Employment and Support Allowance and Work Capability Assessments

Debate between Charles Walker and Sheila Gilmore

Thursday 5th February 2015 Westminster Hall

[Sheila Gilmore (Edinburgh East) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Walker. I am grateful to all the members of the Work and Pensions Committee, who have done a great deal of work over the past months and years on this issue. I want to look first at a couple of slightly more detailed aspects of this matter that were not fully covered—no one can cover all of it—in the introductory remarks.

The first is mandatory reconsideration, whereby someone who has had a decision that they wish to dispute goes through a stage in which the decision will be reconsidered. People now have to go through that step before they can go to a formal appeal. The Committee recommended that claimants who had been deemed fit for work following the process, and who have requested a reconsideration, should continue to be paid ESA at the assessment rate until they receive the reconsideration decision.

That issue has been raised repeatedly, not just in the Committee’s report, but on a number of other occasions, but it has been repeatedly rejected by the Minister and his predecessors on the ground that it would be wrong to pay ESA when the claimant has been found fit for work. Ministers say that there is no legal basis for making such payments. However, if the claimant is still found fit for work after reconsideration and subsequently appeals, ESA is reinstated at that point while awaiting appeal, which could be some months, not just weeks, and it can be backdated.

In December 2014, the DWP published statistics on mandatory reconsideration, stating that of the 177,000 ESA mandatory reconsideration decisions made between October 2013 and October 2014, 75% were cleared within 30 days, which still leaves a quarter—some 44,000 individuals—taking more than 30 days. I would argue that that increases the need for allowing ESA to run on, rather than decreases it. If reconsideration for 75% of the people involved is over inside a month, why go through a process of applying for a different benefit, with a different conditionality, and then have to go back to the previous benefit, for such a short period of time? The payment made is exactly the same—the ESA assessment rate is the same as JSA, so there is no difference in the amount of money people would be given.

However, there is a cost of administering a new application, and then presumably moving it back again. Citizens Advice has calculated that the cost of doing that is £160 per claimant and that if all claimants took up a JSA claim at that point, it could cost around £30 million in administration costs in a year. That just seems to be a pointless activity, which leaves some people who do not make the claim for JSA without income at all during that period. If they apply for JSA, they may find themselves subject to conditionality, stress and upset, all for a cost—not a saving—to the DWP; that does seem strange indeed. If there is a legal reason why this cannot be done, it is not beyond the bounds of imagination for Government lawyers to resolve the matter fairly quickly, presumably through regulation.

Another issue that remains missing from the published statistics on reconsideration is outcomes. What has been the outcome of the mandatory reconsideration process? How many of the requests for reconsideration result in a decision being overturned? How many mandatory reconsideration requests that are not overturned go on to an appeal being launched? At the moment, we still do not know.

I raised that issue with the previous Minister and the Office for National Statistics last year. Before reconsideration became mandatory, there were far fewer reconsiderations, but one way of judging the performance of the assessors and the decision makers, and the efficacy of the whole process of the WCA, is in part—and I accept that this is only in part—by the proportion of successful appeals. If any organisation receives a large number of appeals that are then successful, it will want to look at its processes and say, “Why has that happened? Perhaps we are doing something wrong and could do it better, so people would not have to go through that.” It is therefore important to know what is happening in the process.

At the moment, in the published statistics, when a decision is overturned at the reconsideration stage, it is counted in with the original decisions. Given the large number of mandatory reconsiderations, I would argue that it is very important to separate out the outcomes at each stage; there are the original decisions, the decisions after mandatory reconsideration, and the decisions after appeal. That is particularly pertinent given the advent of a new company carrying out assessments, because it will be one method—I appreciate that it will not be the only method—of judging the ongoing performance of the new provider. Will the Minister confirm when those statistics on reconsideration will start to be published, so that we can see what is happening in that respect?

I also want to raise the issue of reassessment. There has been a temporary stop on routine reassessments, not as a managed decision because of concern about reassessments, but because of the backlog. Therefore, in response to a backlog that has built up considerably over the last couple of years, the decision was taken to suspend most routine reassessments. That must be a great relief to a lot of people who were being called in at yearly intervals for reassessment, but it is not a considered approach to the question of reconsideration. The temporary halt, however, gives us an opportunity to look at the purpose and practice of reassessment and decide how we want to handle it better.

The Government frequently refer to the previous incapacity benefit as leaving people languishing on benefit. I have always argued that that was an exaggeration. The many IB claimants who went through reassessment prior to 2008 and the new system coming in would have been surprised to hear that there was no reassessment, because they certainly experienced it. Further, this is a time when we have to look at the outcomes of the migration process from incapacity benefit. Far higher numbers of people have been found unfit for work and been placed in the support group through the migration process than was originally predicted. We might therefore want to ask whether actually, people are genuinely far less fit than might have been assumed. On that basis, why does one have to go through very frequent reassessments that will not prove anything different from what has happened before?

