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382. This Schedule provides for repeals and revocations consequential on the provisions in the Bill.
FINANCIAL EFFECTS OF THE BILL
383. The Government estimates the total net effect of the Bill on public finances to be -
384. Some of these sums may appear not to add up exactly. This is because all figures are estimates and have been rounded up or down as the Government considers appropriate.
385. These estimates are based on behavioural assumptions and are therefore uncertain. In addition, both costs and savings are highly subject to a number of variables including economic growth rates, labour market conditions and future inflation rates, and assume the policies will be implemented as set out in the White Paper Raising expectations and increasing support: reforming welfare for the future (Cm 7506). As such, they are dependent on the timescales for, and specific nature of, implementation.
386. The main financial implications of the Bill for the public sector lie in the following areas:
PART 1: Social security
387. The Government estimates that the social security provisions in the Bill will produce the following net costs -
388. Some of these sums may appear not to add up exactly. This is because all figures are estimates and have been rounded up or down as the Government considers appropriate.
389. Costs are incurred as a result of an increase in the resources required to deliver work-related activity for some claimants of employment and support allowance, implementing the drugs provisions and piloting work for your benefit provisions and increased conditionality for some lone parents and partners. Offsetting savings occur as a result of reduced benefit expenditure.
390. Provisions to increase work-related activity for some claimants of employment and support allowance and to increase conditions upon some lone parents and partners of benefit claimants are all expected to increase employment which will reduce benefit expenditure. Removing Adult Dependency Increases (ADIs) in carers allowance and maternity allowance and provisions to increase the qualifying period of contribution conditions required to claim contributory jobseekers allowance and employment and support allowance will also deliver some benefit savings. Small savings are also estimated as a result of increased fraud penalties and a stricter sanctions regime.
PART 2: Right to control
391. £5 million has been allocated to meet the costs of pilot schemes for the right to control provisions. This will provide funding for participating authorities and for evaluation of the pilot schemes. Evaluation of the initial phase, taking into account a variety of factors, including outcomes and cost effectiveness, will be used to inform a Government decision on the wider application of these provisions.
PART 3: Child maintenance
392. The Government estimates that the child maintenance provisions will have a negligible impact on public finances.
PART 4: Joint birth registration
393. The Government expects that costs for the joint birth registration provisions will arise from supporting the implementation, monitoring and evaluation of the policy. This will include training registrars, ensuring that prospective parents are informed of the changes, developing appropriate documentation and collecting relevant data to monitor the impact of the policy. Current assumptions indicate that the impact of the policy on the courts will be modest or negligible and that the legal aid impact will be less than £1m. More details about the expected costs and benefits are provided in the Impact Assessment accompanying the Bill.
394. These costs and savings are in cash terms, so they represent the actual amount of money expected to be spent and saved in each year. They vary from those in the Impact Assessment which are Net Present Value calculations and represent how individuals value the costs now. For example, costs/savings in the future are not worth as much to individuals as the costs/savings now, so the future costings are adjusted for inflation and then reduced by the social rate of time preference (3.5% per annum). The Impact Assessment also captures economic, rather than fiscal, costs and benefits. Economic costs and benefits are defined as those that have a real impact on the economy and include income transfers (benefit expenditure) only in so far as they could reduce or increase the efficiency loss of taxation.
395. Increases in the number of work-focused interviews resulting from the measures in this Bill are likely to mean an increase in the amount of work for staff within Jobcentre Plus. However, as some measures will be piloted initially, and some will not take effect immediately, it is not possible to quantify at this stage what the likely effect on staffing will be.
396. The Better Regulation Executive guidance requires the Government to publish an Impact Assessment (IA) when it introduces any legislation likely to-
397. IAs have been prepared in respect of 14 provisions in the Welfare Reform Bill. The remaining provisions in the Bill did not fulfil the criteria for requiring an IA.
398. The costs identified in IAs are economic rather than financial - the Financial Statement above provides the expected costs of the Welfare Reform Bill. Equality Impact Assessments have also been carried out to identify any risk of differential impact in relation to gender, ethnicity, disability, and where possible, age, sexual orientation or religious beliefs.
