Welfare Reform Bill

Lord Patel Excerpts

Tuesday 8th November 2011 Grand Committee

[Lord Patel]

My Lords, I thank noble Lords who have supported my amendments. There are three amendments in my name: one to ensure that any period of time-limiting contributory ESA restarts following any period a person spends in a support group, one to ensure that the assessment phase is not included in any time limit of contributory ESA, and one to ensure that time-limiting contributory ESA for those in the WRAG is not applied retrospectively.

Many groups, including Macmillan, Disability Alliance and others, oppose the introduction of a 12-month limit to the amount of time someone is able to claim contributory-based employment and support allowance for those in the work-related activity group. Macmillan, the Disability Benefits Consortium and others in the wider disability sector oppose the principle of time limiting ESA. People with a disability or illness who have paid into the system should be able to receive support for as long as they meet the eligibility criteria for ESA and are unable to work due to their condition.

Clause 51 amends the Welfare Reform Act 2007 to introduce a 12-month limit to the amount of time a person is entitled to contributory ESA for those in the WRAG. In my view, Clause 51 should be removed from the Bill. Removing this clause would ensure that disabled people would continue to receive critical financial support for as long as their disability or long-term condition limits their ability to work.

The Government’s own figures show that 94 per cent of people in the WRAG will need ESA for longer than 12 months. Those affected, including 7,000 cancer patients, will lose up to £94 a week in vital support. The Government’s proposal is based on their objective to make savings. However, they have provided no evidence to demonstrate that a 12-month time limit is reflective of the amount of time people in the WRAG need in order to be able to return to work.

The coalition agreement promised, I believe, to protect the vulnerable from spending cuts. In his first party conference speech, the Prime Minister last autumn said:

“People who are sick, who are vulnerable, the elderly—I want you to know we will always look after you. That's the sign of a civilised society, and it's what I believe”.

It cannot be right for the Government to propose such a significant policy change without providing evidence that the measure is appropriate and reasonable. Can the Government publish evidence to demonstrate that a 12-month time limit reflects the likely needs of people in the WRAG? What organisations or experts were consulted before the decision was taken to introduce a time limit for contributory ESA?

The time limit will be imposed on people who are in the WRAG. Those in the WRAG are people who, following a work capability assessment, have been found to be not fit for work due to their disability or illness. While those in the WRAG are expected to carry out some work-related activities in order to help them return to work, they are still considered to be not fit for work. If following the WCA they had been found to be fit for work they would be ineligible for ESA and placed on jobseeker’s allowance.

People in the WRAG could still be severely disabled or disabled, as is the case with people recovering from aggressive cancer treatment and other debilitating conditions. I have one example. Martin was diagnosed with primary progressive MS in February 2007. He continued to work until November 2009, albeit with difficulty. He cannot walk or stand up, has incontinence problems and suffers badly with fatigue and muscular weakness in his legs and back. Martin recently received a letter from the DWP outlining how the Government are seeking to change the rules of ESA and impose a time limit on the benefit. He said:

“The real sting in the tail is that the ‘clock’ starts ticking from the date you first ever started receiving the benefit. In my case that is since June 2009, so some 27 months, so in their eyes I am 15 months over the limit! Therefore, my payments would stop immediately once the policy comes into force next year”.

Poor old Martin. What is he going to do?

Currently, no one is placed in the WRAG indefinitely. Only those who meet the strict eligibility criteria for ESA and are unable to work will be able to continue to receive ESA. People in the WRAG can be called for an assessment at any time and will lose the benefit if they are found fit to work. The government proposals will affect only those vulnerable people who are too unwell to work. The vast majority, patients with cancers and others, want to work if they are able to and do not need an incentive. Unlike incapacity benefit, the WRAG or ESA is clearly focused on supporting people into work and receipt of the benefit is conditional on claimants taking agreed steps on activity to move towards work. That can include training, education or condition management. Claimants who take the agreed steps to return to work should not be penalised simply because they need longer than one year.

