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Orders of the Day
Welfare Reform Bill
[Relevant documents: The Third Report from the Work and Pensions Committee, Session 2005-06, HC 616, on Incapacity Benefits and Pathways to Work, and the Government’s response thereto, Cm 6861.]
Order for Second Reading read.
4.32 pm
The Secretary of State for Work and Pensions (Mr. John Hutton): I beg to move, That the Bill be now read a Second time.
The reforms in the Bill set a new direction of travel for our welfare system. They are underpinned by a belief in an active enabling welfare state that sees tackling poverty and social exclusion as its central mission, with no one left behind and no one written off. The Bill therefore marks a major shift away from the established orthodoxy of welfare provision in our country, which has always treated functional limitations as automatically disqualifying people from the world of work. That is based on a flawed analysis of the nature of disability and the rights of disabled people, and it is time we changed it.
The Bill before us today therefore signals a new approach. It offers new support in return for new obligations for people to help themselves, and it delivers on our manifesto commitment to reform incapacity benefits while ensuring security for those who cannot work. Together with the wider welfare measures set out in our Green Paper, the Bill continues a process of reform that has sought to lock in the right set of values: of universality and opportunity; of security and equity; of fairness and due process— values that stretch back to Beveridge—under which the right to work is fundamental in tackling poverty and building aspiration for everyone in our society.
When we came to office nearly 6 million people in Britain were dependent on benefits. Between 1979 and 1997 unemployment went up by 50 per cent., and in a world where discrimination already scarred the lives of many disabled people and older workers, the numbers claiming incapacity benefits trebled, while 3 million children were left to live in poverty. I make no apology for reminding the House of those grim and shameful statistics. They set the context for the challenge that we now face, and they teach us valuable lessons about the role of the welfare state in today's society.
Through the minimum wage and tax credits, we have tried to make work pay, and through record investment in the new deal and Jobcentre Plus we have begun to create an enabling welfare state that tries to respond to the needs of individuals and matches rights with responsibilities.
Today, as a result, there are
more people in work than ever before—2.5 million more than in
1997, with the biggest increases in the neighbourhoods and cities that
started in the poorest position. Overall, there are 1 million fewer
people on benefits, and 2 million children and 2 million pensioners
have been helped to escapethe poverty line. As last
month’s Organisation for Economic Co-operation and Development
report showed, not only do we have the highest employment
rate among the G7 countries but, for the first timein 50 years,
we have the lowest combination of unemployment and inactivity
rates.
Of course, there is more that needs doing. The challenge that we face today is how to build a modern welfare state that allows people to exercise their fundamental right to work, when our economy and our society are changing more rapidly than at any time since the industrial revolution. While the pace of such change can seem daunting or even terrifying, the forces that lie behind it, in my view, represent progress, not decline, and they hold out more opportunities than threats. If we can take full advantage of them, they will extend the chance to reduce poverty and social exclusion in our society.
We must act to meet that challenge, which is why we have set ourselves the aspiration of an 80 per cent. employment rate, with 1 million fewer people receiving incapacity benefits, 1 million more older people in work and an extra 300,000 lone parents off benefit. That is why we are taking forward through secondary legislation the measures in our welfare reform Green Paper to provide more support to lone parents and to break down the barriers experienced by older workers. And that is why we have introduced the Welfare Reform Bill, which will enact crucial elements of the proposals that we set out to the House in January.
Mr. Gordon Marsden (Blackpool, South) (Lab): My constituency is 15th in the table of constituencies with the highest number of incapacity benefit claimants, so I welcome the attempt to get more people into work. Does my right hon. Friend agree that a key aspect of the process involves changing attitudes among some employers towards the employment of people with disabilities? A written answer in the other place recently stated that 15 per cent. of disabled people of working age who want to work are not in employment, compared with 4 per cent. of the non-disabled working age population. Does my right hon. Friend agree that that must be a key aspect of the welfare reform programme?
