Welfare Reform Bill
Orders of the Day
4:30 pm

[Relevant documents: The Third Report from the Work and Pensions Committee, Session 2005-06, HC 616, on Incapacity Benefits and Pathways to Work, and the Government's response thereto, Cm 6861.]

Order for Second Reading read.

4:32 pm
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John Hutton (Secretary of State, Department for Work and Pensions; Barrow and Furness, Labour)

I beg to move, That the Bill be now read a Second time.

The reforms in the Bill set a new direction of travel for our welfare system. They are underpinned by a belief in an active enabling welfare state that sees tackling poverty and social exclusion as its central mission, with no one left behind and no one written off. The Bill therefore marks a major shift away from the established orthodoxy of welfare provision in our country, which has always treated functional limitations as automatically disqualifying people from the world of work. That is based on a flawed analysis of the nature of disability and the rights of disabled people, and it is time we changed it.

The Bill before us today therefore signals a new approach. It offers new support in return for new obligations for people to help themselves, and it delivers on our manifesto commitment to reform incapacity benefits while ensuring security for those who cannot work. Together with the wider welfare measures set out in our Green Paper, the Bill continues a process of reform that has sought to lock in the right set of values: of universality and opportunity; of security and equity; of fairness and due process— values that stretch back to Beveridge—under which the right to work is fundamental in tackling poverty and building aspiration for everyone in our society.

When we came to office nearly 6 million people in Britain were dependent on benefits. Between 1979 and 1997 unemployment went up by 50 per cent., and in a world where discrimination already scarred the lives of many disabled people and older workers, the numbers claiming incapacity benefits trebled, while 3 million children were left to live in poverty. I make no apology for reminding the House of those grim and shameful statistics. They set the context for the challenge that we now face, and they teach us valuable lessons about the role of the welfare state in today's society.

Through the minimum wage and tax credits, we have tried to make work pay, and through record investment in the new deal and Jobcentre Plus we have begun to create an enabling welfare state that tries to respond to the needs of individuals and matches rights with responsibilities.

Today, as a result, there are more people in work than ever before—2.5 million more than in 1997, with the biggest increases in the neighbourhoods and cities that started in the poorest position. Overall, there are 1 million fewer people on benefits, and 2 million children and 2 million pensioners have been helped to escape the poverty line. As last month's Organisation for Economic Co-operation and Development report showed, not only do we have the highest employment rate among the G7 countries but, for the first time in 50 years, we have the lowest combination of unemployment and inactivity rates.

Of course, there is more that needs doing. The challenge that we face today is how to build a modern welfare state that allows people to exercise their fundamental right to work, when our economy and our society are changing more rapidly than at any time since the industrial revolution. While the pace of such change can seem daunting or even terrifying, the forces that lie behind it, in my view, represent progress, not decline, and they hold out more opportunities than threats. If we can take full advantage of them, they will extend the chance to reduce poverty and social exclusion in our society.

We must act to meet that challenge, which is why we have set ourselves the aspiration of an 80 per cent. employment rate, with 1 million fewer people receiving incapacity benefits, 1 million more older people in work and an extra 300,000 lone parents off benefit. That is why we are taking forward through secondary legislation the measures in our welfare reform Green Paper to provide more support to lone parents and to break down the barriers experienced by older workers. And that is why we have introduced the Welfare Reform Bill, which will enact crucial elements of the proposals that we set out to the House in January.

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Gordon Marsden (Blackpool South, Labour)

My constituency is 15th in the table of constituencies with the highest number of incapacity benefit claimants, so I welcome the attempt to get more people into work. Does my right hon. Friend agree that a key aspect of the process involves changing attitudes among some employers towards the employment of people with disabilities? A written answer in the other place recently stated that 15 per cent. of disabled people of working age who want to work are not in employment, compared with 4 per cent. of the non-disabled working age population. Does my right hon. Friend agree that that must be a key aspect of the welfare reform programme?

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John Hutton (Secretary of State, Department for Work and Pensions; Barrow and Furness, Labour)

I agree that that is true. However, we are making steady progress in bringing to the attention of employers the tremendous pool of skilled labour available among people who are claiming incapacity benefit. It is a mischief and a mistake to assume that if a person is on incapacity benefit they have no skills, talents or opportunities—far from it. I have been tremendously encouraged by the agreements that we have reached with major national employers that are prepared to offer people on incapacity benefit a second chance to return to the labour market. We want to see more such agreements, and we will do everything we can to speed up the process.

