Welfare Reform Bill

Lord Grayling Excerpts

Wednesday 9th March 2011 Commons Chamber

[The Minister of State, Department for Work and Pensions (Chris Grayling)]

This will provide my hon. Friend with an extra minute to conclude his remarks. We very much welcome the work of the Select Committee, and I assure him that the points that he and the Select Committee raise will help us to shape some of the outstanding issues and the Committee debates that lie ahead.

[Mr Heald]

I thank my right hon. Friend for that. One encouraging development is that many of the proposals in the recent Select Committee report on housing benefit change—proposals for improvements such as monitoring the changes as they are implemented—were accepted when the Government responded to it. It is particularly welcome that the original proposal for people to lose 10% of their benefits after 12 months has been abandoned. I see that the Chairman of the Select Committee is in her place, and she may catch the Deputy Speaker’s eye in a moment; we are all pleased that the Committee has been able to make a difference in that way.

Finally, let me say a few words about how the contracts for the Work programme are dealt with. It is important to have proper implementation.

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[Dame Anne Begg]

Indeed. We heard on Monday, in Burnley, that the appeal process can take anything from a year to 18 months. There are real doubts about the ability of the tribunal system to cope.

[Chris Grayling]

At present, the appeal process takes 17 weeks on average. A year or more is absolutely not the norm. I would be happy to discuss the matter in the Select Committee, but I should grateful if the hon. Lady would note what I have said for the record.

[Dame Anne Begg]

Interestingly enough, a constituent of mine is having to wait for six months. I thought that that was ridiculous enough, but two or three weeks ago, when the Committee was taking evidence, we were told that someone was having to wait for between nine months and a year. Perhaps the Minister should talk to his officials, because it seems that in some areas, at least, the wait is much longer than 17 months.

I mentioned the withdrawal of contributory ESA after a year. Many of the people who will lose that benefit will not qualify for a means-tested benefit, particularly in my constituency, where there will probably be a partner or someone else in the household who has an income. Such people will lose all the money that they have.

We have heard today what has been said by cancer charities, but it is not just cancer sufferers who will be affected. Many other people may not have been given a diagnosis, or may have had a mental breakdown from which they have not recovered. It may take at least a year for those people to get anywhere near the Work programme, although they will be in the work activity group because their disabilities will not be severe enough for them to qualify for membership of the support group. They will be told to come back after another three months, because they will still not be fit for work. They may find that they have used up the whole year’s worth of contributory benefit before they are anywhere near even looking for a job. Many with other illnesses and disabilities will fall into the same category.

I was going to read out a letter from Heather Bennett that would have summed up the position far better than I have. Unfortunately I have no time to do so, but I ask the Government please to reconsider.

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[Mr Tom Clarke (Coatbridge, Chryston and Bellshill) (Lab)]

I should begin by declaring an interest: I am co-chair, with Lord Rix, of the all-party group on learning disability.

Members will not be surprised to learn that I intend to oppose the Bill and support the reasoned amendment. In the short time available to me, I shall speak in direct opposition to this Welfare Reform Bill, because if it is implemented it will devastate the lives of people who are sick, people with disabilities and many vulnerable people throughout Britain, not least in my constituency.

Since before I was elected to this House, I have firmly held to the principle that people with disabilities should have the same opportunities as everyone else, no less and no more, and I have to say that the election of this new coalition Government does not in the least diminish the need for a principled stand to be taken on behalf of people who require support. That is because of the highly punitive measures that are being proposed, and which have not been denied today, and I hope to have the time to address some of them later.

On Tuesday 30 November I secured a Westminster Hall Adjournment debate on Government plans to remove the mobility component of the disability living allowance for disabled people who live in a residential establishment. At the beginning of that debate, I said:

“To put that into context, it is important to establish which members of our society qualify for that benefit. The first, and by far the most common group, is where the claimant is unable—or virtually unable—to walk. The second group consists of people who are both blind and deaf. The third category comprises people with a severe mental impairment, and/or severe behavioural problems. In truth, we could not be discussing people who are more vulnerable or deserving in our communities.”—[Official Report, 30 November 2010; Vol. 519, c. 197WH.]

I also pointed out that of all the proposals on welfare reform, this is the most brutal and cruel. I have had no assurances on this issue during the course of the debate

[Chris Grayling]

It might be helpful to put on the record that we have been very clear that we intend mobility provision to continue for people in care homes. There is an overlap between a number of provisions however, and we have formed the view that it is better not to include a stand-alone clause in this Bill, but to include the issue as a whole as part of our review establishing exactly what needs to be done and through which channels.

