and that housing benefit will be paid directly to individuals, who must make the decisions she describes.

One big claim for universal credit is that it will make work pay in all circumstances, but Government Members somehow cannot understand that making work pay means increasing benefits, because the majority of people who receive the benefits that will be affected by the Bill are in work. The group who are out of work and the group in work are often the same people, as my hon. Friend the Member for Westminster North (Ms Buck) has said—they move in and out of work.

The principle of universal credit is to smooth the move into work. The Government are freezing the benefits that make up universal credit statutorily for the next three years. I do not know why we are not having the normal uprating debate. There is no reason why the measure must be in the form of legislation, which makes me suspect that it is a political decision. The freezing of those benefits will tie the Government’s hands on the introduction of universal credit and could undermine it.

In spite of everything that has been said today, tax credits were a huge success. They increased the income of workers on low wages and made work pay. For the first time in at least two generations, the poverty trap was ended—I thought that it had gone for ever. There was a genuine poverty trap created by the previous Conservative Government and to all intents and purposes tax credits got rid of that. Almost everybody was better off as a result of tax credits unless they lived in a high accommodation cost area such as London or they had a large number of children. Work paid. The incentives did not always work because work did not pay enough. Through the Bill, the Government are repeating the same mistake—the incentives to move into work under universal credit will not be high enough to make work pay in all circumstances.

[Bill Esterson]

My hon. Friend is making an excellent point about the impact of universal credit. I am sure she is aware that the DWP itself says that 1.8 million main earners will be worse off if they take extra hours under universal credit than they are under the current arrangement. The figure for second earners is 300,000.

[Dame Anne Begg]

Indeed, and Barnardo’s has just published a report which says that families that depend on child care to allow the adults to work will be worse off if they increase their hours. The claims that are being made for universal credit—that it will do away with the cliff edges, smooth the transitions and make work pay in all circumstances—are false. The Bill will make that more likely to happen, not less likely.

Welfare benefits have already been attacked and reduced. We have heard today about housing benefit. Still to come are the changes to council tax benefit, and tax credits have been frozen for the last two years. We now know that universal credit will be set at a level comparable to the benefits that it will replace—income-related job seeker’s allowance, income-related employment support allowance and housing benefit, as well as tax credits. If those benefits have not increased with inflation, by the time universal credit comes in it will be set at a much lower level as a result of the decisions taken today. That will mean less support through universal credit for those moving into work. Unless the Government intend to change the tapers and the disregards—and I have heard nothing to suggest that—the difference between being in work and out of work will not be very great, and on many occasions people could be made worse off by increasing their hours or taking work in the first place.

I have always suspected that when the Government said that no existing claimants would lose in cash terms from the introduction of universal credit, it was their intention to reduce what people were receiving before the move to universal credit. This Bill confirms that that is exactly what they intend. They seem to have missed the essential point—to make work pay, the Government need to increase in-work support, not decrease it as this Bill will do. So when universal credit is introduced and fails to be the magic bullet that the Government have claimed—when it does not do all that has been claimed—they cannot say that they were not warned. That is why I will not support the Bill and will vote for the amendment.

Personal Independence Payments

Anne Begg Excerpts

Thursday 13th December 2012 Commons Chamber

[Esther McVey]

I thank my hon. Friend, who quite rightly states that PIP is intended to look at fluctuating conditions, take all the impacts into assessment and deliver for those people.

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

I welcome the Government’s decision to delay the implementation of PIP and hope that they will continue to keep the timetable under review, because I suspect that it might not be as easy as the Minister implies it will be today. I advise her that she worries disabled people very much when she talks about the increase in the costs of DLA. Any increase in DLA, unlike for out-of-work benefits, is not necessarily a bad thing, because if more people are getting more DLA, more people are living independent lives and engaging in society in a way that they were not doing previously. Of course, any money spent on DLA or PIP is often money saved in other budgets, whether in the NHS or in social care. I ask the Minister to be very careful about the language she uses, because many disabled people are very worried about the implementation of PIP and what it will mean for their lives. Any words about saving money makes them think that they will be the victims of some kind of economic drive by the Government to ensure that they are saving on the budget for the very vulnerable. That money is spent very wisely on giving them an independent life.

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. Just before the Minister answers, I remind Members that we must have much shorter questions, because I want to get everybody in.

Remploy

Anne Begg Excerpts

Monday 10th December 2012 Commons Chamber

[Esther McVey]

I totally agree with my hon. Friend and we are working tirelessly every day. We are getting updates every day on how we are getting the ex-Remploy staff into work. As I mentioned earlier, when I first came to the House 35 people had a job. Within three months, by beefing up the personal support work, we have more than quadrupled the number who get into work. We are doing a positive job and we will continue to do so.

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

May I just clarify what the Minister said about the situation in Aberdeen? A group of workers have set up a public interest company, but they have had to move out of the Remploy factory because it is now closed. The group of workers who have managed to get themselves together and continue to produce textiles have managed that despite Remploy, not because of it.

