Select Committee on Work and Pensions Minutes of Evidence

Examination of Witnesses (Questions 200 - 211)

MONDAY 21 MAY 2007


  Q200  Chairman: Freud does talk, of course, about the private and voluntary sector, with I think more emphasis on the private than on the voluntary sector?

  Mr Fothergill: I know. I am trying to avoid that one.

  Q201  Mrs Humble: First of all, my apologies, Chairman, to you and my Committee colleagues and to the witnesses, for arriving late. I have been attending the installation of the Mayor of Blackpool, a very important civic event. We were also celebrating Blackpool getting into the play-offs in Wembley on Sunday; so I hope there are no Yeovil supporters in the room. I want to ask you some questions about radical reform, picking up on what the Chairman was asking you a moment ago about the incremental reform that is taking place through the DWP; forgive me if you have touched on this area already. I would like to know what your opinions are of more fundamental reform, for example, having a Single Working Age Benefit. I know that the Wise Group, in your submission, did make reference to that but then you pointed out all the difficulties as well. Abigail, if I could start with you?

  Ms Howard: Interestingly, I was at IPPR this morning talking to them about their work on the Single Working Age Benefit, and I look forward to that coming out. I think I need to know more about it to make a judgment, to be honest. I think the idea is a really appealing one, the idea that there is one benefit and that is paid because you are out of work, there are additional payments on top of that which are for certain circumstances. Then again, as we said before, sometimes that starts to feel like it is going to be complex in a different way. I think I would need to know more about it. In principle, I think the idea of a Single Working Age Benefit is a very attractive one, but it is how it works in reality, I suppose, and whether we could administer it in a way that actually lives up to the promise.

  Ms Lunn: I would agree, in the sense it would be good to know more about it, but it seems to be a sensible suggestion. One thing we were talking about, various people, working with young people, is when you are out of work but you earn more if you are on Incapacity Benefit than if you are on Jobseeker's Allowance, having those differences seems really not to make sense. I can see you might have to get other benefits on top of that single benefit, which could be very complex, I am sure, but it does not seem to make sense.

  Mr Fothergill: Having worked, as I banged on about before, since 1977 around the benefits system, any time that anything simplistic has been tried to be brought in something always happens to it, and there are all these anomalies and transitions that go on to protect people's existing rights, which is good but eventually it all filters through. It really worries me as to whether a Single Working Age Benefit would actually be that simple. It would be great if it could be, but there are people, obviously, with different circumstances, there are bolt-ons for children and for mortgages, and all sorts of things, that go on at the moment. That is quite straightforward. There are premiums on top of the Income Support, there are allowances for children, there are all sorts of things that go on and that is quite straightforward. I was talking a bit earlier about the Employment and Support Allowance, which seemed to be quite straightforward, top level, holding level, satisfy themes, but then there is this kind of spiralling spine of payments which seem to be being introduced as well. Within one benefit there seem to be all these different rates and complexity, depending on what work activity you get involved in, then possibly further sanctions beyond and below the holding rate as well. Often they start off by looking simple but end up being relatively complex; there are ones which some could never be as complex as, but the age issue I do not see as a simplified difference between 24 and 25 really.

  Q202  Mrs Humble: Do you think it is actually a realistic possibility, because on the one hand we have what is seen as almost dysfunctional complexity, but on the other hand we have the different needs of different people? Certainly the evidence that the Committee has had from those who represent people with disability and those who have children with disability is that they are very much aware of the complexity of people's lives and they say that the complexity within the system reflects the complexity in people's lives, and therefore we do need either different sorts of benefits or different add-ons to a basic benefit. If you are going to have all the add-ons then you cannot call it a Single Working Age Benefit. Can you see any way that the Government can actually balance those two different demands, simplicity whilst at the same time recognising the complexity of people's lives?

  Ms Lunn: I do not know. Maybe it is more about what we have talked about before, the tools so that people can explain it better, the training and the time Jobcentre Plus staff, for example, have actually to make it simple for their clients. I think that is part of the problem.

  Mr Fothergill: It is more of an issue about choice, is it not, and going to different departments. People should get what they are entitled to and should be aware of what they are entitled to, but certainly there will be circumstances where people will not have that ability or will not be able to understand what all these different complicated benefits are. If you are getting Attendance Allowance, Mobility Allowance, Disability Living Allowance, it just goes on and on, Housing Benefit, Council Tax Benefit, there is a whole raft of issues. What people want is the best outcome and if someone is severely disabled then what they are getting in income should reflect that, and there should be some kind of capability, through properly trained staff, for that to happen, but often it does not because people do not know how to administer the benefits.

