Welfare Reform Bill

Jenny Willott Excerpts

Wednesday 1st February 2012 Commons Chamber

[Dame Anne Begg]

At present, those on incapacity benefit—the existing benefit, which the Government are to replace—who have made the necessary national insurance contributions will keep that benefit until they return to work. Is the hon. Gentleman saying the costing should be done on any other basis? Obviously, the reason the Government are introducing the time limit is to save money: there can be no other reason, as the hon. Gentleman has effectively admitted. This is the result of a money-saving decision by the Government. It is not about being fair; it is about saving money to deal with the debt and the deficit, which were not caused by the people—and their partners, wives and husbands—who have tried throughout their lives to do the right thing.

I am conscious of the time, but I now want to say something about the youth rate. When I intervened on the Minister, I was genuinely trying to obtain some clarification, but I have ended up even more confused than before about how the youth rate will work and which groups of young people will no longer receive an independent—that word is important—income replacement benefit. They may receive non-means-tested benefits and, for instance, disability living allowance or the new personal independence payment, but they will not have any income.

Let me give an example of someone I think will be caught by that, someone who came to my constituency office a number of years ago. He was a young lad of 20 who had been in work for six months when he was diagnosed with a virulent condition. I cannot remember what it was, but it meant that he would be unlikely to work again, and indeed his condition was going to deteriorate. This young man lived with his girlfriend, who earned about £15,000 or £16,000 a year, just over the income support level. Under the measures proposed by the Government, he would not qualify for any income at all. He would be wholly dependent on his girlfriend, and the household income would consist only of her income. That does not strike me as right, and it does not strike me as fair. I should be grateful if, before we vote on the amendment, the Minister would tell us exactly which group of people will lose out as a result of the abolition of the contributory youth rate.

[Jenny Willott (Cardiff Central) (LD)]

Does the hon. Lady accept that that young man would probably qualify for disability living allowance? He would therefore have some income, even if he did not receive means-tested ESA.

[Dame Anne Begg]

The household might possibly get housing benefit, but that goes on paying the rent. The young man might get disability living allowance, but that is paid because he has extra expenses due to his disability. What he does not have is an income. He has no money to go to the pub for a pint, to buy clothes, or to do anything that the rest of us, disabled or not, take for granted. He has no independent income. It is totally different if someone is out of work and unemployed. I am disappointed that those on the Government Benches cannot see that distinction, and cannot see that those who are long-term ill or disabled, and who have no prospect of improving their financial circumstances themselves because of the level of their disability, are being penalised by the Government. That is partly why I most certainly will support the Lords amendments this afternoon, and I encourage right hon. and hon. Members to do so, too.

[Jenny Willott]

Returning to the issue of the time-limited employment and support allowance, there is real concern about an arbitrary time limit. As was kindly pointed out by the right hon. Member for East Ham (Stephen Timms), at a party conference the Liberal Democrats showed their concern by passing a motion against arbitrary time limits. However, the amendment from the Lords and the Government’s original proposal both set arbitrary time limits; it is just that one is longer than the other. Neither of the options in front of us would get rid of an arbitrary time limit, as a number of Members have highlighted.

One way to make the system less arbitrary is to ensure that people are in the right category in the first place, with those in the greatest need in the support group, so that they are not affected by a time limit. My colleagues and I have looked long and hard at the issue, and the important thing is to get the assessment right in the first place and make sure that people are in the right category, as those in the support group are exempt from the time limit. We need to make sure that people who need long-term, indefinite support are in the support group and can get that. That is a more effective way to protect those who need the most help than changing one arbitrary time limit for another.

[Dr Whiteford]

I share the hon. Lady’s concern about getting the test right in the first place, but is she confident that the work capability assessment is working as it should?

[Jenny Willott]

I was going to come on to that. If the hon. Lady will bear with me, I will hopefully answer her question.

[Harriett Baldwin (West Worcestershire) (Con)]

The hon. Lady is making many interesting points. Does she agree that when a person has a degenerative illnesses such as multiple sclerosis, their condition may change during any finite period, so it is important to emphasise that people can be reassessed and put into the support group if their condition deteriorates?

[Jenny Willott]

The hon. Lady is right, and many conditions get worse at varying rates—very slowly for some people, and very quickly for others. It is important to make sure that people get the benefit that they should, and that the assessment is right, as the hon. Member for Banff and Buchan (Dr Whiteford) said.