Will the Minister tell us what the Government’s position is on sheltered workshops and sheltered placements for disabled workers? Are they in favour of them or not?

[Esther McVey]

What we are in favour of is getting as many disabled people as possible—there are 6.9 million disabled people of working age—into mainstream work. If anything will help with that journey for those people, we will be in favour of it.

Oral Answers to Questions

Anne Begg Excerpts

Monday 10th December 2012 Commons Chamber

[Mr Duncan Smith]

That is absolutely true. We were left with a series of benefits that too often were riddled with fraud and error. Not all of this is about fraud. Many people are receiving overpayments or underpayments when they should be receiving the correct amount. Too often with tax credits, people are chased at the end of the year, without their realising that they had received the wrong money in the first place. Universal credit will be kinder in the sense that it will be adjusted each month. It will help us save huge sums—some studies state £2.2 billion per year.

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

The Government’s decision to go digital by default—in other words, people will be able to receive universal credit only if they apply online—surely creates a greater chance of fraudulent activity. We all remember what happened with the online form for child tax credits. What guarantees do the Government have that universal credit will not be susceptible to online fraud and that the necessary checks will not take such a long time that they will delay payment? All of a family’s income will come through universal credit.

[Mr Duncan Smith]

We have taken account of that. I have had the opportunity to discuss this with the hon. Lady, and I am sure I will again. The reality is that digital by default does not mean that that is the end of it for people who are not online. On the contrary, we allow for those who are not online. We will help and support them as they make their claim, and it will be taken through the system. They will receive their money on time. For those in doubt, we will make payments anyway. We fully recognise the reality of the need for money and for it be sorted out afterwards—that has been taken into account.

Oral Answers to Questions

Anne Begg Excerpts

Monday 5th November 2012 Commons Chamber

[Mr Hoban]

My hon. Friend makes a useful point. Professor Harrington highlighted in his second review the issue of fluctuating conditions. We are working on an evidence base to look at descriptors for fluctuating conditions, to make sure that they are taken properly into account in the work capability assessment.

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

When the Government started to move people from incapacity benefit to employment support allowance, provision was made for those who were particularly or very disabled so that they would not have to go through the work capability assessment and would go straight into the support group. However, a number of my constituents have been moved from incapacity benefit and on to the work-related activity group of ESA without first going through a work capability assessment. How widespread is this, how many people is it happening to, and why is it happening?

[Mr Hoban]

I would be grateful if the hon. Lady supplied me with the evidence she mentions. There are clearly situations in which people go straight into the support group without undergoing a work capability assessment. It depends on the information supplied when they originally make the application.

Working-Age Disabled People

Anne Begg Excerpts

Thursday 25th October 2012 Westminster Hall

[Mr David Amess (in the Chair)]

A number of colleagues want to speak. I understand the time pressures and the arrangements, and I will accommodate everyone. I hope that we can work together so that everyone is satisfied in terms of their commitments. I call Anne Begg.

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

I am glad to hear you say that you hope to accommodate everybody, Mr Amess. Rather a lot of people have turned up, I am glad to see.

As Chair of the Select Committee on Work and Pensions, I shall speak to our report published in February. Although the title is “Government support towards the additional living cost of working-age disabled people”, most people know the issue as the switch from DLA to PIP, but we thought that that might be confusing, which is why we used the long title.

I begin with a declaration: since 1977, I have been a recipient of, first, the mobility allowance and then the mobility element of disability living allowance. Therefore, any changes to DLA will directly affect me in terms of the benefit for which I qualify. Some people might think it a handicap that I have to make such a declaration, but I hope that having been the recipient of the benefit in question gives me not a unique perspective, because everybody else who receives the benefit will feel the same, but an unusual perception and understanding, in parliamentary terms, of how important the benefit has been.

When I first qualified for the original mobility allowance, I was an impoverished student finding it difficult to get around. I certainly could not afford to own a car and did not come from the kind of family who could afford one, although I had been able to drive since the age of 17. The mobility allowance and then access to a Motability car revolutionised my life as a young teacher on a not particularly high wage. It made my life so much easier, and I have always paid great tribute to the late, lamented Lord Alf Morris, whose idea Motability was. He will be sadly missed for all the work he did in that area.

Returning to the report, the Select Committee’s first finding was that there is considerable scope for reform of DLA. Much of the evidence that we got, even from people who might be critical of the new scheme, admitted that many things about DLA perhaps needed to change. The claim form was long and complex, the criteria were not straightforward and there was no proper or rigorous system for reviewing awards where necessary. Having accepted the need for reform, many of the people from whom we took evidence went on to say that that could have been done by reforming DLA, and not necessarily by introducing a completely new benefit, although the Government said that the new benefit could represent an opportunity to address the problems of DLA while improving support for disabled people. In their response to our report, they said:

“These reforms present an ideal opportunity to start afresh, keeping the best elements of DLA… but bringing the benefit up-to-date in order to better reflect 21st century society.”