Mr. Hutton: I agree that that is true. However, we are making steady progress in bringing to the attention of employers the tremendous pool of skilled labour available among people who are claiming incapacity benefit. It is a mischief and a mistake to assume that if a person is on incapacity benefit they have no skills, talents or opportunities—far from it. I have been tremendously encouraged by the agreements that we have reached with major national employers that are prepared to offer people on incapacity benefit a second chance to return to the labour market. We want to see more such agreements, and we will do everything we can to speed up the process.
Mark Pritchard (The Wrekin) (Con): How will the Bill help the unemployed in Shropshire? In the past year unemployment in the county has risen by 30 per cent., and it is rising in the west midlands, too. Is it not the case that unemployment is now at a four-year high? How will the Bill help those people?
Mr.
Hutton: Unemployment is a lot lower than it used to be,
when the Conservative Government were in
office. Labour Members remember that unemployment twice reached 3
million under the stewardship of the Conservative party.
The hon. Gentleman asks what the Bill will do for jobseekers. The Bill primarily focuses on the needs of people who currently have some functional limitation and are unable to work. The thrust of the proposals is to encourage the speedy return of those people tothe labour market. Any of the hon. Gentleman’s constituents who currently claim incapacity benefit will have access, in the next 18 months to two years, to the pathways to work programme—the first attempt by any Government, Conservative or Labour, to do something practical and positive for people who are out of the labour market because of incapacity and who desperately want to return to it.
Tony Lloyd (Manchester, Central) (Lab): My right hon. Friend knows that I support the Bill. Will he accept that this is a unique opportunity to create a new consensus that belies the rather carping intervention by the hon. Member for The Wrekin (Mark Pritchard), and which states that we agree about the right to work and the duty to work? It is the Government’s role to provide the facilities to allow people to work and to ensure that employers can cope with the extra needs of those who are currently on incapacity benefit and who should be able to work. However, such a consensus will work only if the Opposition parties endorse my right hon. Friend’s strategy.
Mr. Hutton: I hope we will see that later. Certainly,it has been indicated so far that Opposition parties broadly support the proposals in the Green Paper.
Mr. Sadiq Khan (Tooting) (Lab): Not the Liberal Democrats, surely.
Mr. Hutton: I understand that that is in fact the case— [ Interruption. ] I should ask some of my hon. Friends to write my speeches for me, as they would be much more entertaining.
Mr. Mike Weir (Angus) (SNP): I am interested in the Minister’s comments. I agree about the need to work with employers to get more disabled people back to work. However, one of the things that struck me about the Bill was the lack of any clear idea of how people will be helped once they have obtained a job, rather than in getting a job. Many people, particularly those with mental disabilities, require long-term help after they have been appointed to a job. Can the Minister tell us about his proposals in that regard?
Mr. Hutton: That is precisely what pathways to work currently provides. It is true that the details of that are not spelt out in the Bill, but we recognise the need for the Department and for Jobcentre Plus to provide such ongoing support. In Scotland there are now fewer people claiming incapacity benefit than there were in 1997.
Tom
Levitt (High Peak) (Lab): Will my right hon. Friend take
this opportunity to congratulate the staff of the Glossop and Buxton
jobcentres, and others throughout Derbyshire and in the other five
pilot areas, on pathways to work? In my area they have vastly
exceeded expectations not only in getting back to work many people who
were not expected to be in the programme, but also in providing much
job satisfaction for jobcentre
employees.
Mr. Hutton: I am happy to congratulate those staff. I visited the pathways to work scheme in Derbyshire a few months ago; it has probably been one of the most outstandingly successful examples of how this typeof intervention can work. What was significant in Derbyshire, as we heard a few minutes ago, was that cognitive behavioural therapists were directly employed to fast-track the provision of help and support for people with mental health problems, to give them the self-confidence to represent themselves to employers and to secure work—and many have succeeded in doing so. That is a model of what more needs to be done, and what we are keen to extend across the country.
