Employment and Support Allowance (Consequential Provisions) (No. 2) Regulations 2008

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Mr. Harper: My hon. Friend makes a sensible point, as did my hon. Friend the Member for Weston-super-Mare (John Penrose), and the hon. Member for Walthamstow touched on a different aspect of it. I am sure that Labour Members, some of whom may come in with their own questions, will want the Minister to reassure them on that. As I think the hon. Gentleman correctly anticipated, they fear that many of their constituents will be coming into their surgeries or getting in touch by letter or e-mail.
Mr. Lee Scott (Ilford, North) (Con): Would today not be the time for a corrective statement to be made to give our constituents the categorical reassurance that they will not lose out by returning to work and being faced with the problems described by other hon. Members earlier?
Mr. Harper: I am grateful to my hon. Friend. I am sure that, to reassure his own colleagues, the Minister will want to say that, if people who are currently on incapacity benefit take the help that is available to move back into work but it does not work out and they have to go back on to ESA, they will not be worse off. I am sure that Labour Members, as well as Opposition Members, want to be reassured about that. The last thing that any hon. Member wants—I am sure that this is not the Government’s intention—is to have another 10p tax situation in which they have not caused the problem intentionally but the effect is that they penalise some of the most vulnerable people in the community and that they have to fix that at a later date. It would be much better to listen to the warnings now from the various groups that have made proposals and, indeed, to hon. Members on both sides of the House and to think about the regulations as the Government introduce them.
It is also worth saying that the Government have been challenged on the matter previously in both Houses, as one would expect them to have been, and this is their response:
“The government does not accept that the rates which have been announced are incompatible with statements made to Parliament. The rate of £84.50 for those in the work-related activity component is above the rate of long-term Incapacity Benefit (£81.35) at the time the statements were made.”
I think that it is an innovation that Ministers have discussions back in 2006 and say that a future benefit will be at a rate higher than the benefit that currently exists, but when they bring it in, they do so at a lower rate than the benefit that exists at that time and then pretend that it was the benefit level pertaining to the time when they made the statement that was relevant. If we carried that logic through, we would have extraordinary situations in which people were existing on a certain amount of benefit and then a new benefit was introduced that Ministers had talked about a number of years ago, but people’s benefits were cut and Ministers said that that was fine, because they were talking about the benefit rates of a few years ago. That would not stand much scrutiny among members of the public. The Minister needs to explain that that innovation—talking about rates at the time when statements were made even though the benefit does not come in until a good two or three years later—will not be adopted by Ministers as a new form of government.
Jenny Willott: Will the hon. Gentleman comment on the proposals that have been made on how the issue could be got around—for example, a disregard of £1 for those on the contributions-based ESA—and on whether he has considered some of the alternatives that could be put in place, so that we can give some good advice to the Minister that he might care to take up?
Mr. Harper: I am grateful for that intervention, but given that we have not heard from the Minister at all in response to some of the hon. Lady’s very sensible questions and given that the Minister is furnished with help in the House for policy development—help that neither she nor I are furnished with—it is better if the Minister sets out how he will deal with the issues, rather than us setting out how we will deal with them. I look forward to that with interest. If he sets out a sensible way of dealing with them, we can come back and challenge him. If he does not, we can make that decision when we consider the regulations towards the end of this sitting.
Specific details in the regulations relate to the treatment of contributory ESA. When the income support claimant’s partner is in receipt of contributory ESA, that is treated as income. In relation to part 2 of the regulations, paragraph 7.2 of the explanatory memorandum says only that contributory ESA will be treated as income for income support. It does not say whether ESA on the income side will be treated as income for the purposes of income support. Will the Minister say whether both types of ESA count as income for the purposes of income support for the claimant’s partner?
John Penrose: My hon. Friend is generous in giving way again. Does he agree that the regulations send a catastrophic message on work incentives? They say to people that if they work, they will be worse off when having to claim benefit than if they had never worked. That message is fundamentally unjust and unfair for the whole of society when it comes to the sort of industrious behaviour that we are trying to encourage. It runs completely counter to the fundamental principles underlying many of the genuinely advantageous ideas that underpin much of the Government’s legislation. In particular, those on income-based ESA, who are in a support group and therefore not required to work, are, as the Minister will confirm, none the less allowed to volunteer to work or to try to get work if they wish.
Mr. Harper: I am grateful to my hon. Friend for that contribution. Indeed, as he was there, he will know that the Financial Secretary to the Treasury, the right hon. Member for East Ham, then Minister for Employment and Welfare Reform, had some sympathy with that point. Indeed, he said that he was aware of the concern that some might lose out. He said:
“We are going to look at this and see whether there is anything further we can do to help.”
He said that he was not sure at that stage whether the Government could help, but he understood the concern and said that they would consider the matter.
I presume that the Minister will be able to tell us the outcome of the review—I hope that that is not too strong a word—set in train by the former Minister for Employment and Welfare Reform, and whether officials and Ministers concluded that anything could be done. The then Minister said that he was unlikely to be able to do anything that would kick in at the start, but he did say that the Government may be able to make changes subsequently to deal with what might be seen by some as an unattractive feature of the arrangements. He said:
“We will be looking at that over the coming weeks.”
That was on 2 July. A number of weeks have passed since then, including the summer recess. I hope that officials have been busy beavering away, and that they have been able to brief the former and the current Minister. I hope that we will hear something good this afternoon.
