Welfare Reform Bill
Baroness Meacher Excerpts(13 years ago)
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Baroness Lister of Burtersett
My Lords, I shall speak also to Amendment 71JA. These amendments have been tabled with the assistance of Gingerbread. The aim is to protect the opportunity for responsible carers to access further education and training up to and including level 3 when their children start school without facing the risk of sanctions. This means that responsible carers would be deemed to be fulfilling work search and availability requirements while studying until their youngest child reached the age of seven or the course ended. These amendments strike me as eminently reasonable, and indeed should be seen as totally consistent with the Government’s own anti-child poverty and social mobility strategy which emphasises the importance of education and training and the contribution they can make to ensuring that paid work represents a genuine path out of poverty.
The level to which a person is educated has a significant influence on how much they can earn and their ability to move up the earnings ladder. As Gingerbread points out, it is well established that holding a level 3 qualification can provide substantial economic value, particularly in relation to marginal wage returns. For example, only 25 per cent of people aged 25 to 29 holding a level 3 qualification are earning less than £7 per hour compared with 55 per cent of those with a level 1 qualification, and 37 per cent of those at level 2. Level 3 qualifications include access courses to HE as well as vocational courses. It makes long-term sense to enable lone parents in particular to improve their educational qualifications so as to maximise their labour market opportunities.
Until recently, lone parents on income support could complete a full-time further education course up to and including level 3 in preparation for entering the labour market or higher education. This meant that lone parents on income support had a two-year window of opportunity to access training with a fee remission when their children started school and before moving on to jobseeker’s allowance when their youngest child turned seven. As of September 2011, lone parents claiming income support are no longer eligible for fee remissions when accessing further education. Lone parents on income support will now have to self-fund as well as pay for any necessary childcare if they want to improve their chances of employment by undertaking training. Instead, fee remissions are available for individuals in receipt of JSA, but claimants will be required to continue actively seeking work while training, and if offered a job, be prepared to drop out of a training course or face a payment sanction. JSA work search and work availability requirements severely limit lone parents’ ability to train and gain skills that could help them find higher paid employment that is sustainable, and to make the most of opportunities to progress once working.
This modest amendment raises larger questions about some inconsistencies in government policy. On the one hand, as I have said, education and training are key elements in their child poverty and social mobility strategies. On the other hand, they are pursuing what in the jargon is called a “work first” rather than a “human capital development” approach to moving people from benefits into paid work. One of the risks of such an approach, identified by, for example, Dr Sharon Wright of the University of Stirling in a recent article, is that it can mean that large numbers of benefit recipients end up cycling or churning between unemployment and temporary low-paid jobs without advancement. Without the opportunity to train, lone parents face just such a future of low paid, insecure employment, cycling between in-work poverty and out-of-work benefits with little prospect of their financial or social circumstances improving. In our last session, we heard how they might then face in-work conditionality if they do not manage to improve their position to get themselves above the threshold which applies to them.
This amendment would go a small way to addressing the issue by ensuring that responsible parents, in particular lone parents, are better placed to advance in the jobs market and thereby lift themselves and their families out of poverty. I beg to move.
Baroness Meacher
My Lords, I support Amendment 51EA moved by the noble Baroness, Lady Lister. I was impressed when the Minister mentioned in an earlier debate that providers of support to claimants will be rewarded financially if their clients find a job and remain in it for two years. That claimants should achieve long-term employment is clearly the objective of the Minister and the Government. I have no doubt that it is a fine objective. Certainly it is supported by me and, I am sure, by other noble Lords around the table. However, this clause seems to run absolutely in the opposite direction. It encourages claimants with young children to rush into a low-paid and probably insecure job rather than taking the opportunity to train and prepare themselves for long-term work.
Will the Minister explain the rationale behind the lack of protection for carers responsible for very young children aged five or six while they complete a training course up to level 3? Does he see the apparent inconsistency between the aim of placing people in long-term employment, which we all support, and incentivising them to take low-paid work rather than educate and train themselves in order to better their future? I will be interested to hear what he says about that.
My second point is about the unreliability as an employee of a primary carer of children who are in the first two years of school. Having had four children, I have strong recollections of the childhood illnesses they pick up in the early years: for example, a cold, an infection or German measles. If you have four children, it is not one lot of German measles but four, one after the other. Employment? Forget it. This is a serious point. The strain of working when your young children are starting school and picking up all those bugs has to be experienced to be fully understood. In education and training, one can catch up when life settles down and the kids go back to school. I know because I did it. I did an economics degree when I had three children under seven.
We know that the Minister is under enormous pressure to deliver cuts through Parliament, but perhaps this issue is worth fighting for in terms of the Government's own admirable priorities of encouraging claimants to undertake training in order to improve their long-term employment prospects for the future.
Lord McKenzie of Luton
My Lords, I will speak briefly in support of the thrust of the amendment. It raises issues about the right age at which full conditionality should apply, and perhaps takes us back to debates we had on another Bill. Perhaps today is not the occasion to revisit them. However, I am not sure that we have debated thus far in the Bill the basic conditions for accessing universal credit. This is predicated on the fact that somebody is within the system and subject to full conditionality. This is what the amendment seeks to ameliorate. One basic condition for accessing universal credit is that somebody should not be receiving education. I presume that that is meant to cover broadly the same arrangements as exist under JSA. Perhaps the Minister will clarify that.
Baroness Meacher
May I interrupt the Minister for a second? He says that this will enable these people to get into work. Let us suppose that someone could take a job at a check-out in a Tesco store but was actually interested in trying to do better than that. Would that be acceptable or would they be expected to take the check-out job at Tesco? That is one of the issues.
Lord Freud
There is a lot of change going on in this area, as noble Lords will know. We are committed to picking up the recommendations of Professor Wolf, who wrote a stunningly important report—one of the best reports in this area that I have ever read. There are some principles in there about funding following the individual which have not been fully worked out. I am not discussing a static situation here. On the question of the check-out counter and fitting it around A-levels, as things currently stand the position is that the person would have to take the check-out job and fit the A-level around that. However—I hope that noble Lords can read between the lines—this situation has movement in it in the years to come, given what the Department for Education is determining to do around the Wolf report. I do not think that this is the last word on the matter but it is the last word as far as this Bill is concerned at this particular time.
Baroness Meacher
Would the Minister take this away and think about how to word the legislation here and at DWP in order to allow for flexibility in, one hopes, not too many years’ time in response to the education ministry?
Lord Freud
I will take that on board. This is a very important point. It is not one that I would cavalierly dismiss at all. How we raise human capital among people who have perhaps not had as good a start in life as we would want them to have is a central point. I will think about it and try to make sure that the way we design the structure will allow the flexibility to incorporate future developments. I am grateful for this particular amendment.
Lord Kirkwood of Kirkhope
My Lords, I am trying hard to say nothing from this end of the table because it is important to make progress. However, I too am very worried about the press reports that have coming since the summer. I said at the beginning of our first session in Committee that some of the language that was being used in relation to these issues and to benefit deductions was extremely worrying. It is getting more acute and more refined. I do not think the Minister can hide behind the defence that he tried to use, although it is absolutely accurate. Changes of this kind would come under the powers given to the courts because these things will be decided in court. But the latest BBC newswire I have seen on this issue described the Prime Minister, David Cameron, talking about benefit reductions for fines up to a maximum of £25 under universal credit. That came from a BBC report. If the Prime Minister has it in his heart and head that universal credit is going to be subject to what I calculate to be a 37 per cent reduction in the standard allowance, I do not think it is fair for this Committee, or indeed the House, to go through all these legislative proceedings, pass this Bill and give it Royal Assent, without some consideration of exactly what that means.
