Welfare Reform Bill

Naomi Long Excerpts

Wednesday 9th March 2011 Commons Chamber

[Mr Duncan Smith]

One second. Would the hon. Lady forgive me? I have been asked to answer a question and I shall try to answer it. We have already made some very substantial change to support people in cancer treatment. The concerns of Macmillan and others relate to oral chemotherapy. I understand that. We have already asked Professor Harrington, in his second review, to undertake to give some advice on that. We have a slight problem with that from the start, because it is a fairly new form of treatment and a limited number of people are on it. So far, much of the medical evidence suggests that it does not affect people in the way that intravenous chemotherapy does; it is not as debilitating. We remain open to that evidence.

Although there is no provision for oral chemotherapy right now, my right hon. Friend the Employment Minister has made it clear that Professor Harrington will review the subject and take evidence, and we have asked the cancer groups to offer up their thoughts and advice, in addition to the medical fraternity. We will take account of what Professor Harrington says. As the hon. Member for Birmingham, Selly Oak (Steve McCabe) knows, last time we adopted all the recommendations in the professor’s report in their totality. So we are not in the business of trying to harm or affect cancer patients; quite the contrary. We made some very serious changes to what we inherited from the previous Government—I would like to think that they would have done the same—and we will continue to do so. I hope that answers the hon. Gentleman’s question. If he will let me get on with the rest of the Bill, I will.

[Naomi Long (Belfast East) (Alliance)]

Will the right hon. Gentleman give way on that point?

[Mr Duncan Smith]

I would like to make a bit of progress, if the hon. Lady does not mind. I think I have been pretty generous on that aspect. I will return to it.

The key is that I hope the Bill in general—we shall get to the more specific elements later—represents a whole new concept: a contract with people who are in need of support. For those who are able to work, work should pay, and for the most vulnerable in society we will continue to provide the support that that they need. I think it is our duty to do so. We can debate the levels of that support, but it is our duty none the less.

The Bill says to the taxpayer, “Your hard-earned money must be spent responsibly.” We sometimes forget, in our debates on welfare, that the taxpayer is also a player in this, because taxpayers—many of them on low and marginal incomes—are constantly being asked to pay in taxes towards support for others. That is fair, but we have a responsibility to ensure that taxpayers too are properly supported. I shall now outline some of the principles of the Bill, and then I will try to get through the various clauses.

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[Harriett Baldwin]

As the hon. Gentleman knows, there are many provisions in our welfare system for exactly that sort of situation. I do not think that anyone is suggesting that people with no capacity for work should get out and work. We should have a generous safety net, as we do for people in those situations.

However, the system as currently constructed has many barriers that send the message that taking on full-time work is not worth while. With single parents facing a withdrawal rate of 96%, what kind of message does that send to people about the sense in going to work? We have all met people who work 16 hours a week. As we know, the way that working tax credits work gives people an incentive to find a job working 16 hours a week. At the moment, those working 15 or 17 hours a week find themselves financially worse off. That is why it is so important that the Bill tackles those cliff edges, ensuring a much smoother process and a linear relationship between the time that people work and the amount that they take home. At the end of the day, we all respond to the financial incentives that are inherent in the system.

As we heard earlier, the current benefits system also pays couples more to live apart than to stay together. I believe that I am right in saying that 2 million people in this country would identify themselves as being in a relationship but living apart. No one can deny that, in large part, that is down to the messages and the financial incentives sent through the welfare system, which will be reformed by this Bill.

I am sure that Opposition Members will welcome the fact that the distributional analysis of the universal credit shows that the vast proportion of additional money in the system will go to those in the lowest income deciles, with 85% going to those in the four lowest-paid deciles.

I should point out, however, to the Secretary of State that it was still a shock to realise that even under the changes that we are discussing today, the benefit withdrawal rates for those going into work will still be 65p in the pound. That is still a shockingly high marginal deduction rate, when our higher-rate taxpayers are on 51% or 52%. The Child Poverty Action Group, the Centre for Social Justice and Family Action have all argued for a withdrawal rate of 55%, with Save the Children arguing for a 50% withdrawal rate. I hope that everyone in the House will welcome the fact that the Bill gives the Chancellor in future the ability to stand at the Dispatch Box and say that he is making a change in the marginal withdrawal rate, because we would all like it to be reduced over time.

