Welfare Benefits Up-rating Bill

Debate between Lord Low of Dalston and Lord McKenzie of Luton

Monday 25th February 2013 Lords Chamber

[Lord McKenzie of Luton]

My Lords, this is a focused amendment concerning disabled people who are in the support group for the purposes of the employment and support allowance. Noble Lords will recall that in the main phase of ESA an individual will receive a personal allowance and an additional support component. Those are currently £71 and £34.05 respectively. They will increase to £71.70 and £34.80 under the Social Security Benefits Up-rating Order 2013. This is an increase of 1% for the personal allowance but a CPI increase of 2.2% for the additional component. We will have the opportunity to debate the regulations shortly, although, of course, they cannot be amended. Under income-related ESA, other premiums may be applicable, such as the enhanced disability, severe disability and carer’s premiums. Of course, the final amount of any payment depends also on the income, if any, of the claimant.

So far as the Bill is concerned, for those in the support group, the support component and the premiums are outwith the maximum 1% cap, and we support this. However, that is not the case for the personal allowances for a single lone parent and couple, and it is this injustice that we are seeking to rectify. In doing so, we are placing reliance on the commitment made by the Secretary of State for the DWP. On 8 January 2013, he said:

“I stand by what we said originally, and I say it again: in this Bill we have protected people on disability living allowance, as well as people in the support group on ESA”.—[Official Report, Commons, 8/1/13; col. 194.]

That is not the case. Noble Lords will recall that those in the support group are those with the greatest challenges who are deemed neither fit for work nor work-related activity. They are not generally in a position to improve their financial background by way of accessing the labour market and I believe it is generally accepted that they experience higher living costs. The amendment would not represent a hugely expensive change to the Bill, but this is fundamentally about an issue of fairness and insisting that Ministers carry out their promises.

Amendment 3 stands in the name of the noble Lord, Lord Low. I will perhaps offer our view on that amendment when I reply on my amendment. I beg to move.

[Lord Low of Dalston]

My Lords, I support the amendment moved by the noble Lord, Lord McKenzie, to which I have added my name, but I rise principally to speak to Amendment 3, which is in my name alone and provides that the 1% uprating should not apply to benefits paid to claimants in the work-related activity group.

The amendment is essential if the Government are to fulfil their pledge to protect disabled people from the 1% uprating cap. Only disabled people are in the work-related activity group. The assessment process ensures that non-disabled people do not qualify. A recent DWP study tracking those receiving ESA over 18 months revealed that three-quarters of recipients were undergoing regular treatment for a health condition, including a stay in hospital for some. ESA for those in the work-related activity group is paid in two parts—the main component, which is equivalent to jobseeker’s allowance and worth about two-thirds of the total benefit, and the work-related activity group component, which is worth the other third. Many disabled people are being placed in the work-related activity group. Capping increases in their benefit at 1% will mean that households receiving ESA in the work-related activity group will be £87.65 a year worse off. The Government’s proposals to exempt from the 1% cap the support group component for those placed in the support group mean that less than a third of ESA payments for less than half of disabled people receiving ESA will be protected. That is what the amendment of the noble Lord, Lord McKenzie, would achieve, but it would address the shortfall only for the quarter of a million disabled people in the support group.

The most recent DWP figures show that there are 360,000 disabled people in the work-related activity group who also need protection. This amendment would achieve that. One third of disabled people in the UK were found to be living in poverty before the global economic crisis. Disabled people routinely experience higher living costs associated with their disability on things such as equipment, personal assistants and special diets. Disabled people experience the same increases in general living costs as everyone else: food inflation is running at 4.5% and travel inflation at 7%. Unfortunately, disabled people were not able to catch up financially during better economic times. We should not allow them to slip further behind as a result of this Bill; rather, we should ensure that the Government’s objective of protecting disabled people is fully delivered.

Welfare Benefits Up-rating Bill

Debate between Lord Low of Dalston and Lord McKenzie of Luton

Monday 25th February 2013 Lords Chamber

[Lord Low of Dalston]

My Lords, somewhat to my surprise, I find my name on this amendment, so perhaps I should say a few words. I do not want to repeat all the arguments that were advanced at Second Reading and I do not have a lot to add to the very eloquent speech that we have just heard from the noble Baroness, Lady Meacher, but there are a couple of points I would like to make.

The first is the economic argument. I said at Second Reading that it did not really make any sense, at a time when the economy was flat-lining, to withdraw additional purchasing power from a section of the community that was most likely to spend it: those on welfare benefits. With every day that goes by and the economic news piles up about the dire condition of the British economy, the stronger this argument gets. The Minister did not respond adequately to that argument at Second Reading. I would be grateful if the Government gave further serious consideration to the force of that argument, which is genuine and considerable.