Now I have two complaints. First, as I said in the first day in Committee, a particular language is being used. The Prime Minister talked about the current maximum deduction of £5 as “much too soft”. Indeed, the Secretary of State is not absolved from some of these phrases which really target people on benefits. Of course, we are talking about people in the courts and who have committed crimes. We may even be talking about people who took part in riots—I am not sure about that. That has to be borne in mind and taken into consideration, but to remove up to 25 per cent of £67.50—the level that I understand is being set for the introduction of universal credit in 2013—is a massive reduction for anyone to contemplate. It will simply push people to the margins.
Secondly, what kind of benefits are we talking about? Are claimants to include state retirement pensioners who may find themselves in the courts? Are they contributory benefit claimants who may well have been paying in for all their lives to get that access? Under this new regime, are they likely to be subjected to a £25 benefit deduction? It is not sensible for the Committee or House to contemplate going into universal credit against the background of this being possible without serious consideration of what it is, in detail, that is in the mind of the Prime Minister or Secretary of State. I completely absolve the Minister of any of this stuff, but he must understand that it causes serious concern to people. I guess that this could be introduced by a change in regulations, late at night on a wet Thursday. Unless I get some pretty compelling, better evidence about the provenance of this idea, I will be there, wet on a Thursday, waiting for him. It is unimaginable that we should just pass these things willy-nilly because these benefit claimants riot and need 37 per cent of their entitlement reduced. It is unconscionable and we need a better explanation than the one we have at the moment.
Baroness Meacher
I rise very briefly to add my support to this. Many years ago, I wrote a book about the withdrawal of benefits after four weeks from people who had been in difficulty. The book clearly showed that 90 per cent of them or more went straight into more crime. This is just another obvious, simple situation where that is all that the Government will do. I know that the Minister will not wish that to happen. I plead for him to take this away and think about it.
Lord Freud
We are looking carefully at the system of hardship payments we want to put in place under universal credit. We want to ensure that there remains a financial safety net for claimants who have been sanctioned—that is what hardship payments are about. However, we want to avoid the existence of such a safety net undermining the deterrent effect of sanctions. It is clearly a rather delicate balancing act. I should make the point that, under universal credit, hardship is only available following a sanction, not at the start of a claim. It will no longer be necessary within the structure of universal credit. We are looking at a payment for people who have been sanctioned.
We are still considering how best to achieve this but believe that the ability to make some payments recoverable is one way of continuing to support those most in need while ensuring hardship payments are not seen as a simple replacement for sanctioned benefit. In other words, we want to make sure that sanctions continue to keep having an impact. We are still considering our approach to recovery that will ensure adequate safeguards are in place. This includes the arrangements in more complex situations of the kind the noble Lord, Lord McKenzie, pointed out, such as when a couple has separated. Regrettably, I can not give hard answers to his, as usual, specific and beautifully placed questions. Those are issues that we need to address and are addressing.
Baroness Thomas of Winchester
My Lords, I shall speak to Amendment 52BD in this group, about disabled claimants. If the noble Baroness, Lady Lister, thought that her brief was complex, this is pretty complex too. At the moment, if a disabled person is in work they can claim the disability element of working tax credit if they fulfil two tests: a work disadvantage test and the benefit test. The work disadvantage test includes many criteria, but one of the most common ways to qualify is if you are unable to work full-time because of a health condition or impairment. You also have to fulfil the benefit test if you receive DLA or attendance allowance or you have been receiving sickness benefit for at least the previous six months.
There are other qualifying criteria that would take all afternoon to go through for both the work disadvantage test and the benefit test. An example of the work disadvantage test criteria is that you cannot extend your arm sufficiently to shake hands with another person without difficulty, which sounded rather French to me. Suffice to say that the criteria for qualifying for the disability element can be complex but probably covers a lot of disabled working people.
Under the universal credit, many disabled people will not receive extra help because the gateway to extra support is through the work capability assessment. So someone will not qualify for the disability disregard if they have been found fit for work. For disabled people who are already in work, a new test will be designed and we are hoping that that new test will have some lower criteria in it.
Some of the criteria for the work disadvantage test look similar to the criteria for the WCA, but it is unclear what the qualifying criteria will be for this test for disablement under the universal credit, as I have said. If everyone else is giving examples, I might give the example of someone who might benefit now from extra help but might not qualify in future. I am afraid I have not given her a name but she is a person with MS who can walk up to 100 metres but gets tired very quickly and is unable to cook a meal for herself. She may now qualify for DLA lower-rate care and might also receive the disability element of working tax credit, if she were able to work only part-time because of fatigue levels. This person probably will not qualify for the personal independence payment, although until we see the new criteria, which we were told would be available at the end of October, we cannot tell. This person probably will not qualify for any more help under the universal credit than a person who is not disabled.
Another of the worrying things about the loss of this extra help for many disabled people under universal credit is the passporting factor used by local authorities for travel passes, leisure passes and so on, so disabled people may lose out on a much wider scale than may at first seem apparent. I look forward to hearing what my noble friend has to tell us about that.
Baroness Meacher
My Lords, I support some of the concerns that have already been raised by other noble Lords. I am not clear about the logic of ending the provision for adding disregards if a claimant falls within two categories, both of which qualify for a disregard. As I have always understood disregards, the idea is that they compensate for the costs that a claimant faces, whether those costs arise from being a lone parent, being disabled or whatever. I am sure that the Minister has a rationale for the measure but it is difficult to think what it could be. Is he going to provide a disregard for the disability side, the lone parent side or some other side? Why provide it for this bit rather than that bit? Why not provide the disregard for both sets of additional costs? It would be interesting to hear his rationale for this measure.
Given that the Government want to make swingeing cuts to the welfare bill, I completely understand that two-earner households are not a priority from that perspective. However, going back to the Government’s commitment to having incentives to work, this is another example of a part of this legislation running completely counter to that aim. I know that the Minister will correct me if I am wrong, but as I understand it the second earner will have almost no incentive to work, particularly if they have children, as they will not have the earnings disregard but they will have to pay the 30 per cent or so costs of childcare. This will almost certainly be the case if they have children. Therefore, it would be helpful if the Minister agreed with me that this is a bit of a problem in terms of incentives to work or explained the rationale behind the measure.
Regarding people with mental health problems, I envisage—I think that the Minister agrees with this—that this group will lose overwhelmingly from the shift to the new system and the reassessments for ESA. Rafts of these people will come off ESA and on to JSA with the result that, even with a disability, they will not receive any disability support because they will be on JSA. Yet people with mental health problems can have additional costs in order to go to work that others might not have. For example, somebody with severe anxiety might have to have someone accompany them on their journey to and from work, although they may be able to sit there and do the job when they get there. However, if they get no financial support at all for their disability—I understand that that is what the system sets out—how will these people have an incentive to work? They will have to pay for this support out of their tiny pockets.
The other point about people with mental health problems is that many of them can manage only a limited number of hours of work and need to build up their hours slowly. I do not know how this will work. The structure of the universal benefit is very good in this regard and should make life easier for people—at least in theory, if the two computer systems of the DWP and HMRC manage to bond together as they are supposed to do. However, the loss of disability support will cause problems in terms of incentives to work.
Sue Royston of Citizens Advice also provided me with the facts that were read out by the noble Baroness, Lady Lister. I will certainly not repeat them but I would find it helpful if the Minister could confirm for me how the two tapers of the universal credit on the one hand and the council tax benefit on the other will work together. Perhaps he has already done that when I was not here, as I have not always been here due to other commitments. I still hope that he will ultimately find a way to bring council tax benefit within universal credit, as it is such an important issue.
I am sorry to be a bore and raise this again, but it would make such a difference for so many people. If not, it seems to me that claimants working a few hours and building their employment up slowly will be dogged by a terrible complexity and lack of clarity not that dissimilar to what they have suffered in the past. That would be a great pity.
Baroness Hayter of Kentish Town
My Lords, the explanation that I am most looking forward to from the Minister, having taught us the difference between soon and very soon and that spring comes between winter and summer, is where on earth is the end of October if not yesterday, on Halloween night. We await that answer.
