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I have not
addressed many specific concerns whichI know that other hon.
Members will raise in the
debate. We will listen carefully to what is said and genuinely look
forward to a constructive experience in Committee. We will certainly
not oppose the Second Reading of the Bill tonight, so it can go forward
in Committee.
Several hon. Members rose—
Madam Deputy Speaker (Sylvia Heal): Order. I remind hon. Members that Mr. Speaker has imposed a 12-minute limit on speeches by Back Benchers.
6.12 pm
Hugh Bayley (City of York) (Lab): Since 1997, Labour’s macro-economic policies, support for flexible labour markets and welfare to work incentives have guaranteed faster growth in this country than across the EU as a whole, created 2.5 million additional jobs and reduced employment to less than 1 million. That success has brought tangible improvements to the welfare of millions of employees and their families, but those improvements have not been shared by sick and disabled people of working age.
In my intervention on the hon. Member for Runnymede and Weybridge (Mr. Hammond), I mentioned that the number of people of working age who were not working and who were claimingill-health benefits quadrupled when his party was in power. Labour’s achievement has been to stabilise those figures. In our first term, the number of people on incapacity benefit decreased marginally from2.4 million to 2.263 million. In the second term, the figure rose marginally, but it was still slightly belowthe level that we inherited when we came to power. However, it is clear that stabilising the figures is not enough. More needs to be done and I therefore welcome the Bill.
I was the Minister responsible for disability benefits when the Welfare Reform and Pensions Act 1999 was before the House. I do not need to remind hon. Members who were in the House at the time that the Bill had a rocky ride.
Justine Greening (Putney) (Con): I apologise for returning to the hon. Gentleman’s earlier point about stabilising the figures, but I have been looking for a statistic. Is he aware that, since 1997, the number of young people under 25 claiming incapacity benefit has risen by 71 per cent. to 170,200? Does he agree that that statistic is particularly concerning?
Hugh Bayley: The hon. Lady should not pick among the figures. Any rise is a concern, and any reduction—there have been reductions among other age groups—is a benefit. The demonstrable difference between the Labour party’s time in power and when the Conservative party was in power is that the number of people claiming incapacity benefit quadrupled under the Conservatives. Overall, the Labour Government have stabilised the figures, but we need to change that and get the numbers down. When the Conservative party came to power, 600,000 people were on invalidity benefit, so it must be possible to have fewer than2.4 million people on incapacity benefit now.
When the
1999 Act was before the House, two points attracted criticism. The
first concerned the changes to
the contribution conditions for incapacity benefit and the second
concerned the reduction in the value of incapacity benefit for those
claimants who had occupational pensions. The Government responded to
those criticisms by amending the legislation, but the controversy drew
attention away from the Government strategy to increase benefits for
severely disabled people who could not work and to start to provide
support for people on incapacity benefit to return to work through the
new deal for disabled
people.
As many hon. Members have acknowledged, the Government have set an ambitious target to reduce by 1 million the number of people claiming incapacity benefit by enabling those people to get back into work. Having set such an ambitious target, I do not want the Government to make the same mistake now as we did in 1999 by giving the impression of narrowing the eligibility gateway to incapacity benefit instead of enabling people to overcome the limitations imposed by illness or disability in order to remain in work or to return to work.
The Government have demonstrated through the new deal for disabled people and, more recently, through pathways to work that, with appropriate help and support, people on incapacity benefit can return to work and, importantly, cope with work when they get there. Simply enabling people to get a job is not enough, because one must give them support to enable them to make a success of their jobs. Through the new deals, some 75,000 disabled people have come off incapacity benefits and returned to work.
In the UK, we reap the benefits of a flexible labour market so far as overall employment is concerned, but we still have an inflexible labour market when it comes to employment opportunities for sick and disabled people. Compared with other OECD countries, we have an acute shortage of occupational health services. We also have a rigid culture among both employers and employees that either one is well and working or oneis limited by illness or disability, and off work temporarily or permanently.