[Naomi Long]

I acknowledge what the hon. Lady says about the Bill giving the Chancellor the freedom to do that, but it does not require him to do it. Would it not provide people with more certainty if the Government indicated that that were the intention?

[Harriett Baldwin]

I think that we have heard the Secretary of State put that on the record on a number of occasions.

There are a few debating points that have arisen in this debate, particularly from the Opposition, that I would like to address in my few remaining minutes. On savers, we can have a debate about whether someone with £16,000 in savings ought to be in the benefits system, but we should all recognise that the welfare system should focus on those on the lowest incomes and with the lowest savings. That is one of the difficult decisions that it is worth tackling, and the Bill does that.

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[Julian Sturdy]

I agree that this Bill offers an important pathway back to work. We have to get more jobs in the private sector and restore the balance between public and private sector jobs, which was skewed by the previous Government—certainly in my region and in the north especially. The measures that this Government are introducing—I hope we will see more of them in the Budget—will incentivise private sector growth and job creation which, alongside the Bill, will get more people back into work.

It is a sad but well-known fact that the current system discourages those in low-paid jobs from increasing their hours, as rates of tax and benefit reductions often leave them worse off. This ridiculous situation helps only to dampen aspiration while increasing dependency in the benefits system as a whole. In addition, hard-working, taxpaying families, who are feeling the squeeze in these difficult economic times, should not subsidise the small but still significant number of people in our society who see the welfare system as a career choice. That must stop. By annually capping benefits, withdrawing support from those who refuse to work and increasing the financial incentives for those who do work, the Bill includes specific measures that will make work pay.

[Naomi Long]

I agree with the hon. Gentleman on the need to change the system to ensure that people do not aspire to live on benefits, but is that not more about changing people’s aspirations and their pathways to opportunity, rather than simply setting caps and putting difficulties in the way of those claiming benefit when they are in difficulty?

[Julian Sturdy]

It is about changing aspiration, which is what the Bill does. As my hon. Friend the Member for Meon Valley (George Hollingbery) said, it is about taking a carrot-and-stick approach. It is important to have certain caps on benefits, but we must also encourage aspiration to get people back into work. The current system did not do that. Instead, it dampened aspiration, which is why it is fundamentally important that we change the system. As many hon. Members have said, it is a case of now or never—we must grasp the nettle. The DWP estimates that the reforms could reduce the number of workless households by as many as 300,000 and that about 700,000 low-earning workers will be better off as they keep more of their earnings.

Administrative reform to our welfare system is long overdue; it is simply wrong that taxpayers’ money should be squandered recklessly as often happened under the previous Government. The creation of the universal credit, which will bring together various and often overlapping elements, such as jobseeker’s allowance, income support and housing benefit, and pay them in a single lump sum will cut administrative costs and reduce the risk of fraud. It is predicted that, as a result of the universal credit, just over 2.5 million households will receive higher entitlements, with more than 350,000 children and 500,000 working-age adults being lifted out of poverty altogether, as the shadow Secretary of State acknowledged earlier. That was the only thing he said that I agreed with, but it is important to mention that acknowledgement.

Lastly, and returning to my initial comments, the overriding objective of the Bill must be better to protect, equip and support the most vulnerable in our society. Too many of this country’s welfare resources have been diluted and too little has been directed at those in most need. To maintain the status quo would be to champion the cycle of dependency and despair that Britain’s welfare culture, as constructed by the Labour party, currently promotes. I know that many welfare claimants are apprehensive about the Government’s changes, but let the message go out loud and clear that those who are truly in need will receive more support, better targeted assistance and higher standards of care. I truly believe that is the motivation underlying the reforms and I strongly urge all Members to support this important Bill.