Under universal credit, the support currently obtained by a tax credit will be obtained via disregards, hence their importance. The disregards will allow some groups to earn higher amounts before benefit starts to be withdrawn, thus household income will be held to similar levels as now via tax credits. However, as has been mentioned, at present there seems to be no mention of disability in such disregards. Amendment 52B would provide an additional disregard for one aspect—carers who are currently not set to receive any disregard. We support that amendment and I shall speak to Amendment 52DB, which stands in my name and that of my noble friend Lord McKenzie. It would include a disregard for a second earner, but we will cover that issue in Amendment 52C. It is also intended to ensure that there are earnings disregards for claimants who are disabled, lone parents or the second earner—often a woman. Further to the comments just made, as each disregard recognises the impact of the particular circumstance on the earning potential of the individual, and as such impacts are cumulative, it is proposed in the amendment that the disregards should also be cumulative, as each circumstance—whether being disabled or being a lone parent—makes earning that much harder to achieve and, perhaps, more costly, with extra travel times or other expenses.
At least initially, it is foreseen that under universal credit we will have a 65 per cent taper for earned income, so a disregard improves the incentives to move into work by not applying the taper for the amount earned for the first disregard. That means that the value of the disregard for the claimant is 65 per cent of the actual amount written on paper, if you like. Someone with a £40 disregard who earns £40 can keep all their universal credit and will thus be better off by £40. Without the disregard, they would keep only 35 per cent of the £40 and so be only £14 better off. The figure of £40 that we use as the disregard is actually worth £26 in hard cash, which is the only way that I can think about these things.
There is a little complication, of course. There will be a maximum disregard for each group. Those not receiving support for housing costs will receive the maximum disregard and those getting support for their housing costs will see the maximum level of their disregard reduced by one and a half times the amount of their housing support. I trust that noble Lords are all with me. Good. Most claimants in rented accommodation will receive the minimum disregard. We know that universal credit aims to,
“allow people in work to see clearly how much support they can get”.
I just hope that they are better at doing that than I am.
The 14 October briefing note referred to by my noble friend Lady Lister on disregards set out the new higher disregard levels to try to deal with the localisation of council tax benefit. It aims to ensure that income support for council tax is effectively disregarded. Whereas single people previously would not receive any disregard, they will now get the amount mentioned, £13.50, as a disregard. Similarly, the disregards for lone parents and couples have been increased. However, as has been mentioned, Citizens Advice points out two problems. The first, elaborated by my noble friend Baroness Lister, is that those earning more than the amount will still be subject to two earnings tapers until no longer eligible for help with council tax. What plans does the Minister have to deal with this two-taper issue caused by the localisation of council tax benefit? Secondly, although the level of disregard has been increased to reflect council tax changes for single parents and couples, no such addition has been given to disabled people. Perhaps the Minister could also explain in his answer why they have been overlooked.
Lord Freud
You do not when there are caring responsibilities. We have discussed this. There is a responsive set of conditionalities for people who have other obligations. If you exclude people with very few hours—many will do those few hours for rather more than the minimum wage—they are actually much better off than under the current circumstances because we have done it through addition rather than as an extra disregard.
The noble Baroness, Lady Hayter, said that an estimated 50,000 carers will be worse off under the universal credit. That is not correct. That figure was an estimate of the number of single and non-disabled benefit claimants who are carers. Only those whose earnings fall within the very narrow band of two to five hours at the national minimum wage could experience a very slightly lower income under universal credit.
I turn to Amendment 52DB. The universal credit is designed to help improve work incentives to break cycles of worklessness. A couple will jointly benefit from a single earnings disregard set at the highest amount to which either person is entitled. In practice, this may mean that only the earnings of the first earner are disregarded. Given the financial constraints within which we are delivering universal credit, it is best to focus on the clear aim of reducing worklessness for the household as a whole rather than spreading the available resources among different earners in one household.
To revert back to an earlier amendment on piloting, this is clearly something that we can test. If that gets a better result, it can be changed when a Government have adequate money. This is not a matter of principle but of affordability. We estimate that if couples who were both in work were entitled to—
Baroness Meacher
Again, will there be flexibility within the legislation? As the Minister said, if the Government pilot this and find that the taxpayer is losing more money because fewer of these second earners go out to work, he will want to introduce a second disregard. Will there be the flexibility within the legislation to enable the Government to do that?
Welfare Reform Bill
Baroness Meacher Excerpts(13 years, 1 month ago)
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Lord McKenzie of Luton
My Lords, as I was saying, these amendments relate to Clauses 13, 14 and 22, the introduction of work-related requirements and the claimant commitment. The drivers of some of the work-related requirements, or indeed no work-related requirements, depend on whether the claimant has limited capability for work and/or work-related activities. These concepts are, of course, familiar to us from ESA deliberations, and are to be imported into universal credit under Clause 38. We will debate that in due course when we reach those clauses. The definitions are aligned to the provisions of Clause 12, and the additional amounts payable under that clause.
Amendment 51CAC seeks to ensure that the claimant commitment provided for by Clause 14 should be not only a record of a claimant’s responsibilities but a statement of the responsibilities of the Secretary of State with regard to the claimant. Amendment 51CCA is in similar vein and requires the claimant commitment to include a statement of the Secretary of State’s responsibilities and details of how the claimant can appeal the contents of the commitment. A similar proposition was advanced in the other place and received short shrift, but given the Minister’s clear commitment to transparency and to the universal credit actually changing attitudes, we are interested directly on these issues.
We had understood that there was a consensus around the proposition that welfare benefits systems should involve both rights and responsibilities for claimants. Those responsibilities clearly encompass compliance with work and work-related activity requirements and the rights obviously include, but are surely not limited to, receipt of relevant benefits. Much of the support for claimants will come via the work programme in which the Government are investing heavily and seem committed to providing personalised support to individuals. A black-box approach gives a framework for that flexibility, but not of itself individualised assurance to claimants. What contractual obligations will providers have to spell out for individual programmes and communicate this to the claimants? Although we accept that the incentivised payments structure will provide encouragement not to abandon the hardest to help—a point that the noble Earl, Lord Listowel, focused on—the obligation to be clear on what support would be provided should surely reinforce this. Of course, not all claimants will enter the work programme, or at least for a while, so there should be an obligation on Jobcentre Plus staff to particularise their side of the bargain.
It is fine having general customer charters, but they are no substitute for setting out what the Secretary of State will commit to in respect of individual claimants. Incidentally, could the Minister take this opportunity to take us briefly through the claimant journey, as it is now envisaged—those who will or will not enter the work programme and the related timescales for the claimant commitment? It is understood that the intent is that the claimant commitment would result from dialogue, although that does not necessarily mean total agreement in every case.
Amendment 51CCA would also have the claimant commitment set out information on how to challenge the contents of that commitment. The Minister in the other place indicated that appeals could arise only following sanctions for failure to comply and we will obviously be discussing those in due course. In respect of work search and availability requirements, the briefing note provided by the department indicated a right to object to what is proposed and an ability to have the position reviewed by another employment officer. However, that is stated not to apply to other requirements recorded in the claimant commitment. Why not?
The amendments yet to be spoken to by the noble Lord, Lord Skelmersdale, and the noble Baroness, Lady Meacher, are concerned in an important way with those involved in drawing up the claimant commitment to make sure that they are appropriately trained. That must involve access to specialists to cover the multiplicity of situations that will be encountered, such as dealing with those with mental health conditions, fluctuating conditions and hidden disabilities, to name just some. Will the Minister remind us what information from the WCA or indeed the work-focused health-related assessment—he might update us on that because it was suspended for a while—will be before those who have responsibility for inputting into the claimant commitment? So far as the work programme is concerned, what contractual commitments do providers have in respect of training and how is that to be monitored?
