Welfare Reform and Work Bill

Neil Coyle Excerpts

Tuesday 27th October 2015 Commons Chamber

[Owen Smith]

No, obviously I am not suggesting that for a minute. That is a nonsense thing to say. Let me walk through what the Government are proposing.

[Neil Coyle (Bermondsey and Old Southwark) (Lab)]

Does my hon. Friend share my concern that under the coalition Government the projected savings that were meant to come from changes to housing benefit and employment and support allowance never materialised? Savings of £10 billion were not made by the previous Government. Perhaps Government Members should be challenging their Secretary of State and calling for his resignation.

[Owen Smith]

Of course they should. If they had any guts they would do precisely that. There has been an abject failure on housing benefit. The bill has gone up and up and up. If the Bill is passed—I sincerely hope it does not pass after yesterday evening’s decision—housing benefit spending will go up some more. We know the Government have failed on that and they will continue to fail in the future.

Let us look, for a moment—

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[Neil Coyle]

The National Audit Office has suggested that as a result of the incompetence of the coalition Government and the Secretary of State for Work and Pensions, £140 million was wasted on the early stages of universal credit. Is my hon. Friend aware that that could have helped 108,000 people who are now being punished for that failure and face the withdrawal of tax credits, or 21,500 people over the course of the current Parliament? Should the money not have been better spent?

[Owen Smith]

That is a brilliant point, and extremely well made. There are myriad examples of waste and incompetence in the handling of our DWP budget under this Government, not least the enormous increase in housing benefit.

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[Oliver Dowden]

We need to be clear about the problems with tax credits. Let me offer the House three facts. The first is that, under the last Labour Government, 1.4 million people remained on out-of-work benefits for almost the entire period. Secondly, the number of workless households doubled, and thirdly, the level of in-work poverty rose by 20%. So there has been a massive increase in expenditure on welfare and on tax credits, but it is not delivering the reduction in poverty that we all desire.

[Neil Coyle]

Does the hon. Gentleman not agree that tax credits have played a role in tackling in-work poverty?

[Oliver Dowden]

This is precisely the point that I would like to get on to. Despite the increased expenditure on tax credits, we continue to see these dreadful statistics on poverty, and that is because this is a flawed model that is based on taxing people on the minimum wage who can barely afford to pay tax, recycling that revenue through the welfare system and using it to top up low pay. That is not a sensible way to proceed.

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[Damian Hinds]

My hon. Friend is right, and it is right that those exemptions are made.

[Neil Coyle]

Will the Minister be absolutely clear that the half a million disabled people receiving ESA in the work-related activity group will not be protected under the measures that he has just outlined?

[Damian Hinds]

People who are in the work-related activity group are, by definition, people who are to be helped to move closer to the labour market. What I have said in the list of exemptions that I have read out is that the amounts that are specific to the additional costs of disability are protected, which is something that we discussed in Committee.

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[Debbie Abrahams]

I thank the hon. Gentleman for his intervention, but his question belies the facts. Some £640 million is being withdrawn from people in the ESA WRAG, while £100 million is meant, in some undisclosed manner, to provide support. There is no information from the Government on how that will support disabled people back into work.

As I was saying, there is no analysis of the impact that this will have on the disabled people who will be pushed into poverty. Disabled people are twice as likely as non-disabled people to live in persistent poverty, and 80% of disability-related poverty is caused by their extra costs. Last year, there was a 2% increase in the number of disabled people who were pushed into poverty. That is equivalent to 300,000 people. The Minister’s recent reply to me did not address this particular point, so I would be very grateful if that could be explained. Half a million disabled people will be affected and lose £30 a week—nearly a third of their weekly income. What is the Government’s estimate of the increase in the number of disabled people who will be living in poverty?

[Neil Coyle]

I welcome my hon. Friend to her rightful place on the Labour Front Bench. Is she aware that in the other place Lord Low is going to carry out an independent review of poverty, in the absence of a Government study? Will she encourage the Government to interact with that independent review, in particular on poverty and the impact on higher health and local authority costs as a result of the reduction in ESA?