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[Naomi Long (Belfast East) (Alliance)]

I welcome the opportunity to participate in the debate, because this issue will have profound implications for the welfare and benefit system, and will impact on all our constituents.

Time is limited, and the scope of the Bill is extensive, so I shall focus on a few key issues, the first of which is the proposed changes to disability living allowance, particularly the work capability assessment. The Government appear to place more emphasis on the independence of those who judge someone’s fitness for work, rather than on their expertise, which is of concern to many people, particularly those who suffer from hidden, complex and often poorly understood conditions with variable symptoms, including autistic spectrum disorders, mental health issues and multiple sclerosis.

A medically qualified assessor may be independent, but not necessarily an expert in a particular condition. The single point assessment is unlikely to give a comprehensive view of an individual’s fitness to work that is more reliable than that provided by an expert in the field who has treated and monitored the patient over a long period. The clinician will also follow professional ethics in making judgments about a patient, which provides a safeguard for the Government. If expert written evidence is available, it should be used and should carry more weight than the opinion of a benefits assessor, who may not have detailed expertise in dealing with those matters.

[Dr Whiteford]

As someone who represents a constituency that was part of the work capability assessment pilot, one of the biggest concerns was that the evidence of I know that someone’s GP or consultant was not taken seriously by the medical assessors. Will the hon. Lady comment on that?

[Naomi Long]

That is a fundamental concern. One of my constituents recently came to Parliament, on behalf of the mental health charities Rethink and MindWise, to give evidence to the Select Committee on Work and Pensions about the impact of the assessment proposals on people with mental health problems. Members who met her at the round-table session would agree that she presented her evidence in a professional, competent and effective manner, as one would expect of someone with a medical degree. However, her evidence carried weight not because of her degree, but because she receives disability living allowance. She is not fit for work, and is not permitted to practise as a GP as a result of serious mental health issues, which developed in her final year of study.

If a benefits assessor, even a medically qualified one, witnessed her performance in Committee, they would doubtless assume that she was fully fit to work. However, her condition is unstable, and in periods of ill health, she is unable to leave her home or interact with people at all. Even when well, she is reluctant to take on additional stressful responsibilities because of her history of instability.

[Chris Grayling]

It is important, as people are listening to this debate, that the actual situation is placed on the record. Will the hon. Lady confirm that the system that she is describing is the one that we inherited from the Labour Government, which we have taken steps to change through the Harrington review? In cases where we have made changes to the assessment, the work was done by the previous Government, whose recommendations we accepted. Finally, does she accept that, at the end of all this, there is a collective desire to make sure that the system works as well as possible and that there is a commitment to continue to improve it where possible?

[Naomi Long]

I would like to confirm, on the first issue, that I am not making these points as a member of the Labour party or of the previous Government but as a member of the Alliance party, reflecting the concerns of my constituents. Furthermore, I would hope that there is a collective will to ensure that people are dealt with fairly in the system. However, the doubts that I am expressing to the Minister have been expressed to me by my constituents.

A problem with single point assessment needs to be taken into consideration, and I urge the Minister to look carefully at the issue. The young lady in question, for example, had a dual point assessment by the British Medical Association on her fitness to practise. One doctor said that she was fit to practise, and the other said that she was not, because of the complex nature of her condition. Neither of them was wrong when they dealt with the person in front of them, but her complex mental health condition prevented them from seeing the same individual in the same way.

I do not believe that the problem arises solely with mental health issues, but with many other conditions. People can have good days and bad days, and they may need additional support. As the Bill progresses through the House, it is hugely important that we address that issue.

Much has been said about the removal of the mobility component of the disability living allowance for those in residential care, so I will not rehearse the arguments, but I have corresponded at length on it with the Under-Secretary, and from her most recent correspondence I am aware that there is a valid concern about the inconsistent way in which the needs of some of the most vulnerable people in society are being met.