The Bill will cause real hardship for disabled people, carers and children. Disabled people are said to be protected but, as we showed at Second Reading, the protection accorded disabled people is partial. There is some protection for those in the support group receiving employment and support allowance, and disability living allowance is exempted from the 1% cap, but those receiving employment and support allowance in the work-related activity group and other disabled people receiving other benefits do not receive protection from the 1% cap. It cannot therefore be said that disabled people are fully protected, nor are carers.

Above all, children are not protected. Disabled children in this country are already disproportionately likely to live in poverty. Approximately 40% of all disabled children—about 320,000—live in poverty, compared with a poverty rate of 30% across all children. Nearly a third live in severe poverty—where a family’s income is less than 40% of the national average. Under universal credit, which will begin to come into effect later this year, parents of disabled children can receive a benefit called the disabled child addition. This will replace the current disabled child tax credit, but, under universal credit, the support available for disabled children who do not receive the high rate of DLA care component will be cut by half, from £57 a week under the disabled child tax credit to £28.52. The Bill will mean that the value of this benefit will increase at a significantly slower rate, by just 1% as opposed to in line with the CPI, which is currently running at 2.7%. As a result of the Bill, parents of disabled children receiving the lower disabled child addition of universal credit will lose £25.21 a year, or £75.63 over the three years during which the 1% cap is intended to operate. I would be grateful if the Minister could reflect further on the hardship that will be caused to all these groups and have second thoughts about the universal application of the 1% cap.

[Lord McKenzie of Luton]

My Lords, I shall speak to Amendment 1 in this group and to the other amendments that we have in it: Amendments 6A, 9 and 10A. I am grateful to my noble friend Lady Hayter for moving the amendment in my absence and apologise to the noble Baroness, Lady Meacher, for missing the very start of what was a powerful presentation.

Amendments 1 and 9 would remove the reference to 1% in Clauses 1 and 2 and hence remove the 1% cap on the uprating of relevant sums and amounts. Amendments 6A and 10A would delete the prohibition on uprating such sums and amounts under the annual uprating of benefits and tax credits. We fully intend these amendments to undermine and negate the purpose of the Bill, which we consider to be unnecessary, misdirected and contributing to the continuing economic failure of this Government, a failure all too evident from last week’s downgrading of our AAA credit rating by Moody’s.

Let me be clear from the outset on Labour’s position: we will make no commitment now on spending or tax for the next Parliament and will set out our spending plans at the time of the next election. However, right now we would uprate in line with inflation—I shall come on in a moment to how the Government can plug the hole in their increasingly fragile finances.

This Bill is unnecessary because if this Government misguidedly wish to plough on with this capping on uprating, they could simply use the annual uprating process. The Bill provides no certainty for taxpayers because there is no certainty on claimant numbers, except perhaps the prospect of them increasing, given the Government’s economic failure. As for the markets, it is frankly untenable to suggest that by locking those amounts, which account for less than 0.1% of government spending, into legislation they will be assured and comforted. It does not seem to have cut any ice with the rating agencies. The certainty of a real terms cut in support cannot be welcomed by claimants, especially when they have no certainty about the level of the real cut.

We all know why the Bill was brought forward. We made our position clear at Second Reading and I do not propose to revisit the issue in Committee. The Bill is misdirected on several counts. It does nothing for jobs. Indeed, by withdrawing real resources from low-income families, which of necessity have the highest marginal consumption rates, it is damaging demand. It ignores the IMF warning that the fiscal stabilisers should be allowed to operate. Its justification is supposed to be that there needs to be some correction for the fact that benefits have been uprated at a faster rate than earnings over the past five years—essentially, that those out of work have done better than those in work. It is perverse, therefore, that two-thirds of those hurt by the Bill are in work, taxing the very strivers whom the Government claim to be supporting. Indeed, specifically included in the cuts is in-work support, such as working tax credit, SSP, SMP and paternity pay, as well as in and out of work benefits such as housing benefit, the very support that enables individuals to sustain employment and manage work and family responsibilities.

It is not only those in work who are having their living standards cut. The Government are failing to honour their pledge to protect the most severely disabled. If they still hold to their obligations under the Child Poverty Act, they are drifting further away by pushing a further 200,000 children into poverty. Worst of all, at a time when the Bill will reduce the living standards of the very poorest, they are rewarding those with the highest incomes, including 8,000 millionaires, with a generous tax cut. The contrast could not be greater: a £2,000 a week tax cut for some, 71p a week if you claim JSA.