[Sheila Gilmore]

Will the hon. Lady give way?

[Jenny Willott]

I will make some progress, because I have hardly said anything yet, and I am being intervened on left, right, and centre.

The Harrington process is critical to getting the assessment right. I welcome the work that has been done looking specifically at cancer patients, which will ensure that the vast majority go into the support group. That is the right way forward. I also welcome the fact that Professor Harrington is looking at how we assess chronic pain and fatigue, because in many chronic, long-term conditions—particularly fluctuating conditions—those are the elements that cause people most difficulty in thinking about returning to work, and the elements that, at the moment, the work capability assessment is not very good at identifying and reflecting. I really hope that Ministers will implement whatever recommendations Professor Harrington makes on those issues; on past experience, his recommendations have been sensible and have made a significant difference to the assessment.

On the point made by the hon. Member for Banff and Buchan, there is evidence that the system is improving. I looked earlier today at the latest figures on the outcome of the work capability assessments, which I found quite reassuring when it comes to the Bill. We have to treat the figures with caution, but they show that initially, following the work capability assessment, more people are going into the support group than the work-related activity group. That is a crucial point. If we are getting the assessment right, and more people are going into the support group in the first place, the time-limit for people in the work-related activity group becomes less of an issue, because the people who need the most care are getting support indefinitely.

[Dr Whiteford]

My concern remains that far too many people are having to appeal against their work capability assessment result, and those appeals are overturning the original decision, so the system really is not working as well as it should.

[Jenny Willott]

I understand the hon. Lady’s concern, and the issue has been raised over a number of years by those on both sides of the House.

[Chris Grayling]

It is important that we put it on record for the House once again that, possibly with a tiny number of exceptions, no appeals have yet been completed following the introduction of the Harrington reforms. Every appeal that has been discussed up to now took place under the system that we inherited, rather than since we changed the system last summer.

[Jenny Willott]

I am grateful to the Minister, and I hope that when the figures flow through on appeals that have taken place under the new system, we see a reduction in the number of decisions overturned, and in the number of people who go to appeal. That would suggest that the assessment was working properly.

If we make sure that the assessment works properly, it will reduce the arbitrariness of the timetable, but as the Minister mentioned in an intervention on the Opposition spokesman, the right hon. Member for East Ham, it is important that we recognise that many people will receive six months’ statutory sick pay before they go on to the ESA, so they will be receiving benefits for 18 months. It is important that the Government continue the work that is being done to look at ensuring that employers work with staff when they become disabled or fall sick, and do not immediately push them on to ESA. Instead, employees should get the support that they need, possibly to stay in work over an extended period, and get their full entitlement to statutory sick pay and ESA, so that they get the full 18 months’ support to which many of them will be entitled.

[Stephen Timms]

The hon. Lady set out the fact that there was objection at her party conference to an arbitrary time limit. Does she accept the case for setting the limit, whatever it should be, in regulations instead of in the Bill? Putting it in the Bill means that it will take another Act of Parliament to change it in future.

[Jenny Willott]

There needs to be some stability, so that people know what to expect. One of the problems with putting that type of provision in regulations is that it becomes very difficult for people to know what they can expect. That creates uncertainty, which makes it more difficult for people to cope.

To return to the point made by the hon. Member for West Worcestershire (Harriett Baldwin) about people with deteriorating conditions, I welcome the concession that the Government made in the Lords. It is important that people with MS, motor neurone disease, Parkinson’s and so on get ongoing support when they really need it. That is definitely a step forward.

I still have some concerns about work incentives and the means test. A person does not get means-tested ESA if their partner has a low level of income. If the partner worked 24 hours a week on the minimum wage, that would be a household income of £145 a week. However, as people would get increased housing benefit, council tax benefit and so on, the drop in income for that household when the sick or disabled person no longer received ESA would be significantly less than the scare stories are leading people to believe. I also appreciate that when universal credit is introduced, that will be far less of an issue, because the income disregard for households in which there is someone with a disability will be set much higher, at £140 a week. In the future, under universal credit, a household with an income of £140 a week will get the whole of their income and the full universal credit on top of that, so this is mainly an issue for the 18 months between the introduction of the policy that we are discussing and the introduction of the universal credit in October 2013.

