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Mr. Rowlands: If some of the guesstimates are right, the problems could be much larger than we already fear. One local assessment is that only about one third of those currently in receipt of invalidity benefit are aged 58 and over. I find difficulty in reconciling that figure with the claim that about half the recipients of invalidity benefit will be excluded from the process.
Mr. Dewar: There is a great deal of room for debate, discussion and local variation in the process. We will not know all the results until the system shakes down and we can call on what I fear will be bitter experience. My hon. Friend represents a south Wales constituency and I suspect that there are very specific problems in that area. One hon. Member earlier quoted the figure of 160,000 people on invalidity benefit; figures I have been given suggest the number to be nearer 175,000. Whichever figure is right, it is well above what we would usually expect on a population-per capita basis. We are all aware of the problems of the mining industry, which is a particular characteristic of people on invalidity benefit in my hon. Friend's area.
The test is meant to be a narrow gate. It is easy to mock it and its descriptors; it is easy to make fun of the new numerical totting up system. I do not want to do that, but there are problems. For example, I find it rather quaint
Column 1243that we are told that if someone cannot raise one arm above his head to reach for something, he is entitled to no points on the scoring system. If someone has no problem with reaching, not surprisingly he is entitled to no points on the scoring system. That appears to be redundant information and there are other similar examples.
However, rather than making fun I believe it to be more important to examine the general principle. We are concerned that there is a confusion between capacity for work and a loss of facility. Of course, medical condition is an important component, but the Government admit that other matters are also important--for example, age. Research produced by the Department suggests that once someone has passed 50, the aging process becomes a conditioning and important practical factor. I would be prepared to give personal evidence about that, as, no doubt, would some of my contemporaries.
The selection of the age of 58 is arbitrary. It was plucked out the air for no obvious reason. Nevertheless, age is a factor. Also, if there is no work that a person can reasonably be expected to do, in the real and practical world that factor cannot be entirely ignored. There is still great concern about whether the test will be sufficiently sensitive and flexible to take account of diseases where remission is a problem or where pain is a presenting problem. There are the problems of describing severe as distinct from other forms of mental disability.
There are hon. Members in the Chamber who took part effectively in the Second Reading debate. I remember being annoyed when the Secretary of State --who is something of a stranger to our debates these days--said:
"Our new test has already been welcomed."--[ Official Report , 24 January 1994; Vol.236, c. 38.]
He managed to give the impression that if people were not exactly burning bonfires outside the offices of Disability Alliance, the Disablement Income Group and other such organisations, they were near to that. It was not a fair impression.
The Secretary of State prayed in aid one witness, the National Back Pain Association. It had happened to write to him and he had interpreted its views as being very much in favour of tests. As the association was the one example that the Secretary of State gave, I took the trouble to contact it a couple of days ago. It could hardly be described as a hostile witness, given that it was the only friend that could be produced in court on the original occasion. It may interest the Minister to know--it is not the most stringent of criticisms, but it is interesting given the source--that the association
"is concerned as to how the assessors will measure pain as a functional limiter. We feel that many chronic back pain sufferers will have difficulty in sustaining the level of activity necessary to return to work--pain is invisible and not always observable. A back pain sufferer could perform the test satisfactorily but at what cost and is it sustainable?"
I make that point because it is typical of many of the points that have been made by organisations with experience in the matter. I was glad, therefore, to return to them for further thoughts. I remind the Minister that, despite the nice ruled lines and dried ink, and the dotting of the i's and crossing of the t's in the Department, genuine concern still exists outside in the real world.
One should not argue these matters in terms of hard cases. I became a little irritated--I am sure that some hon. Members here will remember it-- with the level of some
Column 1244of the debate on Second Reading of the Jobseekers Bill. The Secretary of State told us about the case of someone on invalidity benefit being caught cleaning the windows of the Benefits Agency office from which he received his benefit. We were told about javelin contest winners who were on invalidity benefit. The hon. Member for Southport (Mr. Banks) conclusively established the Government's case with the rather curious fact that the man who waved the flag at the Grand National was on invalidity benefit. I do not think that any of that does any service to these difficult issues.
No doubt exists that one of the reasons why we are in this position is that the Government believe that the health of the nation is improving and that, therefore, we should be able to do without many of the people on invalidity benefit. The famous phrase from the Prime Minister was that the figures "beggar" belief. Complicated attempts were made to suggest that, because the number of peptic ulcers in society had halved, a similar reduction should be seen in invalidity benefit. I remember having exchanges with the hon. Member for Stratford-on-Avon (Mr. Howarth) about the Policy Studies Institute report.