[Debbie Abrahams]

My hon. Friend makes some excellent points. The Equality and Human Rights Commission is able to undertake that analysis. Other bodies and organisations are doing it, so why are the Government not able to do it? Surely this is what we should expect from the Government in their implementation of policy. There are real concerns from disabled charities, disabled groups and Lord Holmes, the chair of the EHRC’s disability committee, about the extent to which the assessment of the impact on disabled people is understood.

On incentivising work, on Second Reading the Secretary of State for Work and Pensions stated:

“the current system discourages claimants from making the transition into work.”—[Official Report, 20 July 2015; Vol. 598, c. 1259.]

What about people with progressive conditions, such as Parkinson’s, multiple sclerosis and motor neurone disease, who have no prospect of recovery but have undergone a work capability assessment? They have been found not fit for work and placed in the WRAG group. Are the Government seriously saying that the measure will incentivise this group of disabled people into work? They have already been found not able to work through the Government’s own assessment process. Their progressive conditions are not going to change. This is a real concern.

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[Helen Whately]

I thank my hon. Friend for making his point so forcefully.

I will move on to the proposed amendments to clause 13. The Bill Committee heard evidence of the damage that a long period or a life on welfare can do to people. Our witnesses talked about people who had been out of work for a long time having their confidence destroyed, and about how they begin to feel that they are not capable of changing their lives. We were also told that 61% of people in the work-related activity group want to work, yet only 1% come off that benefit each month. I am sure that many of us know of people who find it difficult to get into work for all sorts of reasons, such as mental health problems, and need extra help to do so. The current system is not working well enough. Not only does clause 13 remove financial disincentives, but, critically, and hand in hand with that, the Government have committed new funding to help that group of people into work, which is a response to what they really want.

[Neil Coyle]

What message does the hon. Lady think she is sending to the 8,000 people with progressive and incurable conditions in the employment and support allowance work-related activity group when she says they should be working rather than receiving support?

[Helen Whately]

I had a conversation recently with the company that does the work assessments. We talked about the importance of people with progressive conditions not being put in groups that would lead to them being made to work if it is not possible for them to do so. We should not assume, however, that just because someone has a progressive condition they do not necessarily want to work and be helped to do so.

Although many people knock jobcentres and are critical of them, the Committee also heard about the effective work they do across the country in supporting people, particularly those faced with barriers, to get into work. I have heard of some great examples in my own constituency in Kent.

In summary, many important and valid points have been raised in Committee and in this Chamber. The amendments, however, propose to pull apart a package of considered changes to welfare, including tax changes such as increases to the personal allowance and access to free childcare, as announced in the summer Budget. That package of measures is about making work pay and helping people into work.

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[Neil Coyle]

I want to speak about new clause 3, to which my name is attached. It was a privilege to be a member of the Bill Committee, which studied this issue in some detail. I thank the hon. Member for Beverley and Holderness (Graham Stuart)—who is no longer present—and the hon. Member for Bury St Edmunds (Jo Churchill) for speaking positively about the new clause. I hope that that is an indication of consensus that it is a necessary amendment to the coalition Government’s changes in relation to personal independence payments. I also pay tribute to my hon. Friend the Member for Sheffield Central (Paul Blomfield) and his local citizens advice bureau. They helped with the drafting of the new clause, and also provided genuine case studies of terminally ill people who are missing out on the swifter support that the new clause would deliver.

New clause 3 is designed to address a bureaucratic anomaly that has arisen since the Government began ending disability living allowance and introducing personal independence payments. New claimants of PIP who become terminally ill can access additional support swiftly, and under the DLA system, people could, on receipt of a terminal prognosis, access help swiftly. However, since PIP has begun to replace DLA under the coalition’s regulations, an issue has arisen that affects people who are already on DLA, become terminally ill, and are required to move on to PIP before they can access the additional help that the whole House seems to agree should be provided. The aim of the new clause is to enable people receiving DLA who are transferred to PIP owing to terminal illness to receive their first new payment immediately after being transferred. Currently, claimants must wait four weeks for their final DLA payment to be made, and then another four weeks to receive their first personal independence payment.

