Examination of Witnesses (Questions 200
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
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
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
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
alsoand this is a technical termnacker 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
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
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.