These issues of claimant commitment are very important, but in the words of the noble Baroness, Lady Campbell, who is not with us today, we believe that co-production is an important issue. If there is to be real commitment for individuals, it should not be something that is imposed: the Secretary of State should have some ownership of it. I beg to move.
Baroness Meacher
I rise to speak to Amendments 51CB, 51CC, 71C and 71D on behalf of the noble Lord, Lord Skelmersdale, who sends his apologies to the Committee because he cannot be in his place today. It is a little unusual for me to speak to amendments on behalf of a Conservative Peer, but it is a pleasure to do so.
Before I refer to the comments of the noble Lord on these amendments, I would like to support the comments of the noble Lord, Lord McKenzie, in relation to the claimant commitment and the importance of that containing the responsibilities of the Secretary of State as well as the responsibilities of the claimants themselves, and the importance of specialist Jobcentre Plus staff. I will also speak about those two points in the next group. The groups were together but now they are apart.
The noble Lord, Lord Skelmersdale, has given me his notes on these amendments, which I will try to reflect in my remarks. He says that we heard a lot on the Health and Social Care Bill about the myth that the Secretary of State for Health is in total control of the National Health Service. The situation is not very different in the DWP, is it, he asks. I emphasise the fact that the noble Lord said that because it is more interesting that he makes these comments than if I were to make them. We all know that, although technically it is the Secretary of State who is occasionally involved in tribunal and court cases, it is really one of his officers who does the work and occasionally is found to be at fault—or, says the noble Lord, in the case of the employment and support allowance, not so occasionally.
The noble Lord was alarmed to discover that for ESA alone, there have been around 518,000 fit-for-work decisions between October 2008, when it started, and November 2010. The rate of appeal was around 40 per cent and, in that percentage, 40 per cent were successful in their appeals. The reason for all those successful appeals is not solely the Atos computer; the desk officers and DWP staff generally share the blame, although perhaps not to the same extent. The noble Lord has, with difficulty, discovered the success rate of appeals against decisions relating to other benefits from April to August this year. They are 15 per cent for JSA and 27 per cent for income support. Those are probably the nearest thing we have to the universal credit arrangements in the Bill and they give us a guide to what we might expect, not least because the fault, if fault there is, will be with DWP staff rather than computers. This all brings us to the noble Lord’s amendments: it must be vitally important that staff are not only trained, which to some extent they are, but monitored as well. The 24th report of the Merits Committee also raises these issues.
I share those concerns of the noble Lord, Lord Skelmersdale, but perhaps I might add a few remarks of my own. I am aware that the Minister has been determined to reduce the appeals success rate and that he has in fact had some considerable success. If I understand it correctly, this has been in part as a result of introducing a review process, prior to appeal hearings, which has enabled errors to be picked up earlier. Perhaps the Minister can explain the average length of time between the initial decision and the review decision following an appeal, and how that average time gap compares with that between a benefit entitlement decision and an appeal hearing, as we had them before the reviews came into play—we still have them, of course. In other words, has the introduction of the review process significantly improved the position for claimants by providing a significantly earlier opportunity to have wrong decisions righted or overturned? Also, does the Minister know what proportion of successful appeals, whether at review or ultimate appeal hearing, apply to claimants with mental health problems?
Lord Freud
My Lords, the form and content of the claimant commitment is of the utmost importance and we are working hard to get it right. I hope that the illustrative claimant commitments provided to noble Lords have proved helpful in this regard. We are introducing the claimant commitment to improve compliance, bringing together in one place a clear statement of the requirements a claimant is expected to meet. What we need to bear in mind is that the claimant commitment is for every recipient of universal credit, many of whom will not be subject to work-related requirements. For these individuals the contents of the claimant commitment will be minimal, including the duty only to report relevant change of circumstances. In this case, the amendments we are discussing would not be relevant.
Even for claimants who have work-related requirements placed on them, certain requirements are simply not open to negotiation. A claimant in the “all work-related requirements” group must look and be available for work. A claimant in the “work-focused interviews only” group must attend work-focused interviews. These very basic requirements are not open to negotiation. When establishing the detail of requirements, for example, and the type of work that someone has to look for, I agree completely that there should be dialogue and consultation between the adviser and the claimant. This is not to say that we will not be tough on some jobseekers but, for the majority, we expect this to be done in co-operation. If a claimant is unhappy with specific requirements, they will be able to ask for another adviser to review them. This happens now under jobseeker’s allowance; there will be an appropriate review procedure under universal credit as well.
The basic work requirements, which are not negotiable—such as that the jobseeker must look for work—clearly would not and could not be the subject of such a review requested by a claimant. Similarly, in terms of the support we provide, we envisage there being a wide range of support available to help claimants prepare for and move into work. It is intended to meet the needs of individuals and target the right support at the right time. The issue raised by both the noble Earl, Lord Listowel, and the noble Lord, Lord McKenzie, of what we are doing for the hardest to help and on creaming and parking is one that we have endeavoured to answer in the structure of the work programme, where we are trying to deal with it by price differentiation.
We have minimum standards for prime providers. If they breach those it is treated as a breach of contract, so we do have some powerful tools. At the same time, we have much more active management provider performance than ever before, and to the extent that providers are under-performing, we will shift market share by claimant group to the best performing providers in each area. This means that claimants will be moved to where they are most likely to get the best support to help them deal with their particular barriers to work. These are systems that we have created within an overall black-box approach, which would clearly break down entirely if we then imported a series of regulations and requirements such as were implied by the noble Lord, Lord McKenzie.
Baroness Meacher
I very strongly support the comments of the noble Lord, Lord McKenzie, because it seems to me that we are talking about oiling the wheels and enabling the system to work. It seems to me that part of that is transparency to the claimant, which is the noble Lord's previous point, but also transparency for the provider. If I understood this right, the assessment and the clinical report on the claimants will not be provided to the provider, who then has to prepare all this activity to enable the person to return to work. If that is really so, I appeal to the Minister to take that back and think about it because I cannot see the system working.
Lord Freud
Let me clarify what information goes over. The former WCA is confidential and does not go over. How does the adviser build the revised requirements with the claimant? The evidence that he uses includes the claimant’s fit note, advice from Atos—not the former WCA, but some advice can go over—and other medical evidence. Those things come together to form the basis on which agreement is reached.
Baroness Meacher
My Lords, I rise to speak briefly in support of Amendments 51CD, 51CE and 51FA and the related amendments concerning Clauses 44, 46, 49 and 56, which were all tabled by my noble friend Lady Hollins. As she said, they concern claimant commitment and sanctions. The objective of these amendments, as I understand them, is to ensure that claimants’ long-term conditions or impairments are understood by Jobcentre Plus. The claimant commitment ensures that the claimant’s problems are recognised and that the necessary adjustments are made and that when sanctions are being considered the likely impact of the health condition or impairment on the claimant’s failure to comply with some condition is fully taken into account.
I shall take these three points in turn. The first is the need for Jobcentre Plus to understand the long-term conditions and impairments of claimants. Here the training of staff is paramount. In view of the incredible range of disabilities to be dealt with and the precision of the assessments required, can the Minister confirm that people with mental health or learning difficulties will be dealt with by specialist Jobcentre Plus staff in those particular fields?
That has not been the case in the past, and the consequences have been absolutely appalling, yet the need for specialist knowledge will be even greater when this Bill comes into effect. I have referred in previous discussions around these issues to a conversation that I had with a Jobcentre Plus manager about people’s mental health problems. When I asked that manager what happened to those people, he said, “Oh, my staff don’t understand mental health problems”. I said, “Well, so what happens when someone with a mental health problem comes in seeking help?”. He said, “We can’t really help them, so what happens is that they become homeless and then they go back into hospital, and so then they get some help, and the process starts again”. That is such a statement about the failures of the past, and the reasons why I fear that with all this precision about what everybody has to do things will be very much worse for this group in future. We know that an awful lot of these people will fall into jobseeker’s allowance—and we know what happens then.