Mr. David Marshall (Glasgow, East) (Lab): I am grateful that my right hon. Friend took the time to visit Glasgow and see at first hand the terrible problems facing the city. As he knows, my constituency has the highest number of people on incapacity benefit in Great Britain: more than 11,000 of the tragic Glasgow total of 60,000. Is he aware that the working links pilot in Parkhead and the partnership action team for jobs in Glasgow, East have come to an end despite being very successful? Will he consider extending those two projects to work in tandem with his reforms, in order to tackle successfully the most serious problem in my constituency and other constituencies in Glasgow?
Mr. Hutton: My hon. Friend is right to draw attention to the problem facing many people in Glasgow who are on incapacity benefit and want the opportunity to work again. I know how actively he is involved with this issue in Glasgow, where, in conjunction with the city council and local employers, a huge amount has been done to move people off incapacity benefit back into employment. Some 11,000 to 12,000 people in Glasgow have been helped to re-enter the labour market over the past few years. That is a great tribute to Jobcentre Plus, local employers and the local authority.
We took the decision to end action teams and roll up funding into a new deprived areas fund, which will allow access to a similar level of resources to support such initiatives in my hon. Friend’s constituency. I am sure that local Jobcentre Plus staff would be happy to explain to him how they are taking that forward.
Mr. Khan: My right hon. Friend knows that more and more people cite mental health problems as the chief reason for claiming incapacity benefit. Will he confirm that the new personal capability assessment will be more sophisticated, the better to identify people with mental health conditions and tailor the help that they require more effectively?
Mr.
Hutton: That is our intention. We have convened several
groups involving mental health stakeholders to work with us to design a
better, more accurate and fairer assessment of people’s mental
health problems
when they present with a claim for employment and support allowance. It
is important to find a way forward. The fact that the current
arrangements do not do that properly has been the subject of continuing
concern. We are anxious to try to find a way of resolving
it.
Geraldine Smith (Morecambe and Lunesdale) (Lab): Does my right hon. Friend agree that the public sector has a huge role to play in helping people get back into work? Indeed, Lancaster city council has been involved in projects for the long-term unemployed. Does he also accept that it is sometimes difficult for private companies, which are small businesses, to employ someone who has, for example, been on incapacity benefit and may require several days off sick because of a genuine illness? That is sometimes one of the biggest barriers to people going back to work. Are there any measures to deal with illness once someone returns to the workplace, and with the need for time off?
Mr. Hutton: That is a genuine problem. However,it does not lend itself to any quick legislative fix.The Bill contains nothing that would directly tacklethe concerns that my hon. Friend raises. We have responsibilities in Jobcentre Plus to ensure that we do everything we can to support people with mental health problems in staying active in the labour market. We will continue to discuss with my hon. Friend and others ways in which we might improve on those methods.
Mrs. Madeleine Moon (Bridgend) (Lab): Bridgend has been an incredibly successful pathways to work pilot scheme area. Unemployment is 2.6 per cent., with fewer than 1,200 unemployed, but more than 5,000 people are on incapacity benefit. On Friday, my hon. Friend the Member for Ogmore (Huw Irranca-Davies) and I met the mental health matters group from Bridgend. Its members were worried about whetherthe personal capability assessment recognised thattheir capacity to cope changes daily. Even a changein medication or moving to a cheaper brand of medication can affect their performance and capacity to attend for interview. Will that be taken into account, and not lead to people losing their right to benefit because of a fluctuation in capacity?
Mr. Hutton: It is important that the personal capability assessment is more than a snapshot. It is especially difficult to craft the assessment as my hon. Friend suggests for those who are mentally ill. We are working hard to try to reach agreement on the best way forward and we will continue to discuss that fully with all the relevant stakeholders. We need employers to co-operate with Jobcentre Plus, and I strongly believe that the evidence shows that they are willing to do that. My hon. Friend referred to pathways to work, which has been another great success in south Wales. I hope that we can build on that.
Mr.
