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Mr. Philip Hammond (Runnymede and Weybridge) (Con): I am grateful to the Secretary of State for letting me have an advance copy of his statement and the Green Paper.
We broadly welcome the thrust of what the Secretary of State has said and we will study with great care the detail of the Green Paper. The world of work and the global economy are changing rapidly, and Britain's future prosperity depends on harnessing the skills and abilities of all its people. We cannot afford, either in social or in economic terms, to leave 2.7 million people abandoned on long-term benefits.
Incapacity benefit has operated as a crude system that condemns hundreds of thousands of people who have something to offer to inactivity, deprivation and social exclusion. It creates and perpetuates dependency and squanders ability. It is failing individuals, it is failing our economy, and it is failing our society. It is no longer fit for purpose, so we welcome the Secretary of State's shift of emphasis to the abilities and skills that people have rather than the disabilities that they suffer.
Let me be clear where we stand: we believe that work works. For those who can work, it restores self-esteem, it re-includes them in the social fabric of everyday life and it rescues them from the trap of long-term benefit dependency. It is the job of policy makers to ensure that work also pays—that the perverse disincentives of a
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bureaucratic benefits system are removed, so that the phenomenon of the benefit claimant who wants to work and who can work but who risks being worse off by doing so is consigned to history.
The Secretary of State has been in his post for only four months, but his Government have been there for nearly nine years. We like much of what we have heard today, but he will forgive me if I say that we have heard much of it before. Much of what he has said was trailed in the five-year plan; we were promised this Green Paper before the summer recess. Further back, at the 1997 general election, Labour proclaimed itself the party of welfare reform, but while the Labour Government have done "sweet nothing"—[Hon. Members: "Oh!"] Those are not my words but the words of his own Minister for Employment and Welfare Reform. While the Labour Government have done "sweet nothing", total numbers claiming incapacity benefit have gone up, the numbers claiming for more than five years have gone up, the number of young people under 25 claiming has gone up by 70 per cent., and the number of people claiming on the grounds of mental and behavioural problems has doubled. So we will take no lectures on legacies from the right hon. Gentleman. The test of this Secretary of State will be whether he at last can start to deliver where his predecessors failed to do so.
Unfortunately for the Secretary of State, his plans are presented against a backdrop of a slowing economy, steadily rising unemployment and an unprecedented funding crisis in NHS trusts, all of which will make it much harder now than it would have been a couple of years ago to achieve the laudable objectives of rehabilitating people and then getting them back into work.
We have not yet had time to analyse the Green Paper in detail, but we have heard enough to identify some of the key areas where we will want to satisfy ourselves that the small print matches the headline rhetoric. Reform of the system so that it delivers a focus on what people can do, rather than what they cannot do, will require changes to the personal capability assessment, as the Secretary of State said. It will also require a change in the mindset of the tens of thousands of people who administer the system. Can the right hon. Gentleman tell the House how the personal capability assessment will be reformed, in particular, to make what is still primarily a physical capacity test more responsive to the high levels of mental illness among claimants?
Effective early intervention in respect of new claimants is the key to catching them before they become trapped in benefit dependency. Does the right hon. Gentleman agree that prompt and early medical assessment, coupled with the availability of rehabilitation resources, is the key? How will those resources be delivered, given the pressure that primary care trusts are under? Will he buy in NHS services with Department for Work and Pensions funding, or will he buy in rehabilitation services from providers in the private sector? Can he assure the House that he does have, somewhere in his locker, a more subtle approach to the vital question of engaging GPs in the early intervention process than that of offering them cash inducements?
We will study the way in which the proposals, as well as dealing with new claimants, address the needs of the 2.7 million people currently on incapacity benefit. The Secretary of State may be tempted to concentrate on
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new claimants, but if the new focus is the right one it would be a betrayal both of those who are already on incapacity benefit and of the taxpayers funding them not to apply the same work-oriented approach to them. Off-flow rates have decreased by a third since 1997; will he set himself a specific target for getting current incapacity benefit claimants back into work?
A couple of weeks ago, the right hon. Gentleman identified 100 constituencies with the highest concentration of incapacity benefit claimants, which we cross-correlated with job vacancy figures. Perhaps unsurprisingly, we found that those constituencies have very few job vacancies—in fact, there are only a quarter as many job vacancies as there are incapacity benefit claimants. Does he recognise that in those areas simply refocusing and retraining people to exploit the skills and abilities that they have will not necessarily result in their finding work? How will he deal with the geographical mismatch of work opportunities and incapacity benefit claimants?
Can the Secretary of State guarantee some concrete and effective measures that will ensure that private and voluntary sector organisations can compete on a level playing field with public sector organisations? The evidence for the contribution that they can make is clear in the results of the new deal for disabled people—a programme that has been substantially delivered by private and voluntary sector contractors—but the National Audit Office report shows that the playing field is still tilted against private and voluntary sector organisations when contracts are placed. Only if that bias is removed can such organisations play their full role—the role that the right hon. Gentleman says he wants them to play. What specifically is he doing to deal with that matter and is he willing to spend some of his political capital standing up to those who will no doubt fight tooth and nail to preserve the predominance of public sector provision in this area?
