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In time, as
provided for by schedule 4, existing claimants will be
“migrated” to the new employment and support allowance.
That will help to reduce the complexity involved in having two
completely separate administration systems running indefinitely. I want
to make one thing clear, however: existing claimants will not be
mandated to undertake work-related activity as a condition of receiving
the full amount of the new
benefit. Clause 12 gives us the necessary power to require ESA claimants
to undertake work-related activity, but we will ensure that the
regulations made under the clause reflect the position that we set out
in the Green Paper in relation to existing incapacity benefit
claimants. As the Green Paper also made clear, the current benefit
level of existing claimants will be fully
protected.
Angela Browning: What is the position of people who are still receiving the old severe disablement allowance, which preceded incapacity benefit? Will those whose claims show that they still have SDA status be brought within the incapacity benefit loop, or will they be treated as a separate group?
Mr. Hutton: That is a very good question and I wish that I had the exact answer to it right now, but I will ensure that my hon. Friend the Minister for Employment and Welfare Reform deals with it in his winding-up speech.
Following consultation on the Green Paper, wemade two substantial changes to our proposals. First, we listened carefully to concerns that the adoption of jobseeker’s allowance rates in the employment and support allowance would penalise disabled young people. It was never our intention to discriminate against young disabled people and we decided that young people will now get the same basic allowance as everyone else in the main phase of the ESA.
Secondly, there were strong concerns from employers over our proposals to simplify statutory sick pay. Our intention was to simplify the process of administering the scheme while maintaining the crucial balance between helping to keep costs down and retaining protection for the most vulnerable employees. Employers felt that the simplicity they would gain from these changes was not sufficient to outweigh the loss of flexibility that waiting days gave them, so we decided not to proceed with those proposals at that point. We will instead invite all interested stakeholders to discuss with us the scope for alternative approaches to simplification, which must not, however, involve unreasonable costs to employers.
Danny Alexander (Inverness, Nairn, Badenoch and Strathspey) (LD): In his answer to my hon. Friend the Member for Yeovil (Mr. Laws), the Secretary of State suggested that conditionality would not apply in respect of medical activities. Will he confirm that the conditionality in the Bill can apply to the work-focused, health-related assessments that are proposed in clause 10?
Mr. Hutton: Yes, but it will not and we will make sure of that in the regulations.
Part 2 takes forward our Green
Paper proposals to simplify the existing housing benefit system to
improve work incentives and encourage personal responsibility for
housing choices. Following the success of the18 pathfinder
areas, the Bill will facilitate the extension of local housing
allowance across the deregulated private rented sector. Where possible,
to promote personal responsibility among tenants, we propose that
payments of housing benefit will be made to the tenant, rather than the
landlord, but appropriate
safeguards will be in place to protect both tenants and landlords so
that in cases where tenants are likely to have difficulty in managing
their affairs, payments can still be made to the
landlord.
Mr. Andrew Love (Edmonton) (Lab/Co-op): My right hon. Friend rightly points to the success of the18 pathfinder areas. One reason for their success is the enhanced money advice provided in those areas, so will he give us an assurance that such an enhanced money advice service will be available on the roll-out nationwide?
Mr. Hutton: Yes, we will certainly want to do that and it will feature in subsequent debate and the Minister for Employment and Welfare Reform will comment further at the end. He is going to have to make a longer speech than he anticipated, but there we are.
The Bill also provides for a reduction in housing benefit where someone has been evicted from their home on grounds of antisocial behaviour and refuses to co-operate with the support that is offered by the local authority to help improve behaviour. There is clear research evidence that the provision of intensive support and supervision can achieve significant changes in the behaviour of persistently antisocial households.
An active welfare state, with rights and responsibilities at its heart, must send a clear signal to those evicted for antisocial behaviour that they are at the end of the line and cannot simply expect to move to another property and continue their bad behaviour at the expense of decent hard-working families. That would serve only to undermine public confidence in our welfare system and if we are right to expect minimum standards in other areas of the welfare state—I believe that we are—we should be consistent across the whole system, including housing benefit.
We intend to pilot the sanction in about 10 English local authorities over a two-year-period as soon as we have the legal power to do so. Proper consideration will be given to the needs of any children involved in such cases, but we cannot go on turning our back on those who have to put up with that kind of behaviour and who rightly look to us to deal with the problem. The Bill makes a start in the right direction in this sphere.
Mr. Terry Rooney (Bradford, North) (Lab): My right hon. Friend knows that I have some doubts, but if people in rented accommodation suffer from that penalty, should it not also apply to those who receive state support for mortgage interest payments? If guilty of similar antisocial behaviour, should not those people be subject to a similar regime?