However—this is a big “however”—the Committee felt strongly that part of the problem was that the backdrop to the introduction of the reforms got them off to a poor start. The first knowledge that anyone had of an intention to reform, and indeed replace, DLA came not from the Department for Work and Pensions, but from a Budget document in 2010. Page 36 of the Budget policy costings said:

“This measure will introduce an objective medical assessment and revised eligibility criteria… The assessment will follow a similar process to the Work Capability Assessment (WCA) used for claims to Employment and Support Allowance, with a points based system to assess eligibility… the central assumption for this policy is that it will result in a 20% reduction in caseload and expenditure once fully rolled out.”

That was the introduction to the change. Because it mentioned a 20% reduction, people in receipt of DLA and many of the disabled organisations that represent them immediately felt that the reason for the change was not to improve the benefit, but to save money. The mention of the WCA and the fact that the Government would follow the kind of framework used for employment and support allowance also rang a large number of alarm bells among disabled people. By the time the Government’s proposals were published, the WCA had already obtained a bad name for being mechanistic, uncaring and unfeeling, and for getting assessments wrong. Putting all those together, we find that the principle of reforming DLA was somewhat overshadowed, because those to whom it would apply were immediately suspicious about the Government’s motives. We said in our report that we thought that that was unfortunate, because it certainly did not get the reform off to a good start.

It is true that during the process the Government listened to some of the criticisms. They dropped the proposals in the original draft of the Welfare Reform Bill to end the payment of the mobility component to care home residents. They also agreed, as the Bill went through the House, to extend the personal independence payment qualifying period, and it is certainly true that the first consultation on the first draft of the eligibility criteria produced some welcome changes, particularly on, for example, people’s ability to get around and preparing a meal. Important changes were made.

However, there are still a lot of questions. I hope that the Minister will not mind, but most of what I am about to say takes the form of questions. I know that she is a new Minister and keen, but I suspect that she will not be able to answer them all today. It will be good if she answers what she can. I know that she has already agreed to appear before the Select Committee some time in November; perhaps this debate will give her a taste of what we might ask her when the time comes. In some cases, she might be in a position to write to us with explanations, and about what has changed.

Part of the problem is that we do not yet know a lot of the detail of what will happen. The framework in the Welfare Reform Act 2012 was very vague. Everything is being done through regulation, but we still have not seen the final regulations. The most recent criteria were published in November 2011. Considering that PIP will be paid to new claimants from April next year, time is getting tight, and a lot of people are concerned about exactly how it will be tested and what the impact of the reform will be.

The first issue I want to raise is the lack of an impact assessment. Although the Government introduced the original PIP proposals in December 2010, it was not until January 2012 that they estimated the claimant count reduction—at about 500,000 people by 2015-16, which would be 23% of the claimant cohort. The published criteria included a number of hypothetical case studies that showed which types of claimant would and would not qualify for the new PIP, and at which rate. Crucially though, the case studies did not state whether, and at which rate, claimants would have qualified for DLA, so, without that information, it has been impossible to do a comparison and get an idea of who would and would not get the new benefit, and which types of claimant would lose out.

According to a survey published this week by the Hardest Hit coalition, entitled “The Tipping Point”, some 94% of disabled people fear that losing their DLA would be detrimental to their health, with 65% feeling that they would be unable to work and 75% saying that losing DLA would increase their local authority care needs. Without a full impact assessment, we are unable to answer a number of questions. How many people will lose their adapted Motability cars, and how will that affect their ability to work? Many people use a DLA care component to pay for local authority services, so what will the impact be on local authorities if those people do not qualify for PIP? What assessment have the Government made of DLA’s role in preventing people’s health conditions from worsening? What could the impact be on NHS budgets?

The Government need to consider the cumulative impacts on disabled people of welfare reforms, including the reform of DLA. We also have the 12-month time limit on contributory ESA, the incapacity benefit reassessment to move people on to ESA, cuts to local authority care budgets and the lowering of disability premiums under universal credit. Some claimants might be hit by only one or two of the changes, but some might have to deal with them all as they come in over the next three years. That would be an enormous change for them.

Our report said that we were glad to hear in evidence that there had been a form of co-production of the PIP criteria and the implementation of PIP, involving organisations that represent disabled people. However, we have spoken to some of those organisations, and they said that calling the PIP policy development “co-production” is somewhat absurd. There has been some consultation, but until we get the final assessment criteria, we, and they, will not know whether the Government have listened to them and acted. The Government consulted the organisations and might have heard what they had to say, but action is a different matter.

Disability groups have not been consulted about the framing of the PIP assessment contracts or the guidance to assessors, so, although there has been limited consultation, the wider implications of how the measure will work in practice have not been subject to any kind of co-production. In one meeting, the Disability Benefits Consortium told us that the documents had been counted in and counted up, and that it had been given 15 minutes to look at them. That, again, is hardly co-production.