As my hon. Friend the Member for Glasgow, North-West (John Robertson) said, far too many GPs still sign sick notes without recognising the cost or that work, perhaps with reduced hours or changed responsibilities, may aid recovery. We must ensure that welfare forms an important part of GPs’ initial training and postgraduate education. Perhaps we should examine ways to reward GPs who use sick notes wisely in the same way as we reward GPs who prescribe rationally and wisely.
Dr. Ian Gibson (Norwich, North) (Lab): My hon. Friend will know that an important part of the assessment is that a doctor appointed by the Secretary of State will be chosen to help the decision maker to decide whether a person no longer has the capacity to work. How will those doctors be chosen and how will we know that they are doing this with some understanding at different stages of the process?
Hugh
Bayley: My hon. Friend raises an important point. When I
became the Minister with those responsibilities, there was no specific
training in disability assessment for such doctors. The Royal College
of Physicians introduced a postgraduate
diploma in disability assessment medicine to train them and it was
intended to ensure over time that all doctors working for the
Department for Work and Pensions would be trained in disability
management. That is an extremely important part of the
package.
There is a shortage of vocational rehabilitation services, including medical and psychological services and practical help with overcoming functional impairments. A study in 14 OECD countries, “Transforming Disability into Ability”, which was published in 2003, compared the number of people who each year go through vocational rehabilitation with the number flowing on to long-term incapacity benefits. In Norway, Denmark and Korea, more people get access to vocational rehabilitation than go onto incapacity benefits. In Germany, Sweden, the Netherlands and the United States, about 50 per cent. of the number who go on to incapacity benefits get access to rehabilitation services. In Switzerland, Australia and Portugal, the figure is some 20 to 30 per cent. In the UK, it is still less than 5 per cent. We are second lowest of the 14 OECD states in the study.
More revealingly, the study calculated that spending on vocational rehabilitation as a percentage of spending on disability benefits varies enormously. In Norway, Germany, Sweden, Switzerland, Portugal, Australia and Belgium, spending on rehabilitation is between 70 and 100 per cent. of spending on incapacity benefits. In Denmark, Korea and the United States, the figure is about 50 per cent. In the UK, along with Poland, Austria and the Netherlands, we spend less than 20 per cent. of the amount spent on benefits for long-term sick and disabled people on rehabilitation. It is therefore not surprising that fewer people are rehabilitated in the UK or that the number of incapacity benefit claimants here is higher than the number of people claiming similar benefits in most other OECD countries. It is important to complement the measures in the Bill by substantially increasing the resources available for vocational rehabilitation. That would gain widespread support from organisations representing disabled people.
Within the national health service, there has been a substantial increase in resources for rehabilitation. However, its priority is to rehabilitate hospital patients to the point at which it is possible to discharge them so that they may return home, and not necessarily to continue the rehabilitation to the point where they can return to work. The NHS needs to earmark more resources for vocational rehabilitation.
The Government should consider creating financial incentives to reward successful cases of rehabilitation. As the hon. Member for Runnymede and Weybridge said, huge savings accrue to the DWP and the Government when people come off incapacity benefit. Those savings should be recycled to pay for more people to be rehabilitated.
There
are lessons to be learned from abroad, although not necessarily from
the Netherlands, where, as my hon. Friend the Member for Bradford,
North (Mr. Rooney) pointed out, there is an incentive for
employers to rehabilitate their staff because they carry the cost of
somebody being off work for the first two years of absence. That is not
the situation in this
country. We could perhaps learn a better lesson from Germany or
Switzerland, where, under the Bismarck insurance scheme, employers pay
into a common fund that gives cover for health, rehabilitation and
pensions. The German phrase for such funds is “Rehabilitation
vor Rente”—“rehabilitation before pension”.
