Welfare Reform Bill

Lord Patel Excerpts

Wednesday 11th January 2012 Lords Chamber

[The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud)]

My Lords, I speak in support of the amendments tabled by the Government in relation to Clauses 51 and 52—namely Amendments 33, 34, 37, 39, 40, 41, 43, and Amendments 63 to 67.

The important issue of the impact of time limiting on those with deteriorating conditions was raised in Grand Committee. I outlined in debate the existing safeguards which would protect people in these circumstances. However, when we looked again at the safeguarding provisions, it was clear that a person would be able to requalify only in very limited circumstances. In light of that helpful debate, we have decided that further clarification should be provided on the face of the Bill and are therefore moving these amendments.

The government amendments will enable people whose contributory ESA, while in the WRAG, has ceased as a result of time limiting, to requalify for an award of ESA if, after their award ends, they continue to have, or are treated as having, limited capability for work, and—I stress this point—at any time thereafter they develop and continue to have limited capability for work-related activity and would become eligible for the support group. The substance of this new category of entitlement is found in Amendment 43, which provides for claimants to have further entitlement after time limiting has been applied to an award of contributory ESA. I note with pleasure that the noble Lord, Lord McKenzie, and the noble Baronesses, Lady Morgan and Lady Meacher, have added their names in support of Amendment 43.

Without wishing to anticipate or foreshadow the debate on Amendment 42, tabled by the noble Lords, Lord Patel and Lord McKenzie, I trust that the noble Lord, Lord McKenzie, having lent his support to Amendment 43, may feel able not to proceed with Amendment 42. I shall endeavour to explain why shortly.

I turn to the remainder of the government amendments in this group. In previous versions of the Bill, the time-limiting provisions for ESA youth appeared in Clause 52. As a result of the amendments, we have moved to provide for new entitlement to contributory ESA through deterioration, and it has been necessary to amend how the time limiting of ESA youth awards will work to provide for the new deterioration category. This is because we wish the category of further entitlement to ESA after deterioration to cover both claimants who deteriorate after their time-limited contributory ESA awards end and claimants who deteriorate after their time-limited ESA youth awards end. We have therefore moved amendments to provide for Clause 51 to deal with the time limiting of ESA youth awards where a claimant is in the work-related activity group. To be clear, the clauses as revised by the government amendments still have the effect that claimants awarded ESA on grounds of limited capability for work developed during youth will have their awards time limited, if the claimant is not in the support group.

Amendment 42 is similar in a number of respects to Amendment 43, and I think I can probably say was the inspiration in an earlier form for that amendment. However, the point is that Amendment 42 is less favourable than Amendment 43 in one important respect, as it states that a claimant must be assessed as having limited capability for work-related activity within five years of the termination of the first ESA award. The approach taken by the government amendments would not seek to put this time limit on the new form of entitlement to ESA for claimants whose condition deteriorates. We would allow a claimant to return to a contributory ESA award at any time after their time-limited award has ended, as long as they develop limited capability for work-related activity or fall to be treated as having it, and as long as they have continued to have or be treated as having limited capability for work throughout the period after their time-limited award ended.

On this basis, I trust noble Lords will agree that Amendment 43 and the supporting government amendments provide a more generous approach than would be provided by Amendment 42. I beg to move.

[Lord Patel]

My Lords, I speak to Amendment 42, to which the Minister has just referred. Before I start, perhaps I might wish him a happy new year and, in doing so, thank him enormously for his Amendment 43. It may be claimed that it was in response to my amendment in Grand Committee; if so, I am very grateful for it. I thank him and I do not need to go any further.

[Baroness Meacher]

My Lords, I support Amendment 43, tabled by the noble Lord, Lord Freud, and I also wish to congratulate him on levering a little money out of his Government, or the Treasury, to enable that amendment to be tabled. However, I also want to speak to my Amendment 42A, rather late in the day, which seeks to introduce just a little more humanity into this part of the Bill. It simply extends a little the remit of Amendment 43.

At present, a claimant who has a terminal illness and who is expected to live no more than six months would be placed in a support group, which means that they would have no conditions attached to their benefit entitlement. If they have a few good days when they might be able to work, there is no commitment for them to have to do that although anyone in this position who has a job will no doubt wish to work as far as they possibly can. I am talking about those people who do not have a job and who therefore find themselves in the position of having to look for one, when they have a terminal illness that will deteriorate over time until they finally die.