To remind the House, it is interesting that the institute's analysis was that about 29 per cent. of the increase in the number of people on invalidity benefit arose because pensioners were staying on invalidity benefit after retirement age to enjoy the fact that it was tax free; if they took the same money under pension eligibility, it would be taxed. Most hon. Members with the persistence to stay for the debate will know that that choice has been removed in the legislation, and that many pensioners will have increased tax bills as a result. No doubt the Government will say that they have reduced invalidity benefit figures substantially because those people will have lost that right. Another 16 per cent. of the increase was due to the increase in the number of women in the labour market. Those factors have nothing to do with fraud or abuse. I hope that the Government accept that.
One of my worries relates to the problem of the black hole or twilight zone, as I think the Minister called it. Inevitably, a large number of people will be displaced. They will become dependants in their own homes. They will live on savings, if they have any. If they do not, they will be thrown on to non-contributory jobseeker's allowance, or, before that comes into being, on to income support. The Government's current estimates are that in 1995-96, 95,000 people will be displaced from invalidity benefit by the changes. In 1996-97, the figure will be 190,000 in 1996-97. Those people will have to sign on. Almost inevitably, they will end up on means- tested benefits because they are unlikely to have a contributions record that will allow them, even for the six months, to claim what is left of jobseeker's allowance.
The Government have been critical of the growth in means-tested benefits and of the damage and dangers of those benefits. I find it a strange inconsistency that so much of what they are introducing in terms of incapacity benefit and jobseeker's allowance will significantly force up the number of people on means-tested benefits. More important, it will create in many communities a bitterness, a feeling of failure and a hopelessness, which will not be good for morale, and which will lead to many personal problems.
I think too of single men who may be especially vulnerable--or single women; but let us take single men for the example. If they are on their own, they may have
Column 1245to fall back on basic income support. They will be in a position that is an odd reversal of the normal career because they will be on basic income support for 10 or perhaps 12 years and their income will improve only when they retire, because at least they will then have the pensioner's premium. For that long period, we are creating a substantial social problem and making no attempts to deal or to wrestle with it.
May I turn briefly, as I recognise that many of my hon. Friends wish to speak, to the interesting and important point that was made by my hon. Friend the Member for Ellesmere Port and Neston (Mr. Miller). Administration has been the bugbear of much of the change in the social security sector. I am concerned about some of the figures that are already beginning to emerge because of the changes made in the administration of incapacity benefit. To illustrate that theme, I want to use the example of growth in appeals.
To take one criteria, let us consider what has happened since 1993. The House will remember that, in that year, the Government announced that there would be improvements--an interesting term--in medical control arrangements and that they hoped to save £240 million over a two-year period. In 1991, 4,852 appeals were decided and the number rose in 1992 to 53,088. In 1993, when the new regime was introduced, the number jumped to 9,422. The latest figures show that, in the first quarter of 1994, the number continued to grow, with 4,005 appeals decided. I know that this matter is open to argument about interpretation, but the success rate of appellants has increased from 49.6 per cent. at the beginning of the period to which I referred, to 58 per cent. It is worth remembering that, back in 1979, it was 21 per cent. There is a tale there and some deductions can be drawn from it.
It is not just the past trend that is worrying; the continuation and perhaps dramatic acceleration of that trend also worries many of my colleagues. Just before I came into the Chamber, I obtained a briefing note from the National Association of Citizens Advice Bureaux. It said that its offices in many parts of the country were being inundated with people who were worried about their position vis a vis the changes that have not yet come into effect. A real danger exists of administrative chaos.
In 1993--these are the most recent figures that I could find that have a statistical base--23,105 appeals on incapacity benefit were lodged. The Minister told me the other day that he was expecting 140, 000 in 1995-96. That is a quantum leap. I know that he will say that the Government have put more money and resources into the medical advisory service; he will tell us that they are all geared up to deal with it. I hope that he does not think that I am a cynic, but if he is right in his expectations--on all experience, he is probably in the right ball park--the system will seize up under that strain and under the other administrative problems that are reflected in the expected dramatic jump from 23,000 to 140,000. That is a measure of the problems that we may face.
Column 1246My hon. Friend the Member for Merthyr Tydfil and Rhymney (Mr. Rowlands) referred to the nightmare of the introduction of the disability living allowance. We must be concerned about what is happening.
Mr. Dewar: I cannot tell my hon. Friend. I should be able to give him some relevant information but I have forgotten it. I myself received an answer to the effect that the added expenditure on the Benefits Agency's medical service was, I think, £3 million or £4 million. The Minister may be able to help later. In any event, I hope that I have made the point fairly.
