I will say something about the NHS outcomes framework, and then respond to as many of the points that have been raised as I can in the time remaining. Recognising that many people have more than one medical condition, we have deliberately taken a generic

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approach to the NHS outcomes framework, rather than focusing on specific diseases. We recognise, however, that cancer is a big killer, and we have said repeatedly that improving health outcomes for cancer patients is a priority for the Government. We have aimed to reflect that in the framework by including seven specific indicators on cancer. Those include the under-75 mortality rate from cancer, and the one and five-year survival rates for the three major cancers, to which other hon. Members have referred: colorectal, breast, and lung. In addition, two overarching indicators include data on cancer: potential years of life lost from causes considered amenable to health care; and life expectancy at 75.

The indicator “under 75 mortality rate from cancer” is shared with the public health outcomes framework. By having that shared indicator, with joint accountability for delivery, Public Health England and the NHS Commissioning Board will have the incentive to work together to improve cancer mortality and survival. That relates to the question about the commissioning of public awareness campaigns. I can confirm to the hon. Member for Leicester West that Public Health England and the NHS Commissioning Board will have a joint responsibility, and a clear obligation, to commission in that regard.

John Pugh: On the point about indicators, a clear theme throughout the debate has been late diagnosis. Late diagnosis is not the same as late treatment. With GPs probably under more pressure than ever before not to make unnecessary referrals to secondary health settings of one kind or another, do the Government keep or have they any intention of keeping statistics on whether, where people are diagnosed late, the cause of the late diagnosis was that they presented far too late or that the GP and whoever they saw figured out what was wrong with them far too late?

Paul Burstow: I am coming to that. It relates to the point raised by my hon. Friend the Member for Basildon and Billericay (Mr Baron), who chairs the all-party group, about staging data. I will say more about that in a minute.

Outcomes for cancer patients and survivors will also be covered by other areas of the NHS outcomes framework. For example, we will measure patients’ experience of the NHS by looking at different patient surveys. We have been talking about that in this debate.

In addition to the indicators in the outcomes frameworks, the cancer outcomes strategy sets out a commitment to improve cancer survival rates generally and—we have heard the figure—to save an additional 5,000 lives a year by 2014-15. The strategy is supported by more than £750 million of investment for implementation during this spending review period.

Our aspiration is to have cancer survival rates as good as the best in Europe, but we have to stage progress to that goal. Our ambition during this spending review period is to halve the gap between England’s survival rates and those of the best in Europe. The estimate, based on the latest figures available, is that that would save an extra 5,000 lives. To deliver on that ambition, we must tackle survival rates for all cancers. To realise our goal, we are taking action to achieve earlier diagnosis of cancer, to extend existing screening programmes for breast and bowel cancer and to improve access to radiotherapy.

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Let me deal specifically with early diagnosis. My hon. Friend the Member for Southport referred to the recent lung cancer awareness campaign—the “coughing” campaign as I think he described it. Obviously that campaign has not just dropped out of thin air into the broadcasts of our media around the country. It is the product of a detailed process of testing, trialling and evaluation. Indeed, the original idea came from a local campaign in Doncaster. Then there was a series of regional pilots to see how it would affect behaviour and what benefits would arise from that. I will be more than happy to send my hon. Friend the details of that and, as we evaluate the national programme, how that is going as well.

Early diagnosis is central to our strategy. It is one of the areas to which our international benchmarking has pointed us. By diagnosing cancer earlier, we will improve patients’ chances of being successfully treated, as other hon. Members have said. Through the national awareness and early diagnosis initiative, we have worked with the NHS and other stakeholders to run a number of campaigns to raise awareness. That is about getting people to talk about things that they would not necessarily normally want to discuss—getting them to overcome embarrassment, because embarrassment never killed anyone, but not turning up at the GP’s and asking key questions about particular cancers certainly does.

The hon. Member for Leicester West asked about support for GPs. A range of support is available to help GPs assess when it is appropriate to refer patients for investigation of suspected cancer. Obviously, there are the National Institute for Health and Clinical Excellence referral guidelines. However, we need to do more and we are investing in better GP access to diagnostic tests. I will say a little more about that in a moment. The national cancer action team, Cancer Research UK and Macmillan Cancer Support are working together to develop a broader GP support programme for the coming years. That includes working with the Royal College of General Practitioners.

The hon. Member for Strangford (Jim Shannon) raised the issue of pancreatic cancer. We are working closely with Pancreatic Cancer UK. In fact, we will be working through many of the issues of early diagnosis in a workshop specifically on pancreatic cancer next week. I will be speaking at that event.

We know from the latest diagnostic waiting times and activity figures that despite increasing demand, the proportion of people waiting more than six weeks for an endoscopy has decreased during 2011-12. I hope that hon. Members will join me in congratulating the NHS on the way in which it went about preparing for and dealing with the increased work load that arose from the bowel cancer symptoms awareness campaign that ran between January and March this year.

The Department is working with partners to support the NHS to improve the management of diagnostic demand. There are a couple of things that we are doing in particular. We are promoting the uptake and spread of efficient and productive service models. Some places have no problem in utilising the capacity that they have. Other trusts have struggled, and we are using NHS Improvement to target the trusts where the highest waits have occurred. We are also providing a variety of tools and information to support commissioners. Data

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are a key component in driving improvements, and we have a new data set for diagnostics, which is providing a wealth of new information.

In our cancer outcomes strategy, we said that access to appropriate treatment, delivered to a high standard, was critical to improving outcomes. That is why we have made available £150 million more over the spending review period. In April 2012, we confirmed plans to develop proton beam therapy services in Manchester and London by the end of 2017. Those services will have the capacity to treat up to 1,500 people a year. Much has been achieved with regard to access to radiotherapy in recent years. Radiotherapy waiting times are now within the 31-day operational standard for both first definitive and subsequent radiotherapy. Modelling shows that that improvement saves 2,500 lives annually in comparison with waiting times in 2007. Data are playing their part, and there are other issues around that.

I want to touch on investment. In answer to a question last week, I said that the first and foremost responsibility for maintaining equipment and identifying when it needs to be replaced does, of course, sit with the provider that uses that equipment. However, in March 2012, we announced the establishment of a £300 million fund, to be operated by NHS Supply Chain, to bulk-purchase medical equipment to achieve better prices for the NHS and to encourage trusts to keep their equipment up to date. It is therefore a combination of responsibilities, but we certainly see the foremost responsibility sitting clearly with providers in that regard.

About 1.8 million people living in England have had a diagnosis of cancer, and the number is growing. We know that we can do more to improve their quality of life, which is why we have been working in partnership with Macmillan Cancer Support on the national cancer survivorship initiative. The use of patient surveys has been a key aspect of that. We will publish a full analysis of the detailed work that we have undertaken jointly this autumn.

We have committed to the next cancer patient experience survey in 2012. We find those data invaluable. The shock to the system when a provider finds itself at the bottom of the tables is very powerful indeed and is leading to significant improvements.

The hon. Member for Ealing, Southall (Mr Sharma) talked about the limited scope of existing indicators. I can tell him and other hon. Members that we are considering how we can make progress on bringing a number of indicators together. My officials are working with the information centre to consider the resource implications of substituting existing indicators and whether it would be appropriate for a composite indicator to replace some of the individual survival rate indicators. Ensuring that we cover more cancers was a concern that several hon. Members raised in the debate.

On funding cancer networks, my right hon. Friend the Secretary of State has made the position clear. We have provided funding for the remaining year for which the Department is responsible. Indicative figures have been set out. A review is going on of clinical networks and how they are governed. That will ultimately determine precisely how much resource is allocated. There is no final figure at this stage.

Regretfully, I shall conclude now, as I am about to run out of time. There is much going on in respect of cancer. I will write to the hon. Members who took part

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in the debate so that they can see what I would have said if I had more time. However, the cancer outcomes strategy remains the guiding light for the Government to deliver the world-class cancer care that people deserve in this country.