Those insurance funds have an incentive to rehabilitate, because the
person then goes back to work and starts paying contributions again. If
the scheme fails to rehabilitate, it ends up paying a pension for
life.
There have been similar experiments in Sweden, where pilots have merged benefits and health budgets at local level to pass benefits savings on to health care providers when rehabilitation successfully gets people back to work. I should like our Government to adopt a similar approach. Perhaps a simple way to pilot it would be to give a health and vocational rehabilitation purchasing budget to the managers of the pathways into work pilots. If the NHS does not have the incentive to rehabilitate to the point at which people get back to work, we need to create an incentive for the DWP to reap the financial benefits when somebody is successfully rehabilitated and returned to work.
When the Conservatives were in power and unemployment broke the 3 million barrier for the second time, a Conservative Chancellor of the Exchequer said that, sadly, there was no alternative. The record of this Labour Government in their first two terms has shown that there is an alternative. For fit people of working age, unemployment has fallen dramatically to fewer than 1 million. That is something that this Labour Government will be remembered for. The challenge for the third term is to show that there is an alternative for people on long-term sickness and incapacity benefits. The Bill shows the way forward, but it needs to be complemented by greater investment in rehabilitation services.
6.26 pm
Danny Alexander (Inverness, Nairn, Badenoch and Strathspey) (LD): It is a great pleasure to follow the hon. Member for City of York (Hugh Bayley). I agree with the stress that he puts on the need for more emphasis on rehabilitation in the training of doctors and a greater sense of awareness, particularly among GPs, of the importance of work and occupational health as a route to dealing with medical conditions. The medical practice in Camden in north London where the idea of having an employment adviser within the practice has been piloted has received visits from all the Front Benchers present, and it is probably getting sick of politicians trooping through the place. The lesson to be learned is that such a measure can have a great deal of success in helping people back to work, as well as reducing medical bills.
This debate has been delayed for far too long. The fact that more than 2.5 million people remain on incapacity benefit is unacceptable, and it is a disgrace that that group has been so long neglected by Governments of both parties.
The
Minister will be pleased to hear that we strongly agree with the
principles behind this reform—principally, that society should
play a much more active role in enabling the sick and disabled to take
the opportunities afforded by participation in the labour
market. That objective is vital not only for the individuals concerned
but for society as a whole. As has been said, work is the best route
out of poverty, and we all benefit, as a society, from higher levels of
economic activity.
While supporting the principle of welfare reform and many of the measures in the Bill, we are concerned because the Government’s proposals are short on detail, because there is a shortage of funding in some respects, and because they rely for delivery on a Department that is under massive pressure. Liberals have long believed that freedom is curtailed by poverty and disadvantage. Today, my right hon. and learned Friend the Member for North-East Fife (Sir Menzies Campbell) again made tackling poverty a top priority for Liberal Democrats. Welfare reform is central to that objective.
Despite the long wait, the Bill gives every impression of being rushed in some respects. Huge chunks of important policy detail are relegated to secondary legislation, and by leaving Second Reading until just before the recess, the Minister gives himself time to work out the detail in many of those areas. The carry-over procedure, which will be the subject of a later motion, was neither designed as a general catch-all to allow Departments to delay legislation nor to apply to Bills that had not been subject to pre-legislative scrutiny. If the carry-over motion is to have all-party support—it was intended that such motions should—the Minister for Employment and Welfare Reform must provide a specific justification for using it in the case that we are considering. I hope that he will do that in his winding-up speech.
I hope that the Minister can also give a clear assurance, linked to my previous point, that sufficient time will be allocated in Committee to allow full scrutiny of the Bill’s important provisions. That will require the Government to publish in draft the key statutory instruments—the Minister undertook to do that in answer to oral questions—but I hope that he will include those that deal with the level of benefit, rules of entitlement to benefit, the capability assessment and the other proposed medical assessments, conditionality, the housing benefit reform and sanctions.
