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

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Mr. Harper: My hon. Friend makes a good point that will have been heard by the Minister, who I hope will address it when he winds up.
Lastly, will the Minister confirm how much the ESA will cost in total? I hope that he will be able to confirm a figure, because I have had a variety of answers on that point from other Ministers. Lord McKenzie gave one answer in the House of Lords, claiming that the figure was
“£400 million in total to be spent on ESA over the next five years—in comparison to what we would have done on incapacity benefit added to the £1.1 billion invested in Pathways to Work.”—[Official Report, House of Lords, 22 May 2008; Vol. 701, c. 1648.]
It was not entirely clear from that answer whether the figure would be £400 extra on ESA compared to incapacity benefit, on the rates, or whether that in some way included the cost of pathways to work. I received a subsequent answer from the Secretary of State on 2 June, stating that the £400 million figure was spread over three years, but I am pleased to say that a letter from him later confirmed that it was spread over five years. That letter of 18 September was placed in the Library and was available to Committee members. Will the Minister confirm that the £400 million is an increase in benefits paid out and does not include any increase in the cost of pathways to work? That would be helpful.
Members who have spoken have laid out a number of concerns about the regulations, although no one has disagreed with the principle of the employment and support allowance. The Opposition want to hear coherent answers from the Minister that reassure us about our concerns. If we do not, we shall be forced to vote against the regulations and to tell the Government to go away and deal with the issues, to ensure that their policy intentions are properly carried out and that the detail of the regulations does not inadvertently damage the interests of some of the most vulnerable groups in our society.
5.20 pm
John Penrose: I rise simply because, having been involved with much of the legislation in the earlier stages of its progress through this place, I am gravely concerned that the Government need to tread carefully. To follow up on the last point made by my hon. Friend the Member for Forest of Dean, the principle of encouraging people and providing them with plenty of support to get back into work no matter what their starting point has broad cross-party agreement throughout the House. It also enjoys huge support outside the House from many of the disability groups scrutinising the legislation in great detail.
I echo everything that my hon. Friend said about the clear anomalies, and I shall add one more. There seems to be a problem with couple rates in the new employment and support allowance. As far as I can see, there seems to be no couple component to the employment and support allowance after the assessment phase. I hope that the Minister will reassure me that I have got it wrong, but from what I can see, that seems to be the case. I have some figures, kindly provided by the Child Poverty Action Group, which illustrate the effect. Under the current regime, a couple receiving long-term incapacity benefit who become sick before they are 45 receive £152.80 a week including the adult dependant addition. Under the new regime, if they are on income-based ESA, they will receive £142.10. That is over £10 a week less. Worse, if they are on contribution-based ESA, they will receive just £89.50 a week, which is a massive cut, as everyone here can appreciate.
The same problem seems to apply to people who become sick after the age of 45. Clearly, that group will be larger. If the figures are correct—I welcome the Minister’s reassurances if he thinks that they are—people who become sick between the ages of 35 and 45 currently claim £143.95 under long-term incapacity benefit with the adult dependant addition, but on income-based ESA, they will get roughly £2 less, or £142.10. If they are on contribution-based ESA, they will get £89.50 a week as well. Those differences are severe. Will the Minister confirm that they are correct, or at least broadly right, if not to the penny?
I am concerned that, in addition to all the other perverse incentives against employment that my hon. Friend and various other Opposition Members have raised concerns about in our discussions so far, the measures introduce an incentive against marriage, or against couples who happen to be ill. That is clearly contrary to public policy, and it is not something that anybody in this House would want to do, inadvertently or deliberately. I am sure, therefore, that that cannot be what the Government intended when they set out to produce this legislation. I would greatly value the Minister’s reassurance that the figures are broadly incorrect, that there has been a serious mistake and that he can furnish us with some correct figures or tell us that the Government plan to put them right and thereby reduce and remove the perverse incentive as soon as possible.
5.24 pm
The Parliamentary Under-Secretary of State for Work and Pensions (Jonathan Shaw): It is a pleasure to serve under your chairmanship, Mr Amess. This is my first opportunity to address colleagues in my new role as Minister with responsibility for disabled people. This is a timely debate because in a couple of weeks we will see the advent of the radical reform of the welfare to work agenda with the new ESA benefit.
The new deal for disabled people represented the first ever systematic attempt to offer help to people on incapacity benefit with getting back to work. Colleagues from all parties have supported the principles of that programme. However, we all know the scale of the problem. In 2003, 2.7 million people of working age were on incapacity benefits. There was an immense job to do and we needed to take action. That is why we introduced the first pathways to work pilot. That was the first time that a mandatory interview was required, combined with a structure of support for customers on incapacity benefits. The element of conditionality plus the array of support available through the programme has been incredibly successful. So far, more than 94,000 people have been helped into work.