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Crisis Loan Funding

12.30 pm

Dr Eilidh Whiteford (Banff and Buchan) (SNP): I am pleased to have the opportunity to debate crisis loans and the changes to the social fund ushered in in the Welfare Reform Act 2012. My primary purpose in requesting today’s debate was not to rehearse arguments we have already had on the substance of those changes, although a number of issues remain unresolved and undoubtedly inform today’s debate, but to seek clarity from the Government about the implementation of the new system and assurances about the funding allocations accompanying the policy changes.

Although social fund crisis loans and community care grants will disappear from April next year, the need for emergency and one-off support for people on low incomes will not. We know that funding will be made available to local authorities in England and the devolved Administrations in Scotland and Wales to provide discretionary social assistance, but we do not yet know how that will work in practice or how local authorities and devolved administrations are expected to deal with the shortfalls. Questions raised throughout the process on the merits of ring-fencing the social fund allocations remain acute. We need to know what guidance the Government will issue to support implementation and whether resources will be allocated to establish a replacement system.

In terms of contextualising our discussion this afternoon, it is worth drawing attention to the important role that social fund crisis loans and community care grants play in our welfare system. They act as a safety net for people on low incomes who face unexpected or unplanned costs and help people to acquire essential furniture or equipment if they are setting up home in very straitened circumstances.

As the debate about crisis loans progressed last year, the Government repeatedly relied on the argument that the cost of crisis loans was spiralling and needed to be brought under control. Back in March last year, I suggested to the Secretary of State for Work and Pensions that the rise in the uptake of such loans was largely attributable to the recession. Given the ongoing economic turbulence, financial insecurity and high unemployment of the past few years, that might seem to most of us to be a no-brainer, but the Secretary of State insisted that the cost of crisis loans was rising prior to the recession.

I am glad to have the opportunity this afternoon to scrutinise that claim in more depth. It is clear that there is a link between the rise in demand for crisis loans and the onset of the financial crisis. We should be honest enough to face up to that. Members who have followed the issue will be aware that the Department for Work and Pensions annual reports on the social fund have been published from 2006-07 onwards only. If we use 2006 as our pre-recession baseline, as the Government appear to have done, there is clearly a dramatic year-on-year increase in both the number of claimants and the amount spent on crisis loans as the recession began to bite.

Mr Andrew Smith (Oxford East) (Lab): I congratulate the hon. Lady on securing this debate on a very important subject. Underlining the point she makes, does not the DWP’s own research, “Local Support to Replace

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Community Care Grants and Crisis Loans for Living Expenses in England”, show that there is indeed a close correspondence between flows on to jobseeker’s allowance and the number of crisis loan applications?

Dr Whiteford: The right hon. Gentleman makes a salient point, which backs up the point I am making.

I want to look back a little further, using information that had to be obtained from the Government under a freedom of information request by a non-profit company called Full Fact. Looking at that, we can see that, in reality, prior to 2006-07 and the start of the banking crisis, the amount spent on crisis loans was remarkably stable between 2000 and 2005-06. During that period, the gross amount spent on crisis loans did not fluctuate—up or down—by more than 5%, and spending dropped in 2003-04 and the following year. Although overall there was a slight upward trend prior to 2007, it would be misleading to compare that with the dramatic increase in applications and expenditure once people started to experience hardship, as work dried up and costs for basic foods and heating started to rise. I am concerned that we are still in that position and that we can expect demand to continue to rise for as long as the economic turmoil continues.

I am struck by briefings from Citizens Advice Scotland and others that outline the wide range of circumstances in which people try to access the social fund. Those seeking crisis loans and community care grants include people moving into independent living and those who need basic furniture to set up home after a family breakdown or a period of homelessness. They also include people with employment problems, those with complex benefits claims, who are caught in the quagmire of the system with no immediate source of money for food or heating until their claim is resolved, and those who incur unexpected travel costs due to the illness or hospitalisation of a close relative.

Those eligible for crisis loans face a wide range of circumstances, but what they all have in common are cash flow problems, compounded by an underlying low income. That is a temporary state of affairs for some, but some others, such as those who are disabled or have long-term health problems, have little financial resilience to deal with unexpected costs. They have limited means to absorb financial shocks, such as the cooker or fridge breaking down or the aftermath of exceptional events such as burst pipes or a break-in. Burst pipe problems came home to me in the past couple of very severe winters. People living in homes that are not well heated are often those who would particularly struggle if faced with having to redecorate or get a new carpet. Such events are not only a burden on those on very low incomes, but on anybody living on a modest income who has to count the pennies.

Hywel Williams (Arfon) (PC): Does the hon. Lady share my despair at the report in The Guardian today and the series of reports that will come out this week? About 3.5 million families are one step away from disaster. They have no resources, no savings and are potential claimants of the social fund. The potential is enormous.

Dr Whiteford: The hon. Gentleman’s point is well made. There are connections to be made across a wide range of policy agendas. His point is particularly important

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because it acknowledges that the prolonged economic stagnation we are experiencing has eroded the savings and assets of many, not only the unemployed or disabled. For the very poorest however, things have become a lot more precarious. I am sure that many MPs here today will have cases in their constituencies and can think of people who have been living an insecure, hand-to-mouth existence for some time, because work is so hard to find in the current circumstances.

The situation with crisis loans presents us with risks and challenges. Welfare organisations have expressed marked concerns about what will happen in practice when the social fund disappears. Their chief concerns relate to ring-fencing and whether set eligibility criteria and binding policy guidance will be attached to the funding allocations. They fear that without ring-fencing and clear guidance, big disparities could emerge in different parts of the UK and that, at a time of substantial cuts in the public sector, it will be all too easy for allocated funding to be absorbed into more general social work budgets or used to plug funding shortfalls elsewhere.

Those are legitimate, serious concerns. I hope that the Government will take the opportunity today to offer reassurance that they will put in place robust measures to ensure that there is good provision across the country and to prevent wide divergences emerging.

Dr William McCrea (South Antrim) (DUP): I congratulate the hon. Lady on securing the debate. Does she agree that without appropriate crisis loans many of our constituents in crisis will be left hostage to high-cost and illegal lending, which will lead them into greater disaster?

Dr Whiteford: The hon. Gentleman makes a critical point and, incidentally, the Secretary of State has acknowledged that that is a risk.

The welfare system is different in Northern Ireland, where it is more fully devolved to the Assembly. I am conscious that a lot of my remarks today are not so pointedly directed there, but the general principle very much pertains. In Northern Ireland and Scotland, the risk of payday loans is real and causes untold misery in communities. MPs are presented with those stories, but are in many cases helpless. Once people are caught in a spiral of uncontrollable debt, it is difficult to get them out and reschedule those debts, particularly if they already have limited means. That is an issue for another day, but it is an important point that I hope I can come back to before I conclude my remarks.

I have some concerns about the way the changes will work in practice. We are less than 10 months from a substantial change to the welfare system, and it is not yet clear what resources will be available to the devolved Administrations and local authorities to help with set-up costs and administration associated with implementation, and whether those resources will be enough. I hope that the Minister will provide clarity about that this afternoon, and set out in more detail how the Government intend to proceed, and on what time scale. Given the substantial administration costs of the current arrangements, we must accept that there will be significant cost in setting up a new system. Local authorities and devolved Administrations need to be properly resourced to do

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that. I hope that a ministerial commitment will be set out today, with an explanation of what is being done and how far towards implementation the plans are.

A crucial underlying issue that cannot be ignored is the fact that, while demand for social fund support has risen dramatically since the start of the financial downturn, the budgets are not keeping pace with the growing need. For example, the community care grants budget has been frozen since 2005-06, so it has fallen in real terms in the past seven years. The 2012-13 community care grant budget in Scotland is 7% down on last year. I am sure that MPs, who work alongside their local authorities, will be aware of the increased strain on their budgets. I am sure I am not the only one who has met constituents who are waiting far too long for simple home adaptations or equipment that they could not otherwise afford, to enable them to live independently.

