Select Committee on Work and Pensions Written Evidence

Memorandum submitted by Bruce Birchall

  I submitted a 10-page response from the Writers Guild Disability Issues Committee to the consultation the Strategy Unit organised in response to the Improving the Life-Chances of Disabled People initial report. This focused on the unemployment of disabled writers and actors and suggested an employment initiative was needed akin to the Federal Theatre Project, run under Roosevelt's New Deal in the 1930s.

  This rather more modest report looks at the Poverty Trap and how it acts as a disincentive for disable people who are only capable of part-time work to do any paid work above £20 a week. At part-time rates of pay, they will never earn enough to escape the Poverty Trap whereby for every £1 of earnings, 65p is clawed back from Housing Benefit and 20p from Council Tax Benefit. This is especially true in London where rents are so much higher than elsewhere in the country.

  I raised this in questions from the floor to the new Minister when she spoke to the TUC Disability Conference on 25 May 2005. She undertook to raise it with Civil Servants at the DWP.

  I put my question in the context of the recent Joseph Rowntree Foundation Report into poverty amongst disabled people, because of the extra costs of disability. Given that the original Rowntree Foundation research into poverty in York in the 1930s fed directly into the Beveridge Report and the concept of a guaranteed minimum income to escape poverty that was the foundation stone of the Welfare State, this latterday Rowntree Foundation research into poverty amongst disabled people will have a similar huge importance as creating a basis for new thinking about the social policy issues it addresses.

  The Report the Foundation issued indicates that in every impairment group studied, the shortfall between the costs disabled people will incur to meet the extra costs of disability and the benefits portfolio currently available to them is of the order of £200-£250 a week. Prominent among the costs incurred are equipment (a power wheelchair and a wheelchair accessible van to transport it eg) and the cost of Personal Assistants (to operate that equipment eg).

  It seemed to me therefore that a motion was needed to the 2006 TUC Disability Conference that explored this issue in a little more depth. The word-count permitted for motions will limit the detail that the motion can go into, but it will kick-start a process whereby other research starts to inform the writing of the draft legislation that would be needed.

  So let's start the ball rolling by looking at the motion I drafted and the Writers Guild Disability Issues Committee discussed at a recent meeting (I am its Chair). It will next be discussed at the TUC Disability Committee on 1 November and I am circulating it to the Executive Committee of TUDA, the Trade Union Disability Alliance, on which I sit, for comment and feedback.

  There is also a one-day Conference, called On The Edge, about part-time, casual and agency workers at the TUC which I am attending on 14 October, which will inform the debate usefully, too. The name suggests how such workers are marginalised and seen as peripheral in the workforce, and the conference is predicated on the notion that the Trade Union Movement needs to lend these atypical workers its protection and mainstream their issues.

  Draft Motion that the WGGB Disability Issues Committee is proposing (subject to revision after consultation) putting forwards to the TUC Disability Conference in May 2006.


  The DWP's plans to encourage disabled people into work are underpinned by the assumption it is full-time long-term work that they want, are capable of undertaking and is available.

  Yet many disabled people are only capable of doing part-time work, and hourly rates available are insufficient to escape the Poverty Trap, whereby loss of Housing and Council Tax Benefits creates a high marginal rate of taxation, such that it is hardly worth accepting work they do obtain.

  Yet because of the extra costs of disability, disabled people need to work and to save. Yet limits on earnings of £20 a week and on savings of £3,000, are imposed.

  Yet with Wheelchair Accesible Vans costing upwards of £18,000, if they cannot earn and keep the money and cannot save, how are disabled people's extra costs to be met?

  Conference therefore calls for a radical overhaul of the tax, benefits and credits system that would abolish the Poverty Trap, abolish Care Charges, and establish the principle that working and saving towards meeting the extra costs of disability should not incur income tax or loss of benefits and should be treated as Direct Payments are, ie it's not personal money.

  It seemed obvious to me that this money would be kept in a separate account and that the disabled person would need to keep accounts of money raised and how it was spent on the extra costs of disability for such a scheme to be acceptable to the DWP. I then had the flash of intuition/insight that this meant it would be handled in the same way as Direct Payments. Indeed, for those in receipt of Middle or Higher Rate of the Care Component of DLA, most councils require disabled recipients of care packages to make a contribution from their Care Component towards the total costs of the Care Package. In the case of Kensington & Chelsea, where I live, the Council wants disabled people to put 37.5% of their Middle/Higher Rate of Care Component into the kitty.

  I am against Care Charges, as there is a postcode lottery involved. The logic of clawing back say £30 a week eludes me, when the Rowntree Foundation has demonstrated that disabled people have a £200-£250 weekly shortfall of income from benefits as compared to the costs they incur if they were to meet their needs in full. All that that clawback does is make it a £230-£280 shortfall, and the logic that Councils use to justify their charges ("You can afford it, you get all that extra benefit!") is clearly spurious (the riposte has to be "No, we can't afford it, we get £200-£250 a week less than we need!").

  It seems to me that the DWP Select Committee has to confront the fact that disabled people are living £200-£250 a week below the Poverty Line and that the conceptual basis of the Beveridge Report 60 years ago was to establish a minimum level of income, below which no citizen is allowed to fall. What was it Tony Blair promised on coming to power, that he would abolish poverty in 20 years? Well, that means there are only 12 years left and the clock is ticking.