Mr. Hutton: As my hon. Friend knows, that is not in the Bill, but if he raised that matter again in Committee or on Report, I am sure that we would reflect carefully on any arguments that he deployed.
Those
responding to the Green Paper consultation expressed concerns about
introducing local housing allowance for tenants in social housing. We
recognise
those concerns, and we have therefore decided not to introduce such
legislation at the
moment.
Part 3 proposes a number of measures to improve the administration of social security, including new powers to allow greater sharing of information to improve the take-up and delivery of benefits and other services administered by my Department and by local authorities. For example, where pensioners are entitled to both pension credit and council tax benefit or housing benefit, common information on personal and financial circumstances will only need to be given once.
Mrs. Moon: Can my right hon. Friend explain who will decide whether an individual should receive personal payments of their rent allowance? There is great concern among professionals working in the health and social care sectors that families with children will find themselves in debt, as their benefit will be paid into overdrawn bank accounts, the banks will use it to pay off bank arrears and it will never reach the landlord. Can he explain how we can ensure that people are not forced into further debt under that proposal?
Mr. Hutton: I can just point to the research and the outcomes in the pathfinder areas, and my hon. Friend might want to study them. We have seen no correlation between the direct payment of the local housing allowance in those areas and any difficulty that those tenants have in paying their rent. There has been no increase in arrears and no problem with landlords then seeking to evict tenants. As a general principle, it is right to treat adults as adults and for the payment of rent to go directly to them.
There are safeguards, however, and in the pathfinder areas—we have been very clear about this—about15 per cent. of those who are eligible for local housing allowance have not received it directly, because they felt that they were at risk of not paying up. There are problems, for example, if someone has a drug or alcohol dependency. We certainly do not want to make matters worse in those cases. There is a sensible way to deal with those concerns that does not underminethe fundamental principle—this must be right in the welfare state—that we should treat people in the benefits system as adults. We manage money; they are perfectly capable of managing money, too, and we should not start with any assumption that they cannot do so.
Kali Mountford (Colne Valley) (Lab): My right hon. Friend is describing a new system that will bring together those in different parts of the civil service who did not work so closely together previously, along with other sectors. May I tell him that my discussions with people inside Jobcentre Plus suggest that that is causing them some concern. They need to learn lessons from the past. They are also concerned about the target that has been set of benefiting 1 million people’s lives. The assessment that others have made that that target is not too challenging does not fit with their concerns about the new system.
Mr.
Hutton: We will have plenty of opportunities to listen to
those concerns and to act on them where we think that that is the right
thing to do. I think that my
hon. Friend is referring to the aspiration—the
objective—of getting 1 million people off incapacity benefit.
That is the right objective for us to have. We are investing
significantly more in the help and support available to people who have
a measure of incapacity. They and the organisations that represent
disabled people have made very clear to us the importance that they
attach to extending what my hon. Friend the Member for Manchester,
Central (Tony Lloyd), who is no longer present, referred to as the
right to work. That is the right and proper thing for us to do, but I
am quite sure that the debate about how we implement these reforms will
continue inside and outside Jobcentre Plus, and we are certainly more
than willing to listen to what people are telling us about
them.
Mr. Marsden: I want to touch on the 1 million target, which, although ambitious, should be put in front of us. However, does my right hon. Friend agree that it is extremely important—particularly in a constituency such as mine, where many of the target people onIB might have been in that position for five or10 years—to focus on an element of job progression if we are successful in getting them into work, so that they do not think that they are coming into work at a relatively low level, without aspirations and skills or the training that they need to develop them thereafter?
Mr. Hutton: I absolutely agree with that, and some of the issues to which my hon. Friend refers will be picked up by Lord Leitch, when he reports to my right hon. Friend the Chancellor on how and to what extent we can do more to support the skills of the labour force. However, I agree with my hon. Friend fundamentally: we are here to help, and we will be long-term partners in incapacity benefit reform. We have a role to play in supporting people not just to get a job, but to make progress up the labour-market ladder as well. I agree with him that that is very important.
Lyn Brown (West Ham) (Lab): Given that 60 per cent. of people come off incapacity benefit within the first year, is it realistic to assume that we can take1 million people off it? If we are basing that estimate on pathways to work figures, how can we be sure that the 8 per cent. of people in respect of pathways to work are not also included in the 60 per cent. of people who would normally naturally come off incapacity benefit in the first year?