Many disabled people will simply not be fit enough to return to work after just one year. For example, people with cancer will often experience side-effects of their condition and treatment, such as severe fatigue or depression, for many months and in some cases years, even after their treatment is finished. People with cancer face a range of barriers that impact on their ability to return to work. They can experience debilitating physical and psychological effects from cancer and its treatment, including severe pain, fatigue, nausea, fever and diarrhoea. The majority, 53 per cent, are not advised by medical professionals about the impact of their cancer diagnosis on their working lives and how they can manage their condition. They are not routinely offered the range of back-to-work services they need, such as counselling, retraining and workplace advocacy. They are less successful in securing workplace adjustments to which they are legally entitled and which would help them return to work. This is likely to be linked to the fact that just 43 per cent of employers know that people with cancer have legal protection against discrimination.

Means-testing thresholds are such that thousands of people will lose all their ESA if their partner earns as little as £150 a week. The Government’s own estimates predict that 700,000 people will be affected by time-limiting by 2015-16. Of those who actually lose out, 51 per cent are in the lowest third centile for income; the average drop in income would be £52 a week, but for those in the lowest centile—the lowest third—this figure is £35 a week, a significant amount of money for people struggling to make ends meet. What estimate has the department made of the number of people who will fall into poverty as a result of time-limiting contributory ESA?

Furthermore, people who are currently covered by special rules and can reasonably be expected to die within six months are automatically placed by the support group and will not be affected by time-limiting. However, people who have a terminal diagnosis but who are expected to live for longer than six months currently can still be placed in the WRAG and will therefore be subject to time-limiting. This means someone who has a prognosis of two years and is placed in the WRAG could lose their support after one year, even though they may have only one year left to live. Many of these people will not go on to claim a pension and therefore may receive only 12 months of ESA for all their national insurance contributions. People who lose their contributory ESA due to time-limiting will not be able to claim contributory ESA if they have subsequently become terminally ill and are covered by special rules. This is despite the assurances given by the Government that people who are terminally ill will not be affected by time-limiting.

The Government have claimed that there are alternative means of support available for those who lose their ESA, such as housing benefit or tax credits. However, these are dependent on personal circumstances and many cancer patients will be ineligible. For instance, a couple without children who own their home will not be eligible for housing benefit and they will qualify for tax credits only if the working partner works more than 30 hours, which may not be possible due to caring commitments. My question, therefore, is: can the Government publish evidence to demonstrate what alternative means of support is available for people who lose ESA and give the number of people who are eligible for this support?

For cancer patients, financial worries are second only to worries about their condition and treatment. I have serious concerns about the impact that time-limiting will have on the psychological well-being of sick and disabled people who might already be experiencing depression and anxiety. This will also put pressure on mental health services funded by local authorities. What assessment have Ministers made of the impact that time-limiting will have on health and social care budgets and services, and what discussions have they had with the Department of Health?

Calls for a rethink on the time limit have not been limited to people with cancer and certain disabilities. Concerns about the impact of the proposal is widespread. I noticed that at the Liberal Democrat conference in September delegates voted unanimously to make it Lib Dem party policy to oppose an arbitrary time limit on ESA. I wonder what discussions the Minister has had with his Lib Dem colleagues about alternatives to the 12-month time limit following the Liberal Democrat vote at the party conference, about which no doubt Liberal Democrat noble Lords will correct me if I am wrong.

It is to be welcomed that the Government have recognised the need to make changes to the work capability assessment, and I commend them for at least recognising that. However, I look forward to the Government’s proposal to make more widely available the automatic entitlement to support groups which is currently available to groups such as patients receiving intravenous chemotherapy. As I said, I commend them for that. However, the necessary changes will take time to be implemented, and that will not improve the situation for cancer patients who have finished their treatment and need sufficient time to recover before they are well enough to return to work.