Over-frequent reassessment is stressful for applicants. People describe being really worried when the brown envelope comes through the door with yet another form to fill in to go through the whole process again. It is also expensive, time-consuming, and, I would argue, partly why we got into having the backlog in the first place.

The last independent review from Litchfield recommended, specifically for people suffering a severe incapacity from degenerative brain disorder and who were in the support group, that the reassessment period should be extended to five years. The recommendation was accepted by the Government, but so far, there has been little sign of progress on when that will happen, who it will cover and how many people it is likely to have an impact on. The Committee report, however, asked for the matter to be dealt with without further delay—I would like to hear from the Minister whether that will happen or whether it will just drift on for a long time—and for ways of looking at wider aspects of the reassessment criteria to be considered. As we are moving to a new provider and a new contract, the Committee felt that this was an appropriate time to allow the new contractor to plan its ongoing work. Surely a provider that is trying to allocate its staff and its time wants to know how many reassessments it will be required to do. If the view is that we can push back a bit on that, we need to know at this stage.

One aspect of the system that the Government clearly do not want to get into now—perhaps it will have to be for another Parliament—is whether the test is doing what it should, or whether it is still trying to do two, in a sense, contradictory things. The Chair of the Select Committee went into that to a degree. It is a test for eligibility for benefit that is supposed to determine how close people are to employment and what help and support they might get. However, as it is, those two factors do not seem to get the fullest possible exploration. If people are to be able to make a journey towards employment, their circumstances need to be looked at.

The extent of the challenge people face was illustrated well by the expert panel who looked at WCA as part of a process on whether new descriptors and ways to test people would be appropriate. It looked at the outcomes of some such tests and said clearly that while there was agreement with a fit for work finding, many people who were found fit for work needed a great deal of support before they could find work and 25% would require a support worker to engage in work. If such people have been found fit for work, we must ask what the situation is for the people in the work-related activity group who are supposedly nearer to employment but likely to have greater need of support, adaptations and help to get into employment.

From all the work done on employment of people with disabilities and long-term conditions, we know that a great deal needs to be done with employers; that is a huge part of the process. Indeed, the Select Committee has looked at the whole spectrum. We also looked recently at access to work, because that is a means by which to help people to get into employment. We must look at the process as a whole.

I am concerned that the Government, in their response to the Select Committee’s report, said that they will not take up the recommendation of a fundamental review of WCA or even many of the specific recommendations. It is not only that: the whole of the introduction to the response seems to be more focused on reducing the numbers on benefits than on improving the process and outcomes. Many have been saying this for some considerable time, but it has obviously now dawned on the DWP that the number of people receiving benefit has not reduced as much as had been anticipated, given how many people have been found fit for work. According to the Minister’s own figures, which were given to the Select Committee, slightly under 100,000 fewer people are receiving ESA or IB than were receiving the comparator benefits in 2008. We have been through an expensive, stressful and upsetting process—worse than that for many people—and the outcome has been a reduction in claimants of less than 100,000 at a time when, compared with 2008, the labour market is picking up, so one might expect some people to be going back to employment in any event.

There are two ways to look at that. One is to say, “Maybe people are genuinely sicker or less able than we thought, so what do we do about that?” The other way is to say, “Oh, it has been made too easy for people to reapply, so we will try to make that harder.” I was struck that the introduction to the Government’s response to our report said that the DWP will make it harder for people who want to reapply for ESA for a second or subsequent time to receive that benefit—they should stay on JSA until their claim had been looked at.

There is also a suggestion about introducing the claimant commitment for ESA claimants. The words used here are interesting. It says claimants should be helped in

“their work related requirements including, where appropriate, proactive work search that treats looking for work as a full-time outcome”.

While modified slightly by “where appropriate”, that sounds similar to the claimant commitment that JSA claimants have to go through: for them, job search is a full-time job. Apparently, the DWP is now suggesting that that should be applied to people in the work-related activity group of ESA.

I accept that the words suggest that that should take place where appropriate, but why pick out full-time job search as the one example of what might be in a claimant commitment? If people need help with adaptations, being introduced to employers and sometimes with reskilling, depending on the nature of their previous work—for some, their health means that they cannot do the type of job they did previously—an appropriate claimant commitment, if there must be one, should cover that and not be about endless job search. All too often, when constituents describe what happens when, as ESA claimants, they go into the Work programme, they say that they feel what they are given in the way of help, if anything at all, is endless job searching, as if that will suddenly overcome their problems. I do not believe that it will.