On the PIP assessment, the Government have said that there will be a requirement for face-to-face assessments for most claimants. That also raises a number of questions. On what basis did the Government come to that conclusion? Will the Government not be able to take account of existing evidence in most cases? That leads me to a question on a slightly different point: will there be any transfer of information already held by the Department for Work and Pensions, so that people do not have continually to remind it of such things as, “This is a glass eye, and of course I am not going to see out of it.” That is not as daft as it sounds. Sometimes, when people have gone for a WCA they have been asked what vision they have in their left eye when they have not had a left eye for decades.

The Department clearly has that kind of information—for example, details of a claimant’s need for different formats—or information that highlights the fact that a claimant is particularly vulnerable or lives in a care home or supported accommodation, which might not be clear from their address, so will it be passed to whoever is administering PIP assessments so that people are not insulted by constantly being asked questions the answers to which would be obvious to anyone who knew them.

There is another question about the face-to-face assessment. Does an arbitrary decision to require a majority of claimants to undergo such an assessment not risk subjecting large numbers of disabled people to unnecessary stress and anxiety, and wasting a considerable amount of public money? I understand that the companies that might deliver the assessments have come up with wildly different figures for the number of home visits there will be.

The other concern regarding the PIP assessment relates to the assessment of fluctuating conditions, which has also been an ongoing problem with the work capability assessment. The activity descriptors attempt to capture the effect of fluctuating conditions by considering impacts that are present on over 50% of days, and that is a welcome change to the provision.

Where two or more activity descriptors apply on fewer than 50% of days individually but reach the 50% threshold when combined, the descriptor that applies for the greatest proportion of time will apply. However, people with such conditions can experience enormous fluctuations; one person might have a condition that fluctuates in such a way that they walk well one day but need an electric wheelchair the next. The difference between their good days and bad days is so extreme that they need the adapted house and all the equipment, although the bad days account for less than 50% of the time. Can the Minister shed some light on that?

The other big concern is the contracts. Atos has won the contract for two of the three areas that cover most of Great Britain, and Capita has won the other. Some of the criticism of the work capability assessment falls unfairly on Atos, and some of it perhaps not. Atos is delivering a contract that was written by the Government, so any problem with that contract is the Government’s responsibility. There has been little public discussion about what the Atos and Capita contracts will hold, so we do not know whether the Government are likely to get those contracts right.

One of the flaws of the WCA contract is that providers get paid for every assessment, regardless of whether they get them right, and right first time. On what basis will the providers be paid? The Committee argued that they should be paid for assessments that are right first time. There might be some leeway, but given the number of wrong WCAs there should surely be a penalty in the contract so that the companies would not be paid regardless of the accuracy of the assessments.

On top of that, will there be robust sanctions for provider failure? Will the Department look at the different approaches of the two providers and compare their accuracy and assessment reports? I think that will be crucial, a number of months in, in judging how the providers compare with each other and how they are doing. I know part of the reason why the Government adopted the framework approach to the contract, rather than a single contract covering the whole country, was, hopefully, to get that information and to see which provider was the most successful.

On the PIP assessments and the new assessments for the transition from IB to ESA, we recommended that the Government be sensitive to the timing of WCAs when scheduling PIP assessments. The Government should not underestimate the cumulative impact on vulnerable people of frequent reassessments. There is ample evidence that the WCA has been damaging individuals’ health and may be a factor in some suicides. The Government’s response to the Committee’s report was vague on that matter. They said they would try to ensure, where possible, that claimants will not be called for multiple face-to-face assessments in close proximity. How will they ensure that? Will there be data sharing from the part of the DWP that deals with employment support allowance and the part of the DWP that will deal with the new PIP?

The claim process is meant to be streamlined and very fast, which is to be welcomed, but that may cause some problems because it might be too fast for some people. We know the Government are saying that PIP claims should take about a month, yet, at the moment, the average waiting time for a citizens advice bureau appointment is six to eight weeks, which may be a problem for people who need expert help.

Will four weeks be sufficient to gather medical evidence and for vulnerable claimants to get the help and advice they need? How many people are likely to drop out of the process? If the claimant has a lifetime award, might they think that the reassessment does not apply to them? If the DWP does not hear back from people, will it send reminder letters to say that there may be an issue that has not been picked up? Again, some people will get the letter and think it is a circular, not realising that it is very specific to them and their position.

If the providers’ deadline is to be 30 days to make a judgment, and the end-to-end process is likely to take about two months, will there be flexibility in the time allowed to complete the end-to-end process to ensure that all relevant medical evidence can be collected?

What responsibility will the assessment provider have to seek relevant medical evidence? That is what happens at the moment with DLA, but it looks as if it might be different with PIP. Will all the evidence have to be supplied to the claimant? More crucially—again, this has been a problem with the WCA—who will pay for that medical evidence? Doctors, consultants and other health care professionals are being inundated at the moment with requests to provide such reports. Traditionally, they do not always charge the patient, although they do charge the DWP. Who is going to pay for, in some cases, multiple medical letters, especially as there is a good chance that a large proportion of claimants have a limited income?