This amendment applies to a group of people who are suffering from a life-threatening disease, the symptoms of which cannot be controlled by any recognised therapeutic procedure, and where there is reasonable cause for these symptoms not to be able to be controlled by any such procedure. At present, the default position is that these claimants will be allocated to the work-related activity group and will be expected to undertake interviews and activities on this rather wild and ridiculous assumption that they should be finding a brand new job, with a brand new employer, for whatever little bits of time they are able to function. At the same time, of course, they have to prepare themselves mentally for the ever worsening symptoms that will lead to their death.

My question to the Minister is whether he regards such expectations of persons on a downward path towards death as humane and reasonable. I hope very much that he will answer that question rather carefully in his response, in the sense that having accepted the government amendment and put that forward, he will find that this amendment is a very minor shift which brings people in a rather similar position into line. Again, I must emphasise that this amendment would not in any way discourage terminally ill people who can work from doing so. Rather, it is an attempt to remove callous pressures from being applied to people who already have probably far too much to cope with.

The Minister knows that I understand very well the need to reduce the numbers of people on ESA and, most particularly, to reduce the months and years that some people remain on it. We are really of one mind on that. Of course, proper conditions need to be applied so that if people are really sufficiently well to work, they make every effort to do so. However, we are talking about people whose lives are severely curtailed. They will not be around to spend years on ESA, let alone to claim pensions. Are we not in danger of throwing the baby out with the bathwater here?

I shall leave your Lordships with just one case to illustrate the point. A CAB client had had major surgery for breast cancer, twice. At the time of her assessment for benefit she was suffering severe pain and undergoing tests that revealed some abnormal bone activity. She told the HCP about her condition and the fact that she was due to have a further scan. This lady was found to have metastatic non-curative cancer of her bones, primarily in her pelvis, hips, back and spine, as well as down her legs and in the rib area. She was told that she had three or four years to live, although I have to say that sounds a little unlikely to me, and my guess is that it will be a pretty miserable three or four years.

On appeal, this claimant had her “fit for work” status—which is mind-boggling in itself—removed, but she was placed in the work-related activity group. She became very tearful and had to see a psychologist. She was unable to return to her previous job due to pain from the operations removing the lymph glands under her arms. She got extremely tired, of course—if you have metastatic cancer you are not going to be in a good way to do anything. The CAB adviser was of the view that this client would not be able to work again due to the increasing pain levels that she was going to suffer.

Anyone who has known anyone with metastatic bone cancer will know that this is not a happy thing to have; it is seriously deleterious. That is the point that I want to make: here you have people whose pain, tiredness and general debility cannot be adequately controlled, and there should be some fairly automatic procedure to deal with them. Perhaps the Minister could consider the position of a potential employer. Who would take on an employee with metastatic bone cancer? I have to say that I would not. How reliable would such an employee be, and for how long—for how many days or weeks at a time? Who knows? The prospects, though, are pretty poor.

This client will have to go through the humiliating and endlessly negative experience of writing applications and going for interviews, knowing in her own mind that employers, if they are half sensible, simply will not take her on. It is that aspect that we need to get hold of. Also, she could be accused of wasting employers’ time: why should they be reading these applications and interviewing her when, poor soul, she really is not in a fit state to work?

Noble Lords have mentioned in previous debates that terminally ill claimants will be saving taxpayers substantial amounts of money because of course they will not be living for decades with dementia, as people like myself might be doing. All we are looking for is dignity in those last months and, if they are lucky—although perhaps this might not be lucky after all—years before they die. As the Prime Minister said in his first party conference speech as Prime Minister,

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

We are really not talking about a lot of money here. I hope that the Minister will consider this matter.

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[The Earl of Listowel]

My Lords, I put my name to Amendments 36A and 46, to which my noble friend has just spoken so eloquently. I strongly support them. Young people with a severe congenital disability, or a severe disability developed early in life, merit contributory employment support allowance; it should not be removed from them. Noble Lords who are acquainted with families who have disabled children will know of the appalling difficulties they face when their child makes the difficult transition to adult services. It is particularly important that such disabled young people have financial support because the transition to adult services is often very poor.

Vital to a safe transition is a social worker, who can be a powerful advocate for a child and their family. However, what does one hear again and again from such families? Their social worker continually changes, the parents have to keep rebriefing the social worker on their child's needs, and there is no continuous and strong advocate for the child.