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Mark Pritchard (The Wrekin, Conservative)

How will the Bill help the unemployed in Shropshire? In the past year unemployment in the county has risen by 30 per cent., and it is rising in the west midlands, too. Is it not the case that unemployment is now at a four-year high? How will the Bill help those people?

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John Hutton (Secretary of State, Department for Work and Pensions; Barrow and Furness, Labour)

Unemployment is a lot lower than it used to be, when the Conservative Government were in office. Labour Members remember that unemployment twice reached 3 million under the stewardship of the Conservative party.

The hon. Gentleman asks what the Bill will do for jobseekers. The Bill primarily focuses on the needs of people who currently have some functional limitation and are unable to work. The thrust of the proposals is to encourage the speedy return of those people to the labour market. Any of the hon. Gentleman's constituents who currently claim incapacity benefit will have access, in the next 18 months to two years, to the pathways to work programme—the first attempt by any Government, Conservative or Labour, to do something practical and positive for people who are out of the labour market because of incapacity and who desperately want to return to it.

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Tony Lloyd (Manchester Central, Labour)

My right hon. Friend knows that I support the Bill. Will he accept that this is a unique opportunity to create a new consensus that belies the rather carping intervention by Mark Pritchard, and which states that we agree about the right to work and the duty to work? It is the Government's role to provide the facilities to allow people to work and to ensure that employers can cope with the extra needs of those who are currently on incapacity benefit and who should be able to work. However, such a consensus will work only if the Opposition parties endorse my right hon. Friend's strategy.

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John Hutton (Secretary of State, Department for Work and Pensions; Barrow and Furness, Labour)

I hope we will see that later. Certainly, it has been indicated so far that Opposition parties broadly support the proposals in the Green Paper.

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John Hutton (Secretary of State, Department for Work and Pensions; Barrow and Furness, Labour)

I understand that that is in fact the case— [ Interruption. ] I should ask some of my hon. Friends to write my speeches for me, as they would be much more entertaining.

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Michael Weir (Spokesperson (Work & Pensions; Trade & Industry); Angus, Scottish National Party)

I am interested in the Minister's comments. I agree about the need to work with employers to get more disabled people back to work. However, one of the things that struck me about the Bill was the lack of any clear idea of how people will be helped once they have obtained a job, rather than in getting a job. Many people, particularly those with mental disabilities, require long-term help after they have been appointed to a job. Can the Minister tell us about his proposals in that regard?

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John Hutton (Secretary of State, Department for Work and Pensions; Barrow and Furness, Labour)

That is precisely what pathways to work currently provides. It is true that the details of that are not spelt out in the Bill, but we recognise the need for the Department and for Jobcentre Plus to provide such ongoing support. In Scotland there are now fewer people claiming incapacity benefit than there were in 1997.

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Tom Levitt (PPS (Rt Hon Hilary Benn, Secretary of State), Department for International Development; High Peak, Labour)

Will my right hon. Friend take this opportunity to congratulate the staff of the Glossop and Buxton jobcentres, and others throughout Derbyshire and in the other five pilot areas, on pathways to work? In my area they have vastly exceeded expectations not only in getting back to work many people who were not expected to be in the programme, but also in providing much job satisfaction for jobcentre employees.

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John Hutton (Secretary of State, Department for Work and Pensions; Barrow and Furness, Labour)

I am happy to congratulate those staff. I visited the pathways to work scheme in Derbyshire a few months ago; it has probably been one of the most outstandingly successful examples of how this type of intervention can work. What was significant in Derbyshire, as we heard a few minutes ago, was that cognitive behavioural therapists were directly employed to fast-track the provision of help and support for people with mental health problems, to give them the self-confidence to represent themselves to employers and to secure work—and many have succeeded in doing so. That is a model of what more needs to be done, and what we are keen to extend across the country.

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David Marshall (Glasgow East, Labour)

I am grateful that my right hon. Friend took the time to visit Glasgow and see at first hand the terrible problems facing the city. As he knows, my constituency has the highest number of people on incapacity benefit in Great Britain: more than 11,000 of the tragic Glasgow total of 60,000. Is he aware that the working links pilot in Parkhead and the partnership action team for jobs in Glasgow, East have come to an end despite being very successful? Will he consider extending those two projects to work in tandem with his reforms, in order to tackle successfully the most serious problem in my constituency and other constituencies in Glasgow?