There is ambiguity and considerable variation in the way in which local authorities take the DLA mobility component into account when making financial assessments, and organisations such as Disability Alliance acknowledge that point, but having identified the problem it is incumbent on the Government to ensure that the solution does not end up disadvantaging the benefit’s recipient, who did not create the difficulty in the first place. Independent mobility is crucial to well-being and to social cohesion, and it must be protected more clearly than it is in the current proposals.

Finally on DLA, I am concerned about the change to the qualifying period, and its move from six months to three months, which could have profound consequences for those who develop sudden onset conditions, such as stroke, or experience the debilitating effects of treatment for an illness, such as cancer. It could also affect those who give birth to a child with a severe disability.

At a time when people are genuinely in need, when their energy rightly needs to be focused elsewhere on coping with diagnosis, treatment and recovery, and when additional stress should be avoided, the financial pressure of dramatically increased outgoings to cover expenses, such as travel to hospital and so on, could push them into poverty if that issue is not adequately addressed. I urge the Government to look again at that unintended consequence of reform, and to take action to ensure that the personal independence payment is available to support people at a time of genuine need.

I welcome the Secretary of State’s assurance on employment and support allowance for those taking oral chemotherapy. I trust, however, that he will also consider those who receive radiotherapy, which, although not as debilitating as chemotherapy, can nevertheless be exhausting and preclude people from holding down work.

Another concern that I want to touch on briefly is the abolition of some discretionary aspects of the social fund. Often, families who are trying to make ends meet on a day-to-day basis find themselves pushed into financial stress or even crisis by significant, unexpected and unavoidable expenditure. The replacement of a heating boiler, a cooker or a fridge, or the need to purchase a school uniform, for example, will often leave low-income families in a situation where only those discretionary elements of the social fund, such as interest-free crisis loans, stand between them and being forced to engage with alternative high-interest and often unscrupulous money lenders. There is an ongoing consultation on that and I urge Ministers to await its conclusion before proceeding to legislate to remove those discretionary elements.

In conclusion, and as I said at the outset, these are far-reaching reforms with far-reaching consequences. The Bill is arguably the biggest change to the welfare state since its inception, and it warrants careful and detailed parliamentary scrutiny. Despite that imperative, much of what is intended remains poorly defined and will be ultimately defined not in this Bill or in any subordinate legislation, but in regulations that the Minister will lay, which in turn will reduce the parliamentary scrutiny of their effects. That extensive reliance on unpublished regulations will make it incredibly difficult for people to make a detailed assessment of the cumulative impact of these broad and sweeping changes. The Secretary of State was clearly frustrated, too, because he felt that at times people had misunderstood the thrust of his proposals. Were there more substance to the Bill, that would be less likely.

Furthermore, the inclusion of clauses relating to child maintenance, when that matter is still the subject of public consultation, and the as yet undefined provisions on child care costs, creates uncertainty in an area—the employability of lone parents and second earners in households—that strikes at the very heart of the Government’s objective to make work pay.

One of the most remarkable yet disappointing things that struck me on reading through the briefings that Members received in the run-up to the debate is that, almost without exception, those organisations that actively support and lobby in this area support the principle of the Bill. Disappointingly, however, we have not had the detail that would give people the confidence to commit to the Bill itself.

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[Stephen Lloyd (Eastbourne) (LD)]

Given the breadth of the Bill, I intend to focus on the work aspects.

The right hon. Member for Croydon North (Malcolm Wicks) is no longer in the Chamber, but I trust that he will not mind if I, too, quote Beveridge, who famously said:

“Want is one only of five giants on the road of reconstruction; the others are Disease, Ignorance, Squalor, and Idleness.”

As we all know, those words were written at a time of real poverty for many people in the United Kingdom. How do they apply today, in the 21st century? Indeed, do they apply today? My supposition is that they do. Today, 10.4 million people of working age in the United Kingdom are not working, 5.9 million are claiming out-of-work benefits, and more than 2 million children live in households in which no one is working. It was the great Nye Bevan who said:

“There is no test for progress other than its impact on the individual.”

Yet, today 3.9 million children still live below the poverty line. Some progress! Surely it is time to do something different.