When I was first involved in these debates--they seemed to have begun long ago--I referred to a "petty change" producing "minimum savings" for the Government. I was rapped over the knuckles by the Secretary of State on Second Reading of the Social Security (Incapacity for Work) Act 1994. He compared my approach to that of the late John Smith who had launched a fierce attack on the whole issue. As we now know, John Smith was right and the rap on my knuckles was well justified but no one who now considers the scale of the financial switch and the number of people who will be displaced could possibly argue that it is a petty change. It is a major change and one which I think will cause major problems for the Government. Let us consider the impact of the test alone, leaving aside the difference in benefit levels. The savings are expected to be £210 million in 1995 -96, rising to £700 million in 1996-97 and to £1 billion in 1997- 98. That is a great deal of money to take out of this particular budget.
The test must be seen as part of a package. How will that package be perceived by the public? There are other adjustments involving many examples of how the rate of benefit will be lowered for those who are on the new incapacity benefit as against those who remain on invalidity benefit--the basic rate will be lower between 29 and 52 weeks, the age- related increases will no longer exist and the adult dependency increases will be lower in the middle period and, even when restored after 52 weeks, will be available only to those looking after children or who are over 60. The many changes will be noticed because people notice nothing more particularly than the shortage of the pennies that they want to count in their purse or pocket. My fear is that other people's fears are real and growing. One tries to reassure but it is often difficult.
I happened to be in south Wales last night--as hon. Members can probably imagine, it was rather quiet. I attended a public meeting and was struck by the fact that, at the end, more people came to me to discuss their worries about incapacity benefit and the changes than asked questions about something which to an observer would have been the big issue of the meeting which, the Minister will not be surprised to know, was the Child Support Agency.
I fear that there may be a parallel between the CSA and incapacity benefit. The trouble with the CSA is that it is perceived to be unfair and unjust. Despite all that the Minister has said, I believe that there is a real danger that the new incapacity benefit system will in the end be seen as unfair and unjust.
Column 1247The Minister will no doubt say that once the transitional arrangement has run its course and the reviews have all been carried out there will be no unfairness, but the answer that he will receive is that it is very little consolation to be told that the system is uniformly unfair, which I think is how people will regard it. In other respects, it will be seen as arbitrary as well as unfair. It will be easy to find two applicants in the same town who are comparable in terms of finance, family circumstances, physical disability and loss of faculties but who may receive different levels of benefit because of the date of their first application. Of course, they will also be subject to dramatically different tax treatment. That is not a happy prospect and I think that the Minister has greatly underestimated the problems and trouble that it will produce.
When the system is fully operational, we shall be taking a total of £1.5 billion from the present budget. It cannot be a painless process because it is not simply a matter of administrative reform. Many people will be hit, and hit hard. It can only reinforce the Government's reputation, of which they should not be proud, for introducing change that is unrelated to the needs of the people whom the system is supposed to be helping.
On Second Reading, the Secretary of State, who is not here today, said:
"The Bill is not an attack on the sick and disabled; it is the very reverse. It is designed to protect their benefit against those who abuse it."--[ Official Report , 24 January 1994; Vol.236, c.35.] I do not believe that abuse is the test, but, in any event, very few people will agree with the sentiment that the Act is a way to protect and help the sick and disabled. Once we have experienced the Act, no one will believe it. I predict that Ministers will have to rethink their position and I hope that they will be prepared do so before too much damage is done.
Mr. Alan Howarth (Stratford-on-Avon): The hon. Member for Glasgow, Garscadden (Mr. Dewar) reminded us of the Second Reading debate on the Social Security (Incapacity for Work) Act 1994 just over a year ago on 24 January 1994. Looking back at Hansard , I noted with some embarrassment that I had made an inordinately long speech, so I shall not today rehearse in detail all the reasons why I am unhappy about this measure and the regulations that flow from it, which we are now invited to approve.
I make no complaint about--indeed, I applaud--the Government's determination to retrieve and bring back into balance our public finances. I congratulate my right hon. and learned Friend the Chancellor on the progress that he has already made. What I cannot, however, approve is the fact that the cost of continuing this process should be borne by members of our society whom we must recognise as disadvantaged and in need of our help. Whatever the reasons may have been, it was certainly not the fault of the long-term sick and disabled that in the second half of the 1980s we allowed expenditure and inflation to take off; nor was it their fault that we then deflated the economy so severely and ran up the borrowing requirement.
Under this legislation, it is people who should have a special claim on public support who are asked to make the biggest sacrifice relative to their means and opportunities. The device whereby people are to be
Column 1248selected to make this sacrifice--the so- called "all work test"--is a contrivance that I cannot believe satisfies the rigorous and fastidious intellects of my right hon. and hon. Friends. As I have argued before, the proposition that there can be an objective medical test of capacity for work--for all work--is fundamentally misconceived.