Many case histories have been sent to me, and no doubt to many other noble Lords, which illustrate the impossibility of the task and the consequences of mistakes being made. I want to quote one case to illustrate the point. Just as my noble friend referred to a case where a person had been given nul points—no points—I am also aware of somebody with a mental health condition assessed with no points a year ago. This person was placed on JSA and failed to cope with the conditions; her health deteriorated and she was reassessed and given 33 points. There is something terribly wrong about that. This lady, who was solely concerned to get back into work, complained that she had lost a year of her life. When she could have been getting the support that she needed and getting back into work, she has been sitting there deteriorating. This error, as I see it anyway, probably cost the taxpayer a year of benefits. That is one of my concerns. I have absolute respect for the intentions, and certainly the intentions of the Minister, but the fine-tuning on all these things will not work. I cannot see it working.
In that context, I support the comment of my noble friend Lady Hollins in asking for a medical opinion in relation to these complex cases. We are all aware that psychiatrists and their teams spend weeks and weeks assessing a person and their needs and what the problems really are—and even then they get it wrong sometimes. So how somebody in a single interview who does not have the experience or skill can do that job is really pushing it, I would suggest. That is not quite the language for this House, but I could say much more on that issue—and no doubt we will come back to it on Report.
I move on to the importance of the claimant commitment and recognising the claimant’s problems. The first step is for the Jobcentre Plus to understand—we have dealt with that. The next step is for something to be done about those problems. Here it seems to me that for claimants with mental health problems who are not under a secondary mental health trust—they are a different group altogether and I shall not talk about them here—but the million or so who are under a GP or not receiving any help at all, who are assessed as appropriate for RAG due to a mental health disorder, usually caused by anxiety or depression, it is surely vital that the claimant commitment includes very clearly the requirement that the person should be referred to a professional therapy or health service. IAPT is an obvious choice for many of these people, but not all of them. But my point is that it should be very clear in the claimant commitment—and this takes us back to the responsibility of the Secretary of State—that there is that responsibility there for the referral to be made. My concern is that this very substantial group will finish up with these providers, who probably will not have any real understanding of these kinds of issues.
They will quite likely refer these people to a rather cheap option. I know that they will have £14,000, which is wonderful, but you wonder what they might want to spend that money on. If these people are referred to a cheap or inappropriate option, they will not get back into work. Something relatively simple like a requirement that a therapy or health service that a person requires should be specified in the claimant commitment could transform a system from an incredibly ineffective one to one that would effectively get people back into work.
I know that the Minister has high hopes for Professor Harrington's work, and I share his optimism to some extent, having played a very peripheral role in that work. However, I do not believe that Professor Harrington's work will address the issue that I am raising here. His work should improve the quality of the assessments, particularly of mentally ill people and those with fluctuating disorders, but as I understand it, it will not at all ensure that the right help is available to this very large group of claimants. The whole edifice will fail if this crucial link is missing.
Another issue that I want to touch on is the need to take full account of the claimant's condition in considering sanctions following a failure to fulfil one of the benefit conditions, such as a failure to attend an interview, work-related activity and so forth. I was going to mention the agoraphobic claimant to whom my noble friend Lady Hollins referred. The crucial point is something that the Minister said a little earlier: everybody must attend interviews. They must do this and must do that. In my view, an agoraphobic claimant could not do anything realistically except, with help, get along to get their treatment—professional treatment, not a cheap option. If that happened, and their symptoms were brought under control, you could then start talking about other things that that person should do.
I understand the Minister's point about needing eight processes or whatever, but for some claimants it is vital to stick with the first one until that is done. Otherwise, sanctions will be applied completely inappropriately and destructively. It will not help. In fact, it would make things a lot worse. The extent of errors is well illustrated by the fact that 29 per cent of those in the work-related activity group are placed there only after reconsideration on appeal having originally been found fit for work. For 29 per cent of people, they get it wrong in the first place. The suffering those people go through is appalling.
I was struck by the level of fear in the voice of the carer who is herself a service user at a recent meeting of our service users and carers in east London. She had just attended a reassessment and said that it was terrifying. She said, “He had no idea about my disability”, and had no idea about her responsibilities to her mentally ill son. Under the new system, a claimant can obtain a report from a healthcare professional of their choice. That is great progress. However, there are major concerns, and I look forward to the Minister’s response.
Welfare Reform Bill
Baroness Meacher Excerpts(13 years, 1 month ago)
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Baroness Campbell of Surbiton
My Lords, I support the noble Lord, Lord Best, especially on his amendment regarding the CLG criteria of one-plus-one bedroom. One thing that struck me is that we have not referred in this debate to people with fluctuating impairment who require overnight care but not on a regular basis. People with mental health problems, when they go into crisis, may need somebody to sleep in the bedroom next door for a month or two, and that is not necessarily counted as an overnight carer in considering criteria for an extra bedroom.
We should celebrate that 15,000 disabled people need overnight care in this country—that figure is given to us by the DWP. Has the Minister had discussions with the Department of Health about the implications of the changes to the housing and benefits extra bedroom situation for people with fluctuating impairments? Increasing numbers of disabled people are living at home in the community now, and that is to be celebrated, but many disabled people require the help of another human being in order for them to do that. Otherwise it is back to residential care and the old days of warehousing. This is another good reason to support the one-plus-one bedroom and if we cannot do that, then I certainly support all the exemptions that are called for in all the amendments.
Baroness Meacher
My Lords, I support all the amendments in this group, but I congratulate my noble friend Lord Best on his incredibly commonsense approach to this problem. It seems that allowing an extra bedroom would probably deal with most of the tragic exceptions that people have talked about—what a straightforward way to deal with those exceptions and normal life. I cannot think of any family that at some point does not badly need an extra room, and the case was so well put.
We talk about all the amendments individually, but what is so painfully obvious is that it is the combined impact of the changes in the Bill that are going to have such a devastating effect on so many people. It feels irrelevant to talk about ESA and people being reassessed and placed on to JSA, and therefore losing a section or part of their benefits, but the individuals at the front line are going to be hit by that, then they find their housing allowances upgraded in line with CPI, then they find that their housing allowances are pegged to the 30th percentile, then find that they have an extra room. Oh my God, their housing benefit will not cover the accommodation they are in and they are going to have to think about moving.
It is the impact of so many hits that feels petrifying, and perhaps the change that frightens me more than any is the pegging of housing allowances to CPI. If that goes on longer than two years—perhaps we do not pay too much attention to it because we assume that it will not—we are talking about families and households finding every few years that they have a growing gap between their rent and the allowances they are paid for housing. They will have to move, and move, and move—is that not correct?—over a period of time, into ever more distant areas, ever meaner properties, ever smaller properties. It is difficult to imagine the psychological impact on households of all these changes.
I do not know who devised this law, but I wonder whether whoever it was stood back and thought about all that. I know, and the Minister has mentioned many times, that the driving motivation behind the reforms is to provide an incentive for people to move into work. From where I come from, dealing with people with mental health problems, one thing that stands between them and work is their level of stress and distress and anxiety.
It strikes me that if all the legislative changes go through, we will create an even bigger gap between very large numbers of people who are prone to anxiety and depression—if not psychosis and other things that are even more problematic to deal with—and the labour market. That troubles me, because I respect the Minister’s commitment to providing an incentive for people to go back into work. I also know that he is very sympathetic and understanding about mental health problems. I would be interested to know what he has to say about the apparent contradiction in what the Government are trying to do.
Another aspect of this for people with mental health problems is that to force them to move away from wherever they are—probably away from the carers who might just about prop them up and allow them to survive and carry on—is the last thing we want. The underoccupation rule impacts even more, given the other provisions of the Bill. As I understand it, young people are going to be expected, in some circumstances, to share accommodation. There are an awful lot of people with mental health problems for whom this might be quite helpful. There are others for whom it might be a complete disaster. Indeed, let us not forget to mention the potential sharer. It might be quite difficult to share with some of our folk. We have to be sensitive to the impact, and the combined and compound impact.