By leaving the inflation risk with claimants, the Bill creates greater risk for the poor and uncertainty about their real incomes. The 2012 Autumn Statement cites energy and fuel prices as remaining a potential source of risk over the coming years. It estimates that inflation will be higher in 2013 and 2014 than originally announced due to rises in domestic energy prices and food commodity prices—the very costs that hit the poorest hardest. We see today the reaction of the currency markets to our credit rating downgrade: a weakened sterling, which will put further pressure on prices.

Uncertainty is compounded by there still being no cumulative impact assessment for the raft of benefit and tax credit changes that have been introduced so far by the Government. The IFS, in its 2013 green budget, analysed the effect of the 2013-14 tax and benefit changes. It concludes:

“This broad pattern of tax giveaways and welfare takeaways”—

its own terminology—

“means that the changes, on average, reduce net incomes towards the bottom of the income distribution and increase net incomes in the middle and upper parts of the distribution”.

It states that the below-inflation uprating is the predominant cause of losses in the bottom half of the income distribution and that the reduction of the top rate of tax from 50% to 45% produces the gain for the richest.

That juxtaposition speaks volumes about the priorities of this Government: the rich need more to motivate them; the poor need to feel the lash of cuts to inspire them. This pattern is not new. Looking at the overall position since 2010, apart from the richest decile it is a fact that the poorest have lost the greatest percentage share of their income in the cause of fiscal consolidation. This analysis is consistent with the detailed briefings that we have all received from a range of authoritative sources. They tell us that 68% of those affected by the Bill are actually in work, 30% of all households that will be hit will lose on average £156 a year, two-thirds of those households are families with children, 71% of households affected are at or below average income, and two-thirds of those affected are women.

Disabled People’s Right to Control (Pilot Scheme) (England) (Amendment) Regulations 2012

Debate between Lord Low of Dalston and Lord McKenzie of Luton

Monday 26th November 2012 Grand Committee

[Lord McKenzie of Luton]

My Lords, I thank the Minister for the introduction of these regulations, which have our full support. Right to Control is an important new right for disabled people, giving them greater control and choice over the support they receive to go about their daily lives. It results from the powerful advocacy, not least from the noble Baroness, Lady Campbell of Surbiton, who the Minister rightly referred to, which was advanced during the Welfare Reform Bill 2009 and from the approach of co-production which helped frame these important opportunities. We were also supportive of Right to Control being piloted through trailblazers prior to being rolled out nationally, with the inevitable lessons and challenges that emerge from its practical application.

As the noble Baroness has said, we have had the benefit of the interim evaluation of the trailblazers. However, although not published until February 2012, this related to field work undertaken between June and September 2011, not long after the trailblazers had started. The interim evaluation is therefore inevitably influenced more by start-up issues and less by what might become the steady state. Nevertheless, there are some encouraging messages, even from this early assessment, around changes in culture, encouraging partner organisations to work together and positive influences on how delivery staff work with disabled people. The evaluation identified co-production as having long-term benefits for the design and delivery of services for disabled people.

However, at the early stage the evaluation pointed up some big challenges, including lack of awareness and understanding of Right to Control among staff, including front-line staff. This extended to a lack of certainty over process, a lack of differentiation from previous personalisation initiatives, and a lack of knowledge about legal entitlement.

There was also a lower than expected take-up of Right to Control in the Work Choice and Access to Work funding streams, although it was noted that young people’s access might be through their college rather than through Jobcentre Plus. There was caution on the part of some delivery staff about investing time if the future of Right to Control is not assured. There was the perception of conflicting priorities with the belief by some that it made it more difficult to safeguard vulnerable adults. For some trailblazers some funding streams were already tied into block contracts. Moving away from these has resource implications at a time of severe financial constraints. Budget cuts, redundancies and organisational restructuring have affected trailblazers, making implementation and delivery of Right to Control more difficult.

The Minister said in the other place, and the noble Baroness has reiterated it this afternoon, that the Government continue to monitor the position and to collect management information. Perhaps we can hear how matters are progressing on those above issues. What proactive steps are the Government taking to overcome some of these difficulties and challenges? Collecting information is all very well but there needs to be something more positive, particularly around awareness and understanding. Clearly, trailblazer authorities and stakeholders have a role in this, but so do the Government. Is it still the Government’s intention to see Right to Control being rolled out nationally?

