Welfare Reform and Work Bill (Second sitting)

Corri Wilson Excerpts

Thursday 10th September 2015 Public Bill Committees

[Anna Turley (Redcar) (Lab/Co-op)]

Q 12 Building on that point about the lack of detail in the Bill, one of the biggest concerns you have raised is the huge number of existing claimants, but there is no detail on how they will be dealt with. What are your thoughts on how they should be dealt with? How serious is it that the detail is not there?

Paul Broadhead: Many, in fact more than half, of the existing claimants are in receipt of pension credit, so we are talking about a certain type of individual and we need to ensure that the advice is right. Many of these people have been long-term claimants, so we need fully to understand that change. The timetable for delivery is challenging. There could be an argument—I am not saying there is, because it depends on the Government’s delivery plans—for saying, “Okay, on 1 April 2018, this applies to new claimants,” and we then make sure that we take our time to ensure that everyone understands the effect of the change on their circumstances. Perhaps we could put that back 12 months or so for existing claimants, but it needs to be considered very carefully so that we do not end up with unintended consequences. We have talked about debt—whether it is debt or not and whether it is going to be repaid—and many of these people will not like the thought of debt and might put themselves in a more difficult position than is needed.

Paul Smee: I hope that the Government can come to an early conclusion about the channel through which the advice will be given, because we would want to work with those who are giving the advice in order to understand their position.

[Corri Wilson (Ayr, Carrick and Cumnock) (SNP)]

Q 13 What effect, if any, would the potential increase of sanctions have on the entitlement period? If there were breaks in claims, would that have an effect?

Paul Smee: I am not sure I can answer that off the top of my head. I would not expect there to be any, but if I find that there is, I will drop you a note.

[Corri Wilson]

Thank you.

[Kate Green]

Q 14 I want to follow up on something that was said a moment ago about both existing and, once the legislation is in place, new claimants. I was struck by the statistic that more than half of claimants are in receipt of pension credit, which I suppose means that they are much less likely to achieve repayment by going back to work, as opposed to the eventual disposal of the property. What is your critique of that as commercial lenders, both in the abstract and in relation to SMI?

Paul Smee: Right across the population, we are increasingly seeing people borrowing into later life. The industry is now working on new ways to approach that sort of borrower. There are ways in which the value in a house can be unlocked. It depends on careful advice and helping people to understand the implications of what they are doing, but I think we are going to see more and more people borrowing into retirement, so the industry is getting itself into a position where it can help them to make the right choices. Bearing in mind that at some point people may well want to downsize, or an estate may well dispose of a property, in which case the funds become available.

--- Later in debate ---

[Victoria Atkins]

I am sorry, I was just asking about the rate of the salary.

Tony Wilson: There is an important point here. What drives the experience of the benefit cap is having children and living in the private rented sector. Families with children often have quite high entitlements to tax credits. For example, a family with earnings of £26,000 and three children would receive £5,500 in tax credits. They would also receive £2,500 in child benefit, and they would likely be receiving housing benefit if they were in the private rented sector. So benefits do exist for people on low pay as well as for people out of work. Essentially, a lower benefit cap brings more people into the benefit cap, but these are often people with large families in the private rented sector who would be receiving support in work.

[Corri Wilson]

Q 40 This is a question for Kirsty and Tony. How can you incentivise people who have been assessed as ill to get back to work? When we are capping people who receive severe disablement allowance, how is this treating people fairly?

Tony Wilson: Can I make two quick points to add to Kirsty’s really good, comprehensive list of what works in supporting disabled people and those with health conditions? One further thing is early intervention. One thing we could do much better to incentivise and support is to intervene much earlier. We intervene very late. By the time somebody has got through the work capability assessment and the ESA, they have probably been out of work for a year or more, although they might have been previously in work. Early intervention is really important. The earlier we can engage people, the easier it is and the more effectively we can incentivise a quick return to work.

In terms of financial incentives, for example, one thing that was abolished in 2011 was the in-work credit, which was a payment made to people who were claiming incapacity benefit or ESA when they returned to work. The in-work credit was paid at about £50 a week for 26 weeks. We did a qualitative evaluation of that; there was never a formal impact assessment of it. There is very good literature around financial incentives to individuals when they move into work, internationally. It is not something tested very well here. We should look at how we create financial incentives. It is a behavioural tool to support people to make the transition into work and help to meet the transitional costs of work.