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John Hutton (Secretary of State, Department for Work and Pensions; Barrow and Furness, Labour)

My hon. Friend is right to draw attention to the problem facing many people in Glasgow who are on incapacity benefit and want the opportunity to work again. I know how actively he is involved with this issue in Glasgow, where, in conjunction with the city council and local employers, a huge amount has been done to move people off incapacity benefit back into employment. Some 11,000 to 12,000 people in Glasgow have been helped to re-enter the labour market over the past few years. That is a great tribute to Jobcentre Plus, local employers and the local authority.

We took the decision to end action teams and roll up funding into a new deprived areas fund, which will allow access to a similar level of resources to support such initiatives in my hon. Friend's constituency. I am sure that local Jobcentre Plus staff would be happy to explain to him how they are taking that forward.

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Sadiq Khan (Tooting, Labour)

My right hon. Friend knows that more and more people cite mental health problems as the chief reason for claiming incapacity benefit. Will he confirm that the new personal capability assessment will be more sophisticated, the better to identify people with mental health conditions and tailor the help that they require more effectively?

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John Hutton (Secretary of State, Department for Work and Pensions; Barrow and Furness, Labour)

That is our intention. We have convened several groups involving mental health stakeholders to work with us to design a better, more accurate and fairer assessment of people's mental health problems when they present with a claim for employment and support allowance. It is important to find a way forward. The fact that the current arrangements do not do that properly has been the subject of continuing concern. We are anxious to try to find a way of resolving it.

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Geraldine Smith (Morecambe and Lunesdale, Labour)

Does my right hon. Friend agree that the public sector has a huge role to play in helping people get back into work? Indeed, Lancaster city council has been involved in projects for the long-term unemployed. Does he also accept that it is sometimes difficult for private companies, which are small businesses, to employ someone who has, for example, been on incapacity benefit and may require several days off sick because of a genuine illness? That is sometimes one of the biggest barriers to people going back to work. Are there any measures to deal with illness once someone returns to the workplace, and with the need for time off?

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John Hutton (Secretary of State, Department for Work and Pensions; Barrow and Furness, Labour)

That is a genuine problem. However, it does not lend itself to any quick legislative fix. The Bill contains nothing that would directly tackle the concerns that my hon. Friend raises. We have responsibilities in Jobcentre Plus to ensure that we do everything we can to support people with mental health problems in staying active in the labour market. We will continue to discuss with my hon. Friend and others ways in which we might improve on those methods.

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Madeleine Moon (Bridgend, Labour)

Bridgend has been an incredibly successful pathways to work pilot scheme area. Unemployment is 2.6 per cent., with fewer than 1,200 unemployed, but more than 5,000 people are on incapacity benefit. On Friday, my hon. Friend Huw Irranca-Davies and I met the mental health matters group from Bridgend. Its members were worried about whether the personal capability assessment recognised that their capacity to cope changes daily. Even a change in medication or moving to a cheaper brand of medication can affect their performance and capacity to attend for interview. Will that be taken into account, and not lead to people losing their right to benefit because of a fluctuation in capacity?

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John Hutton (Secretary of State, Department for Work and Pensions; Barrow and Furness, Labour)

It is important that the personal capability assessment is more than a snapshot. It is especially difficult to craft the assessment as my hon. Friend suggests for those who are mentally ill. We are working hard to try to reach agreement on the best way forward and we will continue to discuss that fully with all the relevant stakeholders. We need employers to co-operate with Jobcentre Plus, and I strongly believe that the evidence shows that they are willing to do that. My hon. Friend referred to pathways to work, which has been another great success in south Wales. I hope that we can build on that.

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Mark Francois (Shadow Minister, Treasury; Rayleigh, Conservative)

I thank the Secretary of State for his courtesy in giving way. Clauses 41 and 42 refer to recovering overpaid benefits. In his statement an hour or so earlier, he announced that the Child Support Agency would no longer be with us. As a critic of that agency for many years, I am pleased that it will finally be buried, even if the funeral is somewhat delayed. We are clearly dealing with some sensitive client groups in recovering those overpayments. Although the taxpayer must be protected, will the Secretary of State give some assurance that his officials will handle those cases sensitively and with appropriate discretion?