Pathways to work is now available to everyone on incapacity benefit throughout the country. There has been a huge investment of £1.1 billion to ensure that the regulations work. There is also an additional investment of £400 million that the hon. Member for Forest of Dean asked me to confirm. That is additional money and, as he rightly said, it will apply over the five-year period.
It is in the context of that larger picture that the regulations must be understood. We are putting in place programmes of support that have not previously existed. People on incapacity benefit have seemingly never been engaged with before. We are now doing that. The reform of bringing incapacity benefit and income support into one benefit is a Herculean task. When it goes live in a couple of weeks, we are confident that it will have real benefits for people.
Mr. Stuart: Could the Minister quickly answer the question put by my hon. Friend the Member for Forest of Dean concerning what the £400 million covers? Additionally, will he give reassurances today that if it is not covered in the regulations, action will be taken very soon to ensure that those who seek work cannot be penalised for having done so, whether they are in couples or not?
Jonathan Shaw: The £400 million is to assist people. They will be entitled to assistance once they have been in the assessment group for a 13-week period. If the assessment finds that they need support to find work, they will have that intensively. They will receive an uplift of an additional £26 up front in a shorter period than under existing arrangements. Currently, people wait more than a year before they get an uplift. People stay on a benefit longer and then they get an uplift after a year. That cannot be right. That is counter to the culture that we want to engender in the system. People will get that extra money within the work support group and then they will get that additional support. They will have regular interviews. They will be seen by their advisers and helped to find work.
Mr. Harper: May I press the Minister on this because it is important? I do not think that any Opposition Member is arguing about people who suffer a loss of income because of conditionality and because they have not taken part in activity that they are required to do. We are arguing about people who would have been entitled to a higher amount on incapacity benefit than they will be on ESA, not because they have not taken part in something, but because they might not be able to do so. As my hon. Friend the Member for Weston-super-Mare said, we are creating a set of incentives where if someone takes the chance and goes out to work, and then for whatever reason goes back on to ESA, they will be in a worse position, particularly if they are on contributory-based ESA and are not passported to all those additional benefits. That does not give people an incentive to take the help and support to move into the workplace. The Minister did not deal with that point.
Jonathan Shaw: It would be fair to say that I am painting with a broad brush. I have some specific points on that example that I will come to shortly. People will not be affected from the start point of these new systems. If people are going into work at the moment their situation will not be prejudiced. I have a whole bundle of answers to questions that I hope will satisfy hon. Members, but I first want to paint a broad picture because we have to see these reforms overall. We are putting in the investment, radically changing the culture. For many years when people signed on, the state signed off. That cannot be right. We need to look at people’s abilities rather than simply saying that they cannot work so that they remain languishing for ever and a day. That said, we recognise that many people will not be able to find work and so they will be in the support group of claimants and we will provide many of them with additional support.
Let me come to some of the questions. I can confirm that we will make available the £400 million over the five years. The hon. Gentleman was concerned about that. That represents £400 million additional investment on top of the £1.1 billion. We have to make decisions about the resources available to us. We all know only too well that things are tight, particularly with the economic situation, so all Departments are operating within constraints. Despite that, however, we have made available an additional £400 million.
Mr. Harper: May I press that important point? Will the Minister confirm how much money is being spent on incapacity benefits and the pathways to work programme? What is the trend over the next five years? When the noble Lord McKenzie answered questions on this in the Lords, he seemed to be talking about incapacity benefits and pathways to work, and it was not entirely clear whether he was dealing with them separately or adding them together.
Jonathan Shaw: The hon. Gentleman is trying to tease out of me whether the £400 million is new money or whether it would be spent anyway if we continued with the existing system. Is that what he is asking?
Mr. Harper: Let us add together incapacity benefits and pathways to work and consider what is to be spent over the next five years. Will it be an increase of £400 million on the two together or just on ESA compared with incapacity benefit? If it is the former, a cut in benefits is helping to fund the pathways to work programme, which is not—I think—what Ministers have led people to believe.
Jonathan Shaw: I am grateful to the hon. Gentleman for clarifying his point. Over five years the £400 million is additional spend on benefits, including earlier payments above IBs. Over three years the £1.1 billion is for back-to-work support. I hope that that provides clarification. It will be over and above the money that we are proposing to spend.
The hon. Member for Cardiff, Central asked about training. A number of hon. Members referred to engagement with people who might have a mental health condition. It is vital that we get communication levels right. The hon. Member for Weston-super-Mare cited the example of someone who would be unable to use a telephone. If someone cannot communicate on the telephone, for a variety of different reasons, they could go to a Jobcentre Plus office, and can take a support worker or advocate friend as well. Of course, therefore, we have to make arrangements to engage effectively with people.
The hon. Lady asked about a number of specific points, on which I can provide her with some details. Comprehensive training has been provided for Jobcentre Plus staff—for those who will be processing ESA claims in the contact centres and a range of people in Jobcentre Plus offices who will deal with ESA customers. There has been full staff training and all have had training on the supporting IT systems.
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