We should consider another group. As vice-chair of the parliamentary group for children in care, I know of the high rates of disability among children taken into public care. There must be absolutely no erosion of financial support for these children as they leave care. Amendment 46 would ensure that this erosion would not happen.

I am most grateful to the Minister for his helpful letter to the Convenor. I recognise that retaining contributory ESA for this small group of very vulnerable young people would be somewhat inelegant. I also recognise the concerns that my noble friend raised about the European judgment. However, I hope that the Minister may be able to help in this area, given the particular needs of this vulnerable group. I also hope that my noble friend will press this matter as far and as hard as she can.

[Lord Patel]

My Lords, I speak to my Amendment 45, which takes a much more radical view and proposes leaving out Clause 52. I guess the happiness will end now. However, I take note of the comments made by the noble Baroness, Lady Meacher, about the anxiety over abuses in the system, and I will listen carefully to the response from the Minister, because it is an important issue. I agree with the noble Baroness that it will not be worthwhile pressing any of the amendments if the Minister’s response is that there is a need to reconsider matters in the light of our comments.

I will outline the reason for my suggestion that we leave out Clause 52 by exploring historically why youth ESA was set up. Under the provisions, a person under the age of 20 who is not in full-time education or 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. This measure has existed in some form in the benefits system for nearly 40 years to enable young people to access contributory benefits if they are unable to work because of illness or disability.

The youth rules were introduced for incapacity benefit in April 2001 as a result of provisions in the Welfare Reform and Pensions Act 1999. They were intended to refocus benefits on people disabled early in life who had never had the opportunity to work and gain entitlement to incapacity benefit through the payment of contributions. The rules were carried over into ESA as part of the Welfare Reform Act 2007, again to ensure that young people who had not had the opportunity to build up a sufficient contribution record would not be excluded from the non-means-tested allowance.

With the Welfare Reform Bill the Government now intend to abolish the youth condition, 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 a consistency of treatment for those claiming ESA”.

This assessment completely fails to recognise that young people with long-term health conditions 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, 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 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—and, believe me, there is a significant cost for all kinds of reasons once cancer is diagnosed.

The eligibility of young people for benefits is extremely dependent on their circumstances and particularly on their education status. I have serious concerns about how students, for example, are treated under the system. Full-time students are able to claim income-related ESA only if they are already in receipt of DLA. This is another example of how the eligibility rules at present 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—and we will discuss that later. I believe 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.

Let me give an example. David was diagnosed with stage 4 Hodgkin's lymphoma when he was 22. Before he was diagnosed, he received a full wage working for the NHS that stopped when he was undergoing treatment. As he had been working for his employer for only six months, he was entitled to three weeks’ paid sick leave. He was subsequently unable to claim any benefits, including ESA, because he was forced to move back home with his parents. David told me: “It can be really difficult for young people to build up time with one employer so that they are entitled to sick pay at full pay”. Similarly, it is extremely difficult for young people to build up national insurance contributions, so I am thankful that at present the youth rules enable young people, including those with cancer, to access contributory ESA, which can be a lifeline when they are already impacted by a loss of earnings.

DWP statistics show that 17 per cent of the current caseload of ESA claimants aged 16 to 24 are currently accessing contributions-based ESA, or both income and contributions-based ESA, and could therefore be negatively affected by this change. The DWP impact assessment estimates savings of only about £11 million per annum while noting that 70 per cent of those affected will lose £25 a week as a result of qualifying for income-related ESA only, which equals about £1,300 a year. A further 10 per cent will lose almost £100 a week by virtue of not qualifying for income-related ESA. Over a year, this amounts to almost £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 the Government’s own estimates, this loss of income may affect as many as 10,000 people by 2015-16.

This means that only 20 per cent of claimants will be financially unaffected by these changes. I believe that it is wrong that these savings should be levied from such a small group of vulnerable young people. Indeed, the department’s own impact assessment notes that:

“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”.

I therefore believe it is wrong that the Government should seek to remove a vital form of financial support for young people with serious long-term health conditions. For a proposal that by the Government’s own admission will impact around 10,000 young people, the cumulative savings will be only £11 million.

In Committee, the Minister stated that he believes that his,

“proposals have built-in support for this group of claimants”.—[Official Report, 8/11/11; col. GC 58.]

I can assure the Minister that this is not the case and that his proposals will have a significant financial impact on young people with serious health conditions who may have no other option for financial support. For example, young people with cancer are not always able to access DLA, particularly if they have a treatment period of less than nine months. ESA may be their only option while they are undergoing treatment.