It is widely recognised that the WCA needs to be significantly improved before it is fit for purpose. The introduction of a 12-month time limit for ESA will compound the existing problems relating to the WCA. Instead of taking away support from sick and disabled people who are still unable to work, the Government should be working with disability organisations to design back-to-work programmes that offer personalised support appropriate to customers’ needs. I sincerely hope that the Minister will be sympathetic to the cause and that we will have some proposals from the Government that are encouraging to them.

[Baroness Lister of Burtersett]

My Lords, I am pleased to rise in support of the vital amendments tabled by the noble Lord, Lord Patel, and in opposition to the Question that Clause 51 stand part of the Bill. I am afraid that this will be another of my rather long speeches but this is such an important issue that it is essential that we spend time on it.

The noble Lord, Lord Patel, speaks from his considerable experience as a clinician, particularly with regard to cancer patients. The cause of cancer patients has also been well served by Macmillan Cancer Support, which has done so much to bring this issue to public attention and to brief noble Lords. I shall not focus on this particular group because I cannot possibly bring to the matter the same level of expertise as that of the noble Lord. Instead, I shall discuss some of the wider implications for our social security system, including the gender implications of relying on income-related ESA as an alternative to contributory ESA.

In the other place, the Minister of State told the Public Bill Committee:

“It is a long-standing principle of our contributory system and the JSA system that we allow those who have paid in to draw back out money for a period of time, but that there is a limit to the amount that they can draw out again”.

He continued:

“There has been an enormous inconsistency between JSA and ESA and its predecessors, in that somebody who manages to get themselves on to our sickness benefits is there indefinitely, whereas somebody who is on JSA is there only temporarily. That creates a perverse incentive in the system”.—[Official Report, Commons, Welfare Reform Bill Committee, 3/5/11; col. 650.]

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[Lord Freud]

My Lords, that is a little premature. It is literally too early to look at the timetable of introducing any recommendations, whatever they may be? However, there may be elements that can be brought in sooner rather than later. I do not think that there is an impossible timeline here.

There is a real issue about these particular people who are suffering from cancers and other similar illnesses. You might look at the kind of experience that they will have in practice, because it is easy to look at the one-year ESA in isolation.

In practice, many people will first go through six months of sickness pay, whether it is occupational or statutory sick pay. That is a 28-week period in which many people will undergo much of their treatment. Then there is a one-year period if one is on the WRAG. Many people will go for a period on the support when they are going through treatment. We are seeking to precisely define which types of treatment they can go through. So there is a period on support and then a period on the WRAG. So the idea that there is an arbitrary one year, spinning down the track, from people being ill, is not the reality. There are a lot of stages to go through in our system, which people go through at different times and in different ways. I do not think it is right to think of it in a rather simple way; our system is more complicated.

[Lord Patel]

Sorry to disturb the Minister’s train of thought. I am grateful for the comments he made earlier, and the sympathetic way in which he made them. He may look forward to Professor Harrington’s report. I hope the interpretation of that report will be the important aspect. I gave the example of patients who are on intravenous chemotherapy, who are regarded as different. Equally, for people who are on oral chemotherapy or radiation treatment, it is a very debilitating form of treatment that exhausts one’s body completely. If you ask any patients who are undergoing this treatment, they will tell you that it does.

The second comment that the Minister just made concerns the different amount of money that is available to different people. But it still applies within the 12-month period, unless I have misunderstood.

[Lord Freud]

No, let me make that clear. I will take the points one by one.

Professor Harrington is looking very closely at cancer treatments and is working very closely with Macmillan in particular, to which I must pay testimony; it has provided a lot of extraordinarily valuable background data that we have been grateful for and are using. So there is a process going on.

The point I was making about the timescales is that clearly there is a time when not absolutely all but the bulk of all cancer sufferers going through treatment will be on the support, which is unlimited. They will have gone through that process, then they start the WRAG process, which is time-limited, after that. So it is not “one year for your illness”, if you like; it is one year on these particular benefits.

