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

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Mr. Harper: The Minister mentioned the contact centres. My understanding is that there are 64 benefit centres, only one of which will have the IT system in place by the date on which the benefits will start. In answer to written questions that I have tabled, Ministers have confirmed that in the other benefit centres, everything will be done manually. He expects about 28,000 benefit claimants a month, which sounds like an awful lot of claims to be handled on paper. That sounds like a recipe for a lot of confusion and a lot of postbags being filled up over the next year or so.
Jonathan Shaw: The hon. Gentleman raises an important point. Members in this House will want to be confident that the delivery systems are in place. This will be a considerable transformation. I do not doubt that some inspiration on that point will come to me any moment—one never knows what might fall out of the sky. Hon. Members will understand that I have attempted to cram information on this subject matter and policy area over the weekend.
Mr. Stuart: The Minister will be aware of the difficulties that people have, particularly in rural areas. Perhaps I may briefly mention that Jo White, an adviser who ran a freelance advisory service in my constituency, is now no longer able to sustain that and has gone out, supported people in rural areas and had an 80 per cent. success rate on appeal. There are many people stuck in rural areas who, through the existing state system, do not get the support that they deserve. I hope that the Minister will look carefully at that, especially when bringing in new regulations.
Jonathan Shaw: I am grateful to the hon. Gentleman—he and I have discussed matters rural in another job. As part of the Government’s policy for mainstreaming, it is vital that our Department has those discussions and takes advice from DEFRA. There has been good joint working on a number of projects affecting people claiming benefits in rural areas. As the hon. Gentleman will know, overall socio-economic levels may be high, but they might mask certain areas of deprivation and isolation. It is important to remain conscious of people who live, for example, in constituencies in Yorkshire such as his.
The hon. Gentleman makes a point about appeals. We are all aware of people who have an expertise in supporting people in their appeals. Often, and I am sure that hon. Members will bear me out, when we see a constituent who has been turned down for a particular benefit, we see if we can identify new information—things that perhaps the constituent had not thought of in the first place. DWP and Jobcentre Plus make their assessment on the information in front of them. Often, appeals are upheld because new information is presented to the tribunal. That is an important aspect.
Jenny Willott: It is true that appeals where there is an adviser who supports the claimant have a high success rate—at the moment with the personal capability assessment, that tends to be around 70 per cent. Even for those claimants without an adviser, the overall success rate on appeal is 57 per cent., which is high. As the new assessment is brought in with the work capability assessment replacing the current system, how confident is the Minister that the training and new systems that have been put in place will reduce that? Those who currently work in the system are not confident that there is any chance of it improving.
Jonathan Shaw: I am grateful to the hon. Lady for that comment as it brings me to the point on which I wished to expand. The existing system gives a snapshot of a person at that time. Hon. Members will recall cases—I give a hypothetical example rather than an accurate account—in which someone who has gone for an assessment is asked, “Can you walk? Can you manage a certain distance?”, and the claimant, or constituent, says, “Yes, I think I can manage that,” because they could manage it on that day. However, when we say to those people, “But you cannot manage it today, and you probably cannot manage it next week,” they say, “I tried my best. I thought it was the right thing to do.” They are precisely the people who we want to ensure get an accurate assessment. That is why the new arrangements will look at people’s life as a whole, and their overall condition, rather than just a snapshot. We have endeavoured to introduce our new assessments processes with the involvement of all of those who are concerned about the welfare-to-work agenda and supporting disabled people’s groups.
To finish off the important point about contact centres, which the hon. Member for Forest of Dean asked about, I can tell the Committee that—
Mr. Harper: Now that the Minister is inspired.
Jonathan Shaw: Indeed. This was one nugget of information that escaped me over the course of the weekend. Perhaps I should have given the hon. Gentleman a call. [Interruption.] I am sure that the hon. Member for Rochford and Southend, East wants to ensure that we have a good flow of information to the Whip from a sedentary position, rather than any sort of adversarial—[Interruption.] He is not as nice as I thought he was.
Mr. Harper: He is a Whip.
Jonathan Shaw: Well, I am a former Whip, and it takes one to know one.
There will be six contact centres, and all will have IT that will go live. We are testing the whole benefit delivery system from end to end, where we can key in a claim to get benefit, but there will not be a large clerical process from the first day. We will ensure that our systems are in place and that the IT is there to manage the delivery carefully.
Mr. Harper: The reason I asked the question is that I recently received a written answer that said something quite different. The written answer provoked a letter from the chief executive of Jobcentre Plus, which specifically said that only one out of 63 of the benefit delivery centres would have the IT in place and that the rest of them would be doing it clerically. I therefore calculated, looking at the on-flow of benefits, how many claimants we would be looking at per month, and thought that that sounded rather extraordinary, hence my question. Will the Minister check whether that position has changed since the chief executive wrote to me a few weeks ago, and if so, perhaps a new letter could be furnished and placed in the Library of the House for the benefit of all hon. Members?
Jonathan Shaw: I am grateful for that comment because it is important that all hon. Members have accurate information. They must have confidence that we have the necessary systems in place to deliver the new benefits. I accept the hon. Gentleman’s invitation and I will write to him with the most up-to-date information, and ensure that all hon. Members have a copy of the letter.
The hon. Gentleman referred to mistakes in the regulation. Hands up—yes, we have made amendments to the regulations, and that is right and proper. I thank a number of organisations for pointing those out.