The Minister has also argued that no other group has this kind of concession in contributory benefits. However, that is exactly the point: the rules exist precisely because it is unlikely that young people will have been able to build up the requisite national insurance contributions, but they should still be able to access a benefit designed to provide financial support to those unable to work because of illness or disability. I do not see how this proposal can be part of a “principled approach to reform”, which is the basis for the whole of welfare reform.

The measure will remove a vital source of financial support for young people with serious health conditions and disabilities. I hope that the Minister will give some indication that he recognises this and that he is willing to look at it again or at least give it further thought. I take the point made by the noble Baroness, Lady Meacher, about the abuse of the system, which certainly needs to be addressed. When the time comes for me to decide whether to press my amendment, I will be mindful of that.

[Baroness Lister of Burtersett]

My Lords, I support Amendments 45 and 46, to which my name is attached. The purpose of the amendments has already been explained and the case has been made convincingly. I simply want to add to that. Young people who are disabled from birth or early in life have been entitled to claim ESA or its predecessors from the age of 16 since 1975, as the noble Lord, Lord Patel, pointed out. That has been accepted by all the main parties as a fair and proper way to treat young disabled people. Indeed, my noble friend Lord McKenzie did not thank me for reminding the Grand Committee that in a previous Parliament he was urged to be more generous to this group of young people by the then Opposition spokesperson, the noble Lord, Lord Skelmersdale. I was therefore rather surprised when the Minister argued in Grand Committee that no other age group can qualify for contributory ESA without having paid, or been treated as having paid, national insurance contributions. That is because all other age groups will have had the opportunity to earn such contributions, as the noble Baroness, Lady Meacher, and the noble Lord, Lord Patel, have already pointed out.

We are talking about a very small group. According to the Government’s figures, about 15,000 young people are likely to be affected each year. Some of these will qualify for income-related ESA, although sometimes at a lower rate, when there will be an estimated average loss of £25 a week, which is a significant sum for those on a low income. They may become automatically eligible for passported benefits such as free prescriptions, depending on the outcome of the review currently being undertaken by the Social Security Advisory Committee, but that does not justify removing their underlying entitlement to a weekly income. One in 10—or 1,500 a year—will lose all entitlement to benefit, perhaps because they have a partner in full-time work or because of the capital rules.

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Moved by

[Lord Patel]

38: Clause 51, page 36, line 34, leave out “365 days” and insert “a prescribed number of days which must be at least 730”

[Lord Patel]

My Lords, I shall speak also to Amendments 38A and 39A. These amendments oppose the introduction of a 12-month limit on the amount of time in which those in the work-related activity group, or WRAG, are able to claim contributory employment and support allowance, or ESA.

All the cancer charities, such as Macmillan, the Disability Benefits Consortium and the wider disability sector also oppose the principle of time-limiting ESA. I believe that 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.

As I said, Clause 51 amends the Welfare Reform Act 2007 to introduce a 12-month limit on the amount of time that a person in the WRAG is entitled to contributory ESA. The cancer charities, such as Macmillan, along with the rest of the disability sector, strongly oppose the principle of time-limiting. There is already more than enough incentive for people with disabilities and long-term illnesses such as cancer to get back into work. What they need is enough time and the right support. What they do not need is to be penalised for not recovering quickly enough.

The Government are clearly opposed to removing time limiting altogether. Therefore, I understand the need to find a compromise that meets the Government’s priority of finding savings but, crucially, gives disabled and sick people a more realistic timeframe in which to return to work. Evidence supports extending the one-year time limit.

The impact on disabled people of time-limiting ESA will be considerable. 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 people with cancer, will lose up to £94 a week of vital support, despite having paid national insurance contributions throughout their working lives. The proposal in the Bill is based on the Government’s objective of making savings. However, the Government have provided no evidence to demonstrate that a 12-month time limit is reflective of the amount of time needed by people in the WRAG before returning to work.

The coalition agreement promised to protect the vulnerable from spending cuts. In his party conference speech the Prime Minister, David Cameron, 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 to take crucial financial support away from people who have paid into the system but are unable to work due to illness.

The Government’s own figures estimate that 94 per cent of people in the WRAG will not be ready to return to work after one year—I repeat: 94 per cent—but the Government have stated that the change will help to encourage people to come off benefits. They have also stated that the proposal is aimed at making savings and is not based on an estimate of what is a reasonable length of time within which to expect people with a disability or illness to be able to return to work. It cannot be right for the Government to propose such a significant policy change without providing evidence that the measure is appropriate or reasonable.