The Government have suggested that they are protecting disabled people from the worst cuts. The new clause is concerned solely with terminally ill and disabled people: people with an existing impairment or health condition, and a terminal prognosis. That is a very small group. To meet the Department’s definition of “terminally ill”, the claimant would need to provide independent medical evidence of a prognosis of six months or less to live. While it is great to have the support of the hon. Member for Beverley and Holderness for the new clause, it is slightly more disturbing that Members should suggest that only those with six months or less to live should benefit from our welfare system.

On 9 September, I asked the Department to specify the number of people on DLA who could benefit from the new clause. The response was that the information on the number of disabled people affected was “not collated” by the Department, and

“could only be provided at disproportionate cost.”

That was an incredibly disappointing response, given the nature of the people whom we are discussing.

In May this year, the DWP did publish a statistical report on registrations, clearances and awards of PIP, which indicates how many people might qualify under the new clause. As at 31 March 2015, the number of reassessments under

“special rules for the terminally ill”

was just 1,600 in two years. So that the Government can cost the new clause, let me explain that we are talking about roughly 800 people a year who are disadvantaged by current processes and who would benefit slightly from a more empathetic system: that is, disabled people who are on DLA and are moving to PIP owing to terminal illness.

Let me give the House a couple of genuine case studies. Carol is 59, lives in Sheffield, and was receiving the DLA care component at the lowest rate of £21.80 per week. On 27 May this year, following a diagnosis of terminal, metastatic breast cancer, she notified the DWP that she wanted her claim to be reconsidered under the special rules. The Department awarded her the highest rate of daily living and mobility components of PIP, worth more than £100 a week extra to reflect her new needs and her terminal prognosis. However, owing to the application of the transitional PIP rules, payment was from 8 July, four weeks after her next DLA payment. Had she been a new claimant for PIP and not already receiving DLA, the benefit would have been paid immediately. Carol lost about £240 as a result of a bureaucratic anomaly.

John was diagnosed with terminal lung cancer. He also has chronic obstructive pulmonary disease, and has had his right leg amputated below the knee. He lives in Sheffield and receives disability living allowance, with a high-rate mobility component and a low-rate care component. Under PIP, he is entitled to an enhanced rate of the care component and a high-rate mobility component. Although he discovered on 10 August that the additional help would be available, his next DLA payment was due on 2 September, and under the anomaly he did not qualify for the extra help until 30 September. We are talking about almost an eight-week delay for someone living in those circumstances.

Given the circumstances of those involved, some people affected by the change will simply not live long enough to receive the extra help to which they are entitled under existing rules. That additional waiting time was not required under DLA rules and has arisen purely as result of the introduction of PIP by the coalition Government. PIP is now being rolled out nationally and this issue will begin to affect more people in more constituencies. If Carol or John were new claimants, they would have got help quicker. When people are terminally ill, time is more pressing and more precious. John and Carol are genuine people who would, if the new clause is accepted, have a little more help for a little more time.

We discussed this issue in Committee at some length, and the Minister for Employment suggested that

“PIP recognises the unique challenges of claimants who are terminally ill.”––[Official Report, Welfare Reform and Work Public Bill Committee, 15 October 2015; c. 435.]

John and Carol, however, demonstrate how PIP has introduced an obstacle to swift support and left some people with less help. It is my understanding that that bureaucratic anomaly was an accident, as we discussed in Committee, rather than deliberate policy design, but the result is that it has delayed support for terminally ill and disabled people. The new clause would change that situation.