There are people on ESA whose jobs are being held open for them, but they have to claim because they are still too sick to work and their statutory sick pay has run out. I met a constituent in that position last week and she could see little point in being put through lots of job searches when she was confident that she could return to her employment when she was fit. In the meantime, she was unclear why she should be expected to go to constant interviews with an underlying threat that she might lose her benefit. Are we really saying that people who, by definition, have been judged as unfit for work are to be treated in the same was as JSA claimants?

If the Department is keen to introduce some sort of commitment, that must be sensitive to the needs of that group. It must look at their distance from employment and obstacles that they may face. The Department should also look at the vast experience of specialist organisations in the field who have done excellent work with people with all sorts of health conditions and disabilities and helped them into work. That also needs to be done in a positive way, because the last thing we need is for people yet again to get the impression that the emphasis is, “You are not trying hard enough in some way, so we will make you try harder. If you are not trying hard enough, you aren’t really entitled to benefit.” That is the kind of message that is coming across.

If we really believe that the best thing we can do is help people back into employment in a positive manner, we need to put in all those support mechanisms sensitively. People will respond to that, as they do to many of the specialist providers. I hope that the Minister will tell us why the Government’s response focused so much on those aspects.

[Mr Charles Walker (in the Chair)]

May I rely on Front-Bench Members to split the remaining time equally between them? Thank you.

Tax Fairness

Debate between Charles Walker and Sheila Gilmore

Tuesday 12th March 2013 Commons Chamber

[Sheila Gilmore]

The point I was going to make in relation to the matter that was, after all, raised in an intervention is that if everybody moved successfully and reshuffled, there would be no saving, and that is odd because a saving is wanted. It is in that context that people are saying, “What sort of fairness is it that imposes such a great burden of trying to effect economic recovery on those who are least well off? Could we look at other measures to show that we really are all in this together?” That is where the mansion tax comes in.

The mansion tax enables us, in part, to really feel—as a community and as a country—that people are bearing a fair share of the burden. We have heard a lot about tax avoidance and tax evasion. It worries me greatly that the justification given for removing the 50p rate of tax is that people are not paying it. Instead of looking at why people are not paying it, and whether anything could be done to ensure that it was paid, we again hear, “Actually, we’ll just take it away because they aren’t paying it.” That is not a good message to put out.

We have also had reference—in relation to the mansion tax, Mr Deputy Speaker—to not wanting to have such a competitive tax regime that we risk people fleeing our shores. Reference was made to the PricewaterhouseCoopers report about competitive tax rates. There is an interesting coda to that report from some of those who were surveyed. The question then becomes: will the increased competitiveness lead to increased investment in this country, because that is what is really important? Many of the tax people thought it was crucial to turn improved tax relief on capital expenditure into investment in this country, and that it should be the No. 1 priority for the UK. In 2010, the Chancellor abolished capital allowances for investment in his first year in office. Perhaps he would like to look at the whole report, and not just the parts that suit him.

An argument has been made—as it always is with regard to rates and council tax—about people who are asset-rich and income-poor. It is usually raised as a reason for not putting up council tax banding, for example. In the old days, it was used as a reason for not making changes to the rating system. Yes, we can all come up with examples of people who are in that position. Usually, the example is a widow who cannot afford to pay. However, we cannot design our entire system of taxation around that, and there are ways it can be mitigated, as there are with council tax. If someone is genuinely as income poor as has been suggested, they would—at least until the Government decided to change the rules on council tax benefit—have been eligible for assistance with their council tax. There are always ways to help such people.

Earlier, I made what to some people might have seemed an unfair comparison. We were being asked to think about the widow who might struggle with a mansion tax. The 60-year-old widow I referred to is being asked to pay £13 per week out of an income of £71 a week, and the answer is that she should take in a lodger. If we want to be fair to both groups, we have to treat them with equal compassion.

[Mr Charles Walker]

As the hon. Lady will know, property values vary across the United Kingdom. A £2 million house in London may be the equivalent of a £500,000 or £750,000 house in Edinburgh. For the sake of fairness, does she think that there should be an additional tax on properties worth more than £750,000, so that people really do feel that we are all in it together and that this proposed tax will not just be borne by London and the south-east?

[Sheila Gilmore]

I am not convinced by that argument. If we were to enter into that, we would have do so in ways that I suspect the hon. Gentleman would not find particularly palatable.

There is nothing inherently wrong in levying a mansion tax. All the arguments made about the 50p tax do not apply to the same extent, because buildings do not disappear and cannot be shuffled around. It is a way of generating income and bringing in more tax revenue so that we can do all the things we want with public services, or, as we suggest, enable low-paid earners to have a 10p tax rate. Just because a mistake was made previously does not mean that we should not again consider a 10p tax.