I sympathise with the amendments that noble Lords have tabled about disabled people who have had adjustments to their homes, and those about looked-after children. Those are obvious and glaring problems. I would like to think that the Minister will think seriously about that, in the context that I know he very well understands.
Lord Wigley
My Lords, I speak very briefly in support of Amendment 35, to which I have my name, to endorse entirely the comments of the noble Lord, Lord Rix, in introducing this bank of amendments, and to support the other amendments that deal with disability particularly. In doing so I should declare my interest as vice-president of Mencap Wales. In fact, at the Mencap annual conference in Warwick on Saturday, there were people who asked specifically about these matters. They said, “They have taken away from us home ownership for people with long-term disabilities, and now they are going to start clobbering us on housing benefit, where people with disabilities may be in a particularly vulnerable position”. I should therefore like to ask the Minister, so that I can respond to people who raise these questions with me: do the Government still believe in home ownership for everybody, and if so, does that include people with long-term disabilities? If the Government, having taken away the previous scheme, are not going to put something in its place, surely that is a straight contradiction of what the party opposite has always put itself forward as believing in?
Secondly, with regard to people with disabilities and housing benefit—the amendments before us would make exceptions for them—I hope that the Minister will be able to spell out how he will ensure that they do not suffer. If the amendments are not acceptable, I hope that amendments will come forward from the Government on Report. If not, I hope that there will be an opportunity to vote on these matters to show exactly where each of us in each of our parties, including the coalition partners, stand on such a basic issue.
Welfare Reform Bill
Baroness Meacher Excerpts(13 years, 1 month ago)
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Baroness Meacher
My Lords, it is difficult to follow the fantastic contributions of the noble Baroness, Lady Hollis, and the noble Lord, Lord Kirkwood. Most of the points have been made, but there are a few things that I want to add. I have a cynical mind because I fear that the real rationale behind this proposal is to somehow split council tax benefit away from housing benefit because this is one of the proposals which will open a gap between the costs faced by the individual or householder and the benefit payable. If you add that gap to the housing benefit or housing allowances gap, it becomes very embarrassing because there is no way that people on JSA or reduced levels of ESA and all the rest of it as time goes on will be able to cover their costs. That perhaps makes it easier for the Government—I know this sounds cynical and a bit unreasonable, but I fear that it is true—to devolve some of that responsibility on local authorities rather than have the lot at government level. That is the only possible rationale I can think of for demolishing one of the great pluses of this whole reform—the 65 per cent take-up.
What we are going to see, undoubtedly, is a growing level of debt across the land. Council tax debt is already the largest type of debt dealt with by citizens advice bureaux. There were 170,000 cases last year, before we even start on this new reform, and the level will surely soar. That is one of my big concerns and the Minister will not be surprised that I mention it. Of course, the big group most likely to be in debt is people with learning difficulties and mental health problems. I can envisage many of these people coming to our door in need of in-patient care because they will be under such stress that they cannot deal with it. They will have bailiffs at their door and they will not be able to handle it. The CAB cites the example of someone with mental health problems coming along with a £518 bill in debt for council tax and a £183 bailiff charge. I would be very distressed in that situation and, clearly, our particular group cannot cope.
That is one of my issues. Another one is the work incentive, which I understand, respect and support, but you have to have a situation where the people who are given that incentive can actually work. The state has a special responsibility for those groups who, however much they may want to work, will find it extremely difficult to find an employer to take them on. All the talk about the importance of incentives to work, which we all subscribe to, has to be balanced by that recognition. The state cannot just abandon responsibility for people who simply will not be able to get into work; they will be on JSA because they will have been excluded from disability benefits. They will then have these gaps opening up and they will have incredibly little money to live on.
My last point is a question for the Minister. What will it cost local authorities to set up these administrative systems to run council tax benefits? How much of the apparent saving of £490 million will be lost in the cost of the administration of all these systems, plus the costs of bailiffs, debt collection and so on? I would be interested to hear the Minister’s response.
Lord Williamson of Horton
My Lords, I support the amendment proposed by the noble Baroness, Lady Hollis—not perhaps with quite the same vehemence, but I definitely support it. In fact, I am getting into the habit of supporting the noble Baroness; that may not continue, but for the moment it seems to be well established on my part.
Those of us who strongly support the introduction of the universal credit recognise that the clause we are discussing is the most important one of the whole operation. That is because there can be nothing more important than deciding and making clear what it is by reference to which the award is to be calculated. This is the part of the Bill that says what the award is to be calculated by reference to. At the moment, the current text is “housing”. That is open to quite a bit of discussion and dispute until we are absolutely clear about what is going to happen on council tax.
This is the clause in the Bill that beneficiaries may actually read; they will want to know how their award is calculated, and council tax is an essential element. If they are told, as appears to be the case, that the level of benefit and the calculation of council tax is to be based on everyone else in their locality, whether they are pensioners, disability sufferers and so on, that will give rise to quite a lot of concern about the complexity of the arrangements that are apparently being proposed. I am concerned about that.
Those like me who have a child with a disability know that it is extremely important that, as far as possible, we should find some form of independent living for them. It is extremely important on the social plane. These people are considerably affected by how the universal credit is going to relate to housing and council tax costs. The standard rate will not prove so difficult, but this element of housing and council tax will be controversial. They will feel worried about it—I think that some are worrying about it already—and that is liable to reflect on the universal credit, which I strongly support.
I hope that the Minister will look favourably at the battery of comments on the issue of council tax which, if we follow what is set out in the consultation paper, seems to be complicated to an amazing degree. That is why I support the clarity of the amendment brought forward by the noble Baroness, Lady Hollis.
Welfare Reform Bill
Baroness Meacher Excerpts(13 years, 1 month ago)
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Baroness O'Loan
I have a brief point in support of the noble Baroness, Lady Campbell. As we later consider the disability living allowance and the PIP which will replace it, we need to bear in mind that our understanding of the consequences of living with disability is limited. We demonstrate that by the way in which we conduct our business. People will judge the extent of our understanding in the discussion we have about social security arrangements for them. It is a hugely important issue.
Baroness Meacher
I support that strongly. If one of our Members is actually at risk, maybe the usual channels need to reconsider whether this Committee can be held in this Room. I do not believe that any work can be done by this House if a Member is at risk and feels that they may not be able to breathe. I urge the usual channels to revisit that issue.
Could I ask the Minister three quick questions. One is strongly in support of the point made by the noble Baroness, Lady Hollis, that risk is more important than the idea of getting an additional 24p in the pound—or whatever it is—for every pound one might earn in employment. I know the Minister is as conscious as I am about the special needs of people with mental health problems in relation to risk.
This is a group who may desperately want to work, but who are locked out of employment because of the understandable concerns of employers about taking them on. I know this is much in the Minister’s mind. Has a real assessment been made about the impact of this Bill, geared to economic incentives, on that large group of claimants, particularly on ESA, in terms of the risk that they face? I have been talking about this Bill to a lot of service users, patients, in east London and they all refer to being terrified. Understandably, this might not have been fully taken on board by the drafters of the Bill, the Bill team and all the other people involved. Is the Minister satisfied that the depth of that issue and its importance to a very large group, something like a third or more of claimants in the employment service, on ESA, has been taken on board? That is the first question.
The second one concerns the point raised by the noble Lord behind me about the IT system. We all know about the NHS IT system: it was all going to be wonderful and we were looking forward to it. It was about integrating databases, computers and suchlike. It failed and failed and failed and cost billions. Does the Minister have an estimate of the timeframe for the integration of the Inland Revenue and DWP computer systems? I think that that is the project: obviously he will correct me if I am wrong. Also, what confidence does he have in that estimated timeframe and what is the evidence for his confidence if he has it?