  By the same token, the logic of permitted work, whereby all income above £20 a week means that the same amount is lost in benefits, is equally spurious. How can anyone justify depriving someone who is £200-£250 a week short of what they need because they are disabled, of what they can scrape together by part-time work to bridge that gap? Let alone criminalise them, and call it fraud, if they try to bridge the gap and retain the money, by not declaring the income.

  The logic of saying that the Savings Limit should be £3,000 for a disabled person, the same level as it is for a non-disabled person, also eludes me. The state recognises some of the extra costs of disability by awarding DLA Mobility and Care Components. Why should disabled people not be allowed a correspondingly higher Savings Limit?

  I would propose a £30,000 Savings Limit for anyone getting the Higher Rate of Mobility Component—given that a Wheelchair Accessible Vehicle can cost £18,000-£30,000 and given that Motability can charge 20% pa interest on any loan made a disabled person to purchase a vehicle (a huge disincentive to buy on credit) it should be obvious that saving up for outright purchase makes better economic sense. But doing that is penalised by loss of benefits, such that you will take even longer to save £30,000 as you are forced to dig into it to live!

  As it stands, saving £40 a week (Higher Rate of DLA Mobility Component in round figures) would mean it would take 15 years @ £2,000 a year to save £30,000 to buy a top of the range WAV, by when of course they would cost far more than £30,000 to purchase.

  Therefore, logically, disabled people need to earn the majority of that £30,000. Yet for many disabled people, stamina issues mean they can only work part-time. With the Rowntree Foundation suggesting a £10,000-£12,500 a year shortfall is incurred, it would seem logical to suggest that the income limit is similarly raised tenfold to £200 a week, £10,000 a year or to £250 a week, £12,500 a year.

  In effect this means a threshold for Income Tax for disabled people of this kind of level on top of the £4,000 or so Personal Allowance they are entitled to. Or it could be done by a tax credit. These are details that the systematic review of the tax benefits and credits system that the motion calls for, would look into. I hope to have the assistance of the TUC's research team that helps draft proposed legislation in that endeavour.

  What I do need to impress upon the DWP Select Committee, at this stage, however is that tenfold increases in the Income and Savings Limits are the sort of order of magnitude we need to be looking at, if we are to get disabled people out of the Poverty Trap.


  How long is it since the £3,000 savings limit (before tapered loss of benefits starts to occur) was last reviewed and what has inflation done to the purchasing power of that £3,000, in the meantime?

  Similarly, how long is it since the £20 a week earnings limit (before tapered loss of benefits starts to occur) was last reviewed and what has inflation done to the purchasing power of that £20 a week, in the meantime?

  I hope to make a further written submission when the Green Paper is published and a further consultation opportunity is offered, that would start to put flesh on the bones of this proposal.


  (a)  In the arts media and entertainment industries, freelance work is the majority form of employment.

Very few repertory theatre companies hire actors for a season of ten plays any more. Most actors are hired by the production, which in rep might mean three weeks of rehearsal and three weeks of performances. In touring companies, perhaps 10 weeks of performances.

  So it is a casualised industry. You might work for six weeks or three months and then have as long again before another opportunity arises. 86% of Equity's 35,000 members pay the minimum sub of £90 a year. Subs are calculated as 1% of earnings from the fields of work that Equity organises. so this means that 86% of actors earn less than £9,000 pa. Equity minimum is just over £300 a week, and an actor in work for 26 weeks a year would make just under £9,000 a year. And obviously the effort needed for a disabled actor to exceed this total would be considerable.

  If a writer wrote two full-length shows a year the WGGB contracts would mean that their income per play would be of the order of £5,000 a play ie £10,000 pa would be about their limit. ie it is not just a casualised industry but a low-paid one, too within which disabled writers seeking to work part-time would be competing for work.

  (b)  The reason why the TUC is getting interested in the wages and conditions of atypical workers, eg home workers, is their low pay and poor conditions.

  Typically disabled people in other industries may not have accessible transport to get them to a workplace and may therefore have little choice but to work from home. As writers do.

  This is a topic on which I also made a submission to the Strategy Unit.

  The odds are stacked against disabled people trying to work from home: many RSLs don't house disabled people adequately for their needs, don't allow any tenant to work from home and don't provide the extra space you need to work from home. And being on a low income, disabled people live in social housing not in owner-occupation.

  So a progressive disability housing policy is needed to facilitate working from home and if the Select Committee recognise that working from home, as stamina permits is the most that many disabled people can aspire to, then it needs to take on board what such a housing policy might entail.

  Which brings me to my other draft motion to go to the TUC Disability Conference:


  The only realistic work option for disabled people with stamina or transport issues is to work from home. Accessible housing of a sufficient size for all their needs is therefore vital.

  Storage for specialist equipment, garaging for a mobility scooter, an extra bedroom for a carer; space for a District Nurses' Treatment Area and their medical supplies can all mean extra space is required.

  The TUC should campaign for:

  (1)  All new housing to be built to Lifetime Homes Standards, in Scotland and England outside London.

  (2)  All new homes to be built flush to the street with no internal steps, no steps at the entrance and no basements.

  (3)  All Lifetime Homes to be a minimum of two bedrooms.

  (4)  The Decent Homes Standard to be revised to take account of disabled people's needs.

  (5)  Social landlords to allow running a business from home and to provide accessible live-work spaces for this purpose.

  (6)  Planning as to what mix of one- two- and three or more-bedroom homes are needed in a Local Authority area, to take account of disabled people's need for extra space and facilities.

  (7)  Accessible Housing Registers and Choice-Based Lettings Schemes to be developed in all local authority areas.

Bruce Birchall

3 October 2005

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