I would be grateful if the Minister, if he gets the chance to sum up at the end of the debate, would say whether anything can be done to bridge that gap. For example, we could look at making sure that people in that category are among the first to be moved on to universal credit, so that we can ensure that the period in which they lose out on income is as short as possible. In addition, the DWP impact assessment says that it is likely to cost £30 million in increased benefit payments as the partners of those affected leave work. I would be grateful if the Minister could consider whether there is anything that could be done to reduce that amount of money by considering the effect on such households.

--- Later in debate ---

[Mr Michael McCann (East Kilbride, Strathaven and Lesmahagow) (Lab)]

Will the hon. Lady give way?

[Jenny Willott]

I will not give way any more, because quite a number of people want to speak and we have only half an hour left.

There are still issues about the time limiting of ESA, although many of them will be resolved when the universal credit is introduced. I believe that the Government have been making good progress on improving the assessment process, which is critical to making the system work. I hope that the Minister gets the opportunity—even if only through interventions—to respond positively to some of the points that I have raised.

[Mr Winnick]

This is indeed a grubby and obnoxious measure, but I have no doubt that at 2.30 pm, the Government will carry the day. I sat on the Government Benches for 13 years, and in the unlikely event that my Government had introduced such a measure, I would not have hesitated to vote against it, as I did on other motions on one or two occasions—although not many. I would not have expected my Government to propose such a measure, and I am pleased that we are opposing it. In essence, we are debating a 12-month limit—if the Lords amendments are defeated, as I expect they will be—for those with cancer and other life-threatening illnesses in the work-related activity group of the employment and support allowance. After 12 months, most of them will be means-tested. Some Government Members will ask why such a means tests should not be imposed, but let us be clear, so that when hon. Members vote in half an hour they know what they are voting on: a claimant in the category that I have mentioned whose partner works for more than 24 hours or earns £149 weekly—£149, not £249 or £549—could lose all their benefit. I wonder how many Government Members, who seem so keen on the proposal, could justify that in their constituencies. I certainly could not and would not wish to try.

As has been stated, Macmillan Cancer Support believes that 7,000 cancer patients will be adversely affected by the proposal. The Government’s own figures show that 94% of people with cancer who are placed in the group that I have mentioned need ESA for longer than 12 months. That is not disputed—if it is, the Minister will intervene. I repeat: the Government’s own statistics show that 94% of such people require that support for longer than 12 months.

This is not just about cancer patients. Let me quote a piece written by someone who has a rare bone disease. He is 50 years old and has spent more than three years in hospitals, trying to recover. He is not in a position to take employment, and that is not disputed. He says that he paid national insurance contributions all his life, until his illness, and he gets £89 a week through ESA. He writes that it

“isn’t a big sum…but it makes a huge difference for me. Among other everyday essentials it pays for the heating to keep me warm during the long and often painful days at home while my partner is out at work.”

Not an extravagant sum, is it? We are not being over-indulgent to someone who worked until he had that terrible disease and wants to try to make the best of his life in such circumstances. He says—[Interruption.] I hope the Minister is listening—he smiles.

--- Later in debate ---

My view is simply that the cap is unnecessary and based on prejudice and political posturing. In past debates in the House, there have also been discussions about cutting the cost of welfare. There was one quote about benefits being an incitement to idleness. Such expressions were used in the debates about the poor law and eventually led to policies of less eligibility and the workhouse. We do not seem to have learned anything in two centuries about poverty and how to tackle it.

[Jenny Willott]

I have made clear my view on the total benefits cap a number of times already in the House, but I take this opportunity to highlight again that Liberal Democrat Members support the principle of a cap and the important message that it sends out that it has to be better for people to be in work than on benefits.

It is also important to exempt those in the support group of employment and support allowance and those who receive disability living allowance. We do not expect those people to work and it would be inappropriate to apply a cap to them, so I welcome the move announced earlier today. I also welcome the package of transitional measures that the Government have announced—in particular, the grace period to protect those who fall out of work. The Government’s grace period of nine months, announced today, is more generous than the six-month period that Labour proposed and was discussed in the other place. I believe that nine months is the right period of time to allow people a chance to get back into work. The vast majority of people who fall out of work will get back into work within that period, so the provision is fair both to families and to taxpayers.