The budgetary constraints often prove to be a false economy. They put more pressure on local authority social services when they must step in with more intensive and usually more expensive interventions. The Government have made it clear that they aim to pull back crisis loan spending to its 2005-06 level, with the spend reduced from about £10 million in Scotland in 2009-10 to a projected £4.7 million in 2011-12. On the basis of the existing spend, that will create a funding gap in the region of £5 million to £10 million in Scotland alone next year. That is just one manifestation of problems that will arise in Scotland, England and Wales as the devolved Administrations and local authorities attempt to establish a fair and efficient way of distributing resources from a diminishing pot, against a background of increasing demand for support.

As the hon. Gentleman pointed out, the real losers will be people on very low incomes who turn to unscrupulous lenders and loan sharks who charge eye-watering levels of interest for modest loans. Googling the words “crisis loans” results in the search engine bringing up a range of sites offering very high-interest loans. Those are listed well before the Government website that makes it clear how to get access to Government crisis loans. In fact, crisisloans.co.uk is the website of one such high-interest lender. I am concerned that those lenders of last resort are becoming lenders of first resort. Increasingly, they are the only way people can obtain the money they need just to keep going. That often gets people into a downward spiral, and means that they get caught in debt. How on earth can someone on a limited income who is paying back four-figure interest ever hope to meet such debt servicing? Even people on modest incomes—or quite high incomes—get into trouble with credit cards and find it difficult to live within their means. We must take responsibility for the alternatives if we do not get crisis loans right.

It is not in anyone’s interest if the system is not fit for purpose, or if there are wide disparities within it between different parts of the country or local authority areas. There is pressure on us all to prevent that, and to avoid the avoidable. The people we are discussing are not, for the most part, the ones who caused the economic problems that we face, but they are being asked to carry a disproportionate share of the responsibility for them, and take a disproportionate part of the pain. I look forward to hearing how the Minister intends to tackle

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the funding shortfalls and the implementation budget, in particular, and, more generally, how she hopes the system can be made to work.

12.44 pm

The Parliamentary Under-Secretary of State for Work and Pensions (Maria Miller): I thank the hon. Member for Banff and Buchan (Dr Whiteford) for securing the debate and giving the Government the opportunity to consider some of the details she discussed. It is a pleasure to serve under your chairmanship, Mr Leigh.

The hon. Lady rightly wants clarification about aspects of implementation, and I hope I can provide that. However, it is important to remind hon. Members of some of the reasons for the importance of reform. Clearly, some financial situations are incredibly difficult to plan for, particularly if a family is already struggling to make ends meet. Various pressures can affect different communities, from the flooding of homes, as happened in the recent storms, to the loss of the main breadwinner’s job, when there is a large family. It is important that the welfare state should have the flexibility to cope with the realities of people’s everyday lives, and the needs of different communities. That is the principle on which our reform is built.

For some, crisis loans have, as the hon. Lady pointed out, made a real difference in times of financial crisis. However, I remind the House that we are retaining the alignment payments that make up the majority of crisis loan payments. In future they will be called payments on account. In relation to the costs that the hon. Lady has been discussing, which arise in situations where people need support and, perhaps, lower-cost loans—or, in the case of budgeting payments on account, zero-cost loans—those payments will continue to be available. The change on which I want to focus the House’s attention is not to those alignment payments, which are the majority of crisis loan payments at the moment; it is to personal payments, which are a minority of crisis loans. It is important for the House to understand that; otherwise the discussion will be confusing.

It is important also to understand that demand for crisis loans has tripled in the past six years. That started well before the current economic downturn. Accordingly to the analysis that we have done, that is driven by young, single people on jobseeker’s allowance, many of whom are still living in their parents’ home. That was very out of kilter with trends in other parts of the benefits system, and that is why we felt it was important to take action. It is clear that for some the discretionary social fund had become something more akin to an open credit facility, with crisis loans and community care grants funding everyday expenditure and not being used to deal with the extraordinary financial pressures that, as the hon. Lady pointed out, were the original purpose of crisis loans. That has meant that availability for others, particularly pensioners, who might benefit from some additional support to smooth financial pressures, was not really considered. Some important groups were not necessarily getting access to the support that could have been helpful to them. Our reforms are intended to simplify the currently complex situation, improve targeting, and remove the element of remoteness that has crept into the system. I shall come on to that because it is important in relation to driving the increase in demand

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of recent years. We want to ensure that the support is focused on its main purpose, and that it gets to people who really need it.

The hon. Lady talked about the increase in demand among those who were going on to jobseeker’s allowance. In reforming the social fund we are doing two things, as I have pointed out, the first of which is maintaining the national payments of budgeting loans and advances of benefits, which make up more than 60% of the discretionary social fund. The change is in the flexible support. We want to get support to the most vulnerable people and enable them to have support at a local level when they most need it. We will ensure that that flexible support gets through to people via the local authorities in England and the devolved Administrations in Scotland and Wales. This new local provision will replace community care grants and crisis loans for living expenses.

For total clarity, we need to ensure that we see the difference between those two budgeting streams. Budgeting loans and advances for alignment payments will continue to be there, and they currently make up the lion’s share—some 60%. The change is in that flexible support, which can be better delivered at a local level. By putting in place such changes, we can improve the support that is available to people who find themselves in difficult situations.

The hon. Lady was rightly concerned about the people who are in financial crisis and who might be seeking short-term loans. As she pointed out, some organisations charge extortionate levels of interest to individuals who have little choice over where they borrow their money. Let me reassure her that the new system will provide no-interest loans to claimants who are suffering financial hardship, especially those who are waiting for their benefit payments. Such a scheme will be developed and delivered under the new universal credit system. Let me also reassure her that since 2011, we have invested more than £5 million in a crackdown on illegal lenders, which has resulted in a number of arrests. Hopefully, she will see that we are as serious as she is about the problems that those sorts of lenders can create for very vulnerable individuals.

Ultimately, these reforms will constitute part of the Government’s wider social justice strategy which will try to deal with some of the root causes of poverty while still maintaining a safety net for the most vulnerable in society.

Local authorities are well placed to provide personalised support. We feel strongly that what has happened in recent years, particularly as a result of changes that were made under the previous Administration, that the allocation of personal funding under the crisis loans scheme has become somewhat detached from communities and that it has been difficult to judge the claims. Councils’ local knowledge, broad responsibilities and experience of benefits administration put them in an ideal position successfully to take on the role of delivering the sort of support that is currently being delivered through community care grants and crisis loans.

Dr Whiteford: Let me reiterate the question that I posed during my own remarks. Will the local authorities and devolved Administrations receive funding to help them implement and set up this new system? If so, how much and when will it come on stream?

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Maria Miller: I can reassure the hon. Lady that any administrative costs will be covered outside the budget that is there for supporting vulnerable individuals. I do not have the details of what those budgets will be, but I can write to her with that information.

We are working closely with the Scottish Government as we develop options for the successor scheme. They also agree that local authorities are best placed to deliver the new provision and have agreed with local authority leaders in Scotland that they will work with councils on the replacement scheme from April 2013.

On the Budget, the hon. Lady is right to ensure that funding is available. The Department for Work and Pensions’ current annual funding allocation of £178 million for the discretionary fund will be passed in full to the devolved Administrations and the local authorities. As I have said, any administrative costs will come on top of that.

The Department is basing the division of this £178 million allocation on the amount spent in 2012-13. It is important that the hon. Lady notes that because spend on the crisis loan element of the discretionary social fund is being managed back to 2005-06 levels—the levels before the significant increase that resulted in the change of process. We will be managing this particular aspect of the funding back to those sorts of levels.

As I have said, crisis loan awards have almost tripled since 2006. There were 1 million such loans in 2005 and 2.7 million in 2010. Such an increase can be directly linked to the structural changes that were introduced by the previous Government and not to the recession.

Dr Whiteford rose

Maria Miller: If the hon. Lady could let me finish this point it might help her understand why the changes were so large. We moved from a controlled administration of this benefit to a remote telephone application, which allowed people to push up their number of claims. Claimants were not seen and their cases were not properly known about, which made it difficult to decide whether the loans were accurate or needed. Local areas will be far better able to recognise who requires this support, what conditions they are in and what circumstances apply to them. Localising the process will be a very important part of ensuring that money is getting to people who need it the most.