[Mr Clarke]

So in place of the clear threats we had from no lesser a person than the Prime Minister and in the face of a lack of clarification today from the Secretary of State, we are expected to wait for a review. I am sorry to have to tell the Minister that, as my right hon. Friend the Member for Birmingham, Hodge Hill (Mr Byrne) said in opening for the Opposition, organisations representing disabled people throughout the country are simply not prepared to accept what appear to be assurances at the 13th hour, given what is written in the Bill and given the opposition to my colleagues’ amendment.

I urge the Government to consider the opinions of voluntary organisations and of the independent Social Security Advisory Committee, which obviously took the same view as I did:

“We consider that the proposal to remove the mobility component from people in residential care should not go ahead.”

That remains our determination today. I trust that the Government will take on board the view expressed by such an influential and informed body.

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[Naomi Long]

That is a fundamental concern. One of my constituents recently came to Parliament, on behalf of the mental health charities Rethink and MindWise, to give evidence to the Select Committee on Work and Pensions about the impact of the assessment proposals on people with mental health problems. Members who met her at the round-table session would agree that she presented her evidence in a professional, competent and effective manner, as one would expect of someone with a medical degree. However, her evidence carried weight not because of her degree, but because she receives disability living allowance. She is not fit for work, and is not permitted to practise as a GP as a result of serious mental health issues, which developed in her final year of study.

If a benefits assessor, even a medically qualified one, witnessed her performance in Committee, they would doubtless assume that she was fully fit to work. However, her condition is unstable, and in periods of ill health, she is unable to leave her home or interact with people at all. Even when well, she is reluctant to take on additional stressful responsibilities because of her history of instability.

[Chris Grayling]

It is important, as people are listening to this debate, that the actual situation is placed on the record. Will the hon. Lady confirm that the system that she is describing is the one that we inherited from the Labour Government, which we have taken steps to change through the Harrington review? In cases where we have made changes to the assessment, the work was done by the previous Government, whose recommendations we accepted. Finally, does she accept that, at the end of all this, there is a collective desire to make sure that the system works as well as possible and that there is a commitment to continue to improve it where possible?

[Naomi Long]

I would like to confirm, on the first issue, that I am not making these points as a member of the Labour party or of the previous Government but as a member of the Alliance party, reflecting the concerns of my constituents. Furthermore, I would hope that there is a collective will to ensure that people are dealt with fairly in the system. However, the doubts that I am expressing to the Minister have been expressed to me by my constituents.

A problem with single point assessment needs to be taken into consideration, and I urge the Minister to look carefully at the issue. The young lady in question, for example, had a dual point assessment by the British Medical Association on her fitness to practise. One doctor said that she was fit to practise, and the other said that she was not, because of the complex nature of her condition. Neither of them was wrong when they dealt with the person in front of them, but her complex mental health condition prevented them from seeing the same individual in the same way.

I do not believe that the problem arises solely with mental health issues, but with many other conditions. People can have good days and bad days, and they may need additional support. As the Bill progresses through the House, it is hugely important that we address that issue.

Much has been said about the removal of the mobility component of the disability living allowance for those in residential care, so I will not rehearse the arguments, but I have corresponded at length on it with the Under-Secretary, and from her most recent correspondence I am aware that there is a valid concern about the inconsistent way in which the needs of some of the most vulnerable people in society are being met.

There is ambiguity and considerable variation in the way in which local authorities take the DLA mobility component into account when making financial assessments, and organisations such as Disability Alliance acknowledge that point, but having identified the problem it is incumbent on the Government to ensure that the solution does not end up disadvantaging the benefit’s recipient, who did not create the difficulty in the first place. Independent mobility is crucial to well-being and to social cohesion, and it must be protected more clearly than it is in the current proposals.

Finally on DLA, I am concerned about the change to the qualifying period, and its move from six months to three months, which could have profound consequences for those who develop sudden onset conditions, such as stroke, or experience the debilitating effects of treatment for an illness, such as cancer. It could also affect those who give birth to a child with a severe disability.

At a time when people are genuinely in need, when their energy rightly needs to be focused elsewhere on coping with diagnosis, treatment and recovery, and when additional stress should be avoided, the financial pressure of dramatically increased outgoings to cover expenses, such as travel to hospital and so on, could push them into poverty if that issue is not adequately addressed. I urge the Government to look again at that unintended consequence of reform, and to take action to ensure that the personal independence payment is available to support people at a time of genuine need.

