Benefit Claimants: Free Prescriptions

Baroness Sherlock Excerpts

Thursday 30th November 2023 Lords Chamber

[Baroness Sherlock (Lab)]

My Lords, I thank all noble Lords for their contributions to this short debate, especially the right reverend Prelate the Bishop of London for making it possible and for her introduction. I remain grateful for her continued commitment to the health and well-being of the nation, especially the most vulnerable within it, and I thank her for all she does in this respect.

Before I speak on the Motion, I would like to record my sadness at the news that Lord Darling has died. Before becoming a valued Member of this House, he was Chancellor during the global financial crash. The country was fortunate to be in the hands of someone of such ability and integrity. But as this is a DWP debate, he was also a fine DWP Secretary of State, with whom I had the privilege of working when I was a special adviser to Gordon Brown. Our country is the poorer for his passing.

As we have heard, the trigger for this debate is the Government’s proposal to close the universal credit claims of some people who fail to meet employment-related requirements. As a result, they would cease to have access to passported benefits, including free prescriptions. The noble Lord, Lord Allan, explained the rationale for a prescription charging policy, but the problem is that this is not a health policy. It is a policy that would try to use access to healthcare as a tool to enforce conditionality in the welfare state. The right reverend Prelate the Bishop of London has highlighted some of the real challenges of such an approach. As she, the noble Baroness, Lady Bennett, and others, have said, this clearly risks putting the health of some individuals at risk. It will clearly not make them any more likely to work—less likely, if anything—and it will probably end up costing the NHS more in the long run, as the right reverend Prelate’s example of asthma inhalers versus asthma attack treatment has shown.

The noble Lord, Lord Allan, is on to something on the point of this policy. I am sorry to say that I think there is an attempt to create dividing lines and say, “You do not really want to do X”. To avoid jumping into that trap, I will say for the record that we believe everyone who can work, should work. That has been the basis of Labour’s policy in the past and will be again. The welfare state was created to support those who could not support themselves, and conditionality has been part of it from the start. If people refuse to engage with the system, there must of course be consequences, but not like this. The quid pro quo is that the state should provide the help people need to get into proper, sustainable jobs, and I have real questions about how well it is doing that right now. Although that is a problem, I do not think anyone really believes that this proposal is the solution, and I think Ministers know that.

The OBR forecasts, after taking account of the Government’s plans, suggest that the employment rate will remain static, there will be 600,000 more people on sickness and disability benefits and that that will put spending up 75%. That does not sound like a plan that is likely to be effective in addressing its ostensible objective. It is hard to understand what the Government want to do with this.

In opening, the right reverend Prelate the Bishop of London said that, in her conversations with the Minister, she realised that very few people would be affected and that the media may have misreported this. To be fair, I think they were meant to report it in the way they had. I would not expect the right reverend Prelate to engage in the politics, but I simply quote from the speech made to the Conservative Party conference by the Chancellor of the Exchequer Jeremy Hunt. He said:

“It isn’t fair that someone who refuses to look seriously for a job gets the same as someone trying their best”.


It was then briefed out that the intention was to signal this as a crackdown on those who do not try very hard. The job of the Minister, for whom we all have great respect, is to say that this is one of two things: it is either a major crackdown, which potentially risks the health of many people, or it does not make much difference. I would like to know which it is, so could the Minister explain that?

The most obvious question is how many people will be affected. Has the DWP done a formal assessment of that? If so, please could the Minister share it? If it has not, why not? Secondly, as my noble friend Lord Davies asked, do we know which people will be affected? Are they young or old? Do they have children? Could they be single parents or carers? Who are they? Free prescriptions are just one of the benefits passported from universal credit. Others include dental treatment, help with travel to hospital to get NHS treatment, free school meals for kids and Sure Start maternity grants. Are those included in the same policy?