As I said, we support these regulations and the extension of the pilots for one year—as we have heard, the maximum permitted under the 2009 Act. However, we would not wish that to be an excuse for doing nothing in the mean time to help make a success of Right to Control.

[Lord Low of Dalston]

My Lords, I declare an interest as an ambassador of Disability Rights UK, the largest pan-disability, user-led organisation in the United Kingdom, which has only come into being in the past year as the result of a merger between the Disability Alliance, RADAR and the National Centre for Independent Living. It supports the extension of these pilots but takes this opportunity to raise a number of key issues relating to the promotion of the Right to Control objectives and the evaluation of the pilots.

The Right to Control is about transforming disabled people’s lives and giving them real control over the support that they need to enable them to play a full and equal part in society. That was supported by all political parties when the Welfare Reform Act 2009 went through Parliament. It would be good to see the DWP explicitly recognise that objective, and promote it strongly and consistently both within the department and across government. I hope that this would be used as an opportunity to ensure that the evaluation process will be co-produced with disabled people. “Nothing about us without us” critically and essentially means that researchers should work with disabled people—in particular with disabled people’s organisations which have participated in the pilots—to shape and review the evaluation, so that disabled people are not involved only as respondents.

Disabled people also seek an assurance that, in looking at the cost benefits of Right to Control, the department will take full account of the outcomes achieved. Even where there are no direct savings from the pilots—although it is hoped that there will be savings, especially in reducing bureaucracy—there needs to be recognition that the benefits in freeing up disabled people so that they can access education and employment opportunities and play a full and equal part in society will bring long-term savings as well as improve their quality of life.

I observe that the trailblazers have suffered from a lack of consistency and a change in DWP structures and Civil Service roles. I hope that, in the time left for the project, there will be no more changes of this kind. I would also welcome it if the Minister met with disability organisations to discuss what personalisation means in the context of the work that the department is doing on Right to Control and how to advance choice and control for disabled people. This is particularly relevant in the light of the care and support reforms, the transition to the personal independence payment, the Access to Work review that is going on and the disability strategy.

Finally, I raise a question on the Access to Work review. What assessment has the department made of the readiness of Access to Work to be included in the Right to Control, so that users can make spending decisions across funding streams? The evaluation report says that most significant barriers to the integration of the funding streams under the Right to Control relate to money being tied into block contracts and framework agreements. As a result, there is low eligibility for multiple funding streams. People cannot spend budgets across funding streams while still facing different monitoring systems. However, those trailblazers that invested early in co-production with user-led organisations and individual disabled people have progressed further in this respect. As regards Access to Work, in particular, it is mentioned that someone with an eligible frequent need to use taxis could not buy a train season ticket due to Access to Work guidelines.

From evidence from the Disability Rights UK helpline, Disability Rights UK says that often people who get social care funding and who are also at work will be caught between social care and Access to Work. For example, someone who needs personal care such as help getting to the toilet is told by social care services that the latter do not have to meet the needs for personal care if they arise at work, and Access to Work says that it does not have to fund personal care because that is the responsibility of social care services. Indeed, at an event run by Disability Rights UK last year the case arose of a man who has an adapted bathroom at home and does not need assistance to get to the toilet. However, his workplace does not have an adapted bathroom and so he needs assistance when he is at work.

I would be glad if the Minister would take these issues of overlap and conflict between these different funding streams—Access to Work and social care—and consider how these conflicts can be resolved as the evaluation moves forward.

Employment and Support Allowance (Limited Capability for Work and Limited Capability for Work-Related Activity) (Amendment) Regulations 2011

Debate between Lord Low of Dalston and Lord McKenzie of Luton

Wednesday 16th March 2011 Lords Chamber

[Lord Low of Dalston]

My Lords, many speakers have already gone over the new regulations in great detail, and I do not wish to repeat what others have said and go into all the ramifications. I propose just to talk about the impact of the new regulations on blind and partially sighted people, which is likely to be quite serious and which illustrates that the regulations as we have them at the moment are not fit for purpose. I think that other speakers have been unduly kind about the regulations. The noble Lord, Lord McKenzie, said that he was in favour of them. I have to say that I am not in favour of them as they stand. I am more with the Social Security Advisory Committee, which has said that they are not yet fit for purpose in a number of respects, that they were being rushed through prematurely, and that the department should take them back to await the second phase of Professor Harrington’s review. There should be more mature reflection on some of the points that have been made about the regulations and further consultation with the stakeholders who have been so critical of them, about which we have heard.