Dr Whiteford: I take on board the Minister’s argument, which I have heard from the Government many times before. However, I just do not accept that this is about process. Evidence that was found through a freedom of information request showed that the spending prior to that had remained remarkably stable. It really was not fluctuating. It went up one year and down another year. I am no economist, but I cannot help thinking that it has more to do with the state of the wider economy than with the change of the telephone system. I wish the Government would be more honest in facing up to that.

Maria Miller: The hon. Lady needs to accept that if we open up the benefit gateway in such a way as to make it difficult to manage or police, it is entirely unsurprising if we see a significant increase in the level of demand. I take her back to one of my earlier comments

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about the nature of that increase. It is among a very distinct and particular set of people. It is not at all representative of any increase or changes in the nature of those claiming benefits in total.

In 2011, some 17,000 people received 10 or more crisis loans in a 12-month period. Crisis loans are about preventing serious risks to health or safety or about an emergency. Is it entirely possible that an individual could be in such serious risk and danger over such a prolonged period of time? The hon. Lady must agree that some urgent change is required here. As this is cash limited, any shortfall that is created would have had to be met from the budgeting loan scheme, which would have meant less money for those people who were trying to regulate their borrowing in a responsible way.

Mr Andrew Smith: In the time that remains, will the Minister address another important point that the hon. Member for Banff and Buchan (Dr Whiteford) raised about what safeguards there will be to ensure that vulnerable people who need this support actually get it from local authorities and that other local pressures do not absorb the money?

Maria Miller: The right hon. Gentleman neatly brings me on to my next point. Although there is no need for any new statutory duties on local authorities and the money will not be ring-fenced, the money will be sent out via a specific identifiable grant and it will be accompanied by a settlement letter that will set out what the funding will be used for and the underlying principles, and it will describe the outcomes that must be achieved. The funding will concentrate on providing resources for those facing the greatest difficulty in managing their income and it will enable more flexible responses at a local level. The letter will be explicit that the funding is to provide a replacement provision for community care grants and general living expense crisis loans. It will set out the sort of detail that the right hon. Gentleman and the hon. Lady are looking for to ensure that the most vulnerable people in our society get the support that they need.

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Public Sector Pensions

12.59 pm

Richard Fuller (Bedford) (Con): It is a great pleasure to serve under your chairmanship, Mr Leigh, for, I think, the first time, and it is a particular pleasure, if I may say so Sir, to have the Economic Secretary as the Treasury Minister responding to the debate.

We live in a time when nation after nation is being told: “You are not as rich as you thought you were.” As a result, nation after nation is facing cuts—sometimes mild, sometimes severe—in the services their Governments can provide, the real incomes that their labour can earn and the value of their assets, calculated as the debt that can be raised against their businesses and homes. We are living in such times because for more than a decade nation after nation rapidly increased the amount of its borrowings as a proportion of its economy—its national leverage. It was not just excessive Government borrowing, but an entire national pastime undertaken by millions of households, companies and banks in many nations. That beggaring of future generations is now—sometimes harshly but ultimately correctly—being brought to an end, and it is in that context that we review a future fund, including how it may help and how it might fit with current Government policies.

So, what is a future fund? A future fund is shorthand for moving the burden of paying for public sector pensions from the current tax-as-you-go model to a proceeds-from-invested-capital, or fully funded, model. It is fair to say, and I am sure that the Economic Secretary will confirm this, that Lord Hutton’s recent review of pensions ruled out a move to a future fund. Like you, Mr Leigh, I do not have any wish to be a champion for lost causes, but I hope that I am able to make some strong points about why the Treasury should reconsider Lord Hutton’s proposal to move on and not make a transition in the way in which public sector pensions are funded. This is not about public sector pension negotiations or about changing public sector pensions; it is about the process that the Government undertake to fund the pensions.

I encourage the Economic Secretary and the Treasury to reconsider a future fund for three main reasons. The first is that it promotes intergenerational fairness, and reinforces the Government’s view about long-term thinking for the security of our economy. Secondly, it offers an opportunity to rebalance the structure of earnings, to restore emphasis on pension provision—deferred income—rather than on immediate income and, thirdly, it enables the creation of a UK sovereign wealth fund, to stimulate investment in long-term projects.

I shall take each reason in turn. First, on a future fund promoting intergenerational fairness, those of us of a certain age look back on our lives and, being part of a bulge bracket of population—some of us at the latter end of it—perhaps realise that we have taken a lot for ourselves and that, as a generation, we have been somewhat greedy on the nation’s resources. That is one reason why this Government came into office at a time of such enormous debts, which future generations will need to repay. One thing that guides me as a Member of Parliament is looking for ways in which we can use fiscal probity to unburden future generations of some of those liabilities. Let us be under no illusion: it will

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not be easy for our children and grandchildren to compete in the future world economy. It will be tough. We have new competitors coming up all the time, so they will need every advantage, one of which is to bequeath them lower taxation rates than they otherwise would have.

Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP): Does the hon. Gentleman consider the Norwegians to have been a great example of setting up an oil fund for future generations to ensure that their oil wealth was not squandered in one generation?

Richard Fuller: The hon. Gentleman makes an extremely fair point. I was not in Parliament in the 1970s, and I am not sure whether such points were made at that time, but clearly countries that have received the beneficence of resources—Norway is one example, and Australia another—have seen the value of looking at the long-term investment of natural resources, and have set up future funds to provide for future pension liabilities. The hon. Gentleman makes an excellent point in support of my argument. Of course, we are not as endowed with natural resources as those countries are, but the fundamental point about fairness between the generations is still solid.

Let us remind ourselves that the current level of public sector debt—the debt that we all talk about and are so worried about—is £1 trillion. The public sector pensions liability, which we do not often talk about, is £1.1 trillion. All those obligations have to be paid by future generations and, as we have so significantly ramped up this first amount of debt, should we not look for ways to reduce the unfunded part of public sector pensions for future taxpayers? A future fund would, over time, eliminate that burden from taxpayers and transfer it to the returns that would be generated from a funded pension scheme.

The Intergenerational Foundation has noted some questions about public sector pensions, and also some of the risks, and this change would reduce risk. At the moment, Lord Hutton’s proposals manage risk by way of a view of a cost ceiling on total public sector pension liabilities, which is based on projections of economic growth. The projections show the liability as a steady share of gross domestic product, falling in the long term. I am not sure that history is littered with Governments who under-predict economic growth; in fact, I think that it is often the other way around, with Governments having a rather rosy view of future growth. So, inherently, as we consider the risk that will fall on future generations, there is a likelihood that the Government, under current systems, will underestimate the liability that they are passing on. As Lord Hutton said:

“What we’ve seen is how very quickly the assumptions which underpinned my assessments of the long-term sustainability of public services pensions have been shown to be too optimistic…That is going to affect the sustainability of public sector pensions in a negative way.”

The change in the pensions structure would considerably eliminate that risk.

I shall now talk a bit about the second point, which is the rebalancing of the structure of earnings, to restore the emphasis on pensions. Over the past few decades, the role that pensions have played in the round of the compensation offer made to potential employees has

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reduced considerably and, I would say, undesirably. There is much more emphasis today on the immediate levels of compensation, on “How much will I earn this year?” rather than on “How much of what I earn am I putting away for my long-term retirement needs?”.

House of Commons statistics have tracked the active membership of occupational pension schemes for private sector and public sector employees, and have compared 1995 with 2010. Over that period, the number of public sector workers in such pension schemes increased, from 4.1 million to 5.3 million, but the number of private sector workers halved, from 6.2 million to 3.1 million. That was a halving in the coverage of occupational pension schemes in a very short period—15 years—which is why I say that the change has been dramatic. Being conservative, I like to see things in the round of their consequences. We are now seeing that many people fear that they do not have enough money for their retirement, and the Government have rightly recognised the need to encourage pensions through auto-enrolment programmes. This would be another measure that would encourage people by, as I shall explain in a minute, creating a floor on public sector pensions that would enable the focus to turn back to how pensions will be provided for private sector workers.

