Welfare Reform Bill

Baroness Hayter of Kentish Town Excerpts

Tuesday 14th February 2012 Lords Chamber

[Baroness Hayter of Kentish Town]

My Lords, as we have heard, without our amendment, the Bill will deny thousands of disabled people aged under 20 the right to a non-means-tested ESA when they reach working age. These young people are exactly those whom we discussed in the first amendment—disabled since either birth or childhood. When they grow up they will no longer be entitled to a benefit in their own right but instead will have to rely on means-tested benefit, depriving them of an independent income as an adult. As it stands, even those young people unlikely ever to be able to work will never be entitled to non-means-tested benefits as they will never have the chance to build up a national insurance contribution record. That means that those with early-onset conditions will for ever be disadvantaged compared with those who become disabled later in life and have therefore had time to build up enough contributions to receive non-means-tested benefits.

Clause 52 abolishes the right of people under 20 with work-limiting conditions to be treated as if they had met the NI contributions. I wonder whether our colleagues in the Commons really meant to reject our amendment in the knowledge that it affects young people, some with profound disabilities from childhood, and those with the greatest disadvantage in the labour market. The Bill removes their access to an independent income and reduces their chance of achieving independence. As my noble friend Lady Lister said, it was not to save money—at least that was not listed as a policy intent in the Government’s paper. Therefore, it can only be about changing behaviour, but how do these youngsters change their disability? Most of them would love to work but it is the behaviour of others, particularly understanding employers, which will be the biggest determinant of whether they can find work.

As my noble friend Lady Lister said, these changes are, for the country, tiny—£17 million cumulative—but the impact on young disabled people will be huge. On average, 70 per cent will lose about £25 a week, but 10 per cent of those 15,000 youngsters will lose entitlement altogether, because they have either savings or income from another family member. The Minister spoke earlier about inheritance. I do not know people who go around inheriting lots of money; maybe he does. The idea that because some people may inherit, everyone should be denied access to benefit, I find very strange.

The impact assessment also does not look at the effect on other family members. The introduction of a means test will undoubtedly decrease the incentive for anyone living with a young disabled person either to work or to build up savings. Indeed, these young disabled people will actually have a huge negative dowry to bring into any relationship, because the earnings of the person whom they would love to move in with will immediately kick in against the means-tested benefits of these young disabled people.

We do not know—we cannot work it out from the income assessment—exactly which people will be affected. However, the figures for those under 16 claiming DLA show that 41 per cent of them do so in relation to a learning disability. It is reasonable to assume that a large proportion of the people affected will also be in this group. As my noble friend has said, this is not the amendment she wanted to table. While we must accept that the Commons has given its decision on this provision that removes the right from these people, we ask the Government to monitor its impact, if only to assure both Houses that our fears for these young people are not justified.

The Minister has said that he will review all such policies and impacts of the Bill. We hope as we begin the ending, if you like, of this period of the Bill that the Government can say yes to this very small amendment, which only writes in that such a review should take place.

[Lord Freud]

My Lords, the short answer is that we will monitor it. However, I do not accept the amendment and I will explain exactly why. It does not work in the way that is intended. It is designed for us to have a full formal review. As noble Lords will recognise, we do have reviews and we treat them very seriously. If you look at the example of the Harrington review of the WCA, you see that they can be of immense value in the development of policy.

The way this one would work is that we would have a review one year after the measure came into force. The amendment would require that that report—a big formal report—is laid before the Houses of Parliament within three months, an incredibly rapid timescale as I am sure that the noble Baroness will recognise. We will monitor this and use evidence from a large number of sources on the experiences and outcomes of those affected. We will use DWP administrative datasets to monitor the trends in both the caseloads and in the level and distribution of benefit entitlements.

I want to put into context the huge paraphernalia that this amendment would require in practice. We are looking at the region of 15,000 claims to ESA youth every year. We expect 10 per cent of those not to qualify for ESA—not to be in the system. That is 1,500 people. It is not appropriate to have on the Bill a major Houses of Parliament review when the numbers are so small. The timing is not right. One does not look at a policy like this only once; one needs to keep it under review and look at it over a number of years, not do it in an inflexible way. I am trying to say that I buy the point that we need to watch it, but I do not think this amendment works. We can evaluate detailed specialist research. Broad surveys will be useless. It is too small and we will not pick up anyone if we do it on the FRS. It will be five people if we do it like that. We will have to review it very differently and then use it to inform how we guide our future policy direction and, potentially, operational improvements.

I do not wish to row about benefit tourism. The reason that it came through late, to be blunt, is that my blood was chilled towards the end of last year when I started working through some of this stuff. That is why I missed it in November. I had not really absorbed the implications. I do not think I would call it a panic—