As has been stated by the noble Baroness, Lady Thomas, these regulations fundamentally undermine the structure of the employment and support allowance where claimants with limited capability for work are put into either the work-related activity group or the support group. The new descriptors make the limited capability for work test, the gateway to the benefit, unreasonably difficult to pass for many disabled people, certainly for blind and partially sighted people. By setting such a high threshold for eligibility for the ESA, they transform the limited capability for work test into a limited capability for work-related activity test, which large numbers are bound to fail. This in effect erodes the distinction between the two tests, undermining the intention of the Welfare Reform Act 2007 that there should be two distinct groups of claimants, one moving towards work—the work-related activity group—and the other with no conditionality—the support group. Under these regulations, the number of disabled people able to qualify for the work-related activity group will drop dramatically, as whole groups are largely excluded by the eligibility threshold.

The Merits Committee, in its first report of this Session, stated that the department itself estimates that 23 per cent will be found fit for work and will be required to make a new claim for jobseeker’s allowance, with its obligation to participate in activities to improve job prospects. The Social Security Advisory Committee believes that the DWP has underestimated the support required by this vulnerable group of claimants. It has also said a number of other things: first, that the current descriptors are also inadequate for measuring the capacity of those with mental health conditions, sensory disabilities or fluctuating conditions; and, secondly, that there needs to be a closer correlation between the tests and normal work situations. For example, someone who needs to be accompanied to familiar places by a helper is not sufficiently adapted to their condition to be capable of work, yet this would score only nine points under the proposed new descriptors and would therefore not enable that person to get through the gateway and qualify for the benefit.

The disability organisations that have made submissions to the Merits Committee have also made a number of other points. The perspective on work skills needs to be wider. Someone might be able to pack boxes all day, but not be able competently to find their way to the factory canteen; or again, people with a limited capability for work—blind people are actually instanced for this—may be able to work, but in a very circumscribed set of jobs. There is an insufficient supply of those jobs in a depressed job market.

I wish to concentrate on the impact of the regulations on the situation of blind and partially sighted people, and in doing so I declare my interest, although at my time of life I am not likely to be applying for employment and support allowance. However, I am a vice-president of the RNIB, which has had a certain amount to say about these regulations. Those who know about these things are clear that the new regulations will have a disastrous impact on blind and partially sighted people, who will in all likelihood fail to qualify for the ESA if the regulations come into force. This is deeply concerning, they say, considering that many blind and partially sighted people have limited capability for work and so should be able to qualify for the ESA, where limited capability for work can be demonstrated—which, I repeat, will be very difficult to do under the new regulations.

A person of working age who loses their sight will need to learn new skills such as independent mobility and how to use a computer using screen magnification or speech output software, as well as new everyday living skills such as cooking, dressing, cleaning and so on. It is not appropriate to require someone in this position to end up claiming jobseeker’s allowance, yet that will be the impact of these regulations. Under the proposed limited capability for work test, a blind person’s difficulties in performing most work-related activities would be ignored and only extreme difficulties in navigation and maintaining safety would be assessed. A visually impaired person would be considered to have a limited capability for work only if they were unable to navigate around unfamiliar surroundings without being accompanied by another person.

The RNIB says that it does not believe that Atos has the specialist knowledge and expertise in a medical test centre environment to carry out functional assessments of the mobility of people with sight loss. It says:

“For example, we are unclear how they would determine whether or not a person is unable, due to sight loss, to navigate a familiar route without support, when they will be assessed in an unfamiliar environment at the test centre, under conditions of limited time for the assessment to be completed”.

The department’s internal review stated that it was the department’s intention to continue to work with experts and specialist disability organisations to refine the descriptors related to sight loss. However, this has not happened, despite requests to meet officials. For that reason, the department really ought to look further at the regulations before it has these discussions with interested organisations that it says in its internal review it is its firm intention to have.

For many blind and partially sighted people, the regulations, if brought into force, could see them denied the ESA. This is due to the high qualifying threshold being put in place around limited capability for work and the failure properly to assess the effects of sight loss. The regulations will seriously undermine the distinction between the work-related activity group and the support group, and force people who should be eligible for the ESA on to the JSA, which is not the appropriate benefit for people with limited capability for work. I do not believe that this is either appropriate or that it was the intention behind the Welfare Reform Act 2007.

[Lord McKenzie of Luton]

My Lords, I did not want to interrupt the noble Lord, but I think he said that I had said I was in support of these regulations. I am not and I do not believe I said that—if I did it was certainly not my intention. I tried to play back some of the concerns that have been raised with us. I certainly support the concept of the ESA and of the WCA, but I do not support these particular regulations.