The third point is the role of a future fund in creating a sovereign wealth fund. To create a future fund, we have to fund it—and, boy, does it take a lot of money. If we have £1 trillion of liabilities, that is a lot of money to save up, so a long period is needed. The Australian future fund set a period of 14 years before money could be taken out: the law was passed in 2006, and no disbursements can be made until 2020. For the UK, taking a 20-year period, it would require a minimum of at least £20 billion a year—probably significantly higher than that; somewhere between £20 billion and £30 billion a year—fully to fund all the Government pension schemes over those 20 years.

To put that in context, that figure is equivalent to 3% of total Government expenditure. It sounds a lot, but the Government spend a lot—it would be 3% of expenditure—and it would be only half the money that the Government are spending on the interest on their own debt. It is therefore a manageable amount of money, even though the amount is significant. In addition to looking to fund that out of annual public expenditure, it would also be possible to make asset sales into the fund. In fact, the Australian future fund started with an asset transfer, from the sale of part of the telecommunications company Telstra, for its seed investment. I have checked—with the Minister here, I wanted to be absolutely sure—and the Government’s deficit reduction targets would not be imperilled by any future sale of assets going into a future fund. Quite rightly, if I may say so, the deficit reduction targets are set absent of any funds from the proceeds of the disposal of certain assets, such as those of Royal Bank of Scotland.

Some may say that taking £20 billion out of public expenditure when we are trying to create demand is a very odd suggestion, but of course the £20 billion would not be lost from the economy. Essentially, £20 billion would be transferred from current expenditure to an investment fund for long-term investment. That money would become a fund of resources that could be used to invest in long-term projects. If we take the Ontario teachers’ pension fund—I hope you will look it up later,

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Mr Leigh—it involves patient capital that is invested in long-term investment projects. It is there to secure the pensions of those wonderful teachers in Ontario; they are not quite, but almost, as good as the teachers in Bedford. It is there to protect their pensions, which it does by looking for long-term investment returns. It is the fund that seeded the money for Birmingham airport. If we had our own infrastructure fund set up as a future fund for public sector pensions, we could provide resources to fund long-term investment projects.

Let me say something that I rarely say, which is that I agree with the comments made by the Secretary of State for Business, Innovation and Skills, who spoke yesterday about the need for a significant investment in housing construction. Of course, we need other construction projects, but we understand that we are under fiscal restraints because we must demonstrate that our deficit is being reduced. I ask the Treasury team to consider this very carefully: in current market conditions, particularly with the constraints of fiscal responsibility and the lenient conditions for monetary policy, a future fund would be uniquely placed to provide the long-term patient capital to fund such infrastructure investments, without there being any challenge to the probity of the Chancellor’s deficit and debt reduction policies. This environment provides an opportunity to fund and seed a future fund with the resources from the Government’s credit easing or quantitative easing programmes, and that would happen in such a way that markets would see that it was matching a reduction in the country’s long-term public liabilities for funding public sector pensions.

Dr William McCrea (South Antrim) (DUP): The hon. Gentleman is making a visionary proposal. How does he believe that he could bring the public with him, not only in accepting his proposals but in having a profitable engagement about them?

Richard Fuller: I am grateful to the hon. Gentleman for his intervention. I recently got the box set of “Yes Minister”, and “a visionary proposal” has echoes of “a courageous decision” in the lexicon of that show. However, he raises the important point of how we are to bring the public along with us. That can be done in a number of ways. First, it is a responsibility of our generation to show young people that we are doing everything we can to give them a better future. That is what mums and dads are doing around the country right now—cutting back on their own budgets to make sure that their kids have a few extra luxuries and are protected from some of the problems that we are going through as we try to reduce our deficit. The future fund would be another way of engaging with and doing something for younger generations, and I hope that groups such as the Intergenerational Foundation will press that message.

I am conscious that I am taking up the Minister’s time, but I want to make these points, if I may, Mr Leigh. Secondly, trade unions have been very concerned about a race to the bottom on pensions and—you know what—for many reasons, they have been fair in making that point. We do not want to have minimal or zero pension provision. It would be too attractive to take that headline number for this year’s income; it would be far better for us to have a structure in which people

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understand the proper role played by pensions. If we said to trade unions, during the process of reviewing public sector pensions, “That’s it—no more reviews,” that would deal with all the fears of people enlisting in pension programmes about another change somehow coming in. They have already had one change and now there is another, so they are thinking, “Well, there’ll be another one, so why should I contribute to a scheme when I don’t know where it’s going?” If we called a halt to that while investing in a public fund—the future fund—we could tell trade unions, “That’s the floor in public sector pensions. Now work with the Government on trying to encourage the private sector to start rebalancing the ways in which it looks at compensation, so that the role of pensions is restored to its rightful place.” In those ways, we can bring people along.

Of course, the person I most wish to bring along with me in relation to this opportunity is the Minister, but I am fearful that I am not in a position to do so today. However, I hope that, much like the hon. Member for South Antrim (Dr McCrea) and me, she is at least engaged to look at what the hon. Gentleman called the “visionary” idea of having a proper and fair way between the generations and of accounting for public sector pensions through a future fund.

1.17 pm

The Economic Secretary to the Treasury (Miss Chloe Smith): It is a pleasure to respond the points made by my hon. Friend the Member for Bedford (Richard Fuller). A number of us have heard him make those points passionately and eloquently in the House, and in a fairly factual way, I shall lay out what the Government are able to say in response.

Before doing so, I congratulate my hon. Friend on securing this debate, because he has been able use this platform to draw attention to the importance of ensuring affordability. He has spoken in robust and wise terms of the bombs that an irresponsible Government might leave for future generations, and I particularly congratulate him on raising such themes in his well-informed and practical discussion. I suspect that he will agree that it is a great shame that no Front Bencher from Her Majesty’s Opposition is here to join us in the debate. After all, they have a sizeable charge to answer in terms of what they left for future generations in this country.

I shall describe the situation that we face. As I expect you know well, Mr Leigh, the annual cost of public service pensions paid out has risen by more than a third over the past 10 years to £32 billion. To put that in context, as my hon. Friend did for other areas of spending, that figure is more than what is spent on police, prisons and the courts combined. Put simply, costs have of course increased because people are living longer. Although improvements in longevity are very welcome, the Government are therefore paying public service pensions for much longer than was expected when the schemes were designed. The bulk of that extra cost has mainly fallen on the taxpayer.

My hon. Friend is well aware that rebalancing the costs of providing pensions more fairly between employers, employees and other taxpayers requires bringing expenditure under control. We must make far-reaching structural changes to scheme designs, and that is what the Government are doing.

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My hon. Friend has teed me up to deal with the remarks of Lord Hutton, who produced a landmark report—Members are well aware of it; perhaps you even have it on your bedside table, Mr Leigh—that took an impartial and comprehensive look at public service pensions. The Government are committed to implementing that blueprint, which will give us a new public sector pensions landscape. I do not intend to examine that landscape in detail, but I will make some points about it.

I emphasise, as my hon. Friend already has done, that this is not a race to the bottom. It is important to get public service pensions on a fairer, more affordable footing, but the Government must also ensure that the hard-working public service workers continue to receive pensions that are among the very best available. That is what has encouraged us to consider the changes so carefully. They have been discussed extensively with trade unions and other scheme representatives for more than a year, and those discussions continue.

The changes will deliver the Government’s objective to ensure that most low and middle earners who work a full career will receive pension benefits that are at least as good, if not better, than they would get now. They will also deliver our commitment to protect accrued pension benefits for those closest to retirement.

I have digressed somewhat, so let me return to the key point from Lord Hutton’s report with regard to this debate: the concept of funded versus unfunded. My hon. Friend has referred extensively to the Australian Government’s future fund, but we must bear in mind that we in this country are not alone in providing unfunded public service pension schemes. It is also fair to note that all pensions, whether funded or unfunded, are claims on the output of our successor generations. The great and truly visionary questions raised by my hon. Friend relate to intergenerational fairness, which is an issue that spans both funded and unfunded schemes. The funding status does not determine the sustainability or affordability of pensions, or the size of liabilities built up over time. Unfunded pension schemes are commonly used by Governments, because they are the most cost-effective way to provide pensions benefits over the long term. The method is available to Governments, but not necessarily to the private sector.