As others have said, I have significant concerns around the incentive and disincentive effects of the changes to the ESA WRAG. As much as anything, the most likely effect is to further increase the cliff edge between the support group and the rest of the benefits system. It will probably make the WCA even more of a mess. It will clog up the system even more with appeals and problems. We need the fundamental reform that Charlotte talked about.

Kirsty McHugh: One of the positive things over the past few years has been the introduction of the Health and Work Service. We need to stop people becoming long-term sick to begin with. The early intervention with the employer is important so that when somebody becomes ill, they are prepared to keep them in work. We need to keep an eye out to ensure that that is doing what we want it to.

A lot of people get assessed to death. They go through the personal independence payment assessment and the WCA. They are assessed by the employment providers. We could probably streamline some of that process—that is the outsourced sector and the DWP element. At the moment we are not sharing those assessments in a sensible way. We could probably take some costs out of the system and make life much easier for the people who are subject to it if some of those system issues were more effective than they are currently.

[Jo Churchill (Bury St Edmunds) (Con)]

Q 41 I will try to be succinct, because you have covered a lot of this. My major interest is in how we help occupational health outcomes that would aid employees, particularly those who, for example, suffer from cancer and, through no fault of their own, end up in a situation where they are claiming. Many of them, after Question Time yesterday, asked me why we could not do something like invoke a conversation between a doctor and the employer to avoid them falling between the cracks. They are okay to work and they want to work, but it is an all-or-nothing scenario. Is there any mileage in a better dialogue or a service where doctors can help to inform—this leads into long-term conditions, an ageing population and so on—so that we have a better conduit of information between different services?

Kirsty McHugh: Short answer—yes. We know that the NHS is not brought into the conversation as much as it should be. Again, a positive: employment is now one of the NHS framework outcomes in a way that it was not before. That should be a big step forward for us. Where things work well, the GP is part of the conversation. We often find people who have been on ESA for a long time and whose medicine has not been reassessed. The prescription keeps on running, which cannot be good for them and does not help that idea of work being good for people.

--- Later in debate ---

[Peter Heaton-Jones]

Q 56 It would be interesting to know what percentage of people who have been in receipt of ESA in the WRAG have come off that and in to employment. Does anyone else have anything?

Tony Wilson: The only indicators that the Department publishes are benefit offloads at 65 weeks—the proportion who have left benefit after 65 weeks. You have put me on the spot because I cannot remember what the figure is. It is not a lot—it might be 40% or 45%.

Charlotte Pickles: It is not job outcomes.

Tony Wilson: It is not job outcomes.

Charlotte Pickles: Which is the problem and the point I was making earlier.

Tony Wilson: It is not beyond the gift of the Department to work that out, essentially matching with HMRC and its own data. I think that is something we would all find invaluable.

[Corri Wilson]

Q 57 I just wanted to touch on the carer’s allowance and the widow’s pension in part of the cap. Those are obviously groups of people who are already under a strain: they have either lost a partner or have a caring responsibility 24/7. Should they be part of the cap? Should they be included?

[The Chair]

Any takers?

Tony Wilson: There is a good argument to exempt them. The groups we most focus on exempting from the cap would be those that are least likely to be able to respond by moving into work or moving home. In particular, those are parents with very young children. We would not expect parents with a child aged one or nought to be moving into work or moving home in response to the cap. Therefore, their only option is to see their income reduced. Focusing exemptions on those groups where a labour market or housing response is not possible or feasible is critically important. Some of those may be widows and carers, yes.

--- Later in debate ---

[The Chair]

So the answer is yes.

[Corri Wilson]

Q 75 I should like to challenge the assertion that the changes to ESA and universal credit will save the Government money. It may be just the welfare budget, but surely it will put a strain on other parts of the system: the NHS, charitable organisations and local authorities. That is for anybody who wants to answer.

Sophie Corlett: Yes, I agree, and since the welfare changes that we have already had we have had an enormous increase in calls to our information line from people who are in debt or worried about debt, or worried about how they are going to be able to make ends meet.