The right reverend Prelate mentioned that the Minister had indicated that most of these people will be on a nil universal credit payment and therefore would not qualify anyway. Either nobody in this position would be affected or some will be. What is the process to distinguish between them? Will that action be automatic, will a case be closed at a certain point, or will an individual assessment be made? What safeguards will be put in place to check whether people were failing to engage because of health problems, whether physical or mental? Will this need extra staff and, if so, what will that cost?

I cannot help but conclude that this policy is born of failure. Britain remains the only country in the G7 where the employment rate is still not back to pre-pandemic levels. Some 2.6 million people are now shut out of work due to long-term sickness—the highest number since records began. It is hard not to conclude that a major contributory factor is that the Government have let the NHS lurch from crisis to crisis, when waiting lists have soared to 7.8 million. More and more people over 50 are out of work due to long-term sickness. We all know that large numbers are stranded on NHS waiting lists, who are desperate for treatment or in pain. Many of those are mothers caring for older relatives or other people who are sick or disabled, and they are getting precious little help from the social care system, which still goes unreformed, despite 13 years of promises.

The right reverend Prelate said that health and work are linked, and she is absolutely right. It is quite right that health and employment policies need to be considered together, especially when we have these inactivity rates, but we need to do this in a positive, strategic way. Labour has said that we would invest £1.1 billion in the NHS to provide more appointments and get the backlog down. We would recruit 8,500 more mental health staff. We would also overhaul jobcentres, so that they can provide personalised help and work in partnership with the NHS, employers and others that can help people back into proper, well-paid, sustainable jobs. We would create technical excellence colleges, so that people get the skills that would help them get jobs in their area and then bring the skills that are needed into those areas.

That is the way forward—not a policy that grabs a few headlines but probably will not make much difference anyway. We want a proper, strategic approach to the labour market, working with the health service to help get our country back to work. The social security system is there to support those who cannot work and to help those who can work get back into work. Does the Minister not agree?

[The Parliamentary Under-Secretary of State, Department for Work and Pensions (Viscount Younger of Leckie) (Con)]

My Lords, I begin by expressing my own condolences at the loss of the noble Lord, Lord Darling. I was shocked and greatly saddened when I heard the news earlier today. He was a giant of a man, and he was extremely helpful, indeed instrumental, in helping the country through the financial crisis back in 2008 and onwards.

It is a pleasure to close this important debate which, at its heart, is about ensuring that more people who can work are supported to do so and benefit from all the rewards of work. I start by thanking all noble Lords for their valuable contributions, in particular the right reverend Prelate the Bishop of London for initiating this debate. I also thank her for our meeting earlier this week, which was greatly appreciated. Getting into work and ensuring that work pays remains a key government priority. Building on the £7 billion employment package announced in the Spring Budget, the Autumn Statement set out a further £2.5 billion investment in employment support over the next five years. This support will ensure that no claimant reaches 18 months of unemployment if they have taken every reasonable step to comply with the jobcentre support offered to them.

I will cover two or three points upfront. I was interested in the very hard-hitting speeches from the noble Lord, Lord Davies of Brixton, and the noble Baroness, Lady Bennett. They both opined about the issues of sanctions more broadly. It is fair to say that the right reverend Prelate the Bishop of London alluded to some misrepresentation in the press. I can think only that the noble Lord and noble Baroness have maybe been reading too much in the papers, but their questions were fair.

I say at the outset that conditionality supported by sanctions has been a long-standing feature of benefit entitlement and a policy of past Governments, including past Labour Governments. Claimants on work-related benefits are generally expected to take responsibility for meeting the conditionality requirements that they have agreed to with their work coach. Where a claimant fails to attend a mandatory appointment or fails to comply with specific work-related activities without good reason, an open-ended sanction is applied. Open-ended sanctions are applied from the date of the failure up until the date that the claimant complies with the agreed requirement—I will say more about this later. I am grateful to the noble Baroness, Lady Sherlock, for her general acknowledgment of this policy.