Mark Francois (Rayleigh) (Con): I thank the Secretary of
State for his courtesy in giving way. Clauses 41 and 42 refer to
recovering overpaid benefits. In his statement an hour or so earlier,
he announced that the Child Support Agency would no longer be with us.
As a critic of that agency for many years, I am
pleased that it will finally be buried, even if thefuneral is
somewhat delayed. We are clearly dealing with some sensitive client
groups in recovering those overpayments. Although the taxpayer must be
protected, will the Secretary of State give some assurance that his
officials will handle those cases sensitively and with appropriate
discretion?
Mr. Hutton: Yes, of course.
Part 1 provides for the new employment and support allowance, which will replace the current system of incapacity benefit. It places additional requirements on new claimants to be actively engaged in preparing for a return to the labour market in return for new support, by embedding the values and principles of the successful pathways to work pilots into the structure of the new benefit. We know the difference that pathways to work can make. In the first year of the pilots, the number of recorded job entries for people with a health condition or disability had increased by approximately two thirds compared with the same period the previous year. The pilots’ continued success has driven a significant increase in the proportion of people leaving incapacity benefit in the first six months of their claim, compared with that of non-pilot areas. This early success has underpinned our achievements in helping people off incapacity benefit, with new cases down a third since 1997, and with the first falls in the total count, now down 61,000 in the year to November 2005.
Mr. Weir: Will the Secretary of State give way?
Mr. Hutton: Not at the moment.
At present, nine out of 10 people who come on to incapacity benefit expect to get back into work. Yet as we all know, if they have been on incapacity benefit for more than two years, they are more likely to retire or die than ever to get another job. Little is expected of claimants, and almost no support is offered to them. The gateway to the benefit is poorly managed, and a person gets paid more the longer their claim continues. Even the name of the benefit sends a signal that a person is incapable, and that there is nothing that can be done.
The Bill seeks to change that. It provides for a transformed medical assessment as the gateway to the new benefit, with an assessment process that forthe first time properly looks at a person’s potential capability to engage in the labour market, rather than simply measuring the level of their incapacity. It provides for a new benefit system founded on the concept of measuring and building up each individual’s capability rather than writing them off as incapable, and a radical extension of the support available, which will be underpinned by the extension of pathways to work to every part of Britain by 2008.
We are continuing to review the design of the new medical assessment, and we are particularly conscious of how important that process is for people with mental health problems and learning disabilities.
Mrs.
Ann Cryer (Keighley) (Lab): The National Audit Office has
found that 77 per cent. of cancer patients are not given information
about the financial support to which they might well be entitled. Will
my
right hon. Friend comment on whether Jobcentre Plus staff will now
routinely ensure that such advice is given to cancer
patients?
Mr. Hutton: We do all we can to bring an entitlement to benefit to the attention of such people, but I will reflect on what my hon. Friend has said and see whether there is anything more that we can do. We are not in the business of giving advice, but it is our responsibility to ensure that people are at least aware of the various entitlements that might be available to them.
John Robertson (Glasgow, North-West) (Lab): I know that my right hon. Friend is coming to an important part of his speech. Many people who have been long-term recipients of incapacity benefit have received doctors’ lines time after time without any form of investigation into their illness. Will my right hon. Friend assure me that the new system will ensure that that can no longer happen?
Mr. Hutton: Yes, I can give my hon. Friend that assurance. It will be important that, apart from having access to the support group, people have a regular face-to-face medical examination of their condition, so that we are able to provide them with the right measure of help and support that they need. This is a failure of the present system. I know that there are some of my own constituents who have not seen anyone for some considerable time, and that is not an acceptable way to run our welfare state.
My hon. Friend said that I was coming to an important part of my speech. I am not sure how he knew that, but I have been trying to get to it for quite a while. I would like to remind people of what I was saying about the design of the new personal capabilities assessment. We have created review groups, involving both technical and stakeholder experts, to look atthe mental health and physical components of the assessment. We intend to complete this work by September so that we can provide a clear view of the new assessment during the Bill’s Committee stage.