Mr. Hutton: In pathways areas, access to help and support has not been confined to new claimants; in some parts of the country, the entire stock is being looked at, and in others the pathways are looking back five, six, seven or eight years. I believe that we should set ourselves difficult targets. If a Government set themselves a target that they know they can reach, that is easy; and it is worse to set a target in respect of which we can torture the data until they confess and tell us that we have met it. There should be a genuinely objective measurement of our progress, but if we are to make a difference to the lives of disabled people, it is right and proper that we aim high, not low.
Sammy
Wilson (East Antrim) (DUP): We broadly support these
measures, but may I take the Secretary of State back to what he said
about withdrawing
benefits from those who were engaged in antisocial behaviour? Perhaps he
did not mean to do so, but he seemed to gloss over the point about what
happens in cases involving families with children and where
homelessness might result. I think that his answer to that was that the
interests of children would be taken into consideration. Will the
Secretary of State spell out exactly what he meant by that? Will this
sanction not be imposed on families with children, or else in what
other ways will the interests of children be looked
after?
Mr. Hutton: I am grateful to the hon. Gentleman for his signal of support for the package of measures. In relation to children and the housing benefit sanction, we must remember that housing benefit is administered by local authorities. We intend to give the decision maker—the local authority—an area of discretion in cases involving families with vulnerable children. We do not envisage the full sanction applying in such cases but, for the reasons to which I referred, it is important that a line is drawn. We as a society, and we as law makers in this House, should send out a clear signal that we are no longer prepared to ignore the antisocial behaviour of the small number of people—it is a very small number—who continue to flout any proper standards of social behaviour to their neighbours, and who expect their neighbours, through their taxes and income, to support their lifestyle. However, it will of course be necessary when there are competing considerations—when there is not just a single person or a couple with no children—to take into account the innocent children who are wrapped up in such cases, and we will of course make sure that there is no question whatever of families with children being turfed out into the street.
Ms Katy Clark (North Ayrshire and Arran) (Lab): Does my right hon. Friend agree that there seems to be a direct relationship between levels of employment and the number of people on incapacity benefit? Between 1979 and 1997, the number of people on incapacity benefit trebled, and that was accompanied by huge levels of unemployment. The current Government have made huge strides in this area; 2.4 million more people are in work, and employment in my constituency has increased by 25 per cent. But in areas such as mine, we still have a long way to go in respect of securing full employment. Therefore, does my right hon. Friend agree that we must be realistic in respect of targets, and recognise that they will be reached only as our policies for employment are put in place?
Mr. Hutton: That is obviously true, but we should be confident that we will succeed in meeting the ambitious target that we have set ourselves. The economy and the labour market are strong. Employment opportunities clearly exist, and they are continuing to grow. More people are in work this year than when we came into office, and the numbers are still increasing. Under the stewardship of my right hon. Friend the Chancellor, those of us on the Labour Benches are entitled to be confident about our economy developing in theright way.
Geraldine
Smith: I congratulate my right hon. Friend on the measures
to deal with antisocial behaviour. Let
me give him an example of such behaviour. In Morecambe last night, I was
called to a house at10.30 pm to witness extremely loud music
that was being played by people in flats across the road—I
suspect that those people claim benefit. I was told that they continue
to play their music until 3 o’clock in the morning and drink
alcohol outside. Of course, those people might not have to get up for
work the next morning, but several people in the street do. This is a
considerable problem, so the Secretary of State is right to look at
measures to deal with people on benefit who are committing antisocial
behaviour.
Mr. Deputy Speaker (Sir Michael Lord): Order. Before the Secretary of State answers, I should say that interventions are getting longer and longer. An awful lot of people who are seeking to catch my eye are sitting waiting very patiently. It is not for me to curtail debate, but I just mention that fact.
Mr. Hutton: I shall try to speed up, as well, Mr. Deputy Speaker. I am sure that my hon. Friend the Member for Morecambe and Lunesdale (Geraldine Smith) speaks for many Members of this House, and we all have those problems to deal with in our constituencies. We need to be fair to people—as, of course, we will be—and there will be a due process that can be followed, but I do not think that the vast majority of law-abiding, decent people find it acceptable to continue with the current system, under which people can behave in the way that my hon. Friend describes with total impunity. Just as we have other measures across the benefit system that require a reasonable response from people on benefits, we should have one here, and I am grateful for my hon. Friend’s support for this measure.
Joan Walley (Stoke-on-Trent, North) (Lab): Will the Secretary of State give way?
Mr. Hutton: I shall give way once more but not again, because I need to get on.
Joan Walley: I am most grateful. May I take the Secretary of State back to the issue referred to a couple of interventions ago—areas in which many people are on incapacity benefit? Will he work with colleaguesto develop a joined-up approach to this issue, andtry to find opportunities to link the relocation of Government Departments under the Lyons reviewto areas such as Stoke-on-Trent, in which we need to create even more jobs?