I welcome the Secretary of State’s assurance on employment and support allowance for those taking oral chemotherapy. I trust, however, that he will also consider those who receive radiotherapy, which, although not as debilitating as chemotherapy, can nevertheless be exhausting and preclude people from holding down work.

Another concern that I want to touch on briefly is the abolition of some discretionary aspects of the social fund. Often, families who are trying to make ends meet on a day-to-day basis find themselves pushed into financial stress or even crisis by significant, unexpected and unavoidable expenditure. The replacement of a heating boiler, a cooker or a fridge, or the need to purchase a school uniform, for example, will often leave low-income families in a situation where only those discretionary elements of the social fund, such as interest-free crisis loans, stand between them and being forced to engage with alternative high-interest and often unscrupulous money lenders. There is an ongoing consultation on that and I urge Ministers to await its conclusion before proceeding to legislate to remove those discretionary elements.

In conclusion, and as I said at the outset, these are far-reaching reforms with far-reaching consequences. The Bill is arguably the biggest change to the welfare state since its inception, and it warrants careful and detailed parliamentary scrutiny. Despite that imperative, much of what is intended remains poorly defined and will be ultimately defined not in this Bill or in any subordinate legislation, but in regulations that the Minister will lay, which in turn will reduce the parliamentary scrutiny of their effects. That extensive reliance on unpublished regulations will make it incredibly difficult for people to make a detailed assessment of the cumulative impact of these broad and sweeping changes. The Secretary of State was clearly frustrated, too, because he felt that at times people had misunderstood the thrust of his proposals. Were there more substance to the Bill, that would be less likely.

Furthermore, the inclusion of clauses relating to child maintenance, when that matter is still the subject of public consultation, and the as yet undefined provisions on child care costs, creates uncertainty in an area—the employability of lone parents and second earners in households—that strikes at the very heart of the Government’s objective to make work pay.

One of the most remarkable yet disappointing things that struck me on reading through the briefings that Members received in the run-up to the debate is that, almost without exception, those organisations that actively support and lobby in this area support the principle of the Bill. Disappointingly, however, we have not had the detail that would give people the confidence to commit to the Bill itself.

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[Mr William Bain (Glasgow North East) (Lab)]

It is a pleasure to be called to speak in this debate.

With more than 2.5 million people unemployed, youth unemployment soaring to 20% and persistent levels of intergenerational unemployment, it is clear that the status quo is not working. The hon. Member for Eastbourne (Stephen Lloyd) cited Beveridge, but Beveridge and the Labour Government of 1945 envisaged the welfare state as a system that would redistribute not just wealth but power and opportunity. It was a welfare state built on reciprocity, but we cannot characterise the package of reforms in the Bill as being built on sufficient reciprocity. This is a Government who are introducing a Work programme that will help 250,000 fewer people than the programmes it replaces.

[Chris Grayling]

It is very important to deal with this point head on. That is absolutely not the case: every single person on JSA or ESA who needs and wants support through the Work programme will get it, and the total numbers will be higher than under the previous Government.

[Mr Bain]

If Members look at the details of what is being spent on the Work programme, they will see it does not match up to the initiatives of the previous Government.

We also foresee huge problems for the losers under these reforms. Labour supports a simplification of the universal credit system, but it must be a fair simplification. Yes, about 1 million households will benefit, but it is absurd that that is being paid for by 1.7 million households with incomes of between £16,000 and £24,000 losing out. The squeezed middle will not only be defined; they will be heard loud and clear in respect of the money they will lose as a result of this Government’s policies.

The Government have shown a bizarre lack of clarity regarding whether self-employed people hoping to start a new business will be eligible for the universal credit. The transition for individuals to the universal credit lacks detail and could create disincentives. The credit does not deal with transport costs to and from work, and the cash protection for individuals’ incomes will apply only until their circumstances change, which could be only a few weeks after taking up a job if their hours of work are altered. Changes to crisis loan alignment payments are also likely to affect many claimants. No work has been done to identify the costs of transferring delivery to local authorities, or to identify the most affected groups.

Labour Members know that one of the best means of reducing child poverty is to encourage more second earners to take on part-time work around their family or care commitments. It is extraordinary that the proposals in the Bill will reduce the work incentives for up to 330,000 second earners. This is not a strategy that will reduce child poverty in the short or medium term. Despite the Secretary of State’s statement today, there is a shocking lack of clarity about the provision of child care, the cost of which presents a huge barrier, particularly for women returning to the labour market. Council tax benefit is being devolved to local authorities in a completely unspecified way that lacks clarity and threatens to create new disincentives to work.