399. An Impact Assessment and Equality Impact Assessment have been carried out for the following provisions-
400. Section 19 of the Human Rights Act 1998 requires the Minister in charge of a Bill in either House of Parliament to make a statement about the compatibility of the provisions of the Bill with the Convention rights (as defined by section 1 of that Act). The statement has to be made before Second Reading of the Bill. The Rt Hon James Purnell MP, Secretary of State for the Department for Work and Pensions has made the following statement:
401. In my view, the provisions of the Welfare Reform Bill are compatible with the Convention rights.
Part 1 Social security
402. A potential human rights issue raised by clause 1 is whether a power which may be exercised so as to require jobseekers allowance claimants to undertake work or work-related activity with a view to improving their employment prospects is in breach of the prohibition of forced or compulsory labour in Article 4(2) of the European Convention on Human Rights (ECHR). Clause 1 makes provision for specific schemes aimed at providing assistance to persons who are unemployed and who are required to look for employment as a condition of entitlement or continued entitlement to benefit. The Government envisages that the work and other activity that claimants participating in a work for your benefit programme and other schemes under new section 17A of the Jobseekers Act 1995 would be required to undertake will be reasonable in view of their circumstances. A claimant can only be required to take part in any scheme under new section 17A if he or she is required to comply with the job-seeking conditions. The Governments view is that the provisions of clause 1 and new section 17A are not unjust or oppressive, within the meaning of Article 4(2) ECHR. Clause 1 forms part of a long-established policy whereby claimants who are required to be available for and actively seeking work must take reasonable steps to improve their chances of obtaining and remaining in work. By laying down a rule that claimants must look for paid employment, and accept reasonable job offers, as a condition of receiving a jobseekers allowance, the Government is not forcing them to perform any kind of labour in breach of Article 4(2) ECHR. It could be argued that this reasoning applies equally to a requirement to undertake work (and work-related activity) as part of an employment scheme, the purpose of which is to improve their employment prospects.
403. There is concern that such work or work-related activity is inhuman or degrading treatment and thus in breach of Article 3 ECHR. New section 17A(5)(d) contains an important safeguard in this respect. It is strongly arguable that a claimant would have good cause for refusing to comply with a requirement to undertake work that was unreasonable in public law terms or that was otherwise unlawful (for example, if it was required for an improper purpose or the work itself was in breach of Article 3).
404. Human rights issues could be raised by not paying a jobseekers allowance to claimants who, without good reason, have failed to comply with regulations made under new section 17A, as this could be in breach of Article 3, if it amounted to degrading treatment, or Article 8, which is the right to family life. New section 17A(5)(d) contains an important safeguard in this respect. It is strongly arguable that a claimant would have good cause for refusing to comply with a requirement to undertake work that was unreasonable in public law terms or that was otherwise unlawful. In relation to both Article 3 and Article 8 ECHR, new section 17(8) enables hardship payments to be made. These powers may be exercised so that claimants and their dependants are not placed in situations of extreme privation in breach of those Articles.
405. Both contributory benefits and non-contributory benefits may, in certain circumstances, be classified as possessions for the purposes of Article 1, Protocol 1 ECHR. The Government takes the view that the powers in new section 17A(5)(d) and (6) and (7) do not amount to an unlawful interference under Article 1 of Protocol 1 and that they are capable of being exercised in a way which complies with the Convention rights. The Government considers that those provisions are in the public interest and that they strike a fair balance between the interests of individuals and the community. In addition, non-payment or reduction of benefit may only occur where a claimant is judged not to have good cause for failing to comply with requirements imposed by regulations. Provision may be made in regulations in relation to hardship payments.
406. A decision that a jobseekers allowance is not payable satisfies the requirement for an independent hearing imposed by Article 6(1) ECHR, which could be a potential human rights concern. This is met through the statutory appeal route.