Another thing is the scale of the task and the implementation timetable. As I have already said, new PIP claimants will start to be assessed next April. The figures involved are mind blowing. We as a Committee concluded:

“It is…essential that DWP allows itself sufficient time to get the assessment right and to be able to convince disabled people and their representatives that this is the case.”

It is very difficult to see how that can happen under the existing timetable. How can the DWP hope to learn from the early implementation of 10,000 new claims a week from April 2013 in time to implement new claims nationally from June 2013? The Department has from April to June to see whether the thing is working for new claimants. Why is there no pause before national implementation to make that assessment and see whether there is anything that has to change? We know that with all welfare benefit changes there are always unintended consequences and difficulties that people did not expect—they start hammering our doors, as MPs, saying, “This is what has happened.”

What happens if the assessments are found to take much longer than anticipated in the planning? What if there is found to be a greater need for home visits than was envisaged? All that takes longer. What if the descriptors are simply found not to work in real-life situations? I know there has been some testing, but there seems to be no time to test the final descriptors, which we have not seen yet.

I have done a very quick calculation—I suppose it is called a back-of-a-fag-packet calculation—that we have almost 2 million DLA claimants, and the Government will have 31 months end-to-end to assess all of them. We should remember that, to begin with, they will assess only 10,000 claimants a week, but the DWP will have to reassess some 70,000 claimants a month. That, in itself, is a huge amount. The calculation is fairly rough and ready, and I am not saying that that is the figure, but it will be in that ballpark.

The DWP is already assessing people for the move from IB to ESA. At the moment, the number is meant to be some 11,000 a week, but we know the providers are finding that incredibly difficult to manage. They are finding 11,000 a week—44,000 a month—difficult to achieve, and they will have 70,000 DLA/PIP assessments and 40,000 or 50,000 IB/ESA assessments to do, so to deliver their timetable they are looking at having to assess 100,000-plus disabled people face-to-face each month.

I do not think that is going to be possible, because I do not think there are enough health care professionals in the country for Atos or Capita to get through such a work load. I would not be particularly perturbed if the timetable slipped, which might be what is needed, but the Government have set a rod for their own back by trying to get so many people through the assessments when we know, anecdotally—we do not have the final figures—that they are really struggling to deliver the much lower numbers who are being put through the work capability assessment.

We know that being online might speed up the process—as a Committee, we have some concerns about that—but the online claims system will not be available for April 2013. Is that not indicative of a rushed implementation process? The most important thing is that we need the claimants’ outcomes to be tracked. Will the outcomes be tracked as part of an evaluation strategy? What monitoring will the Government put in place to ensure that all that is working and not falling apart?

Mr Amess, you will be glad that I am about to draw my remarks to a close because I know other people want to speak. I realise I have asked a lot of questions, and other colleagues will have questions, too, so I appreciate that the Minister will not be able to answer them all, but we look forward to taking evidence from her.

I have one last question on the legislative process. When will the final regulations and the final assessment criteria be laid before Parliament? Will the criteria be published in draft before the regulations are laid? If so, when?

We think that time is running out and that the Government have, unfortunately, started off on the wrong foot on what could be a useful reform by giving a lot of wrong messages to disabled people. It is understandable why disabled people feel that the reform is not to help them but merely a cost-saving measure.

The people who will be involved in the process are the most vulnerable people in society. It will be difficult for all of them, including those who will qualify for the benefit and for whom there is no doubt that they will qualify. If the WCA and the change to ESA are anything to go by, even those genuine claimants feel very stressed at having to go through this process. It is incumbent on the Government to get the process right and make it as easy for people as possible and to listen to the criticisms and do something about them, because the people who will lose out are those who need the money they receive through the DLA, and consequently PIP, to survive and have any kind of quality of life at all. They depend on that money to participate fully in society. I am sure the Government agree that that is the absolutely correct and laudable aim of any benefit, and they have to ensure that they deliver.

[Mr David Amess (in the Chair)]

I apologise to the hon. Lady for not addressing her by her correct title, which is Dame Anne Begg. Secondly, on behalf of the House, I should have welcomed her back after her awful accident, which I learned about in The House magazine. I am sure I speak for everyone in welcoming her back.

--- Later in debate ---

[Esther McVey]

I never sought to put them in two distinct groups. I said “affordable for the taxpayer”. I am afraid that it is the hon. Lady who distinguishes between the two. I certainly did not.

The Government currently spend almost £50 billion a year on disabled people, including more than £15 billion on adult social care, £1 billion on free transport for elderly and disabled people, £13 billion on disability living allowance, £15 billion on a range of other benefits and £320 million on disability employment programmes. We are also putting an extra £15 million into Access to Work. We should be proud that we are doing all of that. We spend a fifth more than the EU average, and we are acknowledged as world leaders, which is a very good point to start this debate.

Those services enable disabled people to make their own choices and live independently, and for the services to continue to be available they must be sustainable and keep pace with the needs of disabled people today, which is considered no longer to be the case with disability living allowance. As hon. Members may be aware, from May 2002 to February 2012 the number of people claiming DLA rose by almost 34%. DLA, therefore, is financially unsustainable. We, like many others, including the Select Committee, consider DLA to be outdated and in need of fundamental change.