The Bill proposes a framework of additional responsibilities for claimants, but that can be faironly if the state and employers take their share of responsibility. As the Disability Rights Commission said:
“In return for effective opportunities and support, we believe it is reasonable to expect more people to move towards work. Without effective opportunities and support, it is not reasonable to expect greater responsibilities of claimants.”
The
evaluation of pathways to work shows that the scheme has markedly
improved employment outcomes. It incorporates the individually focused
approach that Liberal Democrats have long advocated, and we welcome its
success. However, unless the roll-out of the scheme is properly funded
and coherently planned, I have grave concerns about whether it can
fulfilall the expectations. The Government have allocated
£360 million, as the Secretary of State said, to rolling out
pathways to work. However, we still do not know exactly how much of the
figure will be spent on doing that. Will the Minister give us more
detail today?
Will he tell us how much money will be spent on the new computer system
needed to administer the new employment and support allowance
benefit?
Even if all the £360 million were spent on rolling out pathways to work, our calculations, based on the amounts that have been spent in the pilot areas, suggest that the figure is more than £250 million short simply for dealing with the needs of new claimants. If the objective were to support all eligible claimants, the welfare black hole would be even greater. Giventhe cuts at Jobcentre Plus, it is also unclear whether there will be sufficient well-trained personal advisers, let alone extra resources from the Treasury, to deliver the scheme.
Although the Secretary of State did not mention the matter, the newspapers report that the Government have tacitly admitted that the funds are inadequate by suggesting that the support through pathways to work should be targeted at those with children. Will the Minister confirm whether that is the Government’s intention?
The Government have made it clear that they want to target pathways resources in other ways. For example, the city strategy is a welcome attempt to tackle concentrations of incapacity benefit claims by joining up resources in specific cities. However, there is a worrying neglect of the challenging issue of helping claimants in rural and remote areas back to work, not to mention the pockets of deprivation found in rural towns and villages. I hope that the Minister can deal with that point, which was also made in an earlier intervention.
It is worth pointing out that the success of pathways to work has not been even for all groups. The Department-funded evaluation, which the Institute for Fiscal Studies carried out, found no statistically significant improvement for people with mental ill health as the primary reason for their claim. Age Concern said that the scheme had been much less successful for the over-50s. Better support for both groups is vital if welfare reform is to be a success.
The voluntary and private sectors can be highly successful in getting people back to work. In some ways and some places, they have been more successful than Jobcentre Plus. I highlight the work of the SHIRLIE project in Inverness, in my constituency. It helps especially those with learning disabilities back to work. The working neighbourhoods project in Parkhead in Glasgow has received several visits from politicians, but has also been successful in targeting not only those on incapacity benefit but a range of disadvantaged groups, through one joined-up project.
However, it is important to ask how the experience of the voluntary sector will be used throughout the country. The current plan is a bit of a dog’s breakfast, with Jobcentre Plus delivering 40 per cent. of provision and the voluntary and private sectors being used for the remaining 60 per cent. If the voluntary sector is as effective as the Government say it is—we agree about that—why will their expertise not be on offer throughout the country?
Work-related activity must reflect the nature of a person’s impairment. Specialist as well as more local providers should therefore be contracted to help specific client groups. There should not simply be big contracts with big providers.
In dealing with the needs of people with mental health problems, we need to ensure that there are enough trained therapists throughout the UK, as Lord Layard, for example, proposed. Given the five-year training for many of those roles, what plans have the Government to train people to fill the roles that will be needed if welfare-to-work support is to be properly available for people whose first reason for claiming benefit is mental ill health?
In proposing the new employment and support allowance, the Government have missed an opportunity to simplify our enormously complex benefits system. They have also missed an opportunity to tackle the poverty and low income traps that remain far too prevalent in the benefit system, not least in the tapers for housing benefit, council tax benefit and income disregards. There is an opportunity to unify the system. The income disregard is currently a great deal smaller than that for incapacity benefit. That means that although the income disregard for incapacity benefit may encourage people to try out work for a few hours a week, they then get caught in the housing benefit trap, which leads to their losing benefit and acts as a strong disincentive to taking work.