The noble Lord made a most effective speech at Second Reading, which I remember vividly. I am sure everyone else does as well. He was making the point about how tough it is getting through the experience of cancer—and we are worrying about that in detail. But I also want to give reassurance on the example the noble Lord used, when you get to a year and you are still having a tough time. That is probably not likely to happen in practice very much because of the different phases.

--- Later in debate ---

[Lord Patel]

Earlier the question was asked if we could have a definition of “terminally ill”. I do not think there is one. This definition that you will die within six months applies where the allowance is available. But as I tried to point out in my presentation, you might be terminally ill and not die within six months. Although you might be pretty sick and even near to death, you would not qualify for the allowance.

--- Later in debate ---

[Lord Patel]

My Lords, I support the amendment moved by the noble Baroness, Lady Lister, but I would also remove Clause 52 from standing part of the Bill. Many charities including CLIC Sargent, a charity which supports children with cancer, and other disability charities are also against this clause. The charities, such as that leading charity for young people with cancer, have serious concerns because of the negative impact that proposals in the Bill will have on young cancer patients and other disabled young people. I believe the Government must undertake a proper assessment of the financial support available to those young people with long-term health conditions and/or disabilities before making these changes, as well as considering the cumulative impact of their programme of welfare reform on this age group.

I emphasise that my proposals do not seek to secure higher rates of benefit for those aged 16-24 but simply to ensure a more level playing field in relation to access to benefits and financial support. For example, I believe it is wrong that students with a long-term illness must already be in receipt of DLA to be eligible for income-related ESA. These proposals are supported by other charities too, particularly young disabled peoples’ charities.

As far as cancer is concerned, every day 10 families are told that their child has cancer. A study in 2007 found that 83 per cent of families incur significant extra costs associated with their child’s cancer treatment, with 68 per cent of families experiencing worrying financial difficulties. New research, published last December, found that on average young people with cancer spent £277 each month over and above their normal expenses, as a result of their illness. Half of those young cancer patients surveyed had to borrow money as a result of their illness. More than one in five had borrowed over £1,000, with almost one in 10 borrowing over £2,000. The top two expenses were travel and clothing.

My proposal would retain the youth provisions for contributions-based employment and support allowance and would ensure that young people with long-term health conditions and/or disabilities are not disadvantaged under the proposed new arrangements for ESA. The reason for these proposals is clear; under the youth provision, a person under the age of 20 who is not in full-time education and who has had a “limited capability for work” for 196 consecutive days can gain entitlement to contributory ESA despite not having reached the contributions threshold. ESA youth claimants are disabled people who are aged 16-19 inclusive or who satisfy the age exception rule, which revolves around rules for education or training, if aged between 20 and 25; they have at least 28 weeks of continuous medical evidence to support a claim for ESA; they are not in full-time education; they have been resident and present in Great Britain for 26 out of 52 weeks prior to the claim; and they do not meet the normal national insurance contribution requirements.

The youth rules were introduced for incapacity benefit in April 2001 as a result of provisions in the Welfare Reform and Pensions Act 1999, which were intended to,

“refocus benefit on people disabled early in life who have never had the opportunity to work and gain entitlement to incapacity benefits through the payment of contributions”.—[Official Report, Commons, 6/11/00; col. 96W.]

The rules were carried over into ESA following the Welfare Reform Act 2007, again to ensure that young people who might not have had the opportunity to build up a sufficient contribution record would not be excluded from the non-means-tested allowance.