In Committee, the Government were asked to publish evidence to demonstrate that a 12-month time limit reflected the needs of people in the WRAG. I have seen no such evidence. The Government were also asked which organisation of experts they had consulted before making the decision to introduce a time limit for contributory ESA. They have not consulted any of the organisations which have subsequently raised concerns about the impact of this policy. The time limit will be imposed on people who are in the WRAG. Those in the WRAG are people who, following the work capability assessment, have been found not to be fit to work because of their disability or illness. While those in the WRAG are expected to carry out some work-related activities to help them to return to work, they are still considered to be not fit for work. If, following the WCA they had been found to be fit to work, they would be eligible for ESA and placed on jobseeker’s allowance. People in the WRAG could still be severely disabled or debilitated, as is the case with people recovering from aggressive cancer treatment.

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[Lord Freud]

My Lords, as noble Lords know, we have two systems of housing support. We have housing benefit for those who rent their property and support for mortgage interest for those who need support with their mortgage payments. Currently mortgage payments are running rather lower than benefit, but that is only because mortgage rates are lower and that can change. We are looking at the whole system of support for mortgage interest, but there is a system in place to support people whether they are home owners or payers of rent.

On the basis of what I have said, I hope that the noble Lord will feel able to withdraw his amendment. Before I ask that he do so, I confirm that the Government see Amendment 39A as linked to Amendment 38, but that none in this group is consequential on another, and we would expect the House to make a decision on each individually.

[Lord Patel]

I thank the noble Lord for his response. I could pick up on each of the points that have been made and answer them, but the time does not allow that. I have to say to the noble Lord, Lord Blencathra, that we are talking here about the level of savings from welfare reform. We are not talking about the Government finding extra expenditure; it is the reduction in savings that we are talking about. The total reduction in saving of the whole welfare reform package will be in the region of £18 billion. We are talking here about not taking money away over five years even to the level of £1.3 billion from the most vulnerable in society. As I pointed out, they are those on the lowest third centile of income, to whom, as the noble Lord, Lord Wigley, said, it is £94 a week. If we are going to rob the poor to pay the rich, we are entering into a different form of morality. The noble Lord asked the question whether it is moral. I say that it is moral to look after those that are sick, vulnerable and poor. If that is immoral, what is moral is to pay the rich—and we are on a different planet altogether.

I come to the figures quoted. The figures are based on the assumption that no one goes back to work until they reach 24 hours. If you speak to cancer patients, you find out that their greatest desire is to go back to work, because it is part of therapy. Noble Lords should read the powerful article written by a very bold and courageous lady called Jenni Russell, which says:

“Not skiving, minister, just suffering cancer”.

She describes what it felt like to have treatment for breast cancer. If you speak to patients on chemotherapy—and my noble friend Lady Finlay sees them every day—they feel good after four days of misery following chemotherapy. By the time they feel better it is time for another period of misery. The effect is cumulative to the point that after a few courses they cannot get out of bed and they wonder whether death might not be better than the disease. It is those people that we are talking about. They are not skivers or benefit cheats. They are the last people who cheat. Are we going to make savings there? I was honest in accepting that what I proposed was costly, but I am not going to be dishonest and say that therefore we should let those people suffer. I ask the House to determine who should be supported.

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Moved by

[Lord Patel]

38A: Clause 51, page 36, line 36, at end insert “except—
(a) where a person is receiving treatment for cancer when entitlement shall continue for so long as the person has (or is treated as having) limited capacity for work; or(b) the person has (or is treated as having) limited capacity for work as a consequence of a cancer diagnosis.”

[Lord Patel]

My Lords, Amendment 38A is specific to cancer patients. I have already spoken enough about the suffering of cancer patients and why they require extra time to recover. I have already referred to the article in the Sunday Times, in which a lady who experienced this describes very fully how debilitating it is. The amendment is merely to say that those cancer patients who are currently undergoing treatment, whether it be chemotherapy or radiotherapy, or who have recently finished treatment and are recovering from it but need that extra bit of time, should be supported. This is a small number of cancer patients; there are not many because most of them have recovered within a year. I beg to move.

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Moved by

[Lord Patel]

39A: Clause 51, line 4, leave out “365 days” and insert “a prescribed number of days which must be at least 730”