Mr. Hutton: My hon. Friend has made a very important point and I look forward to working with her to ensure that those benefits are realised, particularly in her constituency.
I now have the answer to the question that the hon. Member for Tiverton and Honiton (Angela Browning) asked about the severe disablement premium: people in receipt of it can volunteer for pathways. I am grateful to her and to my hon. Friends for their interventions; it is because there have been so many of them that I have now been able to deal with the hon. Lady’s point.
The Bill contains provisions dealing with fraud, and we have decided to go further in this area. Given that some 50 per cent. of fraud against a local benefit also involves fraud against a national benefit, it is crucial that we lift the restrictions that prevent up to 2,000 local authority investigators from tackling the full extent of the benefit fraud that they encounter. Clauses 43 to 45 address those concerns.
Rights and responsibilities lie at the heart of this Bill, and nowhere is the abuse of those responsibilities more blatant than in benefit fraud. Clause 46 will extend the “two strikes” rule for repeat offences, so that people who commit a second benefit offence within five years of their first one can have their benefit withdrawn.
Part 4 of the Bill contains a number of smaller but important measures to correct anomalies in the—
Mr. Michael Clapham (Barnsley, West and Penistone) (Lab): Will my right hon. Friend give way on the question of part 4?
Mr. Hutton indicated assent.
Mr. Clapham: I am grateful to my right hon. Friend. I draw to his attention clause 55, schedule 6 and the reference to pneumoconiosis. Under the schedule, a claim made more than 20 years after a period of employment ended will be disregarded. In effect, that will mean that very few pneumoconiosis-related claims will be made under the Pneumoconiosis etc. (Workers’ Compensation) Act 1979. As he will be aware, provision for bringing a claim under that Act came in when British Coal ceased to exist, in 2004, but because of the way in which the schedule is drafted, it will not be possible to make such a claim. I ask the Secretary of State to reflect on that, and to see whether we can consider the nature of the disease in deciding whether a claim is proceeded with.
Mr. Hutton: My hon. Friend has a great deal of experience in this area and I have a great deal of respect for his view, but I think that he is wrong about the effect of clause 55 and schedule 6. We are trying to incorporate a more practical version of the relevant employer condition, which officials have been applying since 1980 on an extra-statutory basis, and to update the 1979 Act to reflect modern partnership rights by providing for civil partners. We are not trying to restrict access to the scheme at all; far from it. We are trying to put on to a statutory footing and basis the current rules that are being applied. The Minister for Employment and Welfare Reform and I would be very happy to pursue this conversation with my hon. Friend later, but I can assure him and the House that there is no suggestion that we are trying to restrict access to the scheme.
Part 4 of the Bill, which my hon. Friend has read, as I am sure others have—it is fantastic—contains a number of quite important provisions. In addition to provisions relating to pneumoconiosis, there are provisions to ensure that disability living allowance recipients around the age of 16 do not lose up to three months of benefit entitlement, which there is a risk that they might do at the moment, and to simplify the operation of the budgeting loans scheme.
With the Bill, we can harness the power of modern advances in health and employment support, and foster a society of genuine equal rights and opportunities for everyone. We can help families lift themselves out of dependency, tackle child poverty and build a lasting legacy for millions of our fellow citizens. We can deliver an active welfare state that does not simply cushion people from the effects of poverty and unemployment, but which instead seeks to tackle those issues at source. The Bill begins the next stage of our reforms to our welfare state. I believe that it enshrines the proper balance between rights and responsibilities. It reflects the values of opportunity and security. It has been built on the foundation of a broad and wide consensus. It is the right way forward if we are to succeed in tackling the poverty and social exclusion that still blights the lives of so many disabled people. I commend the Bill to the House.
5.25 pm
Mr. Philip Hammond (Runnymede and Weybridge) (Con): As the Secretary of State knows, we are generally supportive of the overall structure that was put forward in the Green Paper proposals and of which the Bill is an integral part. In the three key areas—incapacity and sickness benefit; getting lone parents into work; and getting older people into the workplace, or enabling them to remain in the workplace—we agree that there is a need for change in order to contribute to the Government’s target of80 per cent. working age participation in the work force. It is essential to achieve that target in the face of a rising dependency ratio. I agree with the Secretary of State that we cannot afford to leave anyone behind in 21st-century Britain, so we are broadly supportive of the proposals that we are considering today, but I hope that he will understand that, within that broad support, there are a number of things that we want to question and matters that we want to raise.