Lord Hutton’s report—or, to give it its full name, the interim report of the Independent Public Service Pensions Commission—found that keeping schemes unfunded has many advantages. It also dealt with some areas of funded public service pension schemes in this country, but recommended no change. The report stated that keeping schemes unfunded avoids potentially significant investment management costs and the risks involved in investing, whether in the UK or overseas. The report also noted that there are risks involved in the Government—in one guise or another—controlling up to £1 trillion or more of financial assets. It also stated that, even when the funds are placed in the hands of trustees, in an emergency the Government could still be compelled to underwrite the funds, which represents a further risk.

My hon. Friend spoke of the Ontario teachers pension plan as an example in support of his cause, but I feel honour bound to put a few points on record about its current performance, which is a cause of concern. The plan has experienced recurring funding shortfalls for the past 10 years. Indeed, as of 1 January, it is projecting

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a $9.6 billion shortfall, because the cost of future pensions continues to grow faster than the planned assets. That is connected to how the plan’s members are living longer and to interest rates.

Ireland’s national pension reserve fund also gives us cause to reflect on what can happen with such funds. My hon. Friend may have read the same Financial Times article as I did in November 2011 that reported on how that reserve is to be tapped for €12.5 billion of the bail-out costs with regard to Ireland’s public finances. There are risks connected to some of the schemes, so I do not necessarily agree with my hon. Friend’s interpretation that all is rosy in the land of funded schemes.

Richard Fuller: I do not think that anyone is saying that all is rosy in one scheme or another. Equally, I am sure that the Minister would agree that all is not rosy in the current system. One of the reasons why we have an off-balance sheet is that Governments do not like to talk about the obligations that they incur when they take on additional work. Does she accept that, if we transition to a fund, rather than the current scheme, and Governments add it to the public sector payroll, they would have to justify the full obligation of those pensions to the fund?

Miss Smith: My hon. Friend makes a valid point. Such a scheme could be designed in that way, to entrench the principles of responsibility that have been the key note of what he has outlined today, and for which I respect his argument.

To respond to the debate and to offer the Government’s view on funded pension schemes, we support the conclusions of the Hutton report, as my hon. Friend knows. I think that he will therefore understand why I acknowledge the report’s concerns about funded schemes. I think that he will also appreciate why I want to finish by talking about the problems that can result from moving to a different scheme structure. The transitional costs are difficult to contemplate. As is often the case—perhaps in those countries that have already tried this—a move to funded schemes involves significant financial costs.

Contributions in respect of current employees would have to be diverted to the new pension funds. Pensions in payment would therefore have to be financed through extra Government borrowing or taxation. To put a figure on that for the UK economy, it would cost more than £25 billion next year alone, with costs declining only very gradually over the 21st century. It would be problematic for the UK Government to contemplate that at this time, owing, as my hon. Friend has already said, to the actions of previous Governments and to current global trends.

My hon. Friend referred to the Government’s credit easing schemes, which were announced earlier this year. He is interested in how the funds connected to those schemes could be used in relation to a future scheme, but, although the national loan guarantee scheme will provide up to £20 billion of guarantees to banks, that is not a case of guaranteeing loans to individual businesses. The full credit risk of the loans remains with the banks, so no cash is set aside for the project that could be redirected, as my hon. Friend suggested, to setting up a pension fund. I will direct his interest—I am sure that he is already, as the phrase goes, “all over it”—to the

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memorandum of understanding with the National Association of Pension Funds and the Pension Protection Fund that was announced in last year’s autumn statement. That might be a way to gain direct investment from pension funds into UK infrastructure assets, which I am sure my hon. Friend is interested in.

To sum up, the Government will introduce legislation in the autumn to implement the final proposals that have been reached based on Lord Hutton’s recommendations, including maintaining the current funding agreements. The Government believe that those deals should not need to be revisited in the next 25 years. We have said so publicly and deliberately, and stand by that position. That should reassure pension scheme members that they are right to remain in their schemes, which will remain among the very best available. The Government’s commitment to continue to provide guaranteed, index-linked benefits in retirement should encourage young and old people alike to take up the pensions savings baton. The reforms should achieve the objectives of sustainability, fairness and responsibility within the public finances.

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Parkinson’s Disease (Employment and Support Allowance)

1.30 pm

Mrs Linda Riordan (Halifax) (Lab/Co-op): It is a pleasure to serve under your chairmanship, Mr Leigh, and I am delighted to have secured this debate on Parkinson’s disease, which is a very important issue for many of my constituents and thousands across the country.

A few weeks ago, a number of people with Parkinson’s came to my surgery and I listened with astonishment to the account of the impact that Government welfare changes could have on their lives. They felt penalised for things out of their control. At a most difficult time in their lives, they were being dealt yet another blow due to the heartless system that is in place.

Before I come to my main points, I will set out some background about Parkinson’s disease. It is a progressive and incurable neurological condition. Although it can be well managed with medication and treatment, there is no prospect of a person’s condition improving over time, and there is currently no cure. It is a fluctuating and unpredictable condition. Everyone with Parkinson’s is different, but many people report that symptoms can fluctuate rapidly during the day or week by week. That can include sudden freezing, tremor, muscle-tightening and slowness of movement, or other less visible symptoms such as pain and fatigue. As chair of the all-party parliamentary group on chronic pain, I care passionately about the issue.

Parkinson’s onset is common in people in their 50s and early 60s, which presents an additional age-related barrier to employment for those affected. Many people with Parkinson’s are able and want to work, but many find it difficult to return to work because potential employers make discriminatory judgments about what it means to have Parkinson’s. Many people with the disease now receive employment and support allowance. Currently, claimants with Parkinson’s need to show that they have significant functional impairment that creates serious barriers to work to be eligible for ESA.

I was staggered to hear the stories of people with Parkinson’s—how their illness is dealt with and how the, to be frank, rather cold and heartless system in place fails to recognise the nature of their condition. It fails to understand what people might be going through and offers a fairly rigid process that is the same for any other group of people looking to claim benefits. The process that determines someone’s qualification for ESA uses a points category, as the Minister knows. People are assessed on different criteria and currently if someone scores 15 points they are found to be eligible for the work-related activity group. I will say more about that in a minute.

Through listening to people, such as my constituent Ian Barraclough, I found out the reality of the process, which, as is often the case, is somewhat different from the spin. Sadly, the assessment system fails to recognise, let alone understand, the condition of Parkinson’s. The group that visited my office outlined how there are good days and bad days. Sometimes they can feel fine and then suddenly freeze and their movements become much slower. However, that is barely recognised by the current system; it needs to be changed urgently. I ask the

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Minister: when do the Government plan to recognise the unique nature of Parkinson’s in the current welfare system and when will they adapt the claim form to ask specific questions relating to the fluctuating and progressive nature of this and other similar conditions?

As things stand, people with Parkinson’s are not asked their prognosis and what precautions they have to take in everyday life because of the sudden and unpredictable nature of their condition. For each of the simple tasks on that form, they are not asked if they can do something repeatedly, reliably or safely, or even how long it takes to perform a task. Surely those are common-sense matters to establish if an assessor is to make a judgment about ability to work. Parkinson’s UK and other charities representing those with fluctuating conditions have given their recommendations to the Department for Work and Pensions on how the claim form should change and they see no reason why those cannot be adopted as a matter of urgency.

Jessica Morden (Newport East) (Lab): I congratulate my hon. Friend on securing this debate, which I know will be much appreciated by all those caught up in the work capability process. The Minister’s stock response when questioned about it seems to be to imply that it needs time to bed in. Does my hon. Friend agree that we need the Minister now, after all these months, to step in, get a grip and take responsibility for the process, which is not only deeply unfair to those with serious conditions but is costing the taxpayer dearly through the appeals process?

Mrs Riordan: I absolutely agree with my hon. Friend. It needs to be looked at now because people are suffering and it is costing the taxpayer in the long run. I will say more about that later. With respect to the Minister, the people with the condition are best placed to comment on what should be in the forms and what needs to be done to serve people with the disease best.