In the long run, reducing the number of people on incapacity benefit will save substantial sums of public money, but in the short term significant investment of resources will be required. Can the Secretary of State tell the House over what period the reforms that he is proposing will become self-financing?
The right hon. Gentleman referred in his statement to incapacity benefit as masking long-term unemployment figures. Can he confirm that claimants of his new benefit will be included in the unemployment count?
Finally, it has been reported in the press that the implementation of the proposals that the Secretary of State has outlined today will depend on the installation of a major new IT system. Is that true? If so, given the history of problems with IT systems in his Department, what reassurance can he give the House that the bold initiatives that he outlined will not be beset by the same kind of IT problems and delays as we have seen in the past?
The Secretary of State deserves credit for finally grasping the nettle of incapacity benefit reform, but the true test of his resolve is yet to come. Will he hold firm to the principles that he outlined today? Will he resist the temptation to tack and to trim in response to Labour Back-Bench demands? Will he take effective action to bring about the increase in private and voluntary sector involvement that he says he wants? If he performs on all
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those issues, we will support his proposals and work towards a consensus that is not afraid to say that for all who are capable of work, work is the best option, for individuals, society and Britain's future prosperity.
Mr. Hutton: May I start by welcoming the hon. Gentleman's commitment to work with the Government to bring about these important reforms? I welcome his support and his recognition that incapacity benefit has failed millions of people. Most Labour Members would probably prefer the Conservatives to have done something about it when they had 18 years in government. [Interruption.] As many of us can testify, no such measures were taken.
The hon. Gentleman referred to the record of the present Government, and his hon. Friends have been shouting rudely about it. Incapacity benefit numbers fell last year for the first time ever in the history of incapacity benefit. The numbers coming on to incapacity benefit are down by a third, so the argument that no progress has been made is totally untrue. We are making progress. The reforms will allow us to make further progress still.
The hon. Gentleman spoke about the position in the labour market. I remind him that we have in the UK now the highest employment rate of all the countries in the G8, something never achieved under the Conservative Government. We remember their record on unemployment. I do not want to say any more about that.
The hon. Gentleman asked me how the personal capabilities assessment will be reformed. We say in the Green Paper, and I am sorry if I did not make it clear today, that we will be convening an expert group to work with the Department to undertake that reform of the medical procedures. It is important that we do that. We want to build consensus around the new system. That is very important for the success of the reforms, for various reasons. People must have confidence that the assessments are right, and we will work with the disability movement to make sure that that is true.
I agree with the hon. Gentleman that prevention is the best tactic that we should deploy to prevent people from coming on to benefits in the first place. The Green Paper contains a series of measures—I did not go through all of them this afternoon—which will make a significant difference, including supporting greater investment in occupational health. I hope the hon. Gentleman will welcome that.
Where will the health care providers come from? They will come from the NHS and some will come from the private sector. I was in Derby recently and saw at first hand a hugely successful strategy of involving cognitive behavioural therapists employed from the private sector to provide services for people on incapacity benefit.
I can confirm that existing incapacity benefit claimants will have access to the pathways to work extensions. The hon. Gentleman asked about the work that we were doing with existing IB claimants and said that the focus should be on them. Of course, all the work that we do between now and 2008—I think it will be 2008 when we have legislated for the new benefit and got the system in place—will, by definition, have to be with
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existing claimants under the existing IB system. There is no one else to focus on, so they will have plenty of opportunity to work with us and get back into work.
On the hon. Gentleman's point about vacancies, I saw his figures, as have hon. Members on both sides of the House. I make two comments about his figures and his analysis. First, Jobcentre Plus holds only about a third of the total number of vacancies in the country at any one moment in time. His figures were based on Jobcentre Plus vacancies. We need to bear that in mind. Secondly, as we all know, some of our constituents work in other constituencies where there might be more vacancies. It is true that that happens, but I do not think that the hon. Gentleman recognised that.
We envisage the private and voluntary sectors being very much involved in the pathways to work projects across the country, because we know that if we get the contractual frameworks right and choose our partners correctly, the voluntary sector will be able to make a hugely important contribution to improving the service that we offer. It is true that these reforms will require significant investment. It is equally true to say that we are the first Government ever who have been prepared to stand here and say that we will make that investment to get people with a disability back into work.
The hon. Gentleman's final question was about whether we would count people on the new employment and support allowance as unemployed. No, we will not, for one very obvious reason, which I am surprised that he did not recognise. To count as being unemployed, a person has to be available immediately to take up employment. The very notion here is that we are dealing with people with a measure of illness and incapacity, and we will work with them. We are not going to apply the full jobseeker's allowance conditionality regime to people on incapacity benefit; it would be wrong to do so.
The hon. Gentleman said that I had been in my post for four months. In fact, it is two months; it just feels like four months.
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