The Institute for Fiscal Studies has concluded that, overall, under the universal credit the incentive to work for low earners will be stronger for single people and for those in couples where one partner does not work, but that it will weaken incentives for couples to have both partners in work, owing to a higher withdrawal rate than the current tax credit system. It has also concluded that lone parents will lose out in the long term.

This week, the Social Market Foundation established that 400,000 families with children that currently receive tax credits will lose their entire eligibility for financial support under the universal credit if they have savings of more than £16,000, and that a further 200,000 families with savings of between £6,000 and £16,000 will lose some of their entitlements. As Ian Mulheim, the director of the foundation, said,

“The Universal Credit will punish working families trying to save for the future, such as those trying to get a foot on the property ladder.”

We urge the Government to reconsider the shambolic way in which they have designed the credit, and to introduce a more adequate Bill that is fit for purpose.

On housing benefit, the hon. Member for Manchester, Withington (Mr Leech) mentioned the incredibly harmful effects of the proposal to extend the shared-room rate from people aged under 25 to those up to the age of 35. Some 88,000 people across the country will lose out, with an average loss of £47 a week. In Glasgow, my home city, the impact will be to move people from the social rented sector into the private rented sector, with a resulting increase in rents.

The Secretary of State has not been able to give the House sufficient assurances on the disability living allowance. Yes, we hear of a review, but he has not taken back, nor has he had permission from the Treasury to recoup, the amount he proposed to save by withdrawing the mobility component. His own Social Security Advisory Committee has referred to the terrible impact of the loss of independence that people who lose the mobility component will experience. We therefore urge the Government not just to review these proposals but to withdraw them.

On the move to personal independence payments, we think it unacceptable to require a disabled person to wait six months—double the length of time under the present system—before coming eligible. Richard Hamer, director of external affairs at Capability Scotland, has said:

“The welfare benefits system is the UK Government’s strongest tool to promote equality for disabled people. The changes announced in the Welfare Reform Bill will instead push disabled people and those who care for them further into poverty.”

I encourage Members throughout the House to seek a better Bill than the one the Government have proposed today. I urge Members to vote for the amendment and to seek a better Bill than the shoddy and shambolic effort the Government have proposed today.

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[The Minister of State, Department for Work and Pensions (Chris Grayling)]

I am sorry to follow such a highly negative speech from the Opposition spokesman on an occasion when the Government are bringing before the House an historic Bill that lies at the heart of an historic set of reforms that will reshape the relationship between the Government, the citizen and the welfare system. The Bill strikes a balance between fairness and responsibility, and crucially, it sets out the framework for creating a more effective welfare system that is fit for the 21st century. Above all, the Bill puts in place many more of the building blocks that we will need if we are to tackle the blight of deprivation that affects too many of our communities and too many of our citizens. In the past 13 years, millions of our citizens were left on the sidelines of society, trapped by a culture of dependency, facing financial barriers to a return to work, and with inadequate support to help them to make a return to the workplace, even if their financial position made it sensible for them to do so. All that must now change.

We have had a good and lively debate, and I congratulate all hon. Members who participated in it. Time does not permit me to refer to all the points raised, but I will happily answer questions or letters, and indeed, those who serve on the Public Bill Committee can raise many of the detailed issues in the days and weeks ahead.

Not least among those contributions was a particularly disappointing start by the right hon. Member for Birmingham, Hodge Hill (Mr Byrne), the shadow Secretary of State. He and the Leader of the Opposition have both openly backed the principles of the reforms, and they even put some of the Bill’s measures, such as the housing benefit reforms, in their party’s manifesto. Yet what did we hear today? They have done a U-turn. They have been captured by the left wing of their party, and are reverting to the politics of type. That is a real shame, because the shadow Secretary of State was right to say that the reforms would benefit from consensus. It is therefore unhelpful to hear Opposition Front Benchers spend so much time seeking dividing lines rather than working with the Government to deliver reforms that will transform this country. The shadow Secretary of State may not realise it, but there is a great degree of consensus about the reforms out there in the country, among people who believe that it is time that we sorted out the mess that has built up around our broken benefits system—a mess that has left millions trapped in dependency.

One of the other disappointments of the debate was that so many Opposition Members reverted to type in the language that they used. Too many couched this debate in the kind of language that I thought we had left behind 20 years ago. Let us be absolutely clear. The reforms are designed to help those in our society who are struggling. The universal credit will help to lift hundreds of thousands of adults and hundreds of thousands of children out of poverty. We are challenging for the first time in far too long the cycle of deprivation that incapacity benefit represents for too many of our fellow citizens. We are providing more individualised support to help people to move back into the workplace.