I support the Bill’s Second Reading because I believe that, in the main, it approaches this intransigent issue intelligently and constructively. The nation has got stuck, and it has got stuck because of the system. I do not think that anyone in the Government is particularly at fault, because the problem has built up over the past 40 years. A key part of breaking the system, which I believe the Bill is doing, is making work pay—a concept that the Secretary of State has championed for some time—and that means changing the tax and benefit system.

I will not go into all the details, because I am sure that everyone in the Chamber is well aware of them, but, as some Members have already pointed out, more often than not there is no point in people coming off benefit and going into work because they will be worse off as a result. A constituent of mine, a single mum with three kids who is on housing benefit and the rest, has not worked for 15 years. The rational option for her is to stay on benefit, and if I were her that is what I would do. It would be insane for her to come off benefit: she would probably lose out under the system that we have had for years, and what would happen if she lost her job in a few months’ time? The system is insane, and the Bill attempts to transform it.

[Naomi Long]

Another potential benefit of removing the limit on the number of hours that can be worked by claimants—currently about 16—is that employers would be more likely to take on people part-time, such as lone parents, because they would have more flexibility.

[Stephen Lloyd]

I agree with every word that the hon. Lady said.

How are we to help people back into work when they have been receiving incapacity benefit, jobseeker’s allowance or a similar benefit? As I said when I intervened on the right hon. Member for Croydon North, the Bill will provide much more money for training providers to give them an incentive to focus on people who have been on benefit for a long time, and make it worth their while to spend extra time and resources helping those people back into work. The right hon. Gentleman said that the Bill copies measures taken by the previous Government in that regard. That is true to an extent, but it does a great deal more than that.

In the past 24 hours, I have been in touch with the National Audit Office, according to which the average payment from the DWP to training providers for pathways to work was £1,003 per job. Under the current proposals, providers will be paid a minimum of £3,800 and a maximum of £13,700. What lies behind the Bill is our recognition of the fact that people have been “parked” for years, which is outrageous. Whichever side of the Chamber we are on, we know that if the many people who have been out of work for a long time are to be helped, they will need that extra effort, extra mentoring and extra time. The only way in which we shall persuade training providers to do that is by stuffing their mouths with gold, as Bevan said in the ’50s in respect of the British Medical Association. The Bill attempts to achieve that by making training providers feel it is worth their while expending the extra effort to get people back into work, which is tremendous.

The previous Government introduced the black box concept, and I am glad that we are building on that to start using subcontractors’ imaginative ideas. That is all good and very rational, and it is a simple solution, too. Members on both sides of the House know that, where possible, work is the best route out of poverty.

There are downsides, however. The economy is challenged—that is the best word I can use. I spoke to a senior disability spokesperson the day before yesterday. I said, “Well, it’s obviously very hard for us to get all these extra people into jobs when we’re faced with such a difficult economic situation.” She replied, “Stephen, you’re absolutely right, but at least if we start doing the spadework now it is just possible that when the economy turns in a couple of years the foundations will have been laid and a lot of people who might have seen themselves as never working again could, through the mentoring, be in a position to be able to be swept along with the upswing in the economy.” I certainly hope so, because it is very difficult to achieve such radical reforms now when we face an economic crisis.

I want to give a message to the Minister, and I am sorry that all his colleagues are not present, as this applies to the entire ministerial team. The Bill is tremendous; it is a glass-half-full Bill and it recognises that we have to spend money, which is why I appreciate the Secretary of State getting the £2.5 billion from the Treasury. We have to pour money into this problem to transform the situation, but we must change the language if we are to get people who for years have been on IB or other benefits back into work.

The Bill is clearly designed to do that, which is why it approaches the issue in such a constructive way. I was in Burnley with the Work and Pensions Committee a couple of days ago. A training provider who is very successful in getting people into work said, “If there’s one message to give to the Government it is this: respect. Use the right words, and treat people who have been on IB and on benefits for a long time with respect.” I therefore say that we must use the right words.

The Bill is fit for purpose. I think it will transform the situation, and I will support it on Second Reading.