During the debate on the cap in recent months, there has been a lot of rhetoric about huge families sponging off the state. I have sympathy with some of the points made by the hon. Member for Hayes and Harlington (John McDonnell). Some of that rhetoric has been extremely unhelpful. Suggestions that all those on out-of-work benefits are getting more than people in work are simply not true. The rhetoric has been ramped up a little and that has been unhelpful for getting to the truth.

[Jane Ellison (Battersea) (Con)]

Like my hon. Friend, I welcome the Government’s announcement on transitional arrangements, which is particularly valid for those of us with London constituencies. She mentioned unhelpful rhetoric. Does she agree that it is important that, across the House, we convey what those transitional arrangements are, rather than spending a lot of time making political points and scaremongering, which affects all our constituents?

[Jenny Willott]

Many living in London have been told that they are going to be made homeless and that everybody on benefits gets more than people who work. Those messages are unhelpful. They scare people and we need to make sure that, from now on, there is a more sensible, measured tone to the debate.

[Mr McCann]

Will the hon. Lady give way?

[Jenny Willott]

I will give way on that point and then I will not give way again.

[Mr McCann]

What does the hon. Lady make of what the Secretary of State for Communities and Local Government said about the number of people who will be made homeless because of the introduction of this policy?

[Jenny Willott]

I understand that those are old figures that have been withdrawn and that new impact assessments have been published since. The hon. Gentleman can look at those and see what the new figures are.

As has been highlighted by many Members, the cap will hit people hardest in areas with high housing costs. Those tend to be in London, but are also found in cities around the UK. We are not talking about feckless, workshy families with hundreds of children who are sponging off the state. That is why what the Government have put forward today is much more sensible than the proposal sent down from the other place. Exempting child benefit would help those on the margins, but do nothing for those affected by the highest housing costs, who will potentially be most affected by the cap. The Government’s package of targeted support and discretionary housing payments is a much more effective way to deal with the issues that will be created.

I note that Labour Members have not tried to argue otherwise today. They have said little about the amendments that have come from the Lords. The right hon. Member for Birmingham, Hodge Hill (Mr Byrne) will correct me if I am wrong, but I think that I heard him say that the Opposition plan to vote against the Government on the motion to disagree, as well as to vote in favour of their own amendment.

I disagree strongly with the localisation of the benefit cap because that would create a hideously complicated system that it would cost a fortune to implement. It has been suggested in desperation by the Labour party at the very last minute. The proposal is incredibly vague and was summarily demolished by the right hon. Member for Wokingham (Mr Redwood).

[Bill Esterson]

rose—

[Jenny Willott]

I will not give way any more because I want to give other people the chance to speak.

There are no arguments in favour of what Labour has put forward. It is far too vague to even be considered at such a late stage. I think that the Government’s approach is right.

As other hon. Members have said, alongside the targeted support and the grace period, we need to look at the issue of rents and the ridiculously high housing costs in parts of the country. That affects working families who are struggling to keep a roof over their heads, as well as those who are on out-of-work benefits. The Government have been forced into a number of the measures that they are taking because high housing costs have forced up housing benefit and local housing allowance budgets over the past few years. That money is going mainly into the pockets of private landlords. Alongside the transitional support, which will help with high housing costs and help families in the greatest need, I hope that Ministers will work with the Department for Communities and Local Government and local authorities to bring down rents in high-cost areas. That would be a much more effective way to tackle this problem in the long term in particular areas and would save the Government money in the long run.

Finally, I am grateful that Ministers have now made it clear that the Government will review the implementation of the cap after a year. I welcome that. I hope that it will identify any issues or areas where there are problems so that action can be taken.

[Simon Hughes]

My hon. Friend has done a huge amount of work. Before she sits down, may I say that the things that should give London Members the greatest confidence are the letter from the Secretary of State, which confirms that an independent consortium is carrying out a review of the recent local housing allowance changes, and that Ministers have today made it clear that this policy will be reviewed in a way that is public and accountable, and that if it then needs to be re-evaluated, that can be done by Parliament and Government?

[Jenny Willott]

I agree with my right hon. Friend. I give way to the Minister.