There are some tough decisions, but for what reason do hon. Members believe that we must take those decisions? It might have something to do with the fact that the Labour Government left us with the biggest deficit in our peacetime history and we must pick up the pieces. As the shadow Secretary of State so aptly reminded us, there was no money left when we took office.

I pay tribute to the right hon. Member for Croydon North (Malcolm Wicks) for saying that the best social security policy is a job. He is absolutely right, and that principle—that simple premise—lies at the heart of our reforms and the change that we are seeking to deliver.

Let me also address the point about the gaps in the Bill, which was raised many times this afternoon. I remember being up against the right hon. Member for East Ham (Stephen Timms), the shadow Minister, in Public Bill Committees when he was in government. Some of those Bills had virtually no substance at all to them. This is a bit like the poacher turning gamekeeper, but it is pretty ripe for him to turn round and say that not all the details have been included. What I would say to the House is this. As we work through the Bill in Committee, we will deliver detail to the Opposition at each stage on how we plan to put the measures into practice. We will answer questions and be as open as we possibly can, including in saying where work still needs to be done. The Committee will, I hope, be an exercise in discussion and debate, and we will inform it to the best of our abilities, because these reforms are vital. Making work pay will transform lives, especially for the poorest, through the universal credit, the single taper and getting rid of the complexity that has dogged our system. Members on both sides of the House will know about all the problems that we have had with tax credits over the years and all the constituency cases that have come to us. They should realise that this Bill sweeps all that away. A simpler system for our constituents and a simpler system for society—this is a better way of doing things.

Many of the clauses in the Bill are also vital to the conditionality changes that will underpin the delivery of the Work programme, helping to deliver much better back-to-work support for those struggling to get into work. We have always been clear that there needs to be a clear two-way contract between individuals and the state. We will provide much better back-to-work support and a system that makes work pay, but refusing that support cannot be an option for those with the potential to work. This Bill will place clear and firm responsibilities on their shoulders, and will bring clear consequences if they fail to live up to those responsibilities.

This Bill is about taking a step in the right direction towards a more common-sense welfare system that targets resources more effectively to the vulnerable, but also restores credibility in our welfare system. That is why we have tackled the insanity of a system that can pay housing benefit to people in quantities far beyond what those in work might expect to be able to afford when finding a house for themselves. That is also why we are introducing the benefit cap, so that we remove perverse disincentives to work. Last week I sat with an adviser in a Jobcentre Plus office who said to me, “The thing I find strange is this: why am I organising payouts to people who get far more money than I do, and I’m doing a job?” That is the kind of situation that we have to address.

That is also why we are getting to grips with reforming the disability living allowance, so that we can move away from an unsustainable welfare state and a system where we leave people for long periods, untouched, uncontacted and unchecked. We do not ask the question, “Is this still right for you?” That is what the changes are about, and they are necessary.

Despite the rhetoric, Opposition Members have said that they believe that it is time for reform, and this is why we are pressing ahead with it. We are also sorting out the mess that is child maintenance in this country. Finally, we are doing something that I am very proud of—something that Opposition Members called for, but which the previous Government did not do: putting an end to jobcentres having to accept adverts from sex clubs or lap-dancing clubs in a way that exploits the most vulnerable women in our society. In short, the Welfare Reform Bill is about putting responsibility, fairness and common sense back into the heart of the welfare system, while ensuring that we deliver value for money for hard-working taxpayers.

[Andrew Gwynne (Denton and Reddish) (Lab)]

Will the Minister give way?

[Chris Grayling]

No, I am not going to give way.

Before I conclude, let me briefly touch on a couple of points raised by hon. Members. The Chair of the Work and Pensions Committee, the hon. Member for Aberdeen South (Dame Anne Begg), raised the issue of contributory ESA. I want to make two points to her. The first is that all those who move off incapacity benefit who fit into the contributory bracket will be given access to the Work programme regardless of their status. That is important in ensuring that they receive back-to-work support. However, I would also remind her that the changes to ESA simply bring it into line with JSA. It is a simple principle that, if someone has financial means in their household, the state will not support them. The state will be there to provide a safety net for those who do not have the means to support themselves. That is a sensible principle. We have extended the period beyond six months, so that we can deliver support to people with health problems, but it is sensible to have an aligned system. I will be happy to talk further with the hon. Lady in Committee or in the Select Committee.

[Clive Efford (Eltham) (Lab)]

Will the Minister give way?

[Chris Grayling]

No.

This is an important set of reforms and I commend the Bill to the House.

Question put, That the amendment be made.