The right reverend Prelate the Bishop of London understandably asked about continued disengagement and whether the policies we are taking forward are a bit harsh—I think that is the general principle of what she said. Perhaps I can be helpful by saying that claimants are set mandatory work-related requirements based on the benefit regime that they are in. All mandatory requirements are tailored to the claimant’s circumstances and are discussed with them beforehand, as are the consequences of failing to comply. We have also hugely increased the training that job coaches have. I reassure the House that the quality of job coaches is increasing the whole time, and there is a great deal of sensitivity involved, as the House will imagine.

Following a failure to comply, the claimant has the opportunity to provide good reason. Additionally, a pre-referral quality check is in place to check for known vulnerabilities before a sanction referral is made. Following a referral, cases are reviewed to ensure that the mandatory requirement was fairly set in the first place and to check whether a conditionality easement should have been applied. Claimants will be contacted through the normal channels from the point of sanction decision. These include a digital nudge at six weeks following the decision. Where a claimant remains disengaged following an open-ended sanction, they will receive a notification at month five that will inform them of the claimant closure intention and prompt them to re-engage or to inform us of any new circumstances that may impact this.

The right reverend Prelate asked, reasonably, about the cost of living. We remain very aware of the pressures that people are facing with the cost of living. That is why we have provided £94 billion of support across last year and this year, 2023-24, to help households and individuals with the rising cost of bills. In addition, subject to parliamentary approval, working-age benefits will rise by 6.7% from April 2024, in line with inflation. The House is well aware of the Autumn Statement announcement on the local housing allowance rates, which I know will make a considerable difference.

The right reverend Prelate asked about statutory sick pay. There is a very short answer: we will absolutely continue to keep it under review. She also asked about primary legislation and timing. Although I cannot give her any precise information on the timing, I can say that it is very unlikely that we will be able to bring this forward during this Parliament. That helps perhaps to answer a question from the noble Lord, Lord Allan of Hallam.

Turning to the issue of disengagement, I should explain that for the quarter ending August 2023, 95.3% of sanctions were for universal credit claimants failing to attend a mandatory appointment with their work coach, as opposed to refusing a job interview. These sanctions are typically open-ended, as mentioned earlier, meaning that they can easily be ended at any time by the claimant re-engaging with their work coach. We know that the majority of people who have open-ended sanctions do re-engage with the support on offer within six months. However, there is still a growing number who are choosing not to engage with employment support, despite support being available to them.

It is important to place this area in the context of the Government’s wider Back to Work plan. A key part of this is about ensuring that a short spell out of work does not turn into a period of longer-term unemployment. I am sure that we all agree with that, because the longer someone remains unemployed, the harder it is for them to return to the labour market. This can have detrimental impacts on the individual, as well as the wider economy. That is why, as part of our plan, we are bringing in much more intensive back to work support earlier on in someone’s claim. This includes upskilling, job search support, practical work experience and tailored advice to support claimants. Those claimants who remain unemployed after 18 months of intensive support will undergo a review by a work coach and will be expected to either take up a job or mandatory work placement, or engage in a programme of intensive activity.

To ensure fairness to the taxpayer, it is right that there are consequences for those who refuse to engage with the support on offer. It comes back to my initial comments at the beginning of my remarks. As a result of this new approach, no claimant should reach 18 months of unemployment in receipt of their full benefits if they have not taken every reasonable step to comply with jobcentre support. The noble Baroness, Lady Bennett of Manor Castle, asked about the additional jobcentre support—the AJS. She asked whether this was even proven to work. Perhaps I can reassure her that there is good evidence to show that work is generally good for physical and mental health and well-being, whereas worklessness is associated with poorer physical and mental health and well-being. Work can be therapeutic and can reverse the adverse health effects of unemployment. This is why the AJS aims to support those closest to the labour market to return to work as quickly as possible and prevent long-term unemployment. So we do think this is a very worthwhile project. It will send a clear message to claimants who can work about engaging properly with support.