The new personal capability assessment will identify those who are capable of undertaking work-related activity and the support and interventions that will be necessary to help them get back to work. It will identify separately people who are so limited by their illness or disability that it would be unreasonable to require them to undertake any form of work-related activity.
Angela Browning (Tiverton and Honiton) (Con): I notice that on several occasions the Secretary of State has referred to getting people back into work. Will some of the proposals that he is spelling out todayalso apply to people who have never enjoyed paid employment? They include people with learning disabilities, autism or mental health problems, who might well be in their 20s or 30s, and who would like to work but have no previous experience of doing so.
Mr.
Hutton: It was my mistake not to have made that clear. I
agree absolutely with what the hon. Lady says. We want opportunities to
be more widely shared than they are at the moment, and that will
include people who have never been active in the labour market. Such
people will not be excluded from any of the help and support packages
that we are seeking to make available through pathways to
work.
I recognise the sensitivity and importance of getting such a crucial distinction right. That is why we are consulting all our stakeholders carefully, to ensure that we take an equitable approach. The group that I have just described, known as the “support” group, will receive the new benefit at a higher rate. As now, they will be able to volunteer to participate in work-related activity and access all the appropriate support available, but it will not be a condition of their entitlement to any part of their benefit.
For the vast majority—those who are not in the “support” group—the new benefit will have a clear framework of rights and responsibilities. In return for the additional support provided by the national roll-out of pathways to work, claimants will be required to attend regular interviews, complete action plans and, in time and when resources permit, undertake work-related activity. As the Green Paper makes clear, the full level of benefit that they receive will be above the current long-term rate of incapacity benefit. However, those refusing to engage with the help and support offered, without good cause, could see their benefit reduced progressively to the basic level of jobseeker’s allowance.
I want to return to the point raised by my hon. Friend the Member for Bridgend (Mrs. Moon) a moment ago, which I did not deal with. She asked how we would approach the issue in relation to people who have a mental health problem, and who might, for a perfectly good reason, not have been able to attend, for example, a work-focused interview. At the moment, we would never dream of sanctioning in those cases, unless there had been a home visit, and until decision makers in Jobcentre Plus were absolutely sure that the person had no plausible reason for missing the work-focused interview. With all such matters—I shall make this point later, as I know that Members on both sides of the House will be concerned about benefit sanctions—the success of the policy is not to be judged by how many people we sanction, but the reverse. It will be judged by how many people we can help to get into work, whether for the first time or following on from an earlier career. As we established in relation to the new deal, if we are going to provide new help and support, it is essential to have some reciprocity in the provision of that additional investment in our welfare state. The vast majority of people, I hope, will have no difficulty with that argument.
Mrs. Joan Humble (Blackpool, North and Fleetwood) (Lab): I want to explore a little further the issue of work-focused interviews and people with mental health problems. I am pleased by the reply that my right hon. Friend has given to my hon. Friendthe Member for Bridgend (Mrs. Moon). In order to reassure those who have genuine fears, what steps will he take to ensure that his staff are properly trained to identify when someone’s mental health problem is so severe that it would be adversely affected by being required to attend a work-focused interview?
Mr.
Hutton: I accept that there is fear about all these
issues, and it is important that we dispel those fears.
There is no reason for people to be fearful. We invest significantly in
the training of personal advisers in Jobcentre Plus. Through pathways,
we have been doing this for the best part of two years, and we are
beginning to find a sensible way forward. I do not doubt that there are
areas for improvement, and Jobcentre Plus is always ready and willing
to learn. If there is a role for some of the voluntary organisations to
help us to train our staff properly, we should explore that further. We
are making progress. It is not our intention to be punitive as we
develop these approaches; that wouldbe wrong. As I have tried
to say previously, we can be radical, which I believe that these
reforms are, without being punitive. I hope that my hon. Friend does
not infer from anything that I have said today, or anything in the
Green Paper, that we will punish people unfairly because they have a
level of incapacity. That would be totally at odds with the values to
which I referred earlier, and forms no part of the approach that we
want to develop.