In Committee, the Minister also emphasised that PIP handles new cases under a fast-track system, with claims, on average, being cleared within six working days and with 99% of people going on to receive an award at a higher rate. That is welcome, but it serves to highlight the disadvantage for former DLA claimants moving to PIP, as opposed to the system for new claims, statistics for which the Minister cited. The fast-track system reflects the fact that these people have only six months to live and was meant to mirror the DLA system. The new clause would replicate the system in a way that addresses the anomaly arising from regulations and would provide equivalent support for those on DLA transitioning to PIP and new claimants.

In Committee, the Minister undertook to meet me and interested parties to address our concerns, and that meeting will be tomorrow. I am grateful for the Minister’s time but I thought there would be more of a window of opportunity for the Government to explore this issue in detail before Report and Third Reading. I understand that they may be willing to address this issue in the other place and, as I say, I am pleased to have heard positive comments from some Government Members, but a strong indication today that the Government do intend to address the issue would be very helpful. I hope they will accept the new clause or indicate how they will introduce their own mechanism to fix the anomaly caused by the PIP regulations, which leaves the most disadvantaged terminally ill people waiting while their time with family, friends and loved ones runs out.

[Amanda Milling (Cannock Chase) (Con)]

Having served on the Bill Committee, I am grateful for the opportunity to speak in this debate. I would like to focus my attention on amendments 35 to 48 relating to the benefit cap, and speak first to amendments 35, 36 and 37. In my view, it was absolutely right in the last Parliament to introduce the benefits cap, and it is right that we review its level now, as set out in clause 7. For those reasons, I do not support the amendments, which seek to keep the cap at the current level.

Many of the things I will touch on this afternoon have been covered by my colleagues, but I wish to make a few points. The benefits cap was introduced in the last Parliament to make work pay or, to put it another way, to incentivise people into work, ensuring that those people who can work are always better off doing so, rather than living a life on benefits. This was about creating fairness in the system.

[Neil Coyle]

rose—

[Amanda Milling]

I am going to make some progress.

It is morally right that people who can work are better off in work; why should someone who is able to go to work get more money on benefits than in work? There has been strong support for that argument, both nationally and in my constituency. As I have mentioned in this Chamber before, Cannock Chase is a former mining area, where there is an incredibly strong work ethic. That might go some way to explaining why people would spontaneously say to me on the doorstep that they really supported the cap. That is notwithstanding the general public’s support. A YouGov survey conducted in the previous Parliament demonstrated the strength of public feeling, with around three quarters of respondents supporting the cap.

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[Helen Goodman]

Is the hon. Gentleman aware that self-employment has increased by 42%? How many of those newly self-employed people does he think are in sustainable small businesses? People come to my constituency surgeries who have become self-employed and are working as window cleaners. That is fine—of course everyone needs to get their windows cleaned—but there is a limit to how many window cleaners we need in society. If people are coming out of highly skilled jobs and going into very low-skilled ones—[Interruption.] Conservative Members can protest as much as they like, but when the Treasury Committee took evidence from representatives of the Bank of England, they told us that a lot of the increase in self-employment was not real employment and that it was a sign that people could not get the kind of employed jobs that they wanted. Professor Kristin Forbes said precisely that to the Committee. Conservative Members do not need to pretend that this is some kind of prejudice on my part. It certainly is not.

[Neil Coyle]

Much has been said about the current employment levels. Indeed, we heard earlier that there had been a miracle, no less. Is my hon. Friend aware that the percentage of working age disabled people in work has fallen over the past five years, in direct correlation to the reduction in the number of disability employment advisers and in the number of disabled people being supported by the Access to Work scheme?

[Helen Goodman]

I was not aware of that fact, and I am grateful to my hon. Friend for pointing it out.

On the employment numbers, I also want to point out that there are a lot of people on short-hours contracts. I am not talking about zero-hours contracts, which have now reached 750,000, as Conservative Members must know; I am talking about eight-hour and 12-hour contracts. They provide insecure employment and insufficient money for people to live on, and they make it very difficult to get other jobs. They are, however, recorded as employment. There is all the difference in the world between working 35 hours a week and working eight hours a week, and Conservative Members need to think about that before they start talking about miraculous employment figures.