Having covered that area, I will now focus on the important points that were raised about claim closure. I would like to, I hope, give some reassurance, and dispel a few myths which were put about. I listened carefully to the remarks made by the noble Lord, Lord Davies, whom I have much respect for. However, I am afraid that I just did not agree with much of what he said in this respect. It is important to underline that not everyone who fails to meet with their work coach is subject to a sanction. If you have good reason, you will not be sanctioned, nor will your claim be closed. The examples of “acceptable good reasons” include new or worsening illnesses, health condition flare-ups and periods of mental ill-health—which answers a question raised by another noble Lord. They also include working or attending an interview, unexpected childcare, attending the funeral of a close family member or friend, or transport failures.

Even if there is no evidence of good reason, work coaches can also apply discretionary easements, as mentioned earlier, such as domestic emergencies. When an easement is in place, we relax our requirements so that individuals will not be sanctioned, nor will the claim be closed. Still, if you do not have a good reason for a failure but you take corrective action and re-engage with the support on offer within six months, your sanction will end and your claim will not be closed.

The noble Baroness, Lady Sherlock, asked who these people were, and I hope I can help to answer that. There is a rapidly growing group of disengaged claimants, as the right reverend Prelate acknowledged, on nil award, who have had a failure without good reason and have failed to re-engage for more than six months. They have no housing or child elements attached to their claim. Crucially, this means that claimants who do have housing costs or children can rest assured that they will not be at risk of losing the income that they have come to depend on.

In addition, the people in the impacted group have not declared that they are homeless or, because they have no housing element, they are likely living with family, possibly including their parents, or their friends. We also exclude any claimant with a health condition that impedes their ability to look for or carry out work—which might play into the questions raised by the noble Baroness, Lady Bennett. It is therefore only right that we close the loophole that allows people to continue to maintain a claim without complying with any commitments.

In the remaining time, I will focus particularly on free prescriptions. This was another theme raised by the right reverend Prelate. Not everyone who is subject to a claim closure will lose access to free prescriptions. There is a variety of exemption criteria beyond receiving universal credit that would qualify an individual for free prescriptions. Claimants are entitled to help with health costs, including free prescriptions, only if they are in receipt of a monetary award of universal credit that is above zero and if their earnings in their last assessment period were below the income thresholds. Many will have stopped receiving access to free prescriptions when their claims were fully reduced by the sanction.

As always, if entitlement to other benefits is reliant solely on a universal credit claim to establish eligibility, that eligibility will cease if the claim is closed. By excluding the claimants who have more severe health conditions and vulnerabilities from sanctions, we believe that the claim closure group would likely be claiming prescriptions for only minor health conditions. I think the right reverend Prelate acknowledged this in her remarks.

There were a number of questions, particularly from the noble Lord, Lord Davies of Brixton, pressing me on the lack of support for the most vulnerable. I hope I can be a bit more helpful. A well-established system of hardship payments is available as a safeguard if a claimant demonstrates that they cannot meet their immediate and most essential needs, including accommodation, heating, food and hygiene, as a result of their sanction. In universal credit, claimants are able to apply for a hardship payment from the first assessment period the sanction reduction is applied.

The noble Lord, Lord Davies, asked about work being the best route out of poverty. He knows what my reply will be, which is that the Government are committed to a sustainable long-term approach to tackling poverty and supporting people on lower incomes. He is well aware of the expenditure that the Government are making in this area and we believe that the best route out of poverty is through work. The Government remain committed to a sustainable, long-term approach in this respect.

The noble Baroness, Lady Bennett, asked about abolishing the prescription charge. I say very briefly that the Government have no plans to abolish the prescription charge in England or to review the medical exemption qualifying list. Our policy remains to help those whose need is greatest through the rules we currently have in place.

I really ought to finish. There are a number of questions that I will most certainly answer—

[Baroness Sherlock (Lab)]

I am sure that the Minister will write, but I will ask one simple question before we are timed out: how many people could be affected by this policy?

[Viscount Younger of Leckie (Con)]

I have asked about that figure. I will need to check whether I can give it to the noble Baroness, as it is not in the public domain. It is substantial. I will write to her to give her whatever answer I can. It is a very fair question, which was also raised by the right reverend Prelate the Bishop of London. However, that is as far as I am able to go.