Draft Social Security (Incapacity Benefit) Miscellaneous Amendments Regulations 2000

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Mr. Boswell: I am sure that the Minister will understand if we have to study those statements with care. Can he explain in simple English the effect of the new relaxation for young people? Will someone who has previously been incapacitated who wants to try returning to employment subsequently be able, if it does not work out, to resume incapacity benefit as a result of the change? Will there be no disincentive to try resuming work and every incentive to have a go?

Mr. Bayley: The goal expressed by the hon. Gentleman in admirable, understandable plain English is exactly the Government's goal. We want to prevent someone who receives incapacity benefit as a result of the youth provisions from thinking that it would not be in their best interests to return to work because they might lose a lifetime's entitlement to the benefit. The regulations are drafted in order to achieve that aim. People who are working sufficient hours to receive the disabled persons tax credit would receive protection, but it is conceivable that some people—perhaps with learning difficulties—could work for only one day a week. If such people did so for three, four, 10 or 20 years and found that they could no longer do so, they might lose the entitlement to incapacity benefit under the youth provision.

The regulations are intended to ensure that people will not be penalised for doing whatever work they can. Work is useful for the income that it brings in and it helps people to achieve independence. It is also important as a social inclusion measure: people acquire friends and a routine to follow; they are achieving something for themselves rather than being passively cared for in a day centre. The Government believe that that is important.

The regulations will also provide protection for people returning to this country from abroad—people who were in receipt of the benefit through the youth provisions in the tax year prior to making a new claim.

Finally—a word that hon. Members will be pleased to hear—a year after the changes are introduced, the regulations automatically transfer on to long-term incapacity benefit those aged under 20 who were entitled to severe disablement allowance at the point of change. That will give this group access to long-term rate incapacity benefit at the same time as persons incapacitated in youth who became entitled to short-term rate incapacity benefit under the new entitlement conditions.

The regulations also make consequential amendments to other minor social security regulations. Amendments are being made to the claims and payments regulations, the credits regulations, the payments on account, overpayments and recovery regulations.

The decision to change the contribution conditions for incapacity benefit and to take account of early retirement pensions in certain circumstances were controversial when they were debated in the House. Those changes, however, are in the Act and are not open to amendment by regulation and are not up for discussion today.

In contrast, these regulations are entirely beneficial. They exempt some people from the contribution conditions of pension provisions in the Act. Indeed, they will enable a wide range of deserving groups to continue to receive incapacity benefit on the same grounds as they do now. In addition, people in receipt of the highest rate care component of disability living allowance will be wholly exempted from the pensions payments proposals.

Mr. Bermingham: As my hon. Friend was speaking, I was thinking about a scenario in which someone on incapacity benefit has a spouse or partner who becomes pensionable and then dies; under the terms of the pension, part of that transfers to the disabled spouse or partner receiving incapacity benefit. Is it correct to say that that pension, now payable to the person receiving incapacity benefit, will not be deductible from the incapacity benefit? I see that my hon. Friend assents; if that is the case, I am happy.

Mr. Bayley: Yes, that is the intention. If a pension is payable because of the death of a person who was its primary recipient, it is not intended that it should be counted.

Mr. Boswell: Is not the logic of this somewhat triangular discussion that someone in receipt of his or her deceased partner's pension, or of a portion of it, is better off in terms of benefits than somebody who would otherwise receive his or her pension in his or her own right—a provision that is to be abated under the rules?

Mr. Bayley: It is always difficult to draw parallels. The Government have sought to ensure that where people retire early from work and receive a higher than average early retirement pension, they should not expect full entitlement to incapacity benefit. The hon. Gentleman described a situation in which a spouse—in most cases, a widow—receives the equivalent of a widow's pension. That is a rather different situation and that is why we have made the concession proposed by my hon. Friend the Member for St. Helens, South (Mr. Bermingham), ensuring that where the pension is payable because the primary beneficiary dies there should not be an abatement.

I reassure the Committee that the regulations ensure that all the commitments that a Government make during the passage of the legislation are met. I therefore commend the regulations to the Committee.

4.57 pm

Mr. Tim Boswell (Daventry): It is a pleasure to serve under your chairmanship for the first time, Dr. Kumar, and to respond to the Minister's comments—also for the first time in such a gathering.