The nature of the work-related activity group also needs to be addressed.

Sheila Gilmore (Edinburgh East) (Lab): Before my hon. Friend leaves the issue of forms and tests, proposals were brought forward, and were endorsed by Professor Harrington. The Minister promised what he calls a gold standard review in his response to Professor Harrington, which we were told would start early in the new year, to look at this and other issues about the test and descriptors. Does my hon. Friend agree that must now be done urgently? We are now in June and there is no sign that the review has even started.

Mrs Riordan: I absolutely agree with my hon. Friend. That is the message I picked up from the visitors to my surgery. I will move on to when things changed and to show that they are already losing benefits.

That work-related activity group is for those people with Parkinson’s and other conditions and disabilities where it is recognised that the person cannot currently work but may, with considerable support over time, be able to move into employment, which is what the majority of those suffering with Parkinson’s want. Around 45% of people with Parkinson’s assessed for ESA are placed in that group. By common consent, far too many people are placed in that group because the process is very

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crude and simplistic—as my hon. Friends and I have outlined—and does not take into account the fluctuating and progressive nature of Parkinson’s. Indeed, I have heard of people with Parkinson’s being repeatedly reassessed in the WRAG.

Dr William McCrea (South Antrim) (DUP): Bearing in mind how Parkinson’s effects can change from day to day, surely those making decisions on benefits for sufferers must have a more sympathetic and helpful approach, rather than giving a clinical and cold decision?

Mrs Riordan: I absolutely agree with the hon. Gentleman. As I said, people are reassessed in the WRAG with a computer-generated report churning out recommendations that the person should return to work in six, 12 or 18 months. To imply that someone with Parkinson’s will miraculously recover and get back to work is frankly insulting. The matter does not end there. The person then has to attend meetings with Jobcentre Plus, but the support that is meant to be offered to find work just is not there. Sometimes a person is told, quite bluntly, “Come back in six months or a year’s time; we know you’re not going to get a job.”

The final insult from the Welfare Reform Act 2012 is that many people with Parkinson’s in the work-related activity group are now losing their ESA after a year. That happened to my constituent, Ian Barraclough. Those who have paid their national insurance now have the safety net of the financial support from ESA whipped away from them. They have done the right thing yet have an uncertain future, and they now have to rely on a working partner or on eroding their modest savings because the state will no longer support them.

Herein lies the contradiction at the heart of the Government’s policy. They ruthlessly means-test people’s allowance and fail to have an adequate system in place to check the seriousness of a person’s Parkinson’s disease. When everything is finished, they tell people that they should recover and get back to work. For many people with Parkinson’s, this leads to a feeling of lack of worth and that they are not being listened to. A computer-generated system tells them that they are fit to work when that is not the case.

There are not many jobs to go to anyway. Even if a person feels they can, with support, do some work, many employers are not willing to take on people with Parkinson’s, as they know that the condition can change from day to day. Sadly, the Government fail to recognise that, and people with Parkinson’s do not get the welfare support they need and deserve. These cold-hearted, unnecessary and disgraceful reforms need to be looked at again.

Instead of being placed in the work-related group, it is my belief, and that of Parkinson’s UK, that many more people with Parkinson’s should be in the support group. That group is for those with the most severe functional impairment, where there is no expectation that they can return to work. However, currently only 27% of people with Parkinson’s are placed in that group. The Government need to extend the range of the criteria that allow people with severe and progressive neurological diseases to be placed in the support group. Yet again, the Government fail the compassion test with their dogmatic insistence on placing people in the work-related activity group. They fail to acknowledge

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that many people with Parkinson’s have reached a stage where they are not able to work again. Can it be right that someone whose tremor is so bad that they cannot hold a pen or do up their trousers is placed in the work-related activity group? Yet there are many examples of people affected by Parkinson’s who are being put into this group.

The Government need to think again. They need to recognise that, by the time they are assessed, many people with Parkinson’s have given up work because it is making their condition worse. They are not scroungers. They have worked hard all their lives. My constituent Ian Barraclough has paid his tax and national insurance for four decades, since he was 17. They need to stop means-testing and put more people with Parkinson’s, who are clearly unable to work, in the support group. They need to stop the heartless treatment of people with this condition. I have heard story after story in my office from people about how they had been treated; none had many positive things to say. At a time when they need society to support them, they think the Government are walking by on the other side.

The independent review by Professor Harrington, who was mentioned earlier, made recommendations last year for what he calls a “gold standard review” of the validity of the tests for those with fluctuating conditions and mental health, intellect and cognitive issues. Only now has the Department seemingly woken up to the need to do that. The longer that people with Parkinson’s are subject to these unfair tests, the greater the stress on them and their families. I urge the Minister to make this his priority—both testing thoroughly the validity of the descriptors and those put forward by charities, and revising the claim form.

I secured this debate because I was moved by the countless stories of despair in people’s lives, when what they need is hope and support. I hope the Government recognise that they are wrong, and have the decency to look again at their approach to people with Parkinson’s. I hope that they put in place policies that are decent, fair and just, rather than the current system that, disgracefully, leaves people with Parkinson’s feeling like second-class citizens.

1.45 pm

The Minister of State, Department for Work and Pensions (Chris Grayling): It is a pleasure to serve under your chairmanship, Mr Leigh. I congratulate the hon. Member for Halifax (Mrs Riordan) on securing the debate.

I am glad to have the opportunity to set the record straight on many of the things the hon. Lady said. However, let me start by saying that we understand and are hugely sympathetic; we care very much about people with Parkinson’s. It is about providing the right mix of support for those people who can still remain in the workplace. It is clearly better that they should be able to do so. When they reach a point where that is no longer a possibility, it is entirely appropriate for the state to provide them with unconditional support. However, I am afraid that the picture painted by the hon. Lady was rather one-sided. I hope to set out why I think she has got it wrong.

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The hon. Lady talked about cold-hearted and disgraceful reforms, and about a tick-box system. I gently remind her that that system was introduced by her party when it was in government. In the past two years, we have tried to improve and humanise it. When Professor Harrington first reported on this, he said that one of the great failings of the system we inherited was that there was not enough of a human dimension. He also said that we were not making enough effort—by “we”, he meant the system set up by the previous Government—to secure a proper mix of evidence about an individual. I will briefly walk the hon. Lady through the changes that we have already made. I will also explain to her what is happening about the gold standard review—the work on that has already started. I want to say a little bit about the support we provide to help those people who can still work to do so. On all those matters, she is wrong in the conclusions that she has reached.

Let me be clear and say that there is no such thing as the perfect system. We will never get this entirely right. I would love to say that we could, but these are difficult judgments to make. Often, we are encouraging people to take a step that they may be reluctant to take. If one loses belief in one’s ability to work, it may take some time to be persuaded that there is a way of getting back into the workplace. There is no doubt that this is a difficult process for all those who go through the work capability assessment and the reassessment process. We want to do the right thing. That is why we have introduced changes that increased the size of the support group, and why we have taken steps to ensure that we broaden the unconditional support available to people who are some of the sickest and most challenged in our society. However, we have to try to find the right balance.

I certainly believe—we certainly believe, and I thought it was the view of the hon. Lady’s party—that, where it is humanly possible, it is better either to get people back into the workplace or to help sustain them in the workplace before they eventually reach a point where that is no longer possible. Parkinson’s disease is a deeply distressing and difficult condition. As she said, it is a continuously degenerative condition—it fluctuates, but there is no cure. Of course, it is difficult and stressful for the families of those who suffer from it and for the sufferers themselves. However, it is certainly better—I am sure that all those who work with Parkinson’s sufferers agree—to provide support to keep those people in the workplace in some form of work for as long as possible. It is better for them in terms of quality of life and their overall morale, and it is likely to enable them to lead a longer and more fulfilling life with the condition.