My right hon. and hon. Friends know very well that an individual may be capable of some kinds of work and not others. They know that a person's capacity for work is a function not only of his state of health but of factors such as education, training, skills, experience and, of course, the jobs on offer and their accessibility. All those factors should be weighed together, as they have been since the Conservative Government introduced invalidity benefit in 1971. The notion of an all work test is a fig leaf for the Treasury's determination, regardless of near-term distress or long- term cost, to cut planned expenditure. I am not interested in--I am deeply opposed to--gaining tax cuts at the expense of the long-term sick and disabled. I suspect that many voters share my view.
The long-term sick and disabled are not very good at organising protests and making their voices heard. The media gave no coverage at all to the Social Security (Incapacity for Work) Bill when it was going through Parliament, yet the Act and the regulations are major legislation in terms of their fiscal and human implications. The Government expect to take £410 million from the social security budget in the forthcoming year and £1,720 million by 1997-98 by dint of, among other things, excluding from incapacity benefit 220,000 people who at present can claim invalidity benefit.
Let us be clear about the fact that these people are disadvantaged. A few claimants may indeed be abusing the system, and I do not condone that. But the Department's own research reveals that by far the greater number are poor and--surely my right hon. and hon. Friends will agree--deserving.
Under the medical test which we are asked to approve, one has to score 15 points to qualify for incapacity benefit. Someone who is partially sighted and cannot see well enough, even when wearing spectacles, to discern a friend on the other side of the room, scores 12. If she lives in a rural area without buses, she certainly could not drive to work. She would receive invalidity benefit now, but if she were under 58, she would not receive incapacity benefit under the new system.
A person with myalgic encephalomyelitis--ME--who has problems with gross and fine motor control, cannot bend down and then straighten after picking something up, and cannot tie his shoelace scores only 13 and does not qualify. It used to be thought that polio and multiple sclerosis were hysterical conditions. Is that still the view of the Department and the Benefits Agency medical service on ME? What clarification has been given, to enable us to understand the implications of our vote this evening, as to the calibration under the test of cerebral palsy or multiple sclerosis? Which sufferers from those conditions will qualify for incapacity benefit and which will not? The principle of objectivity presumably means having the facts on the table.
Column 1249I hope that the House will tolerate my once again quoting Dickens, because he would undoubtedly have had something to say about the all work test and the 80 experts whom my hon. Friend the Minister mentioned. The House will remember chapter two of "Hard Times": "Thomas Gradgrind . . . A man of facts and calculations. A man who proceeds upon the principle that two and two are four, and nothing over, and who is not to be talked into allowing for anything over . . . With a rule and a pair of scales, and the multiplication table always in his pocket, Sir, ready to weigh and measure any parcel of human nature, and tell you exactly what it comes to. It is a mere question of figures, a case of simple arithmetic." There was also Mr. Gradgrind's utilitarian colleague:
"A mighty man at cutting and drying, he was; a government officer."
The Department of Social Security certainly produces facts. I commend my right hon. Friend the Secretary of State on his willingness to publish research even when the findings do not validate his policy. Research report 20, a longitudinal study of new recipients of invalidity benefit by Bob Erens and Deborah Ghate, demonstrated that the great majority of new recipients of invalidity benefit were poor and earned in their last job, in 1991 or 1992, between £2 and £5 an hour. They were likely to have been manual workers. The most common causes of their invalidity were industrial diseases and other work-related factors. Only 17 per cent. of them had stayed in full-time education beyond the age of 16, and 48 per cent. had no educational qualifications at all. Once over 50 years old, their chances of returning to employment were very poor indeed. Those recipients of invalidity benefit are the victims not only of injury and ill health but of recession--all too often, people in poor health are the first to be made redundant--and economic change. Where are the jobs in today's economy for people in their 50s with little education, few skills and a poor health record? They have paid national insurance contributions to provide precisely for the contingency in which they find themselves. Indeed, my right hon. and hon. Friends and the House have recently increased the contributions of those people by 10 per cent; yet, by way of these regulations, we would lessen or even remove that benefit altogether. It is not a good thing to do.
My hon. Friends are invited to believe that invalidity benefit has been a wholesale rip-off. It is pointed out, in the relentless repetition of propaganda--my hon. Friend the Minister for Social Security and Disabled People said it again this afternoon--that the cost of invalidity benefit has been soaring, even as the health of the nation has been improving; so, we are supposed to conclude, claimants have been swinging the lead.