Will those who receive the income-related employment and support allowance, who would previously probably have been entitled to income support, also be entitled to passported benefits—for example, free NHS prescriptions and dental treatment, free school meals, funeral expenses and so on? That is important for many claimants. Unless the Minister can clarify the matter, there may cases of the new benefit leaving people worse off.
Will the Minister also explain why employmentand support allowance, once decided, is not to be backdated to the start of the claim? Not doing that will cause serious problems for some people, especially those who leave work or statutory sick pay, or younger claimants who will be penalised through the reduced rate that applies in the early phase of the benefit.
I want to consider the proposed medical assessment process. The incapacity benefit medical assessment desperately needs reform. It is subject to persistent concerns about unfairness and poor decision making, especially about mental health. Some 50 per cent. of appeals are granted. A working group is considering improving the assessment, and I welcome the Secretary of State’s commitment to ensuring that more detail is available before the Committee discusses the matter. It is vital for the Government to get it right. The Royal College of Psychiatrists want rigorous testing and evaluation of the new assessment system for those with mental health conditions. In a written answer, the Minister suggested that some sort of testing, but not a formal piloting process, will take place. Will he explain exactly how the new assessment will be tested?
John Robertson: Does the hon. Gentleman agree that there should be rigorous testing of GPs and the way in which they examine some of their patients to whom they give sick lines so readily?
Danny
Alexander: The hon. Gentleman makes an important point,
which the Minister should address.
There is also a problem with appeals. Roughly 50 per cent. of GPs do not
reply to requests for information for the first medical assessment. It
is only when the appeal phase is reached, and the GP then provides
information, that the appeal is successful. There may be a link, which
the Government should explore, between those
factors.
Mr. Weir: Does the hon. Gentleman accept that one of the problems with the assessment process is that many people who go for an assessment feel that the person conducting it does not have sufficient knowledge of the specific condition from which they suffer? If we are to make changes, it is important to ensure that all those who conduct assessments have sufficient knowledge of the person or condition that they assess.
Danny Alexander: I agree. The hon. Gentleman makes an important point. It is a common complaint that the test takes into account someone’s condition only on that specific day. The new test needs to deal better at dealing with fluctuating conditions and progressive conditions, such as multiple sclerosis.
Mr. Philip Hammond: There seems to be some confusion about whether the new personal capability assessments are to be piloted. When I mentioned the matter earlier the Secretary of State appeared to suggest that they would not, and that there would be testing rather than piloting. According to my Library briefing, the Department’s response to the Select Committee report states, on page 8:
“The working groups are due to report to DWP Ministers by September 2006, after which there will be a period for piloting the revised PCA.”
Perhaps the hon. Gentleman would care to comment on that.
Danny Alexander: I have already expressed the view that this proposal should be subject to rigorous piloting. I hope that in the Minister’s response—
The Minister for Employment and Welfare Reform (Mr. Jim Murphy) rose—
Danny Alexander: I shall give way to the Minister, so that he can tell us now.
Mr. Murphy: I am sorry for intervening on the hon. Gentleman, because I know that many hon. Members wish to participate in the debate, but I want to clarify the confusion. It is our intention that once the review has concluded in September, we will run both systems in parallel with each other to ensure that proper testing takes place. Whether we call that a dummy run or piloting, it will be an effective way of ascertaining whether we have got the new system absolutely right. We shall compare it with the current assessment of existing cases.
Danny
Alexander: I am grateful to the Minister for clarifying
that point— [ Interruption. ] However, my hon.
Friend the Member for Somerton and Frome (Mr. Heath) has
just suggested from a sedentary
position that it is possible for both systems to be wrong at the same
time. The Minister’s plan is not necessarily a guarantee of
success—
John Robertson: They could both be right.
