Welfare Reform Bill

Baroness Thomas of Winchester Excerpts

Tuesday 8th November 2011 Grand Committee

[Baroness Morgan of Drefelin]

My Lords, I have the second amendment in this group, Amendment 71N. It is a big and complicated group. I have also put my name to Amendments 73, 74 and 75. I am not going to say too much about those because the noble Lord, Lord Patel, is going to introduce them in some detail. I support his opposition to clause stand part, and I am sure that we will come to discuss that more generally.

Many people who are placed in the work-related activity group have a deteriorating condition—say, Parkinson’s disease. Some people with motor neurone disease or some forms of cancer have been told that they have only two or three years to live, so it is possible to be in the work-related activity group and still have a very limited prognosis. The purpose of this amendment is to allow certain groups to be exempt from time-limiting of contributory employment and support allowance. This is a probing amendment in many ways, but I would prefer there to be no time-limiting at all, to be clear. If we do have time-limiting, this amendment is intended to safeguard support for people who have had to give up work due to a degenerative condition or terminal illness—for example, Parkinson’s disease, motor neurone disease or cancer. This measure will affect people with a degenerative condition who qualify for the work-related activity group but whose benefit expires before their condition deteriorates, to the extent that they would be eligible for the support group. It will also affect people with a terminal prognosis of over six months who will qualify for ESA under exceptional circumstances.

The Government had originally promised those whose contributory ESA claim had ended at 365 days as their condition deteriorated that, if they qualified for the support group on either functional or terminal illness grounds, they would become eligible again for ESA. This commitment was made in response to a question from Dame Anne Begg MP by Chris Grayling MP. However, there are currently no provisions in the Bill that will allow for someone to restart a contributory claim after their 365 days have expired. Many people with degenerative conditions or a terminal prognosis of more than six months will find themselves without support in the final stages of their illness if they have savings or a partner in work, and therefore cannot seek support from means-tested benefits. People with a degenerative condition will face the impossible predicament of trying to remain in work for as long as possible in order to ensure that they enter the support group within a year of beginning their claim, or having to stop work and focus on managing their condition and thus risk seeing their benefit run out after one year. What a position that we contemplate these people being in.

I use the example of a person with Parkinson’s disease that was lent to me by the Parkinson’s UK charity. It described the following client. He had worked until the symptoms of his condition became too severe for him to continue. He explained that although he had good days, he had bad days. He would only have good days if he carefully conserved his energy. He said,

“but I’m better when I’m not doing anything. It sounds like a skiver’s charter but what it means is that the energy or concentration reserves needed to do simple physical or mental tasks are quite low so any difficulty encountered quickly drains those reserves and I get into a sort of ‘closing down state’. My thoughts slow down. My movements slow down. My breathing gets laboured. I want to sleep. I find it hard to swallow properly. I get headaches and experience a feeling of desperation”.

This proposal promises to create a two-tier system. The rules around national insurance contributions are extremely complicated. I do not claim to be an expert in any way, so it is hard to present a hard-and-fast case, but one scenario that might occur is that someone whose condition deteriorates to the extent that they are eligible for the support group on day 365 of their claim receives indefinite support, while someone who becomes eligible on day 366 gets nothing. What action is the Minister taking to ensure that the Government honour their commitment that those who become eligible for the support group after their 365 days’ claim has expired can receive support through contributory ESA?

I understand that there are exceptional circumstances which are catered for in legislation, in the Employment and Support Allowance Regulations 2008. Someone with a life-threatening condition who would not meet the normal criteria for ESA can qualify under exceptional circumstances and be placed in the work-related activity group. The example given in the guidance for healthcare professionals carrying out the assessment is someone with motor neurone disease. As I have said, we know that the average life expectancy post-diagnosis for someone with motor neurone disease is one to four years. A 62 year-old client of a citizens advice bureau in the south-east had worked all his life, until he became too ill to carry on. He was diagnosed with motor neurone disease and experienced chronic fatigue and reduced mobility. He applied for ESA and was placed in the work-related activity group. What does the Minister intend to do to ensure that people in that situation, who qualify for ESA under these exceptional circumstances, do not lose out as time-limiting is introduced?