I am glad that, overall, the health of the nation has been improving, but averages are deceptive, as we might have been told in an interesting essay, had it not failed to appear in the new edition of Social Trends , and as we have just been told by the school of advanced urban studies in Bristol. The health of the nation is chequered geographically and correlates with the unevenness of socio-economic factors. Poorer people, particularly in the older, industrial areas, experience worse health.
The growth in claims, as the hon. Member for Garscadden reminded us, has been analysed by the Policy Studies Institute. It found, as the hon. Gentleman said,
Column 1250that 29 per cent. came from claimants choosing invalidity benefit rather than the pension, as they were entitled to do; 16 per cent. from the increase in women in the labour market paying national insurance contributions; and 13 per cent. from the increase in disabled people in relevant age groups. Some 42 per cent. was due to the growth in the number of genuinely disabled people. The key to that is that they could not get off benefit because there were no jobs for people with their disabilities and skills, or lack of skills. There was no evidence to suggest that they did not want to be in work. Their benefits were a poor substitute for their earnings. The system has provided no feather bed for idleness. Four out of five claims questioned by officials of the Benefits Agency medical service were, indeed, made by people who were incapable of work.
What will happen to the existing claimants of invalidity benefit? The most severely ill have rightly and properly been exempted from the test. My right hon. Friend is allowing recipients aged 58 and over to be passported through to incapacity benefit. However, he estimates that about 220,000 people will be found to be capable of work over the next two years.
I welcome his assurances that there will be a right of appeal, that those who are found capable of work and decide to register as unemployed will have a full advisory interview and receive special guidance and help, and that additional places on programmes are being funded with extra resources given to the Employment Service and to the placing assessment and counselling service.
To do all that is, of course, right, but I hope that my right hon. and hon. Friends will think carefully and sympathetically about the requirements under the rules of the job seeker's allowance for people suffering from long-term sickness and disability--conditions all too real, although not severe enough to score 15 points--and especially older people. I apprehend that only a fortunate few--very few--will get jobs. It may take them a long time.
Only 41 per cent. of all men aged between 55 and 64 are in employment. The long-term sick and disabled will be competing with people in good health for jobs which, despite all the Government's good efforts to promote job creation, are far too scarce. Let us please refrain from imposing insensitive requirements on them, which will be hard for them to bear, through jobseekers' directions. Let us think very carefully about what requirements in terms of actively seeking work ought to be imposed on the long-term sick and disabled. Let us be as positive as we can, for example, in accommodating a commitment to voluntary work, which many people with a degree of disability will willingly and most valuably undertake on a part- time and flexible basis.
What about the appreciable number of people who will not qualify for incapacity, but who, because of their disability, will not be able to satisfy the more rigorous qualifying conditions for the jobseeker's allowance? My hon. Friend the Minister sought to offer reassurance, but I remain fearful that some--too many--will disappear into the proverbial black hole which he mentioned. It would not be acceptable were that to happen.
Those people are the victims of circumstances beyond their control. They have been unlucky in their health. They have been dispossessed of work opportunities by the colossal changes wrought by technology and globalisation, the restructuring of the British economy and
Column 1251the widening of inequalities in our society. But they are members of our society, fragmented though it is, and we cannot wash our hands of them. We should not for a moment wish to do so or consider doing so. It is fine for the Conservative party to encourage talent and success, but it can be no part of our ideology--I am sure that it is no part of my hon. Friend the Minister's ideology--to let the devil take the hindmost. We cannot neglect the responsibility articulated by the Tory party long ago to elevate the condition of the people--all the people. We must not abandon those who, under the present proposals, will lose entitlement to benefit.
At a cost that we could well afford, we could passport through from invalidity benefit to incapacity benefit all existing claimants over the age of 50. In a parliamentary answer on Monday, my hon. Friend the Minister of State told me that it would cost an extra £45 million in 1995-96 if all claimants over 50 were exempted from the test on the same basis as claimants aged over 58. My right hon. Friends should soften their rigour to that extent. Our economy is quite strong enough to sustain that concession. If they are unwilling to do that, they can at least extend the exemption to people aged over 55--the people who we know have the poorest prospects of finding work--for a cost of only £15 million.
The greater the insecurity of the world in which we live, the more we have a duty to offer care to the vulnerable. That should be a principle common to all parties in the House. As it is, the regulations express a policy which cold-shoulders the vulnerable and I cannot support them.
