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Mr. Levitt: I oppose amendment No. 12, and support the Bill as drafted. I do so with some regret. My hon. Friend the Member for Kingswood (Mr. Berry) and I have worked together on a number of disability issues for many years, even before I was a Member of Parliament, and I am sorry that our views differ in this instance. Let me explain why that is.
Some of my colleagues find the whole concept of what they call means-testing distasteful. I understand their reasons, but I think that ensuring that money goes to those who need it most is what government is all about. Clauses 53 and 54 will enable resources to be targeted at those who are most in need: disabled people and their carers, and others on low incomes.
Clause 54 is, I feel, the more significant of the two.It creates a link between occupational pensions and incapacity benefit. Occupational pensions are deferred income: there is a tax advantage for those who contribute to them at the time of their contribution. It behoves us to examine the treatment of occupational pensions in other parts of the benefits system.
A person receiving a jobseeker's allowance who also has an occupational pension loses his or her jobseeker's allowance pound for pound against the occupational pension. Those who move to old age pensions from incapacity benefit lose their incapacity benefit completely, and some who make such a move do so by taking a cut in income. I do not necessarily defend those two states of play; I am saying that the Bill's proposals are much more generous to those who will be on incapacity benefit in the future than we are now to those receiving jobseeker's allowance, or experiencing the transition to old age pensions.
Incapacity benefit is not strictly a disability benefit. It is there to compensate people for the loss of income caused by incapacity; it does not address the disability itself. There has been no mention in the debate of disability living allowance, the principal benefit for disabled people, which deals with the actual costs of disability. The Bill makes no change to that allowance. It will not be means-tested, and, in that sense, it is true to say that the Bill does not provide for a general means test for disability benefits, despite the way in which it has been portrayed.
Mr. Steve Webb (Northavon):
Will the hon. Gentleman give way?
Mr. Levitt:
I will not, because plenty of hon. Members want to make their case, and I want as many as possible to be able to do so--as I am sure the hon. Gentleman does as well.
What will be the position of new claimants? Those in receipt of incapacity benefit plus an occupational pension of up to £50 a week will not be affected by the Bill. That applies to four out of five people receiving incapacity benefit who either have no occupational pension, or have an occupational pension of less than £50 a week. Only those with incomes of £10,000 a year or more consisting of a combination of incapacity benefit and occupational pensions will have their incapacity benefit withdrawn.
Mr. Webb:
Will the hon. Gentleman give way?
Mr. Levitt:
I have already explained to the hon. Gentleman that I am sure he will get his chance.
Other Labour Members have expressed the view that the £50 limit--the £50 cut-in--of the occupational pensions taper is too small. It may be, but the £50 is not in the Bill. Indeed, the Bill provides the mechanism for
changing the level; it gives the Secretary of State the power to change that level. That ability must be there, but the £50 itself is not in the Bill.
Others object for reasons--which my hon. Friend the Member for Kingswood rightly mentioned--to do with the deficiencies in the way in which the Benefits Agency's medical and tribunal services operate. Those are good points, but they too are being addressed through other measures, many of which do not require legislation. It is therefore not necessary to have them in the Bill.
It has been said that there is a disincentive to save, but let us look at another clause in the Bill: the one to introduce stakeholder pensions. It ensures that anyone whose income is less than £9,000 per year, which will include a lot of disabled people, will receive stakeholder pension credits as though they were receiving £9,000 a year. It would not be possible to fund that measure without the funding made available by clauses 53 and 54.
That stakeholder pension element, from which many disabled people will benefit, has to be factored into the equation when people assess whether it is a cuts Bill. The measures will lead to an extra £1 billion being spent on disabled people's benefits during the current Parliament. If we take into account the changes to the stakeholder pension, to the carers allowance and to the disability income guarantee--which, again, is not in the Bill because it is a Treasury measure--we will find not a deficit of £750 million in 10 years' time, but a net increase resulting in extra funding going to that wider group of people.
I ask my colleagues on the Labour Benches to consider the following situation. At their next advice surgery, they may have in front of them a three-year-old girl who has been born with no legs, and her parents; a 17-year-old boy who has been a promising student, but is now paraplegic after a road accident; a disabled adult on a low income who is never likely to be able to save for a pension; and a bank manager who has taken early retirement with a back problem. He has £70,000 in savings, a £150,000 house, an occupational pension worth £25,000 or £35,000, and £3,500 a year of incapacity benefit on top of that.
The Bill will, for the first time, give that three-year-old girl access to disability benefits. It will give that 17-year-old boy the highest level of non-contributory benefits--higher than incapacity benefit--to meet the needs of his severe disability. As I have already explained, it will give that disabled person a stake in a stakeholder pension. It will allow that bank manager to keep his £3,500 incapacity benefit because he is an existing claimant, but it says that the incapacity benefit of the tiny minority of people who have such an occupational pension, some of whom are on the highest rate of taxation, is better spent on the other people who will benefit from the Bill.
As someone who has been involved with the disability world for a long time, my dream is that everyone who has to leave work early because of incapacity or disability--perhaps through failing eyesight, hearing, dexterity or mobility--will be helped to stay in work for an average of five more years through educating employers about their needs, providing technology for them and other support at work, and preventing discrimination against them in employment. Those measures will retain skills in the work
force, and maintain the dignity and income levels of disabled people. They will have the knock-on effect of reducing the amount that the state pays out in benefit.