I appreciate that the Minister has gone to some trouble to explain the regulations and to take the debate wider than a mere discussion of the text. I keep a list of Ministers with a good bedside manner; I shall have to consider him a potential candidate for inclusion. To respond to him not merely with encomia but to come to the substance of the matter, it is perhaps fitting that, as the daylight draws to a close and as, under the modernised timetable, the parliamentary week begins to labour towards its close, we should take time to debate complex technical regulations that affect a significant number of people, including some of the more vulnerable in our society. As parliamentary scrutineers, we should do our best to ensure that the regulations operate in the way intended and with fair consequences to those involved. The Minister will know that I do not come at the matter as an expert in social security—I would say modestly that there are occasional advantages in having a lay view—and I would not wish to sit an exam on the regulations; that is the Minister's job. However, I come at the legislation from a disability angle. I wish to ensure that matters are fairly operated, as I am sure do many members of the Committee.

The Minister began, as I would like to do, with more general considerations. The first was the new deal for disabled people. There is no suggestion that we should oppose an attempt to focus on the provision of employment opportunities for disabled people, especially, as the Minister helpfully assured us, when there is no element of compulsion. It is a matter of free choice and therefore of widening their opportunity, for reasons—given by the Minister in an interesting later comment—that were not merely economic but social and related to the status of disabled people. As he will know, that is of huge importance in itself for people with learning disabilities, quite apart from the money and benefits. We welcome the concept of focusing on helping disabled people into the employment market, and we would echo the Minister's concern, even if he was a little dismissive of the previous Government's record.

We should all do we can to remedy the existing disturbing situation. At present, 3,300 people a week leave the labour market for incapacity benefit. Although I do not suggest that those people do not need or are not entitled to it, the rehabilitation rate from incapacity benefit back into employment is small. The Minister will be aware that my hon. Friend the Member for Havant (Mr. Willetts) has made proposals to unify the benefit and rehabilitation funds and to improve matters. The intention is to draw on the better record—I do not wish to draw a precise analogy—that is available in the private health market. Private health insurers are generally more successful at getting people back into the labour market. Those are broad considerations, but we shall watch with interest the progress of the Government's new deal for disabled people.

When the Minister winds up, he may want to comment further on the progress of pilot schemes, which, as he said, have now been rolled into a national scheme. I have a reservation—an objective and personal one, as well as a political one—as to whether the advice available, especially in specialist or difficult cases, always has sufficient firepower or expertise to help the disabled individual.

Although the Minister did not want to debate the Welfare Reform and Pensions Act 1999 again, he conceded that many of its proposals, especially that which he delicately but accurately described as the abatement of occupational pension, were highly controversial. The Opposition were worried that they might send to people who would otherwise try to build up their own capacity for retirement a signal that saving did not pay. That might act as a perverse disincentive towards sensible and prudent conduct, and would be anomalous in terms of the various kinds of income involved. Again, the Minister may wish to touch on the matter. I do not intend to reopen the wide issue, which has been extensively debated.

The Minister has made a genuine effort to explain the import of the regulations. Their complex and technical wording is designed to implement political decisions for which the Minister is accountable, and, broadly speaking, to meet the undertakings that have been given and make sure that the operation of the new provisions is as sensible and fair as possible. In case the Minister feels that I am being churlish, I should say that the Minister's general approach to these controversial proposals has been with good intent. I say on behalf of disabled people and other beneficiaries that, in so far as the Secretary of State for Social Security recently announced further improvements in their position—although they must be set against the issues that we did not like in the legislation—we welcome that statement. We are dealing with people who are often in considerable difficulty, even though some may be strong economically. As human beings, let alone as politicians, we all want to respond to the problem as constructively as we can and try to ensure that such people can enjoy a high quality of life and a degree of status and respect in our society.

I approach the regulations very much in that spirit. The Minister has done his best to explain them in detail as well as having taken a wide sweep. However, I want to flag up previous concerns, to which he may wish to respond further. Part 1A is more or less about mildly relieving the provisions of the Welfare Reform and Pensions Act. It protects the position of those who were not able to have made a first contribution of the sort that will be expected in future and who have been on previous types of benefit. Can the Minister confirm that in general terms?

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