Mr. Ted Rowlands (Merthyr Tydfil and Rhymney): It is a rare, if not unique, occasion for the Member of Parliament for Merthyr Tydfil and Rhymney to rise and say that he rather wished that he had made the speech that the hon. Member for Stratford-on-Avon (Mr. Howarth) just made. It was a privilege to listen to the sensitivity combined with close reasoning that the hon. Gentleman brought to the debate. I do not want to engage in a general debate. I want to tell the Minister what I fear will happen in the communities that I represent as a result of the proposed changes. I seek a basic, simple and fundamental assurance from the Minister and I hope that he will be able to respond to my comments at the end of the debate.
Irrespective of the national average figures, the Welsh figures, and particularly the figures for the communities that I represent, are of a different order from those that were presented to the House as the norm. According to written parliamentary answers, 10 per cent. of the male population of working age in Wales receives invalidity benefit. That is 2 per cent. higher than in any region in England. In addition, the 1991 census figures revealed a frightening, disturbing and continuing pattern of ill health in households in the valleys constituencies. Of the top 12 constituencies with the highest ratio of limiting long-term illness in households, 10 are south Wales constituencies. They have the highest ratios in the country. Poignantly, the constituency at the bottom of that league is Wokingham, the constituency of the Secretary of State for Wales.
Column 1252That gulf is a sad comment on us all. After 50 years of post-war effort, there is still an enormous gulf--which is partly historic and continuing--in respect of the social divisions reflected in the figures to which I referred and in the number of recipients of invalidity benefit.
I am most concerned about the figures. I am worried that they are guesstimates. I do not know on what they are based. As I understand it, the Minister rested his case on the fact that half the existing recipients will be excluded from the process. One of the problems is that benefit districts in relation to invalidity benefit do not coincide with constituencies or local authority districts. However, I understand that in respect of the benefit district area that covers my constituency and beyond it--the Merthyr, Cynon and Rhymney district--24,000 people receive invalidity benefit. I am literate, I hope, but I am not very numerate. I am therefore worried about the figures and I would be grateful if the Minister would confirm them. If 24,000 people are in receipt of invalidity benefit in that benefit district, that represents a much higher percentage of the population of working age in receipt of that benefit than any of the averages about which we are talking. The Welsh average is between 7 and 10 per cent., but the percentage in that benefit district is infinitely higher. A much higher percentage of the people in the area that I represent receives invalidity benefit than the Welsh or English averages.
As I understand it, only about 8,000 of those 24,000 people are aged 58 or over; that means that one third would be excluded from the total. I would be grateful if the Minister would confirm my figures. In addition, we must consider those who would be excluded who would qualify under the exemptions; they would account for 16,000 of the 24,000. I have great difficulty in believing that an additional 4,000 fall into that category. That would mean that half the recipients in my area were exempt.
I hope that I am wrong. I hope that the figures can be qualified, altered and changed in a way that allows me to go home and tell the communities which I represent that at least the Minister is arguing that half the existing invalidity beneficiaries in my areas would be excluded from the process. At the moment, on the guesstimates, I believe that rather fewer than half--and perhaps significantly fewer than half--would be excluded.
I want now to consider the implications of a written answer that the Minister sent me about where the savings are to be made. In the reply, it was admitted that 41 per cent. of this year's savings, and 48 per cent. of next year's savings--we are talking about huge figures--are to come from disallowing existing recipients from the benefit. The savings will not be made as a result of new claimants or tax changes. In year two, 48 per cent. of the savings will result from withdrawing and refusing benefit in respect of those who are already receiving it. By any standards, that is a huge withdrawal of financial support from families and communities.
The hon. Member for Stratford-on-Avon took us back to Dickens. I do not want to go back even to the 1930s. The qualitative difference between recession 1930s-style and recession 1980s-style in Merthyr Tydfil is that we still managed to spend in the 1980s. Consumption collapsed in the 1930s and that is what led to the absolute deprivation of the 1930s.
Column 1253The relative impact of the 1980s recession was cushioned in post-war Merthyr Tydfil, which had enjoyed a reasonable degree of permanent or full-time employment for the lifetime of one generation, and people had qualified for occupational pensions and for contributory benefits. When the redundancies occurred in the 1980s, with the double whammy of the collapse of manufacturing and mining, there was, fortunately, a cushion of occupational pension rights, redundancy rights, payments rights and contributory benefits rights for a generation of people who had been "shaken out" of the economy. In many respects, the figures conceal the true depth of economic inactivity. In my area, about 40 per cent. of men of working age are economically inactive. About 20 per cent. of them are registered as unemployed--depending on which bands we consider. If the 1991 census figures are to be believed, another 20 per cent. are economically inactive. Within that 20 per cent. are a very large number of people who receive invalidity benefit.