The hon. Member for Forest of Dean and my hon. Friend the Member for Walthamstow mentioned the housing benefit review. We will be reviewing all housing benefit. We understand that there are issues relating to how the ESA will be delivered and we want to ensure that it is fair. However, we need to consider the enormity of the task of reviewing housing benefit, which is a key component part of getting right the whole equation of people’s being better off in work, rather than on benefit. We cannot do it on a piecemeal basis; we have to do it in its entirety. The Department will undertake that work. We look forward to bringing those proposals to the House and to wider society for consultation. I assure hon. Members that we will keep the matter under review.
Mr. Harper: Will the Minister tell us roughly when the House might expect those proposals?
Jonathan Shaw: I am not in a position to advise the hon. Gentleman about the time scale that we are working to, but as soon as we are in a position to do so, we will advise the House accordingly.
The hon. Member for Cardiff, Central mentioned permitted work. The ESA will be more generous than incapacity benefit in its treatment of people who are in part-time employment while still on benefits; it will extend the higher £92 limit to the income-related side. The limit is only £20 on income support, so the ESA permitted work level is generous. A typical claimant on ESA of £84.50 a week and earning £92 under permitted work limits would have an income of £176.50 a week after tax, not counting their housing benefit or disability living allowance. That would, in many instances, be similar to their income in full-time work and off ESA.
Jenny Willott: Will the Minister confirm that that applies specifically to those on income-based ESA, not to those on contributions-based ESA? That is the point of contention for many hon. Members.
Jonathan Shaw: Yes, I can confirm that. In terms of the contention that hon. Members brought to these regulations, I want to set in context all our investment and expense on this new programme. We will need to keep reviewing certain areas to ensure that people are not unduly disadvantaged. However, there is a whole-scale advantage with the investment of the £400 million and, indeed, with the £1.1 billion for Pathways to Work. On top of that, we are investing in Access to Work, and our doubling of that programme has been widely welcomed. All the changes should be viewed in their entirety. However, we have to operate within some pretty tight financial constraints.
Jenny Willott: Although the Committee welcomes the increase in the Access to Work budget—hon. Members from all parties have said that they appreciate that—the fundamental point for me is the fundamental unfairness of treating two people differently who are, in all financial circumstances, identical apart from the fact that one has worked and the other has not. We are treating those two people unfairly and differently. The person who has contributed and has worked in the past could be significantly worse off.
I appreciate what the Minister says about the other benefits, but those accrue to everybody, regardless of their previous employment history. He has not clarified and confirmed to the Committee what can be done to improve the situation for those who are being discriminated against by the regulations.
Jonathan Shaw: We will keep the permitted work rules under constant review, and we are considering more flexible ways to help more people to take up opportunities and increase their options without fear of their benefits being removed. We will continue to do that. I remember—a whole hairline ago—when I was a care assistant working with adults with learning disabilities that therapeutic earnings, as they were then called, were very restrictive in terms of people’s opportunity to earn any income while retaining their benefits. We will consider ways in which we can be flexible, but we have to operate within the envelope that we have.
John Penrose: I want to pick the Minister up on his last response, because it sounded as though he was trying to avoid saying, but none the less meant, that he accepted that this was an enduring problem and that the difficulties that Opposition Members have been describing exist, but he just did not have an answer to them. I want to press him further on this issue, because it is only one example of the disincentives to work encased in the difference between the income-based and the contributions-based versions of the ESA. Surely, given those differences—this relates not just to permitted work, but to benefit levels and many other things, too—many people will be reluctant to leave their existing benefits and take a job, which may only be temporary. Often, people use a seasonable job as a beginning, and they will find that they are worse off when they come back, because they have some contributions under their belt. Surely, that is the central issue, but I have not yet heard the Minister give a good answer.
Jonathan Shaw: With respect to the hon. Gentleman, the central issue is what the entire package involves. When we instituted the pathways programme, which provided people with support and for the first time put some conditionality to their benefits, people got into work. We are not setting up a programme that will provide disincentives and penalise people. We are setting up a programme that far more generously provides the infrastructure for people to get off benefits and into work, and we are providing that choice for them in a very supportive way—for many of them, for the first time ever.
I accept that there are differences in the system in terms of the contribution and the income-related matters as the benefit comes together, but I do not accept the hon. Gentleman’s suggestion that it will provide a disincentive to work. If we take that point in isolation, we can see how he makes a logical argument with it, but it is not fair to say that it is isolated, given the infrastructure and the investments that we are making across the piece.
The hon. Member for Forest of Dean made some accusations. He said that commitments made by the Secretary of State to pay ESA above the current rate of long-term incapacity benefit for the main phase have not been met. I do not think that that is fair. We have acted in good faith. Those in the work-related activity group will receive £84.50 and those most severely disabled—those in the support group—will receive £89.50, and those rates are well above the long-term IB of £81.35. In reforming IB, we wanted to target additional financial support on the most severely disabled people in our community, and in keeping with that, we have agreed substantially higher rates still for that vulnerable group. That is why we announced an additional £5 extra for the automatic enhanced disability premium passport for those in the support group, thus guaranteeing them a minimum income of £102.10 before their DLA or housing benefit. Many of them would currently receive only £86.35, so they will be nearly £16 a week better off. This is certainly not a cut agenda. We are paying the proposed ESA rates to new customers, including the enhanced disability premium passport, which will cost an additional £400 million over the five years, despite the constraints that we will operate under.
My colleague is tugging at my coat, which tells me that it is time to wind up. I am sorry that I got a little lost in the snow of paper on my desk, but I believe that the regulations herald a new way to institute a benefits regime that helps people to come off benefits and into work. Work, as we know, is good for us.
Question put:—
The Committee divided: Ayes 9, Noes 6.
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Prepared 14 October 2008