[Chris Grayling]

I referred to this earlier, but I would like to put it on the record that we certainly intend to carry out a review, as my right hon. Friend the Member for Bermondsey and Old Southwark (Simon Hughes) said. We would automatically do so with a major policy innovation of this kind. We will carry that out in a transparent way. I also confirm that we are carrying out the other work that he talked about. I want that to be on the record for him.

[Jenny Willott]

I am grateful to the Minister for clarifying those points.

Finally, the Harrington process that has been put in place to review the work capability assessment has been an extremely effective way of getting outsiders to take an independent look at how Government policy is working. It has made significant improvements. I hope that we can learn from that process for the review of this policy to ensure that we are doing what is in the best interests of those who are affected by the cap and of taxpayers.

[Mr Slaughter]

This is how the benefit system works in high-rent areas. If someone with four children goes to Hammersmith council and asks to be placed, they will not be given a permanent home and will be told that they have no prospect of ever getting one, because Hammersmith council is demolishing, not building, social housing. They will not even get temporary accommodation. They will be put in a direct let property under the relationship that the council has with some of the seediest landlords going. They will be charged market rents, but will be living in appalling conditions.

Let us take a real example of a family with four children who live in an ex-council property—these slum landlords go around buying up such properties—on a council estate in the poorest ward in my constituency. They currently get £450 a week in housing benefit for a four-bedroom flat. That will of course be reduced to £400, so they will slowly but surely get to the point of being evicted.

On the day when they are evicted, those people will go back to the town hall with their children. They may then be accepted as non-intentionally homeless, and they might be put into accommodation in Croydon. However, Croydon council says that when the overall cap comes into effect, it will move its families to Hull. That family will therefore face the prospect of a double move.

--- Later in debate ---

[Kate Green]

The point is that a system is being established whereby the parent with care must access the system. There will be a discussion at that point about the process by which that approach to the agency is made. There is no difficulty at all at that point in taking a decision about the responsibility and behaviour of the parent making that application. I cannot understand why the Government think that it is perfectly okay for other officials in the DWP to make decisions on whether people are making appropriate efforts to make themselves available for employment, but not for a decision to be taken on whether a parent has properly engaged in a process of seeking to reach agreement with a non-resident parent.

I also want to speak briefly about the Government’s proposal to amend the obligation on the child poverty target under the Child Poverty Act. The current obligation is for the Government to report on the progress that must be made to achieve child poverty targets—targets to which every party in this House has signed up. There will now be a far weaker requirement simply to report on proposed measures. In other words, there will be an obligation on the Government to report on what they might or might not do, but absolutely no obligation to report on whether it works or on what difference it makes. That undermines what lies at the heart of the Act, which was a genuine wish across the House in the previous Parliament to see real progress in bringing down child poverty and for every politician in this House to be accountable for that outcome.

I very much regret such a weakening of the Child Poverty Act. In future, the Government could legally produce a child poverty strategy that makes no reference to the number of children in poverty—an extremely important measure in driving progress—and has no clear goals for how the proposed actions will reduce that number. When the independent Institute for Fiscal Studies suggests that the cumulative impact of the Government’s welfare reforms on other measures will be to drive up child poverty between now and 2015 and onwards to 2020, one has to wonder whether the proposal is not a rather cynical and calculating step on the part of the Government to wriggle out of an obligation that they know they are not on track to meet.

[Jenny Willott]

I want to speak quickly on under-occupancy and the Child Support Agency.

The main concern on the Liberal Democrat Benches about under-occupancy and the housing benefit proposals—as hon. Members have heard from a couple of my colleagues and from Members on both sides of the House—is about the impact on rural areas and, in particular, the Scottish islands. There is also a concern about urban areas where an active allocation policy has meant that families have been given larger houses in areas that are less popular. I appreciate that it is difficult to lay out in legislation the need to ensure that tenants are offered appropriate alternative accommodation, but it is important that we ensure that when alternative offers are made they should take into account issues such as family and support networks, which are particularly important in helping people to get back into work. Offers should also take into account the distance people will have to travel, how that will relate to the communities, the lack of public transport in rural areas and so on, as well as where people are working and how easy it is for them to commute if they are required to move.