  Q203  Mrs Humble: Is there an argument to use the blunt instrument that might cause disadvantage to some groups simply because it does help the larger number, and indeed even help those who are disadvantaged by it to have an awareness of the situation? Although for people with severe disability, taking into account your earlier remarks about the reforms that are proposed in the Welfare Reform Act, that will in a way look after the needs of the most severely disabled, but for the rest of people if you go into work your employer does not take into account that you might have X number of children at home or other caring responsibilities, you are just paid the wage. Yes, you do get Child Benefit but other than that you get the wage. Is perhaps the issue then the level of the benefit; if the level of the benefit is set at a high enough level then would you need all the add-ons to deal with the complexities of people's lives?

  Mr Fothergill: I think if it is paid at a reasonable amount then that would be good and that could take away a lot of the complexity. I was talking about complexities before and legislation legislates for a very, very small percentage of things that may happen with people. There are all these complexities about what happens in this circumstance, which hardly ever happens really, and that takes up a lot of people's time and effort. If you are going to pay a realistic, living benefit amount then that will be good.

  Q204  Mrs Humble: The problem is paying for it, of course?

  Mr Fothergill: Yes; but balancing the whole thing out may work.

  Q205  John Penrose: I want just to push you a bit on this concept of the Single Working Age Benefit. Just picking up on what Joan was saying, if we have at the moment however many different benefits there are and you say, "No, we are going to have a Single Working Age Benefit and then top-ups, targeted at people who have got additional needs," why is that inherently any simpler? You are still going to have additional forms that everyone who wants any one of those top-ups is going to have to fill in, and are you not going to end up with as many top-ups as currently you have benefits; therefore, why is it going to be any simpler?

  Ms Howard: I think we acknowledge that as the risk of the system. I do not know how that would work because if you have all these different top-ups then, yes, you are looking at another form of complexity. I suppose one appealing aspect is the idea of having work at the core of that benefit, but that is a different issue, that is about the message that sends as opposed to it being any simpler to administer.

  Q206  John Penrose: Is not that rather a fundamental problem? Basically, what you are saying there is the Single Working Age Benefit is one of these wonderful political mirages, like an Integrated Transport Policy, cue one nods sagely, and no-one knows what the hell it means, and it will not work necessarily. Is there anything concrete, which you can point at, which will be better about a Single Working Age Benefit?

  Mr Fothergill: I think certainly you can simplify some benefits. Certainly I think around change of circumstances for the Working Tax Credit, that seems to be something which just is not working which obviously has been trialled before, as I said, with Family Credit; so that may be something you could look at.

  Q207  John Penrose: That is coming back to some other question, the incremental changes, which Terry was talking about, which I think we are all agreed on. As far as it goes, I think every one signs up to, it will be done.

  Mr Fothergill: A Single Working Age Benefit, I do not know; you have got too many circumstances with people, you could not come to one level.

  Q208  Chairman: If it were £500 a week then you might find it would work, per individual?

  Mr Fothergill: Yes; it would be something.

  Q209  Chairman: Can I ask you a question in principle, and particularly you, Michael, as an ex-worker in the Department; a lot of the complexity in the legislation is legacy from previous benefits and it all just gets carried forward, and you have always had the principle of no cash losers at the time of change. Could this be made to work, change, if people's pre-existing rights were bought out, you just gave them a lump sum and said, "Right; you were on that, you're now on this, but to help you across that divide here's £1,000," £2,000, or whatever, rather than running legacy systems for years which also—and this is a technical term—nacker up the IT?

  Mr Fothergill: Indeed, it does, and it has been extraordinarily complicated, each uprating year, especially when you had to use one of these; it was extremely complicated. Would people welcome a lump sum paid, I do not know. It sounds quite an interesting idea, and something I have never thought about before, I must admit.

  Ms Howard: The thing that would ring alarm bells with me is making sure people were then given the help to manage that amount of money and to use it sensibly for long-term planning.

  Q210  Chairman: Yes; you have always got that problem, but, in principle, it is something worth thinking about?

  Mr Fothergill: Yes; if it was cost-neutral and that was the amount of money they would have over a period of time. These transitions normally peter out anyway, or used to. I cannot imagine what transitions are in place now, but certainly monetary-wise they used to peter out year-on-year.

  Q211  Chairman: Just for instance, I think you mentioned earlier the 1986 Act which brought in Income Support; the longest-running transitional claim was over seven years, somebody had no cash increase for seven years. I am sure that individual would far rather have had a lump sum at the point of change and an income that they knew would rise, if only by RPI, each year rather than no cash increase for seven years. That is exceptional, I accept, but lots, certainly into the tens of thousands, of claims were running for three years with no increase?

  Mr Fothergill: A lot of them ran for two years; yes. It is certainly worth consideration, I would say.

  Chairman: Thank you very much. That has been very interesting. Thank you for your time and effort and it will be reflected in our report. I have to say, it has been really useful. Thank you.

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