Welfare reform has been on the Prime Minister’s “to do” list since 1997. It struck me that there is a remarkable similarity between the language of the 1998 Green Paper and that of the 2006 Green Paper, which the Secretary of State published earlier this year. The 1998 Green Paper states:
“People who could work are too often consigned to a life on benefits; those who satisfy the...Test for incapacity benefits are effectively written off and given no help to make the most of their potential.”
Many Labour Members may think that the right hon. Member for Barking (Margaret Hodge) went a little far when she said that Labour had done “sweet nothing” to tackle incapacity benefit since 1997, but it is clear that, despite the Welfare Reform and Pensions Act 1999, many of the aspirations in the 1998 Green Paper remain unfulfilled—hence the repetition of some of the language in this year’s Green Paper and many of the key elements of the Bill.
Of course, the Bill and the accompanying notes leave a number of questions unanswered. That is partly an inevitable consequence of the structure of the Bill. Itis very much a framework and I welcome the confirmation that the Minister for Employment and Welfare Reform was able to give at departmental questions last week that draft regulations will be made available to the Committee before consideration of the relevant parts of the Bill.
Part 1, as the Secretary of State has said, introduces the new employment and support allowance and the arrangements around it, which are inextricably linked to the recently announced roll-out of the pathways to work programme, which will support the measures in the Bill. We agree that a degree of compulsion inthe employment and support allowance regime is appropriate, provided that adequate support is in place, especially for people with disabilities. Many people who have been out of the workplace for a long time will lack the self-confidence that they might otherwise have and will need firm encouragement to re-engage in work.
The first point on which I seek clarification relates to the baseline for the Secretary of State’s announced target. The Government set out a target of a reduction of 1 million in the number of people on incapacity benefit. In its report, the Select Committee was critical of the lack of detailed baseline information andthe Government have subsequently published that information. It shows that in any case—with no additional action whatsoever—it is expected that there will be a 360,000 drop in the number of people on incapacity benefit by 2014-15. That is thus the baseline number, without any of the measures in the Bill or the extended roll-out of pathways to work. Just so that we are clear about the backdrop against which we are conducting the debate, the target for the newregime is to deliver not a reduction of 1 million inincapacity benefit numbers compared with the existing baseline projection, but a 640,000 reduction. Whenthe Secretary of State told the Select Committee that1 million was “a net figure” and not a
“clever statistical sleight of hand”,
he was right, because including 360,000 people who are already in the baseline as part of the net figure is a rather crude statistical sleight of hand. I hope that we are all clear that we are talking about a reduction of not 1 million, but 640,000.
Hugh Bayley (City of York) (Lab): May I respectfully remind the hon. Gentleman that when his party was in power, the number of people on long-term sickness benefits rose from 600,000 to 2.4 million? He criticised the Government a moment ago for not doing enough to reduce the numbers on incapacity benefit. His figures suggest that about a third of a million people will come off the benefit as a result of measures that have already been taken, but I think that he would agree, having repudiated the policies of the past, that more needs to be done, which is surely what the Bill is about. Can he not support it?
Mr. Hammond: The hon. Gentleman obviously was not listening. I said at the outset that we supported the package of measures. However, if we are to have these debates, it is important that we understand the parameters. When a target is announced against which we will measure the success of a package, we should be clear about what that target is. I hope that we are all now clear about the target.
At the time of the publication of the Green Paper, we and the Select Committee expressed concern that existing claimants should not be written off in the process. The regulatory impact assessment that accompanies the Bill says:
“It is clear that to reduce the caseload our strategy must focus on improving the rate at which people leave incapacity benefits.”
Conservative Members strongly agree with that statement, but much of the focus of the package is actually on tightening the gateway on to benefit. The Select Committee has expressed the concern that existing claimants are in danger of being left behind.
It seems to me that there is a wide consensus in the House in support of measures that will help people back into work because that is the best and most effective way of tackling poverty and social exclusion. However, if we all agree on the value of the programme, we cannot accept that those who were specifically referred to and offered hope as long ago as the publication of the 1998 Green Paper should be left behind. The reduction in numbers must therefore represent a genuine increase in off-flow as well as a reduction in the numbers of new claimants. I urge the Minister to give in his winding-up speech a commitment to providing disaggregated targets for those two components of the total reduction to which the Government are committed.
We also need to understand the Government’s thinking about the migration of existing claimants. It has come out during our extensive debate so far that provisions in schedule 4 will allow the migration of existing claimants on to the new system. However, as is consistent with the broad architecture of the Bill, schedule 4 contains largely regulation-making powers. It would therefore be helpful to understand how and when existing claimants will become subject to the new regime.
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