The Government intend to abolish the youth condition as part of the Welfare Reform Bill, as well as time-limiting its receipt to 12 months for existing claimants. The justification for this change, as set out in the impact assessment, is that it will simplify the benefits system and ensure consistency of treatment for those claiming ESA. This assessment completely fails to recognise that young people with long-term health conditions and/or disabilities are already in a place of disadvantage in comparison with older adults, hence the introduction of the youth condition in the first place, and that this change will entrench this disadvantage. This will mean that young people, including those unable to work because of cancer, for instance, will be extremely unlikely to be able to access the contributory element of ESA and will have recourse only to the means-tested income-related element to be subsumed into universal credit. Young people who are ineligible for the income-related component, which will include those with a partner who works more than 24 hours a week and some full-time students, could therefore lose up to just under £100 a week. This will have a devastating impact on those who are unable to work and are struggling with the significant additional costs of a cancer diagnosis.

The eligibility of young people for benefits is extremely dependent on their circumstances, particularly in relation to their education status. There are serious concerns, for example, about how students are treated under the system. Full-time students are able to claim income-related ESA only if they are already in receipt of DLA. I can give noble Lords a case study. This is another example of how the eligibility rules currently disadvantage young people. I am also concerned about the knock-on effect of many young cancer patients who are students becoming ineligible for DLA as a result of the introduction of PIP, removing their eligibility for ESA. It is critical that the Government ensure that the eligibility of students with long-term health conditions and/or disabilities for ESA is not dependent on their receipt of DLA.

I shall give noble Lords an example of a student. A young woman of 20, who was a full-time university student, was diagnosed with an aggressive sarcoma and came home to have treatment. Her mother is a single parent on income support with a younger child. The mother’s former partner died of cancer during the young woman’s treatment, meaning that the mother no longer received child maintenance for a younger child. The young woman was refused DLA initially and, as a result, was ineligible for ESA. In addition, this meant that the mother was not eligible for carer’s allowance, nor did the patient have access to a student loan, as she had taken a year out from university to have treatment. The family of three was therefore living on the mother’s income support alone and was in huge financial trouble, completely unable to pay the bills and under a lot of stress. The social worker, supported by CLIC Sargent, applied for a reconsideration and the patient was awarded DLA, which meant that she could get ESA, her mum got carer’s allowance and they got some housing and council tax benefit. Without the DLA and other benefits, this family would simply not have been able to cope financially.

A further 10 per cent of people will lose almost £100 a week by virtue of not qualifying for income-related ESA. Over a year, this amounts to £5,000. Only 20 per cent, or just under 3,000 claimants, will get exactly the same amount of income-related ESA that they would have got under the youth provisions. Based on government estimates, this loss of income may affect as many as 10,000 people by 2015-16. It is wrong that this saving should be levied from such a small group of vulnerable young people. Indeed, the department’s own impact assessment notes:

“The abolition of the ESA ‘Youth’ provisions is more likely to have an impact on disabled people because ESA is directly targeted at people with health conditions that limit their ability to work. There is a risk that the affected group will be more likely to need more support because of their condition than all ESA customers”.

My amendment is linked to my subsequent amendments in that they all seek to create a more level playing field for those young people with long-term health conditions and disabilities who require support through the benefits system.

[Baroness Hollis of Heigham]

I wanted to say only that I support the very moving amendments of my noble friend Lady Lister and the noble Lord, Lord Patel. When we introduced the 1999 Act, which I remember vividly, and replaced invalidity benefit with incapacity benefit, we considered and decided against the proposals that are now being introduced. This was primarily on the grounds of decency, but behind that lay another argument. The group that we were most concerned about at that time was not so much the cancer patients to whom the noble Lord, Lord Patel, referred, but those people with severe learning difficulties who would never find their way fully into the labour market and, as a result, could never build up contributions or savings. They might at some point receive a modest legacy or something that would help them but we did not want contributory IB to be dependent on that lottery. Therefore, we did not go down that road. Given the very small sums of money involved, in the interests of decency and given that such young people cannot build up the financial resources—and often the practical resilience, with the help of partners and so on—to allow them to cope, I very much hope that the Minister will think strongly about reconsidering the approach taken in Clause 52.