The equality impact assessment accompanying the proposal to limit payment of employment and support allowance to people in the work-related activity group partly justifies that measure on the basis that ESA is a “temporary benefit”. This ignores the reality that it is impractical to expect someone with a terminal prognosis to return to work. We are seeing people with a terminal prognosis being put in a work-related activity group, which is being classified as a temporary benefit. If ESA is a temporary benefit, what action is the Minister planning to take to support those for whom a return to work is not an option?

I, like many here, find these clauses desperately unfair to some of the most vulnerable people in our society. I oppose time-limiting for 12 months for ESA, which appears to me to be completely arbitrary. It is not appropriate that we should be looking at this implementation retrospectively. The assessment period should not count towards any time-limiting and it is not appropriate that people coming out of the support group, if they only have a month left of their time-limiting, should be expected to find work in a month. This is an extremely important debate and I hope very much that the Minister will be able to come back fully with answers to my questions.

[Baroness Thomas of Winchester]

My Lords, at this stage, I am not going to go into all the arguments about the time-limiting of ESA to one year. My noble friend Lord German will address the main issues in a short while. I shall speak to my Amendment 72A to my noble friend the Minister’s Amendment 72, the purpose of which is to question the whole business of the retrospective nature of this provision. Under this part of the new clause, the clock has already started ticking for existing claimants, regarding their entitlement to contribution-based ESA in the work-related activity group rather than in the support group, who have been receiving the benefit for 12 months or more. For them, their claim will stop as soon as the Bill becomes law, which is estimated to be April of next year. By starting the clock well before Parliament has made its decision on the Bill, the Government seem to be acting like a private insurance company that changes the rules of someone’s policy after they have made the claim.

However, this does not seem to have been the plan in October last year. If one looks at the Spending Review 2010’s policy costings, published in October last year, on page 6—it is repeated in the Library briefing pack on the Bill—it is stated at the first bullet point that,

“for existing contributory ESA customers, the time limit will apply at the point they reach one year including the assessment phase. Those with a claim duration of one year or more when legislation comes into effect will have their benefit time-limited immediately and will have at least 12 months to prepare for the change”.

Perhaps the Minister can throw some light on why and when the Government changed their minds and decided to make this provision retrospective—thus allowing hardly any time at all for some claimants to prepare for change. Just to be clear, someone whose claim started in April this year may find by the time the Bill becomes law in April next year that their claim will cease immediately.

Parliament has always deplored retrospective legislation. In 2009, the Constitution Committee of your Lordships' House, in its report on the Banking Bill, drew attention to the need for there to be,

“a compelling reason in the public interest for a departure from the general principle that retrospective legislation is undesirable”.

At least the letter to claimants that was sent out recently by the DWP is headed:

“Possible changes to your ESA”,

and states that the changes the Government want to make have not yet been approved by Parliament. The letter continues by providing the ramifications of the change. I gather that many claimants who have received such a letter are telling citizens advice bureaux up and down the country that they do not know what this letter means for them, and that they are very worried by it. They have good cause to be worried. Not only are the Government breaking the understanding that national insurance contributions—perhaps paid for years and years—protected a person against the loss of employment on health grounds, but many claimants, as we have heard, are likely to be left with only their partner’s extremely modest income, which may push them out of eligibility under the means-tested ESA.

I turn back to the policy costings document of October 2010. Under the heading, “Uncertainty”, we read that the migration from IB to ESA was the cause of particular uncertainty. We now know that a high proportion of IB claimants are being found to be fit for work as a result of the migration to ESA, in spite of appeals. I therefore ask my noble friend whether the Government can now start to quantify savings that might be made on the ESA bill, in spite of an increasing JSA bill—given high unemployment—and whether they will consider reverting to their original plan and drop the retrospective nature of this clause.

We all know of the need for the Government to cut public spending by an eye-watering amount as soon as possible. The Government’s argument may be that JSA is time-limited, so why not ESA? However, in my view, a claimant’s health is a much more emotive subject for their employment—or lack of it—and being ill can be a very expensive business. Using retrospection in this way, when it directly affects someone’s income in an unforeseeable way, seems to be thoroughly bad practice. Is it really good governance to cut massive corners by bringing in this policy in such haste?