Let me start with the process itself. As I said, I do not pretend that it is perfect, but I think that we have made significant improvements in the past two years. We have implemented all the recommendations in Professor Harrington’s first report. We took steps that humanised the process so that, instead of getting the classic computer-generated letter from Jobcentre Plus saying, “You will attend an assessment”, at each stage of the process, people get phone calls that explain in detail what will happen to them. We ask and encourage them to bring forward additional evidence.

We have rebalanced the process so that the work capability assessment plays a smaller role in the decision than was originally the case. We have done that because we want to take into account additional medical evidence

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about a person’s condition so that it is not just a computer-generated exercise. We must bear it in mind that the decision is not taken by the assessor who carries out the assessment, but by a decision maker in Jobcentre Plus, who looks at the assessment and the ESA50 form that the claimant has submitted setting out the nature of their condition, as well as any medical evidence that they wish to submit to Jobcentre Plus. We have introduced a process of automatic reconsideration—a second opinion in Jobcentre Plus—so that if we have got it wrong the first time, there is a quick, simple process for looking at that decision again. The process does not require the claimant to go immediately to appeal; they get a second opinion before they reach that stage, so I think we have a better process.

Jessica Morden: What percentage of people are now successful on appeal?

Chris Grayling: I cannot give the hon. Lady the updated numbers, because they are national statistics and will be published shortly. However, they are still too high. We are in dialogue with judges who preside over tribunals to look at the reasons for that. The reality is that a large number of people go to appeal because they have the opportunity to do so. Sometimes they fall into the fit for work group, which, typically, does not apply to people with Parkinson’s. Of course, they are losing money, as was set out in the process that the previous Government set up, so they have a particular reason to appeal. However, we are working as hard as we can to ensure that the decisions are right first time so that we minimise the number of tribunal successes for claimants. We want to get it right; I do not want people to have to go to tribunals to overturn decisions.

Jessica Morden: Is it not true that the last time we saw those figures, between 40% and 70% of people were successful on appeal, depending on whether they were represented or not?

Chris Grayling: The average figure was about 40% in the last figures that were published. That represents only about 6% of overall claimant numbers. In the case of decision making for Parkinson’s, people are much more likely to end up in a support group. On the average numbers for new claims going through a work capability assessment, 40% are entitled to ESA; 13% are put in the support group; 26% are put in the work-related activity group, and 60% are fit for work. That is the whole gamut of applications.

For Parkinson’s, 71% are entitled to ESA; 33% are in the support group; 38% are in the work-related activity group, and 29% are fit for work at that stage. We expect those who are fit for work—as they reapply and are reassessed as their condition develops—to enter the work-related activity group and then the support group. Of course, when people are not able to work again, they will receive support in the support group.

The hon. Member for Halifax mentioned the case of the constituent affected by the time-limiting proposal. She is right to highlight that. It applies only to people in the work-related activity group and only to people who have money in the bank or who have another form of household income. It establishes the same principle to contributory ESA as has always applied to contributory

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jobseeker’s allowance. In the way our welfare state works, if someone is a JSA claimant with another form of income or with money in the bank, we have always allowed them to get a contribution back in recognition that they themselves have paid contributions. They get six months of contributory JSA if they have other financial means. We have simply applied that same principle to contributory ESA. We have done that for reasons that the hon. Lady well knows. We face enormous financial challenges, and we have had to take back that part of our welfare state into the safety net that it was originally intended to be, and we have had to accept that we cannot afford to pay benefits to people who have got another form of household income. We debated that extensively in the welfare reform debates. I would rather that we had not had to make that decision, but financial necessity meant that was inevitable.

We are not talking about people who have no other means of support. They are not people whose condition has developed so that they can no longer realistically work again. They are people in the work-related activity group who may be able to return to work with help and support, but possibly not in the profession that they worked in previously. It may be that their condition has made that impossible, but that does not mean that it is impossible for them to work.

Sheila Gilmore: The Minister has given us figures for the proportion of people in the work-related activity group, but he has not really addressed the issue of Parkinson’s. The figures that the Parkinson’s Society presented suggest that 45% of claimants are being placed in the work-related activity group. Such people will have lost their previous jobs and are often in their 50s and early 60s. With the loss of the contributory benefit, they have to use up their retirement savings. Will the Minister address the specific issues around Parkinson’s?

Chris Grayling: Nobody has to spend their pension funds while they are of working age. Realistically, if people put aside money for a rainy day, and they become ill and lose their job, but have money in the bank, what else constitutes a rainy day? There will always be limitations on the amount and breadth of support that the state can provide through the welfare state. There were limitations under the hon. Lady’s Government; there are under our Government. The constraints on us are greater than on hers, because the money is not there any more. The reality is that the state has never provided unconditional support for everyone. There are limits inevitably created by an individual’s financial means.

We have only five minutes remaining, so let me touch on a couple of the other points that the hon. Member for Halifax raised. Let me give the context for the gold standard review. We invited the mental health charities and the fluctuating condition charities to bring forward their thoughts on how we could adapt the work capability assessment to reflect more closely what they believed to be the best approach. I am open about this. I want continually to improve this process and I want it to be as good and effective as possible.

What the charities came back with was extremely ambitious, not just in changing the current descriptors. It would involve rewriting and recasting the whole work capability assessment for not only fluctuating conditions

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or mental health problems, but physical conditions as well. It would involve re-engineering all the software and the assessment. It would probably be a two-year process and extremely expensive. Before we embark on that process—I am open to looking seriously at that—we need to understand the impact of the changes.

More than a year ago, I was told by the charities that if I implemented the internal review that I had inherited from the previous Government, with recommended changes to the work capability assessment, it would disadvantage particularly people with mental health problems. The advice that I had internally was that we had done a similar review to the gold standard review on the work capability assessment, as it was then structured, and it showed that more people with mental health problems would end up in the support group—the opposite of what the charities had said. History has shown that the internal advice was right and the charities were wrong, so I really want to get this right. I do not want to embark on a grand project to reorganise this without getting it right.

Work has started on the gold standard review. The terms of the project have been agreed. There are meetings between the Department and the charities virtually on a weekly basis at the moment. The work is being carried out over the next few months. We will judge the outcome of that work and ascertain whether there is a need to make changes or whether the charities have got it wrong. We have to do that. The hon. Lady would expect us to do that. In the meantime, we are looking to embed some of the recommendations that they have made into the way the ESA50 form is structured. If that enables us to tease out more information that is of value to the decision maker, informing the decision about a person’s condition, that is clearly the right thing to do.

The other point that the hon. Lady made was about the support not being there for people in the work-related activity group. That is not correct, either. Every single person in the work-related activity group on ESA has access to the Work programme tomorrow. They will

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receive specialist back-to-work support from one of the providers operating up and down the country—a mix of public, private and voluntary sector organisations, some with specialisms in fluctuating conditions. There is a specialism within each supply chain for those who are on ESA. One of the challenges that we have at the moment is trying to encourage more people to come forward and take advantage of that support. It is absolutely not the case that people cannot access help and support. Everyone has access to support, and it works.

We had a case a few months ago—not a Parkinson’s sufferer, but a gentleman from the north-east who was partially sighted and in a wheelchair. He had applied for thousands of jobs and got absolutely nowhere. He did not believe he could get back into work in a part of the country where the labour market is weak. He joined the Work programme and within a small number of weeks was in employment with a job and his life turned round. That, fundamentally, is what this is all about. I know it is difficult and sometimes challenging. I know that it takes many people through a process that they do not want to go through, because they do not actually believe that they can make a return to the workplace. Is it not better if we can help them get there? Even if they happen to have had to give up the profession that they have had for years, because their condition makes that no longer possible, surely it is better to get them back into doing something that they can do with their condition, that can keep them in the workplace for a few more years and give them a chance to live a more fulfilling life. That is what we are trying to achieve. We will not always get it right. The system is not perfect. It never can be perfect. I wish that it could be, but it cannot.

In conclusion, I can tell the hon. Lady that this is absolutely about saving lives, not saving money. I genuinely want to see more people given a chance to live a more fulfilling life. We will do everything that we can to help them, but those who cannot work again will get ongoing unconditional support.

2 pm

Sitting adjourned without Question put (Standing Order No. 10(11).