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John Hutton (Secretary of State, Department for Work and Pensions; Barrow and Furness, Labour)

Yes, of course.

Part 1 provides for the new employment and support allowance, which will replace the current system of incapacity benefit. It places additional requirements on new claimants to be actively engaged in preparing for a return to the labour market in return for new support, by embedding the values and principles of the successful pathways to work pilots into the structure of the new benefit. We know the difference that pathways to work can make. In the first year of the pilots, the number of recorded job entries for people with a health condition or disability had increased by approximately two thirds compared with the same period the previous year. The pilots' continued success has driven a significant increase in the proportion of people leaving incapacity benefit in the first six months of their claim, compared with that of non-pilot areas. This early success has underpinned our achievements in helping people off incapacity benefit, with new cases down a third since 1997, and with the first falls in the total count, now down 61,000 in the year to November 2005.

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Michael Weir (Spokesperson (Work & Pensions; Trade & Industry); Angus, Scottish National Party)

Will the Secretary of State give way?

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John Hutton (Secretary of State, Department for Work and Pensions; Barrow and Furness, Labour)

Not at the moment.

At present, nine out of 10 people who come on to incapacity benefit expect to get back into work. Yet as we all know, if they have been on incapacity benefit for more than two years, they are more likely to retire or die than ever to get another job. Little is expected of claimants, and almost no support is offered to them. The gateway to the benefit is poorly managed, and a person gets paid more the longer their claim continues. Even the name of the benefit sends a signal that a person is incapable, and that there is nothing that can be done.

The Bill seeks to change that. It provides for a transformed medical assessment as the gateway to the new benefit, with an assessment process that for the first time properly looks at a person's potential capability to engage in the labour market, rather than simply measuring the level of their incapacity. It provides for a new benefit system founded on the concept of measuring and building up each individual's capability rather than writing them off as incapable, and a radical extension of the support available, which will be underpinned by the extension of pathways to work to every part of Britain by 2008.

We are continuing to review the design of the new medical assessment, and we are particularly conscious of how important that process is for people with mental health problems and learning disabilities.

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Ann Cryer (Keighley, Labour)

The National Audit Office has found that 77 per cent. of cancer patients are not given information about the financial support to which they might well be entitled. Will my right hon. Friend comment on whether Jobcentre Plus staff will now routinely ensure that such advice is given to cancer patients?

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John Hutton (Secretary of State, Department for Work and Pensions; Barrow and Furness, Labour)

We do all we can to bring an entitlement to benefit to the attention of such people, but I will reflect on what my hon. Friend has said and see whether there is anything more that we can do. We are not in the business of giving advice, but it is our responsibility to ensure that people are at least aware of the various entitlements that might be available to them.

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John Robertson (PPS (Dr Kim Howells, Minister of State), Foreign & Commonwealth Office; Glasgow North West, Labour)

I know that my right hon. Friend is coming to an important part of his speech. Many people who have been long-term recipients of incapacity benefit have received doctors' lines time after time without any form of investigation into their illness. Will my right hon. Friend assure me that the new system will ensure that that can no longer happen?

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John Hutton (Secretary of State, Department for Work and Pensions; Barrow and Furness, Labour)

Yes, I can give my hon. Friend that assurance. It will be important that, apart from having access to the support group, people have a regular face-to-face medical examination of their condition, so that we are able to provide them with the right measure of help and support that they need. This is a failure of the present system. I know that there are some of my own constituents who have not seen anyone for some considerable time, and that is not an acceptable way to run our welfare state.

My hon. Friend said that I was coming to an important part of my speech. I am not sure how he knew that, but I have been trying to get to it for quite a while. I would like to remind people of what I was saying about the design of the new personal capabilities assessment. We have created review groups, involving both technical and stakeholder experts, to look at the mental health and physical components of the assessment. We intend to complete this work by September so that we can provide a clear view of the new assessment during the Bill's Committee stage.

The new personal capability assessment will identify those who are capable of undertaking work-related activity and the support and interventions that will be necessary to help them get back to work. It will identify separately people who are so limited by their illness or disability that it would be unreasonable to require them to undertake any form of work-related activity.

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Angela Browning (Deputy Chairman (Organising and Campaigning), Conservative Party; Tiverton and Honiton, Conservative)

I notice that on several occasions the Secretary of State has referred to getting people back into work. Will some of the proposals that he is spelling out today also apply to people who have never enjoyed paid employment? They include people with learning disabilities, autism or mental health problems, who might well be in their 20s or 30s, and who would like to work but have no previous experience of doing so.