The next issue, mentioned in item 2.3 in the explanatory memorandum, is about permitted work and the difference between income-based and contributions-based ESA. Again, there appears to be a difference between claimants—this point was raised also by the hon. Member for Walthamstow—particularly the work that housing and council tax benefit claimants are permitted to do. I shall not speak on this at length, as the hon. Gentleman gave a good example, but an individual who has previously worked and made national insurance contributions could be worse off than a similarly placed individual on the income-based stream. Such people suffer largely because of the amount of housing benefit and council tax benefit that they can receive, and the difference in the way in which those benefits are treated for income-based and contributions-based claimants. Indeed, an official said in evidence to the Work and Pensions Select Committee that
“There is still a difference...on the contributory side. There would obviously be a cost to making that adjustment and it is something that we are looking at in the context of the Housing Benefit review”.
The hon. Member for Walthamstow said that he was looking for changes to housing benefit or council tax benefit regulations—not today, as the regulations before us cannot be amended, but perhaps in future. Ministers and officials have said that that work is in train, even if the Minister is unable today to give us a categorical, detailed assurance about specific regulations. It would make Opposition Members and the hon. Member for Walthamstow a lot happier if the Minister could confirm that the work is under way and assure us that the problem will be fixed, even if he is unable to tell us about specific regulations.
David Tredinnick (Bosworth) (Con): As a former Chairman of the Joint Committee on Statutory Instruments, I should like to mention the view of the other place on the merits of this legislation. The House of Lords Select Committee on the Merits of Statutory Instruments said that a number of organisations had written to the Committee to express concern that the regulations do not meet with its understanding of Government policy. Does my hon. Friend have anything to say about that?
Mr. Harper: My hon. Friend makes a good point. It is helpful if the Government take seriously the concerns of the Committees that consider statutory instruments. He mentioned the first part of the Merits of Statutory Instruments Committee conclusions, which states:
“Although there has been extensive consultation and there appears to be general support for the principles”—
I think that there is general agreement on them—
“a number of organisations have”
“concern that the Regulations do not meet with their understanding of the Government’s intention.”
That goes back to the central point that we can agree on the general principle, but the devil is in the detail in regulations such as these. Hon. Members, other organisations and the Merits of Statutory Instruments Committee share that concern. To follow up my hon. Friend’s point, the Committee went on to state:
“The Regulations are complex”—
one finds that when wading through them—
“and claimants may find it difficult to understand the operation of this allowance. The Government needs to do more to explain how the system will work and to address the concerns of interest groups that are in a position to offer significant assistance in helping claimants understand the new system”.
That advice was given to the Government by the Merits of Statutory Instruments Committee so, presumably, the Minister will have an answer to it, and will today say why he thinks that he has resolved the issue.
Mr. Scott: Does my hon. Friend share my sadness that new measures that are meant to make things simpler for some of the most vulnerable people in our society are in fact going to make it more difficult for them to receive what they deserve and need?
Mr. Harper: My hon. Friend is absolutely right and I am sure that we will hear him flesh out those points in due course.
Mr. Stuart: If like me my hon. Friend meets constituents in his surgeries who have suffered from mental illness of one form or another, he will know that their lives are punctuated by periods when they are well and wish to seek employment, but that at other times, their lives are more chaotic. Does he share my concern that people with mental illnesses might be especially badly affected by the measure, and that they could be put off entering employment? Will the Minister comment on their plight?
Mr. Harper: My hon. Friend makes a valid point. There is a general recognition, which is shared by a number of the groups that represent claimants, that those with mental health problems often face greater problems when dealing with the benefits system than those with physical disabilities. That is not always properly taken into account in the way that the Department communicates with them, how they understand such measures or in how the regulations are framed. The point that I was going to make before my hon. Friend intervened was on part 2 of the regulations, which is about income-related benefits, and points 7.14 and 7.15 of the explanatory memorandum, which concerns disabled students. Currently, people on income support can study full-time in some circumstances, but under income-based ESA, only those getting disability living allowance may study full-time. The Government previously gave assurances that that would not be the case. Again, that seems to be a disincentive for disabled students. A number of the relevant regulations, which are referred to in paragraph 7.14 and 7.15 of the explanatory memorandum, mention part-time but not full-time students and the extent to which they are able to carry out full-time study. Will the Minister say whether the position of full-time students is protected?
Paragraph 8 of the explanatory memorandum states that no impact assessment has been prepared for this set of regulations—a little concerning—because they will have
“no impact on business, charities or the voluntary sectors.”
It seems to me that the voluntary sector contains a number of organisations that spend a considerable amount of their time advising vulnerable groups on how the benefit system works and how they might be affected by it. It seems a little strange to claim that a set of regulations introducing an entirely new benefit will have no impact on the voluntary sector, so it would be helpful if the Minister could set out why he thinks that that is the case.
Paragraph 7.51 of the explanatory memorandum states:
“A claim to ESA will normally be made by telephone...The Secretary of State does have the discretion to require a claim to be made in writing and the customer themselves may, for various reasons prefer to make their claim in writing.”
Could the Minister set out what arrangements are in place for those claimants who have a disability that makes using the telephone difficult? It would be useful to know that they will not have any barriers put in their way when making claims or dealing with the Department.
John Howell (Henley) (Con): In talking about the lack of an impact assessment my hon. Friend has quite rightly drawn attention to the voluntary sector. Picking up on the point he made about disabled students, is there not a case for having an impact assessment in relation to those institutions that provide the teaching and that have done so much over the past few years to make skills training much more flexible and personal?
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