I understand that the Government will be doing that through discretionary housing payments, but I would be grateful if the Minister would ensure that guidance making those elements very clear is provided for local authorities. I know that discretionary housing payments are ring-fenced, and that is extremely important, but it is also important that general rules taking into account a sensible approach of looking at community links and the availability of alternative accommodation, or lack thereof, are applied across the country.

[Sheila Gilmore]

rose—

[Jenny Willott]

I am not going to give way.

Another concern is that it will take a while to move people and for accommodation to become available. Registered social landlords are concerned to know how long the process will take, so that they can enable a managed process. While that happens, there will be an impact on their income as arrears are likely to build up before alternative accommodation becomes available. Some RSLs have done work on this, including Riverside housing association, which is based in Merseyside. It has calculated that it will take it at least three years to move everybody around. [Interruption.]

[Madam Deputy Speaker (Dawn Primarolo)]

Order. I am having some difficulty in hearing the hon. Lady because of all the private conversations going on in the Chamber during this important debate. If hon. Members want to have private conversations, perhaps they could step outside the Chamber.

[Jenny Willott]

Thank you, Madam Deputy Speaker.

Will the Minister look at what an appropriate time frame would be and how long it is likely to take housing associations to move people around properties? Will she ensure that discretionary housing payments are available throughout that period so that people do not receive a large cut in their benefit while they are waiting for alternative accommodation to become available? This is a difficult issue and I know that the Government have made provision for those living in adapted accommodation and for foster carers.

[Maria Miller]

I just want to reassure my hon. Friend on a couple of points. First, we intend to commission an independent evaluation of the impact of the size criteria measure, which will give her some of the information and reassurance she seeks about the impact of the changes. We will also be providing funding of £13 million to councils over four years until 2015-16 for support to tenants who wish to move.

--- Later in debate ---

[Jenny Willott]

I thank the Minister for that useful information, which answers in part some of the questions I was going to ask.

It would be helpful if the Government kept an eye on progress. Certain money has been put aside for adapted properties, foster carers and so on, but it would be useful to know that if other vulnerable groups or particular parts of the country are identified as a particular problem, the Government would ensure that that was taken into account in the future allocation of money and in how they look at the impact of the policy on households.

On the Child Support Agency, there is a problem with up-front costs, particularly with the gap that was originally in the proposals between the amount required from those who are working compared with that required from those on benefits. I therefore welcome the Government’s announcement today that they are reducing the fee to £20, which will make a significant difference for a lot of households. Now, we just need to make sure that the service being provided is worth the up-front fee, which frankly it has not been in the past. I hope that we will see some progress in this area so that people will feel they are getting something for their money.

The Minister knows about a particular concern of mine, which I want to raise again today. I still have serious concern about the closing down of old cases and their transferral to the new system. I am sure that all MPs have had people come to see them in surgery with cases in which an irresponsible non-resident parent will not pay, plays the system, refuses to support their own children, and takes years to pin down until a deduction of earnings order in finally put in place. I am concerned about the impact on children of cancelling those orders and making the parent with care start the entire process again, not least because of the difficulties many have had with the CSA in the past and the lack of faith they have in the system. I would be grateful if the Minister would ensure that those cases were prioritised to ensure that when they are transferred to the new system they are properly monitored so that payment keeps flowing as much as possible and that if payment must stop it is only for a very short period so that huge arrears cannot build up, because those cases are the most likely to have a background of large arrears already.

[Mr Watts]

Will the hon. Lady give way?

[Jenny Willott]

I will not I am afraid.

This group of amendments is very varied and we have had a wide debate this afternoon. The Government have made improvements to the Bill, which I welcome, particularly those to the CSA fee. I hope that the Minister will take into account the points that my colleagues and I have raised, particularly on the issue of housing under-occupancy, which is probably the issue of most concern to us in the Bill. So far, I have found that Ministers have listened and taken concerns on board, and I hope they do that today because the Bill is in a much better state now than it was at the beginning of this process.

[Yvonne Fovargue]

I, too, would like to address the issue of under-occupancy and say that the concerns of my local housing department, Wigan and Leigh Housing, are so strong that we have been in correspondence with Lord Freud. There are very few one-bedroom properties, private or council, in my local area, and it will take eight to 10 years to move the 1,450 to 1,800 people who, on the estimates, might want to downsize. During that period, it is estimated, on Lord Freud’s own research, that 35% of those people— [Interruption.]