[Dame Anne Begg]

Those figures have been mentioned elsewhere today, and they should be put in context. The growth in the numbers claiming DLA is because people are living longer. Most of that growth comes from those over 65, because if people qualify before they are 65, they effectively keep DLA until they die. Of course, the introduction of PIP does not apply to that cohort. It is therefore wrong to say that the growth in DLA will be halted by the changes, because the large proportion of the growth is purely down to demographics.

[Esther McVey]

I checked the numbers before I came here today, and the over-65s are not the vast majority, but a third of the total. Interestingly—I think my hon. Friend the Member for Weaver Vale (Graham Evans) brought this up, although many people have touched on it—DLA is not a static benefit; it is a dynamic benefit in so far as 3.3 million people are on it and the conditions they have will change. Some might stay the same and some might get worse, but some people’s condition may get better, and we have to acknowledge that when people get better, they will move off the system. There is a natural movement within the system, and we have to consider all those incidents, which is why we believe the reform is required.

I know I am short of time, so I will address the assessment and answer as far as I can some of the specific questions that were raised. If I do not have enough time, because there were so many points, I will write to hon. Members.

--- Later in debate ---

[Dame Anne Begg]

The hon. Member for Battersea (Jane Ellison) rightly pointed out that not all disabled people who receive DLA are vulnerable, but—this is a big “but”—the most vulnerable in our society are all disabled and will all qualify for DLA. That is why the Government must get this right. That is why the Select Committee must do its job of scrutinising the Government’s proposals, which does mean ringing alarm bells and asking lots and lots of questions.

DLA has been an extremely useful benefit and has helped to transform lives. PIP must do the same, which means that the assessment must be sensitive and supportive so that disabled people have the wherewithal to continue to be all that they can be, be that a Paralympian, an MP or a person incapable of any independent movement. It is imperative that the Government get this right. If they do not, we will turn the clock back to a time when disabled people were neither seen nor heard, and we cannot let that happen.

Universal Credit and Welfare Reform

Anne Begg Excerpts

Tuesday 11th September 2012 Commons Chamber

[Mr Duncan Smith]

May I make a little progress? I think I have been reasonably generous in giving way. I promise that I will try to get the hon. Gentleman in later.

On our engagement, it is clear from what I have just said that the independent OBR has open access. We have been in regular discussions. The right hon. Member for Birmingham, Hodge Hill described it yesterday as a think-tank, but it is not a think-tank. It accredits and decides whether the Government’s calculations and projections are correct. No one has a perfect view of the future, but at least it is independent of all political positions and positioning. It is working with us at the moment. I can assure hon. Members that the process is robust and will continue until the Government announce the final rates for universal credit and the OBR includes them in its forecasts. That is what we are working to.

Elsewhere, we are continually engaging with a host of organisations. The Work and Pensions Committee’s inquiry concluded, quite legitimately, that organisations have concerns. Of course, they will be concerned and will want answers, and we are working and talking with them. We are also dealing with local government, and have shared our draft regulations with the Social Security Advisory Committee and are carefully considering its advice. We are in regular contact with local authorities. We recently visited many local authorities and are informing them about policy work and regulations.

We are consulting on the future—this was raised in one or two questions—of the passported benefits and the interaction with universal credit. That is taking place right now, and we are discussing the matter with the regular and other Departments. They have to decide what they want to do, and we must decide how and whether to incorporate that into universal credit. That process is under way. Rather than constantly saying, “We can’t do these things, it’s impossible, so we won’t try”, it is worth trying to get the system right. One problem for many people is that they have to go to so many places for so many different things, they get confused and often do not get it right, and each time they feel a bit more worn down. If we can smooth out that process and make it easier and more accessible, in due course we will improve the lot of those in the greatest difficulty.

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

Does the Secretary of State now regret responsibility for administering council tax benefit being given to local authorities? That seems to fly in the face of the whole concept of universal credit and creates the very difficulties he claims he is trying to solve.

[Mr Duncan Smith]

I am a huge admirer of the Chairman of the Select Committee, but her inducements for me to express any personal opinion must be resisted. My general view is that localisation is a good thing, and I am sure that local authorities will robustly deliver a system that works brilliantly. Collectively, we are absolutely in favour of it.

--- Later in debate ---

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

This is a timely debate although I would say that, as I chair the Select Committee that happens to be undertaking an inquiry into the implementation of universal credit. I hope that today’s debate and the findings that my Committee will eventually publish—I cannot say exactly what they will be in advance—will help to highlight important issues to the Secretary of State and his Ministers, such as the questions that still need answers, the decisions that still have to be taken and the unintended consequences. I know that witnesses have already presented us with a number of such consequences in the evidence we have taken. Some groups will be worse off under universal credit and some will lose out. [Interruption.] I hope that the Secretary of State is listening, as he is due to appear before the Select Committee on Monday; he has until then to find out all the answers.