Clause 2: Work-related activity: income support claimants and partners of claimants
407. Article 8 ECHR could be engaged if the sanctions to be imposed were to create hardship such that there was an impact upon private or family life. The Government considers that any interference that is established is justified in the economic interests of the country and the need to make the best use of public funds. In relation to Article 8 ECHR, subsection (7) of new section 2D of the Social Security Administration Act 1992 enables hardship payments to be made. These powers may be exercised so that claimants and their dependants are not placed in situations of extreme privation in breach of that Article. The Government is of the view that imposing a reduction in the amount of income support, jobseekers allowance (JSA) or employment and support allowance (ESA) payable for failure to comply with a relevant work-related requirement does not amount to an unlawful interference under Article 1 of Protocol 1. The measures are aimed at increasing the future employment prospects of individuals and are clearly in the public interest. As such if there was interference with property rights, the Government is of the view that it would be proportionate and justifiable.
Clause 4: Couples where at least one member capable of work
408. Entitlements to social security benefits, including non-contributory benefits, are recognised as civil rights for the purposes of Article 6(1) ECHR and disputes about decisions about entitlement to benefit therefore need to be determined by an independent tribunal at a fair and impartial hearing. The appeal system has been set up under the Social Security Act 1998 (c. 14) to establish a fair, ECHR-compliant process.
409. Article 8 ECHR could be engaged if the sanctions to be imposed under regulations by virtue of these amendments were to create hardship such that there was an impact upon private or family life.
410. The Government believes that sanctions encourage participation and help to foster personal responsibility and these aims are clearly in the public interest.
411. The Government is of the view that imposing a reduction in the amount of JSA payable for failure to comply with a relevant requirement does not amount to an unlawful interference under Article 1 of Protocol 1. The measures are aimed at increasing the employment prospects of non-working partners and this is clearly in the public interest. If there was interference with property rights, the Government is of the view that it would be proportionate and justifiable.
412. The Government is of the view that imposing a reduction in the amount of JSA payable for failure to comply with a relevant requirement does not amount to an unlawful interference under Article 1 of Protocol 1. The measures are aimed at increasing the employment prospects of non-working partners and this is clearly in the public interest. If there was interference with property rights, the Government is of the view that it would be proportionate and justifiable.
Clause 8: Power to direct claimant to undertake specific work-related activity
413. Entitlement to social security benefits including non-contributory benefits are recognised as civil rights for the purposes of Article 6(1) ECHR. Accordingly, disputes about decisions which determine entitlement to benefit will need to be determined by an independent tribunal at a fair and impartial hearing. It is intended that similar provision will be made for a reduction in the amount of benefit for a failure to comply with a requirement to undertake a specific work-related activity. The Government considers that this power will be exercised in a way compatible with the Convention. There is an appeal right against a decision to reduce the amount of ESA payable and the Government considers that this is sufficient to safeguard Article 6 rights.
414. Article 8 ECHR could potentially be engaged in one of two ways. Firstly, the imposition of the requirement to undertake specified activity could infringe upon a persons private and family life. Secondly, Article 8 ECHR could be engaged if the sanctions imposed were to impact upon private and family life. The Government is confident that the safeguards are such that there will be no interference in a claimants private life because the provision safeguards a claimants rights, by virtue of the inclusion of the words, reasonable, having regard to the persons circumstances. Regulations will provide that specific work-related activity will not extend to medical treatment and a claimants medical circumstances will always be considered when making a specific work-related activity mandatory.
415. Article 8 ECHR does not impose a positive obligation upon the Government to provide financial assistance at any given level. Article 8 might be engaged if withholding a benefit could be seen to have an impact on family life, but the total amount of sanction imposed in relation to any claimant for failure to comply with the conditionality requirements will be proportionate and where necessary a hardship regime can be put into place.