My third point concerns DWP staff training. Can the Minister, again at this early stage of the Bill, give some assurance to the Committee about the level of funding going into the training of DWP and other relevant staff to ensure that they can understand the complex issues around capacity to get into employment? I have mentioned this story before. In conversation with a Jobcentre Plus manager, I asked how they dealt with people with mental health problems. The answer was: “We don’t”. I asked what happened and the answer was: “They become homeless and go back into hospital”. As somebody responsible for a mental health trust, I would be interested to know whether the Minister is satisfied that in future DWP staff and others will be adequately trained. Our trust and others will not be able to finance large numbers of people coming into hospital who at the moment do not do so.
Lord Freud
We will get a code. But even the current impact assessment shows the transformative effect of universal credit when it is fully implemented. The combined impact of take-up and entitlements may lift hundreds of thousands of individuals out of poverty, including as many as 350,000 children. The vast majority of gains from universal credit will go straight to the poorest households.
I shall pick up the point made by the noble Lord, Lord Wigley, and the noble Baroness, Lady Meacher, on risk. By combining, effectively, out-of-work benefits and in-work tax credits, we effectively de-risk moving from one category to the other and that is a very powerful incentive for the poorest people to take a risk. One other aspect of it which I have been very conscious of as we develop the whole approach is that it is the best way of dealing with fluctuating conditions. You can move, take a risk and work for some months without being terrified that, if it does not work out, you have lost your benefit support structure, because you are just moving up and down the taper. So, from the aspect of risk, universal credit has huge advantages and it is one of the main drivers of our expectation to see many fewer workless households.
Baroness Meacher
I agree with the Minister that that is one of the great things about the universal credit—on the assumption, and this is the second point that I made, that the systems are properly integrated. As I understand it, this wonderful moving in and out of work, with your benefit going up and down as your earnings do the opposite, depends on the integration of those computer systems. My concern is that if the Bill goes through and the universal credit comes in but the IT systems are not ready, then I would have thought that the whole thing would be undermined. I would be interested to know the Minister’s response.
Lord Freud
I thank the noble Baroness. I will leave that till a little later; a number of noble Lords have raised concerns about the IT infrastructure.
To return to the structure of the universal credit itself, the single taper on earnings means that claimants will clearly see how the universal credit award decreases as income from earnings rises, making work financially rewarding for everyone. Alongside the work programme, universal credit will ensure that claimants have a route out of poverty through work rather than a lifetime on benefits—or on social security, depending on language; I will touch on language in a minute as well. I hope, and I hear from noble Lords in terms of principle, that there is general support for this approach.
The participation tax rate assesses the proportion of earnings that are effectively lost through tax and benefits on starting work. The dynamic effect of universal credit means that over 1 million fewer households will face participation tax rates over 70 per cent.
We will also tackle the issue of high marginal deduction rates, which undermine the incentive to increase earnings or hours once someone is working. Under the current welfare system, people in work can gain as little as a 4p increase in their take-home pay for every £1 increase in earnings, and people on out-of-work benefits could see a pound-for-pound reduction on their benefit.
On the questions raised in this area by the noble Lord, Lord McKenzie, regarding the numbers of people who face higher and lower marginal deduction rates, the impact assessment confirmed that 2.1 million individuals will have higher rates under universal credit but that the median increase will be comparatively small, at about 4 percentage points, and many of those will be households with above-average income for universal credit claimants, moving from a marginal deduction rate of 73 per cent to 76.2 per cent. Some 330,000 second earners will face higher rates, compared with 140,000 with reduced rates. The median increase is higher for this group, reflecting the fact that second earners already tend to have lower marginal deduction rates. As the Committee will know, the impact assessment also addressed the issue that some second earners might move out of work, but we are still expecting the net effect to be a large reduction in those who are workless.
On my noble friend Lord Newton’s concern about child benefit and the debate around that, the best that I can do today is to commit to taking that up with Treasury colleagues and find out what the process is. Again, I will revert.
I return to the universal credit. The way that it will tackle the problem of very high marginal deduction and participation rates is to have a consistent taper of 65 per cent. Overall, this produces substantial improvement in those marginal deduction rates. About 700,000 people who currently have rates above 80 per cent will benefit from it. I turn to IT.
Lord Freud
We will have a debate on this matter rather soon, but maybe not today. The only way I can respond is to point out that, depending on how we adjust the system to have what is effectively a tax rebate system outside the universal credit, we could see different effects. Rather than prejudging this, I will reserve that information for another day. We will have plenty of time to deal with it.
I have been asked about IT by a number of noble Lords, including my noble friend Lord Newton, the noble Lord, Lord McKenzie, and the noble Baroness, Lady Meacher, among a few others who have some concerns. We have gone through a huge process of external assessment by the Major Projects Authority, which is a continuous process in stages. The most recent independent review stated a high level of confidence that the expert teams that we have assembled will see us deliver the programme. The review team said that we had made an impressively strong start.
The programme is on time and on budget. It is being developed in a radically new way to government programmes. The difference is that in a traditional government programme the whole system is built, trialled for a few months and then introduced. This system is being built in layers so that we can trial each layer as it develops and test it with customer insight. That process is happening. One of the things that we can do today is take some particular claimant types through the system. I am planning a demonstration for noble Lords later this month to take them through this process, because when they start to see the different elements coming together there will be a much better basis for understanding.
In my confidence, I can quote only these external sources; my own views are perhaps less relevant. The external sources are holding the programme up as an exemplar of how the Government should develop IT. We will be getting these external reviews regularly at each of the difference gateways, so it will be monitored externally very carefully. I have no knowledge of where this is on anyone’s risk register, so I cannot answer that particular question put by the noble Lord, Lord McKenzie. Obviously, though, any big programme is going to be looked at to ensure that it is being done to time and to budget. That is just governance.
I think there is a lot of confusion in the external world between what is an appropriate level of governance and external monitoring of an important, big programme, and the fact that there are always risks involved in developing it. I responded to the article in the Telegraph, saying that this was a programme on time and on budget. Basically, the article was misleading and I stand by that letter.
Baroness Meacher
I wanted to turn the question around another way. The Minister rightly says that there are always risks in these things. If, in fact, the IT system is not ready when the plan is for this Bill to be implemented, will the Minister give an assurance that there will then be a delay in the implementation of the Bill until the IT system is ready? If not, I go back to my other point about the risks, fears and so on. If there is a lot of change and reassessment, which we know are going on anyway, it would be helpful to have an assurance that, as he says, they would then have a system that would deal with a lot of the problems of the current system. It would be extremely helpful if the Minister could give us that assurance.
Lord Freud
I thank the noble Baroness, Lady Meacher, for that. I am at a slight loss at how to respond, in case it is an “Am I beating my wife?” question. I am getting some help from the Box. The universal credit will be built on a computer system, or rather a pair of medium-sized computer systems. We have a careful introduction process. One of the options we had, if I can explain it in layman’s terms, was that we could have picked everyone up electronically out of current systems, moved them over and dropped them into the universal credit, with effectively a Big Bang approach—go for it.
That would have been the conceptual framework in which the noble Baroness asked her question. We are not doing that. We are moving people into the system over an extended period. We will start with the flow in October 2013, and then as we get the system working we will have some managed migrations over a four-year period. It is not the Big Bang approach—where you wait for the thing to go, and then you throw everyone in—that one might envisage. It is a much more considered, steady, incremental approach. Indeed, we are developing the actual IT by using elements and units of what we have much more incrementally than it might seem from outside. That is one of the things that I will try to show noble Lords when we have the presentation; indeed, it will be a wider presentation for all parliamentarians. I see that a few in the Room may be very interested.