We know that major change costs money, not just in administration and set-up costs: the Government have said that there will be cash protection so that there will be no cash losers at the point of transition from existing benefits into universal credit. Those transitional arrangements will then be frozen until the universal credit level is reached or the cash protection will be lost when there is a change of circumstances.

The Government are already cutting large areas of support that people receive—in-work credits next year, for example, while housing benefit is already being reformed—and there are more changes to come. Child care tax credit is being reduced, while the rules for working tax credit for couples have changed so that people have to be in work for more than 25 hours in order to qualify. Under the new universal credit, certain things will not exist, particularly various premiums received by many disabled people and their carers. There probably will be fewer cash losers than originally anticipated as people move on to universal credit, because quite a number of people will already have lost their benefits or have seen a reduction in their income. That is probably good for the Government in respect of transitional protection because it will cost them less, but it is potentially bad for the claimant who is going to have to live on less money.

This is a huge subject, so let me concentrate my remarks on the most vulnerable. Even by the Government’s own analysis, some people will not be able to manage the online claims system or, indeed, the monthly payments. The Government use the term “digital by default”, but it will be impossible for many people, perhaps because of their IT skills or indeed as a result of the cost of accessing the equipment. I was glad to hear the Secretary of State say that there would be terminals in Jobcentre Plus centres, as that has not come out to date in the evidence we have taken; let us hear the announcement on Monday.

The Government say that most people will manage the process or will soon adapt to it. It is great if they do, because if the majority are not able to manage the system as it has been designed, it would be a catastrophe. It would also be a catastrophe if the IT did not work. In that case, everyone claiming universal credit, including those who are computer literate and can manage the system, will be in deep trouble. This is not a single benefit such as tax credits. Then, when the IT went wrong or did not work properly in the first place, it meant only a part of the family’s income not being paid. Families were not left destitute, as they had other income to fall back on until the problem was sorted out or until interim payments were put in place. That cost an absolute fortune at the time. If the IT does not work for universal credit, families will receive no money. They will not be able to pay their rent, pay any bills or buy food. As is inevitable in such circumstances, it will take time for the arrangements to be put in place, and they may become destitute before that happens.

[Alison Seabeck]

Given the potential for arrears and non-payment of bills, there may be serious problems with credit ratings, which would have huge knock-on effects for many people.

[Dame Anne Begg]

We should also bear in mind the debt that those people will incur in the meantime, and the fact that, even when the money has been paid, it will be difficult for them to get back on to an even keel.

I know that the Government will not want to plan for failure, but, as was pointed out by the hon. Member for North Antrim (Ian Paisley)—who has now left the Chamber—they need to have a contingency plan in case the worst happens, or, indeed, the system proves to be susceptible to large-scale fraud. I hope that the worst does not happen, but, given the Government’s record of IT failures, the possibility must have crossed Ministers’ minds. It is not enough to say that the tax credit IT disaster was the Treasury’s fault, as the Treasury is involved in universal credit with real-time information, which is not being developed on the “agile” system by which the Secretary of State sets so much store.

I must admit that—apart from the disastrous Child Support Agency—the DWP has a better reputation than most for delivering new IT systems, although that is not saying much. However, all its previous systems have been delivered over a much longer time scale, with much more testing, than will be the case with universal credit.

The Government say that they have learnt from the experience of the tax credit system that there will not be a “big bang”, because not everyone will come into the system on day one. However, for individual families there will be a big bang, because all their benefit, or income, will be put at risk if anything does go wrong.

Let me return to the subject of those who will not be able to manage the new system. Let us take the best-case scenario that the Government have painted today, and assume that the IT system works perfectly, with no hitches; that most people adapt to the monthly payments; that the welfare rights people and all the other organisations are given lots of money by the Government, are well trained and provide plenty of advice; and that 80% of people—or even 90%, but the Government are saying 80%—are able to access the online form and make their applications digitally. Even if all that works, there will still be people who will not manage. The success or otherwise of universal credit will depend on how well they are catered for, even if the proportion is as low as 10% or 20%. If it is only 10%, that still represents 770,000 households. More than 1 million people will probably struggle with the system, and on the basis of the Government’s own figures the number could be more than 2 million, so I hope that the Government are paying a great deal of attention to that group of people.

[Jane Ellison (Battersea) (Con)]

Does the hon. Lady really think that the only measure of universal credit’s success will be what may happen to the most vulnerable, about whom all of us feel understandable concern? Does she not think that an important measure of its success will be the fact that it will increase incentives to work, and will make work pay for those who want to return to the work force?

[Dame Anne Begg]

If the group about whom I have been talking cannot access the system, there is very little chance that they will be able to return to work. That is why the support is needed.

[Mr Duncan Smith]

I had not intended to intervene, but I think that I ought to take up the point that the hon. Lady has raised. Our plans already take account of a number of people who will not be online. We want 50% of those receiving the benefit to be online when we launch the system in October 2013, and we want the proportion to rise to 80% by 2017. We have always had parallel arrangements for those who will not be online, and we will explain those key arrangements to the hon. Lady.