Danny Alexander: They could, but I shall certainly be keen to see a lot more details of the testing that the Government have in mind. Perhaps the Minister will say more about that when he winds up the debate.
It is also important to understand how the new capability assessment relates to the proposed work-related health-focused assessments. If only those on the work-related activity premium are to be subjected to the latter, but the two assessments are supposed to take place at the same time—as it says in the explanatory notes—how will it be decided whether it is appropriate for someone to move on to the work-related health-focused assessment at stage two? Will that decision be taken on the day, or will they be invited back?
It will be disappointing if, as has been hinted, the new assessment is still to be based purely on a medical model of illness and disability. A test that can take account of psycho-social factors and the barriers that disabled people face would give fairer outcomes. The Government recognised in their Green Paper that the term “personal capacity assessment” had negative connotations. However, so does a test for “limited capability”. If the tests are to be taken together, they should be given a different name, such as the labour market disadvantage test. That would signpost a different approach, focused on identifying impairment-related barriers to work. I hope that the Government will consider that suggestion.
I want to turn now to the conditionality arrangements in the Bill. The principle of responsibility is an essential part of liberalism. Provided that comprehensive support is available to help individuals to get back to work, and appropriate safeguards are in place to protect the most vulnerable, the idea that people should take responsibility for engaging with the available support is one that we encourage. Indeed, it must surely be a central objective of policy to reach a position where disabled people are supported to the extent that they can play their role as full and active citizens, with all the rights and responsibilities that that entails.
However, we have some concerns about the conditionality regime as it is proposed in the Bill. Conditionality will apply not only to engaging with support through work-focused interviews, which we support, but to work-focused activity and, according to the Bill, to taking part in additional work-focused health-related assessments—although the Secretary of State suggested in response to my intervention that the Government had now dropped that plan, which sounds quite sensible.
Pathways to work will need much
higher investment if the balance between the quality of support and the
personal responsibility of the claimant is to be fair. That is
particularly important if the receipt of benefit is to be conditional
on work-related activity. Nor, in the Government’s proposals, is
there any limit to the period for which conditionality will apply. If
someone has struggled to enter the labour market for a long time
without success, despite benefiting from the full range
of support on offer, should they really be forced to continue to take
part in fruitless
activity?
By leaving the details entirely to secondary legislation, the Government are allowing the possibility that a less compassionate Government—or, indeed, the present Government in one of their less compassionate moods—could increase the sanctions and reduce the support.
Mr. David Ruffley (Bury St. Edmunds) (Con): Yes, Labour.
Danny Alexander: I hear a “yes” from the Conservative Front Bench. Perhaps the hon. Gentleman is anticipating an occasion on which he could do exactly that. This is why we need to be careful about what is in the Bill and what is to be introduced through regulations. We remain to be convinced that the safeguards in the system for vulnerable people are sufficient, and a robust system of appeals must also be put in place.
As the hon. Member for City of York (Hugh Bayley) rightly said, preparing disabled people for work is not enough if there are no employers ready and willing to take them on. On this point, the Bill and the Green Paper are both lamentably silent. Much more could and should be done to work with employers. For example, the access to work scheme is one of the Government’s best kept secrets. According to their own figures, for every person helped through the scheme, there is a £1,400 net benefit to the Exchequer and a £3,000 net benefit to the economy. Yet still the Government fail to promote the scheme adequately, and about 80 per cent. of small employers are unaware of it.
The Government should use the Bill as an opportunity to invest in the promotion of the access to work scheme, particularly to small businesses, and to make changes to the way in which access to work decisions are made, so that people will know their access to work entitlements before they approach an employer. Also, I hope that the Minister will review the decision to remove the access to work scheme from central Government Departments. The DWP’s poor performance in employing disabled people sets a bad example.
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