We are not talking about taking £1 or £2 away from people; we are talking about taking £60, £70, £80, £90 or £120 from people, because the benefit is earnings related. It is related to one's contributions and to one's earnings. We are talking about taking between £60 and £120 a week from the family budget. Almost at a stroke, the decision of an adjudication officer will mean that those people will spend months trying to appeal against the loss of benefit.
Let us take a conservative estimate, and say that perhaps 5,000 of the 24,000 people who are in receipt of invalidity benefit lose that benefit within the next two years as a result of the changes. If those people lose on average some £70 a week, we are talking about a loss in the purchasing power of the local economy of £15 million to £18 million a year. There will be serious consequential effects, not only to individual families but to the prosperity of the whole economy.
The contributory benefits which came as a result of the reasonably permanent full employment which lasted from the late 1940s through into the 1970s saved local economies and communities of the kind and character I represented during the 1980s. Much of that money was immediately recycled back into the local economy.
I can think of many families where the man or woman who is in receipt of invalidity benefit probably props up an unemployed son, daughter or married couple for insurance, clothing and a host of the other expenditures which occur in relatively close-knit communities of the kind I represent. Among those communities, invalidity benefit has played a very important social and economic part. Withdrawal of the benefit on the scale proposed worries me, as it could have a serious effect on not only individual families but the collective purchasing power of the community.
I do not believe that Ministers have thought the measure through. They will say to me that people can apply for unemployment benefit, the new jobseeker's allowance or income support. I suspect that a large proportion of those who lose benefit will be people in their 50s who, because of redundancy, have left work. They will not have made the contributions necessary for them to be able to claim unemployment benefit, or the job seeker's allowance from next year. They may not be able to claim income support either, because they have modest
Column 1254lump sums left over from their redundancy money and a small occupational pension which takes them outside the limit. They will, therefore, not only lose the benefit but not qualify for any other benefit.
Should those people bother to sign on for the jobseeker's allowance? They will have to do so to keep their credits for their pensions, and they will have to try to fill the hole left by the loss of benefit. As the hon. Member for Stratford-on-Avon said forcefully, they will have to compete for the same pathetic collection of jobs with younger adults and the long-term unemployed, of whom we have a rather large percentage. People in their mid- 50s who have a disability of one kind or another and who will be shaken out by the new test will be competing for the pathetic, poorly paid jobs available at my local jobcentre. Let me tell the Minister what I am talking about. Someone brought to my attention a job as a security guard that was advertised as paying
"£1.80 an hour--bring your own dog".
We are talking about pathetic rates of pay, and I am not exaggerating.
I do not understand where the national income averages come from, as I have searched in vain through the jobs advertised in the local newspapers for one salary which matches the average income. A considerable differential in earnings has been occurring during the past decade in communities such as mine.
The Secretary of State for Social Security gave a most interesting and, I thought, sensitive lecture in Northern Ireland a few weeks ago, in which he drew attention to the social consequences of what he called the disparity of earnings. He was talking about the social consequences of that disparity, while at the same time introducing regulations which will drive thousands of people in their mid-50s into the labour market to compete with other adults and young unemployed people who have been waiting and hoping for a job.
Mr. Duncan: I have been following the hon. Gentleman's argument closely, and I am perplexed. He seems to be in favour of keeping those people on benefit, rather than letting them compete in the labour market. Even if that is not his view--frankly, it seems that it is--he also seems to be at odds with the Disability Discrimination Bill, which wishes not to discriminate against such people in their search for a job.
Mr. Rowlands: One consequence of the measure will be to drive people who had virtually accepted that they were in retirement--men and women of about 57--and who have been in receipt of invalidity benefit for two or three years back into the labour market. My hon. Friend the Member for Birkenhead (Mr. Field) made an effective intervention, when he described what happened during the 1980s. The Government understood and approved of invalidity benefit as being part and parcel of a whole process which allowed people almost to go into semi-retirement in their mid-50s, rather than scrambling for a job that they were not fit enough to do. The Government are now bringing in a new objective test with a huge retrospective character which will force people back into the labour market.
I must tell the hon. Member for Rutland and Melton (Mr. Duncan) that a large number of people in their mid to late-50s have accepted that they are unable or likely to go back into employment. The loss of benefit will force
Column 1255them into the labour market. They will not feel deprived of their rights--that is the hon. Gentleman's argument--but they will most certainly feel deprived and angry as a result of the retrospective character of the test that is proposed in the regulations.
Mr. Jeremy Corbyn (Islington, North): My hon. Friend is making an excellent case against the measure. Does he accept that those people will also be angry when they find the levels of wages of the jobs for which they will be told to apply? Is he not making a strong case for a national minimum wage to end the obscenity of slave labour rates?