[Dame Anne Begg]

I thank the Secretary of State, and may I also make a plea for it to be easily accessible, high quality and free, which is very important, too?

The poorest in our society are already disadvantaged in the digital age. They have already fallen behind the rest of us. Universal credit and its reliance on digital claims could exacerbate that still further. Instead of giving people living in poverty the help and support, and the access to work, that raises them out of poverty, universal credit could plunge them further into poverty and disadvantage. That would be a disaster.

We will not know the full impact of universal credit until we know the level at which it is set. Despite what the Secretary of State has said today, only then will we know the real marginal reduction rates and who will be better and worse off—who will be up, and who will be down—and whether people genuinely will be better off in work. Only when we get the real figures for real families, rather than the scenario planning that has gone on thus far, will we be able to see whether universal credit will work and they will have more money. Until then, a lot of what we are discussing is just an academic exercise. We need to get those figures, and I hope they will come soon.

There is, however, a great deal to play for. I said on Second Reading of the Welfare Reform Bill that a single working-age benefit is the holy grail of welfare reform. It is now up to the Government to make sure it does not turn out to be a very expensive cracked clay pot.

Oral Answers to Questions

Anne Begg Excerpts

Monday 10th September 2012 Commons Chamber

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

Does the Secretary of State accept that somebody on jobseeker’s allowance with a disposable income of less than £70 a week who manages with fortnightly payments is actually very good at budgeting? The danger of monthly payments is not budgeting but the lack of money to buy everything that everybody else takes for granted and that a person should be able to buy with their benefit.

[Mr Duncan Smith]

Absolutely—I accept that we have to deal with those issues. We are seeking to move to monthly payments. When payments moved from being weekly to fortnightly, everyone said it would cause major problems, but very little happened. We are putting in place requirements so that people may receive their money on a two-weekly basis if they are unable to cope. We recognise that when we introduce this process, people will have to transition into it so that they are not left with a period without any money. All that is under consideration. We are trialling the programmes to ensure that we get this right. I give the hon. Lady my assurance that we will not move on this unless we are certain we can make it work.

Atos Healthcare

Anne Begg Excerpts

Tuesday 4th September 2012 Westminster Hall

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

Congratulations to my hon. Friend the Member for Rutherglen and Hamilton West (Tom Greatrex) on securing this important debate. This is my first time speaking after my extended absence and therefore a good subject.

[The Minister of State, Department for Work and Pensions (Chris Grayling)]

On behalf of everybody in the room and in the House, I welcome the hon. Lady back to the House. We are delighted to see her in such good shape. We were sad to hear of the difficulties in the long period of recovery she has had to go through. She is very welcome.

[Dame Anne Begg]

I thank the Minister for being gracious. He may not be quite so gracious by the time he has heard what I have to say. I do not think that the Government have grasped how disastrous the ESA assessment system is. It is not something that can be fixed by a few tweaks here and there; we tried that with the Harrington review. What we have heard today in the Chamber—and in the “Dispatches” and “Panorama” programmes filmed in June this year—suggests that not much has changed. The people complaining are not just the usual suspects, not just the radical crips, the workshy or those who want money without being assessed. They are ordinary people, most of whom worked hard all their lives until the sky fell in and they lost their job because of an illness or an acquired disability.

It is not enough for Government to say that the genuine claimant has nothing to fear. In too many cases, genuine claimants are not scoring any points in their initial assessment. There is something fundamentally wrong with the system and the contract that Atos is delivering. When the British Medical Association votes at its conference to say that the work capability assessment is not fit for purpose there is something wrong with the system. When GPs are reporting an increased workload, not just as a result of providing reports but as a result of treating patients whose condition has worsened as a result of their WCA experience, there is something wrong with the system.

When my constituent, who has lost his job because he has motor neurone disease, scores zero on his WCA and is found fully fit for work, there is something wrong with the system. When that same constituent appears in front of a tribunal and in less than five minutes is awarded 15 points, there is something wrong with the system. When people with rapidly progressive illnesses are not automatically put in the support group, there is something wrong with the system. When some people would rather do without the money to which they are absolutely entitled rather than submit to the stress of a WCA, there is something wrong with the system. When someone with a severe illness has to fight for a year through an appeal to get the correct benefit, only to be called in almost immediately for another assessment, there is something wrong with the system. When the recall and assessment happen the following year, and the following year, there is something wrong with the system. When people feel so persecuted, there is something wrong with the system. To top it all, they lose their contributory ESA after only a year if they are in the WRAG group.

When up to 40% of appeals are successful and there is no penalty for the company carrying out the assessments, there is something wrong with the contract. When so many appeals result in an award of ESA support group status when the original assessment was no points, there is something wrong with the contract. When there is no penalty for a high percentage of wrong decisions, there is something wrong with the contract. When there is no incentive for assessors to get the assessment correct first time, there is something wrong with the contract.

It is time for the Government to act, because there is something fundamentally wrong with the whole system.