416. It is an established principle that both contributory and non-contributory benefits are possessions for the purpose of this Article. It is more than likely that a reduction in the amount of benefit paid to an individual will be regarded as a deprivation for the purpose of Article 1 of Protocol 1. The Government is of the view that imposing a reduction in the amount of ESA payable for failure to comply with a conditionality requirement does not amount to an unlawful interference under Article 1 of Protocol 1. The ESA reforms, which aim to increase employment opportunities for sick and disabled people, are in the public interest. As such if there was interference with property rights, the Government is of the view that it would be proportionate and justifiable. The Government also considers that including the right to reconsideration will act as a safeguard on the use of this power, giving the claimant of the benefit an opportunity to object to its use without having to wait for a sanction to be applied for non compliance.
417. Entitlement to social security benefits is considered a civil right. Sanctioning benefits is not considered an infringement of that right because there is an independent appeals process. As answering questions on drug use could be incriminating, safeguards have been put in place to ensure that this does not contravene Article 7.
418. The Government will put safeguards in place so that it will not affect a persons private life and therefore does not contravene Article 8. The Government is satisfied that Article 8 rights are safeguarded, though takes the view that if it were found that there was an interference it could be justified on the grounds that it was done in accordance with the law and necessary in a democratic society in pursuance of the legitimate aim of safe-guarding the economic well being of the country. Information provisions are deemed to be compatible for similar reasons.
419. A benefit sanction would normally continue to apply pending the outcome of any appeal (although arrears would be paid in the event the appeal was successful). However, the Government would intend to exercise existing powers to provide in regulations for the imposition of a sanction to be suspended in appropriate cases where an appeal had been brought against a decision that a person had failed without cause to submit to a drugs test.
420. It is arguable that Article 14 could be engaged, because it could be claimed that it treats drug users on a differential basis because of their status. In accordance with this definition, being a drug user is something that someone is doing, it is not what they are. It is the Governments view that the policy can be justified as proportionate, because it only sanctions problem drug users to the extent that they are not complying with a treatment programme that is designed to help them overcome their addiction. Under regulations to be made under the provisions of this Bill, problem drug users seeking treatment will receive favourable labour market conditionality so that they may focus on overcoming their addiction rather than having to search for work.
421. It is an established principle that both contributory and non-contributory benefits are possessions for the purpose of this Article. It is more than likely that a reduction in the amount of benefit paid to an individual will be regarded as a deprivation for the purpose of Article 1 of the First Protocol. The Government is of the view that imposing a reduction in the amount of JSA/ESA payable for failure to comply with a conditionality requirement does not amount to an unlawful interference under Article 1 of Protocol 1. The drugs strategy reforms, which aim to increase employment opportunities for problem drug users, are clearly in the public interest. As such if there was interference with property rights, the Government is of the view that it would be proportionate and justifiable. It is intended that the way in which a sanction for failure to undertake a drug assessment or comply with a rehabilitation plan will mirror the existing sanctions regime under each Act. As the sanctions for the new measures do not go beyond those which are currently in place for existing measures the potential interference in property is the same as that which is already permitted by primary legislation. A claimant will have a right of appeal against a benefit sanction which follows a failure to comply with a rehabilitation plan, in the same way as the claimant can currently appeal a sanction for failure to fulfil labour market conditionality or failure to take part in a work-focused interview.
422. A drugs test will only be imposed in specified circumstances, if a person has failed to undertake a drugs assessment to which he or she has been referred. If a person fails to undertake a drugs test or a drugs assessment, the person will be given an opportunity to show good cause for his or her failure.
423. If the Courts held that using a particular drug as opposed to another constituted a status protected by Article 14, the Government could successfully argue that any discrimination was justified on the basis that it was a legitimate policy choice to adopt measures only in relation to users of particular drugs which it considered caused the most social problems, and also having regard to the significant cost implications of extending the measures to all types of proscribed drugs.
Clause 12: Maternity allowance and carers allowance etc.
424. The abolition of adult dependency increases could raise issues in respect of Article 1 Protocol 1, which provides that every person is entitled to the peaceful enjoyment of their possessions. The Government considers that the withdrawal in respect of carers allowance and maternity allowance is a justified and proportionate response to the need to simplify benefits and remove provisions which are based on an outdated concept of dependency.
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