All those measures are in train. Those on the new deal and access to work are up and running. We should be celebrating because, this morning, the Disability Rights Commission Bill completed its Committee stage with helpful amendments that were asked for by the disability lobby. The Bill will outlaw, and give teeth to the outlawing of, discrimination, but the third leg of that stool is the Welfare Reform and Pensions Bill. That addresses the real needs of disabled people and finances the measures by redirecting some of the funds from some relatively wealthy people to those who have nothing. Amendment No. 12 does not help the people at the bottom in any way. I oppose the amendment and support the Bill.
Mr. David Rendel (Newbury):
I am pleased to have the chance to talk a little about the amendments because they are critical to the whole of the Bill. I should like to follow through some of the Government's arguments and then talk a little about what their aims are. I hope to demonstrate thereby that their arguments are illogical and contain internal inconsistencies, and that their aims will not be met by the measures that they seek to introduce.
When the Government started to talk about welfare reform, they said that the cuts that they planned to introduce were perhaps needed to meet the requirement to reduce the welfare bill--welfare costs in total. They said that those costs had been going up over a period, that they looked like continuing to go up in the foreseeable future, and that it was important to bring them down.
However, when we discussed clauses 53 and 54 in Committee, the Under-Secretary of State for Social Security, the hon. Member for City of York (Mr. Bayley), made it clear that, on the contrary, the clauses were not Treasury driven and that the amount of money that was due to be saved was incidental: it just happened that there would be savings, but that was not the point of the clauses.
The previous Secretary of State for Social Security had made it clear that, if there were to be any cuts in benefits for disabled people, they would be given back to those people in some other way; there would be no net cut in their benefits. Clearly, therefore, although there may be a need to reduce the welfare bill overall, the intention of clauses 53 and 54 cannot be to achieve that.
Another reason that the Government gave for introducing the clauses was that the Tory party and the previous Government had moved people off the unemployment register on to incapacity benefit, and that that was the wrong thing to do. They said that that policy had to be reversed, yet when we questioned them in Committee on the point, they said, "It is not true to say that anyone receiving incapacity benefit does not deserve it, or is not truly incapacitated."
The Government said that all the doctors who had been doing the tests to decide whether those people were really due incapacity benefit had been doing a good job, and that everyone who was currently getting incapacity benefit was due it. What is more, they told us that they did not intend to change the tests, or to give the doctors concerned any other advice. They are changing the name of the test, but they told us clearly that they had no intention of making it more severe, or more difficult to get through;
they have no intention of making it more difficult to receive incapacity benefit following changes in relation to the tests. Their argument that, in some way, what they are doing now will reduce the number on incapacity benefit and push up the unemployment register--which they appear to think is the right thing to do--is inconsistent and illogical.
The Government have said that, wherever possible, they want to encourage people with disabilities to get back into work. My hon. Friends and I share that view and there is probably not a Member in the House who does not believe that, when it is possible for people with disabilities to get back to work, they should be encouraged and enabled to do so. Yet the Government have to answer the question that they failed to answer in Committee, which is how restricting incapacity benefit to people who have worked recently, and restricting the amount of incapacity benefit for people with occupational pensions, will help disabled people to get back into work. It is likely to have the opposite effect. Those who are becoming more disabled through some progressive illness will be tempted to get out of work as quickly as possible because they will need to do so at a time when they have recently paid contributions and will be eligible for incapacity benefit.
The Government say that it is all part of a package. The hon. Member for High Peak (Mr. Levitt) made that point too. In fact, it is not a necessary part of the package. We were told just now that we cannot have the other things in the Bill, such as the increase in severe disablement allowance for some young people, unless we have these two clauses. Yet, as I said already, the Government have made it clear that the savings that they are introducing in these two clauses are peripheral and are not a necessary part of the package. It is therefore illogical to pretend that we cannot have the other parts of the package, which may be welcome, unless we have these two clauses.
What have the Government said about their aims? They have said that their aim is to help the most vulnerable and there are things in the Bill which help to do that. There are things which my hon. Friends and I have not hesitated to welcome. Only a small part of the cuts being introduced in this Bill is going back to the most vulnerable. In these two clauses we see a net cut in the long term of£700 million a year. That is not giving help to the most vulnerable.
Had the Government come here today and said that they needed the cuts because the money was needed to help the most vulnerable, that would have reassured many Labour as well as Opposition Members. They would have believed that that was the right way to spread the available money. Liberal Democrats have no intention of saying that we suddenly want to increase the welfare bill by a huge amount in order to help the most vulnerable. We accept that there is only a certain amount of money available and that, where possible, it should be spread to the most vulnerable. In that sense, we approve of the Government's aim, but we disapprove of the fact that they are not achieving that aim by means of these two clauses.
The Government want to encourage work. We, too, want to see work encouraged where possible. After all, for those who have some incapacity, work is often a means of increasing self-confidence and self-worth. For that reason alone, apart from the financial incentive, it is worth trying to encourage people back to work where possible.
Clause 53 restricts those who will receive incapacity benefit. In the future, it will not go to those who have worked for a long time and been able to make their national insurance contributions over some years. Instead, there will be an arbitrary cut-off which says that if one has not done the right amount of work within the past two years, one cannot get incapacity benefit. Surely, if the Government were really out to encourage work, they would be trying to encourage those who have been working the longest by giving them the most help when they become incapable of working.
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