Mr. Russell Brown (Dumfries and Galloway) (Lab): I welcome the Bill, which, as far as I can see, is based more on people’s abilities than on their disabilities. In relation to work-focused interviews and pathways to work, may I impress on my right hon. Friend that in rural constituencies such as mine, which has two Jobcentre Plus offices 75 miles apart, the difficulty of delivering what I hope will be delivered is much greater?
Mr. Hutton: I absolutely accept that. That is why, wherever possible, we try to take our services out to our customers. I do not know the precise details of the issue raised by my hon. Friend, but he would be welcome to raise it with me in more detail on another occasion.
Roger Berry (Kingswood) (Lab): I support the Bill, and hope that I shall have an opportunity to explain why.
Given that the proposals relating to work-related activity depend heavily on the use of private and voluntary-sector providers, can my right hon. Friend assure us that decisions on sanctions will be made not by those providers but by Jobcentre Plus?
Mr. Hutton: That is certainly the current arrangement, but, as my hon. Friend will know—I suspect that that is why he asked the question—clause 15 allows the possibility of benefit sanction decisions being made by some of our private and voluntary-sector providers. I shall come to that section of my speech shortly, but let me say first that a number of providers have told us that they would like to have those powers. I agree that not all them may want the powers, and I quite understand why, but it is worth exploring the issue a bit further.
I
consider the additional obligations to be central to the reform package
that we are proposing. As I said earlier, I believe that the vast
majority of people will consider them to be reasonable and necessary.
They are very much powers of last resort. As with any such measures,
the proof of their success will come not in large numbers of cases in
which the sanction is imposed, but in the number of people whom we can
return to employment and, therefore, lift from poverty. In the current
pathways areas where extra conditions have been imposed, the benefits
of fewer than 1 per cent. of claimants have been sanctioned. That is a
mark of the success of the deal that we have offered people on
incapacity benefit.
I know that some have expressed concern—as my hon. Friend just did—about clause 15, which permits the application of employment and support allowance benefit sanctions by private and voluntary-sector providers. I can reassure the House and my hon. Friend that a clear system of safeguards, similar to that used in pathways, will be used before any such sanction can be applied, and that the normal rights of appeal will be fully applicable. We will talk to private and voluntary-sector providers about whether they wish to exercise the function, but I think it is important for us to explore whether the new power will be helpful as we engage with a wider range of welfare-to-work providers in the years ahead. We will invest a further £360 million over the next two years to support the measures in the Green Paper, and to secure national coverage of pathways to work.
Mr. David Laws (Yeovil) (LD): Will the Secretary of State clarify what aspect of non-compliance the private and voluntary-sector providers might sanction? Might it relate to participation at an interview, takingup employment opportunities, or obtaining medical assistance?
Mr. Hutton: No sanctions would apply to health care provision. I think it would be entirely wrong to apply sanctions to how an adult decides to obtain health care. Nor would sanctions apply to the job-seeking that the hon. Gentleman describes, because that is not part of work-related activity planning. Essentially, we are talking about work-related activity when it becomes a mandatory condition for benefit—if it does—along with work focus interviews and the drawing up of action plans. Only in those areas could benefit sanctions apply.
Working with our partners in the private and voluntary sector will be a critical part of our building of a modern, active and increasingly devolved welfare state which makes more use of a wider range of providers with the skills and expertise to target local labour market issues more successfully. I said a few moments ago that a modern welfare state could not afford to leave anyone behind, and should not seek to do so. That is why we will roll out our offer of help and support for existing claimants of incapacity benefits—available on a voluntary basis—as pathways spread nationwide. In Somerset, for example, we are already piloting a regular set of work-focused interviews for all existing customers as part of pathways, and if that approach works, we will seek to expand it further as resources allow.
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