Mr. Rowlands: I shall not be tempted by that topic, as you might stop me if I pursued the argument of a minimum wage, Mr. Deputy Speaker. We can have those arguments elsewhere on other occasions. I am simply trying to describe what I fear will be a consequence of the regulations, and the impact they will have on families and communities. I am also concerned about the impact which the measure will have on local purchasing power, which has sustained communities such as mine during two major recessions within a decade. The hon. Member for Stratford-on-Avon produced some fascinating figures. He said that, for merely £45 million, the Government could exclude everybody over the age of 50. That is an astonishing figure. It may turn out to be incorrect and, in communities such a mine, we may find that the regulations have a disproportionate effect. We have heard the assuring figures that more than half the people concerned will be exempt and that the majority of them will have their benefit maintained. That brings us down to about a quarter of existing claimants losing their benefit, as opposed to the rather more serious figures which we fear. If our more worrying and draconian view of the regulations turns out to be true, will the Minister review them? It was right and proper of my hon. Friend the Member for Garscadden to speak about the experiences of the Child Support Agency and the disability living allowance. We have been through those administrative problems, although we accept that Governments occasionally cannot analyse in detail what the direct consequences of their actions or legislation will be. I fear that the number who will lose benefit will be larger than the Minister suggested. My mental arithmetic worked out that he implied that only about a quarter of those currently in receipt of invalidity benefit would lose it. I hope that, if those figures turn out to be inaccurate during the next one or two years, he will promise to undertake a fundamental and urgent review. I also hope that we do not end up with people suffering as a result of the Government's economic mismanagement, as we fear.
Mr. Barry Field (Isle of Wight): I will not follow the hon. Member for Merthyr Tydfil and Rhymney (Mr. Rowlands) and his anecdotal evidence about the advertisement for a security guard which stated "Bring your own dog". It would be no good if it were my dog--his idea of intimidating an intruder is to lick him to death.
I shall be brief as I certainly do not have the depth of knowledge of my namesake on the Opposition Benches. First, I must declare an interest, which is not in the Register of Members' Interests, as I am the president of the Isle of Wight branch of the Multiple Sclerosis Society.
Column 1256My concern is that, although the pain, stress, fatigue and variability of the condition will be taken into account, the questionnaire to be completed before examination by a Benefits Agency doctor does not appear to provide for describing the effects of a variable condition such as MS, or for the effects of fatigue after performing some function.
Severe and progressive neurological diseases are exempt from all work tests. I want to know precisely how claimants who fall into exempt categories will be identified. As I am sure the Minister is aware, multiple sclerosis is a complex and unpredictable condition. It takes different forms, which include relapsing, remitting and chronic progression. Doctors are unable to provide a prognosis for the path that someone's MS will take, so how will agency staff determine whether a claimant's MS is severe or progressive enough to exempt them from the test? Will someone automatically fail if his or her MS is in remission at the time? Will the right of appeal be available for those who are not exempted, but who believe that they should be?
I broadly support the Government's thrust to reform social security legislation and this is an important part of the reform. I simply remind the House that one of our former Members of Parliament, Mr. Rob Hayward, was an MS sufferer. Happily, I understand that the condition was dormant and he fought the by-election in Christchurch. I am sure that among the fraternity of Members of Parliament no one would suggest that fighting a by -election would make one unfit for work, yet those of us who know about multiple sclerosis and are aware of the ways in which the disease can progress, know that it can suddenly accelerate and make someone incapable of work. I see my hon. Friend the Minister nodding--in agreement, I hope.
Fatigue is also associated with that horrible disease. Those of us involved in the Multiple Sclerosis Society hope that, before long, someone will not only discover the reasons for this terrible disease but a cure--the same is true of cancer. In the mean time, I hope that when I vote with the Government tonight I can do so knowing that the Minister will keep a careful eye on this matter. All our regulations and statutes--everything that the House does with the printed word--have to be in black and white, but I hope that the Minister will remember these few words of mine and will ensure that the regulations are implemented with a sensitive and human touch.
Ms Liz Lynne (Rochdale): As other hon. Members have said, the medical test for incapacity benefit is crude and unfair. It is crude because it tests functional ability only and a task that is done once, not over and over again, which is what many people have to do when they are employed.
As has been said, we need a proper definition of work--the hon. Member for Stratford-on-Avon (Mr. Howarth) mentioned that. I know that the other place tried to change the ruling. I want the legislation to include the definition of work used by the private insurance industry:
"that to which someone is suited by education, training and experience."
The Bill would benefit from the inclusion of that definition, but the Lords amendment was defeated by 124 votes to 107.