Welfare Reform Bill
Baroness Meacher Excerpts(13 years, 2 months ago)
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Baroness Meacher
My Lords, I congratulate the noble Lord, Lord Feldman of Elstree, on his very pertinent maiden speech. With a legal background as a commercial barrister, the noble Lord’s contributions to the House will surely be incisive and hard hitting. As the former managing director and chief executive of his family’s textile manufacturing business, he brings invaluable commercial expertise, and as the organiser of the operations and fundraising for David Cameron’s leadership campaign, he is clearly someone who expects, and achieves, success. Noble Lords, particularly Cross-Benchers, will I am sure gain great confidence if they find him on their side of an argument. Again, I congratulate the noble Lord, Lord Feldman of Elstree, and welcome him to the House of Lords.
I begin my remarks on the Welfare Reform Bill by applauding the Government and, most particularly, the Minister for some of the valuable reforms in this Bill, which include: the serious attempt to simplify the system—anyone who knows about welfare benefits knows the importance of that objective; the integration of the universal credit and Inland Revenue databases enabling truly automatic benefit adjustment—what could be more important?—in response to earnings changes; and the two-year window for automatic reinstatement of benefits if a job does not work out. All three are vital changes to reduce the risk of taking a job for people, in particular those with mental health and other fluctuating disorders. I will focus my attention on those groups because I believe that they are the most difficult to help. I say clearly that I have serious and considerable concerns about the Bill, albeit that I recognise its strengths.
As other noble Lords have pointed out, one of our great difficulties in debating this Bill is in distinguishing between the impact of the cuts and the impact of the structural changes. I believe that it is a combination of both that will threaten the stability of the lives of vulnerable individuals and the very fabric of communities. The housing benefit changes are among the most threatening. Many other noble Lords will address those issues and, therefore, I will not do so.
The new personal independence payment presents very severe risks for people with mental health problems. The Minister has been clear in emphasising that benefits will be focused on those in greatest need. Who can disagree with that? But we know that assessing people with mental health problems is far harder than assessing those with physical disabilities—in part, because mental health problems fluctuate from day to day and from week to week, as everyone knows. Atos and jobcentre staff have all been confounded by these problems. I understand from the Minister that the assessments for PIP will be based on, but different from, the assessments for ESA. This gives me some assurance but I remain most concerned about this issue. How many mentally ill people will be wrongly deprived of their benefits, with disastrous consequences? That is something we need to address in discussing the Bill.
I have been involved in a small way with the excellent work of Professor Harrington and a group of mental health charities to improve the descriptors used in the assessments. I am also aware of the planned improvements in the assessment process for ESA, using a report from the claimant’s preferred clinician and having the final decision on ESA entitlement made by Jobcentre Plus staff rather than Atos. Perhaps the Minister can confirm that these elements of the assessment process for ESA will apply also to personal independence payments. I think and hope that they will.
In the end, the validity of the decisions about whether a claimant with bipolar disorder or agoraphobia should be entitled to PIP will depend considerably on intelligent decision-making by well trained and highly skilled Jobcentre Plus staff. My biggest fear is that, under financial pressure, the DWP will have underpaid, underskilled and overworked staff making these key decisions affecting people's lives.
In a discussion with carers of severely mentally ill people in east London last week, they talked about their recent reassessments for benefit and described being “terrified”—their word not mine—because the interviewers had no idea or understanding about the conditions with which they were dealing. One carer referred to a report following an assessment that completely misunderstood the mental disorder of her son. Can the Minister give some assurance about staff training and pay? You cannot get decent staff unless you pay them.
The Bill significantly increases the use of conditions and sanctions for claimants of employment and support allowance. We all know that there are individuals and families for whom a life on benefits has become the norm and for whom a strong conditions and sanctions regime is essential in their own interest to try to re-establish them in an independent life. However, such a system presents huge risks for people whose minds are not clear. A severely depressed claimant may not do what a severely physically disabled claimant would take for granted: open letters, read them, understand them, realise the need to respond and so on. For someone lying in bed wanting their life to end, none of these conditionality requirements will be met—and what then?
Certainly people using secondary mental health services most undoubtedly benefit from undertaking work-related activities, so much of this Bill is common sense and we all agree with the principles. The trouble is, when you look at the application the panic starts. Inappropriate conditionality and sanctions can easily be counterproductive and fairly disastrous. For this very substantial group of ESA claimants, the regime must be supportive, skilled but not frightening.
On a different issue, for this group of claimants the option of having the rental element of universal credit paid direct to the landlord is vital. I understand the principle of encouraging independence and getting people to pay for their own rent, but we have to find a way forward for this group and maybe others that noble Lords may highlight. Failure to find a resolution to this problem for this group will lead to more homelessness and hospital admissions. How many more psychiatric hospital beds can we afford?
The plan to limit contributory ESA to 12 months for people in the work-related activity group is a further matter of concern. The issue is perhaps assessment for the support group. If employers are not going to take people on, they will not get a job within 12 months. That needs to be part of the thinking in assessment for the support group.
I am running out of time. For claimants with mild to moderate anxiety or depression, the availability of good-quality CBT is going to be essential if the Government are to reduce radically the numbers of that group on ESA in a caring way. For people addicted to drugs or alcohol, special benefit conditions need to be established. Regular interviews and job applications simply will not work. I applaud the Minister for removing the provisions in the previous Welfare Reform Act, but we need to do more work on that group.
In conclusion, I hope we can agree solutions to these problems, without resorting to votes, through discussion and greater understanding. I look forward to working with noble Lords to improve the Bill and ameliorate the hardship which will, without any question, result if the Bill goes through as it stands.
Welfare Reform
Baroness Meacher Excerpts(14 years, 1 month ago)
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Lord Freud
I thank the noble Baroness, Lady Hollis. Again, I take comfort from her general support for the universal credit. The point I would like to emphasise is that because we have two systems, an out-of-work benefit system and an in-work tax credit system, the risk of moving from one to the other is enormous. One has only to experience doing a job which does not work out, having to fall back into out-of-work benefits with perhaps a delay of three months as the bureaucracy is sorted out and thus not being able to afford the baked beans mentioned by the noble Baroness, to realise that that kind of risk is highly unattractive. We have created a very conservative group of people who should be prepared to take that risk, by which I mean conservative with a small “c”. On child benefit, we have not made a full announcement of what is going to be in the spending review on 20 October, at which point the detail will be revealed, so I am not in a position to answer.
On the second point made by the noble Baroness, noble Lords will be aware that what we are looking at in the numbers is flows. Any work programme tries to balance the disadvantage experienced by people who have been out of the job market for a period and what it takes to get them back into work against those who have only just lost their jobs. Effectively, that is what all programmes try to do. Clearly, we need to ramp up the speed with which we can get people back into work, and this is one measure that is designed to encourage and put pressure on them.
Baroness Meacher
My Lords, one of the Government’s aims is to reduce the number of employment support claimants by around half a million. I respect the Minister’s expertise in this area and, indeed, his commitment to produce a more efficient system. However, can he assure the House that he will not introduce, for example, the time-limiting of benefits to six months or a year, as has been mooted, for people with severe and enduring mental health problems and other long-term disabilities? Has he made it clear to the Chancellor of the Exchequer that the cost of long-term hospitalisation of these people if their benefits are removed will be a great deal higher than maintaining them on benefits? Finally, will he delay the introduction of the new medical tests until the evidence makes it abundantly clear that they are fit for purpose for all, including for people with fluctuating and long-term disorders, most particularly of course for those with severe and enduring mental health disorders?
Lord Freud
I thank the noble Baroness for those questions. We do not have a target for the transfer of IB claimants into JSA, but we estimate that 23 per cent will move straight over. However, it is an estimate and one point of the trials that have been launched today is to find out what the figure might be. The process by which we move people over from IB to ESA means that a substantial proportion will move on to unconditional support allowance so that they are fully supported. However, we would like to make sure that the work-related activity group within ESA moves through the process so that it does not become another place to park people. We are therefore looking at ways to ensure that those in the work-related activity group move through so that they go into JSA as fast as possible. The worst thing is for people to remain inactive for a week longer than necessary.