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John Hutton (Secretary of State, Department for Work and Pensions; Barrow and Furness, Labour)

It was my mistake not to have made that clear. I agree absolutely with what the hon. Lady says. We want opportunities to be more widely shared than they are at the moment, and that will include people who have never been active in the labour market. Such people will not be excluded from any of the help and support packages that we are seeking to make available through pathways to work.

I recognise the sensitivity and importance of getting such a crucial distinction right. That is why we are consulting all our stakeholders carefully, to ensure that we take an equitable approach. The group that I have just described, known as the "support" group, will receive the new benefit at a higher rate. As now, they will be able to volunteer to participate in work-related activity and access all the appropriate support available, but it will not be a condition of their entitlement to any part of their benefit.

For the vast majority—those who are not in the "support" group—the new benefit will have a clear framework of rights and responsibilities. In return for the additional support provided by the national roll-out of pathways to work, claimants will be required to attend regular interviews, complete action plans and, in time and when resources permit, undertake work-related activity. As the Green Paper makes clear, the full level of benefit that they receive will be above the current long-term rate of incapacity benefit. However, those refusing to engage with the help and support offered, without good cause, could see their benefit reduced progressively to the basic level of jobseeker's allowance.

I want to return to the point raised by my hon. Friend Mrs. Moon a moment ago, which I did not deal with. She asked how we would approach the issue in relation to people who have a mental health problem, and who might, for a perfectly good reason, not have been able to attend, for example, a work-focused interview. At the moment, we would never dream of sanctioning in those cases, unless there had been a home visit, and until decision makers in Jobcentre Plus were absolutely sure that the person had no plausible reason for missing the work-focused interview. With all such matters—I shall make this point later, as I know that Members on both sides of the House will be concerned about benefit sanctions—the success of the policy is not to be judged by how many people we sanction, but the reverse. It will be judged by how many people we can help to get into work, whether for the first time or following on from an earlier career. As we established in relation to the new deal, if we are going to provide new help and support, it is essential to have some reciprocity in the provision of that additional investment in our welfare state. The vast majority of people, I hope, will have no difficulty with that argument.

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Joan Humble (Blackpool North and Fleetwood, Labour)

I want to explore a little further the issue of work-focused interviews and people with mental health problems. I am pleased by the reply that my right hon. Friend has given to my hon. Friend Mrs. Moon. In order to reassure those who have genuine fears, what steps will he take to ensure that his staff are properly trained to identify when someone's mental health problem is so severe that it would be adversely affected by being required to attend a work-focused interview?

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John Hutton (Secretary of State, Department for Work and Pensions; Barrow and Furness, Labour)

I accept that there is fear about all these issues, and it is important that we dispel those fears. There is no reason for people to be fearful. We invest significantly in the training of personal advisers in Jobcentre Plus. Through pathways, we have been doing this for the best part of two years, and we are beginning to find a sensible way forward. I do not doubt that there are areas for improvement, and Jobcentre Plus is always ready and willing to learn. If there is a role for some of the voluntary organisations to help us to train our staff properly, we should explore that further. We are making progress. It is not our intention to be punitive as we develop these approaches; that would be wrong. As I have tried to say previously, we can be radical, which I believe that these reforms are, without being punitive. I hope that my hon. Friend does not infer from anything that I have said today, or anything in the Green Paper, that we will punish people unfairly because they have a level of incapacity. That would be totally at odds with the values to which I referred earlier, and forms no part of the approach that we want to develop.

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Russell Brown (PPS (Rt Hon Douglas Alexander, Secretary of State), Scotland Office; Dumfries and Galloway, Labour)

I welcome the Bill, which, as far as I can see, is based more on people's abilities than on their disabilities. In relation to work-focused interviews and pathways to work, may I impress on my right hon. Friend that in rural constituencies such as mine, which has two Jobcentre Plus offices 75 miles apart, the difficulty of delivering what I hope will be delivered is much greater?

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John Hutton (Secretary of State, Department for Work and Pensions; Barrow and Furness, Labour)

I absolutely accept that. That is why, wherever possible, we try to take our services out to our customers. I do not know the precise details of the issue raised by my hon. Friend, but he would be welcome to raise it with me in more detail on another occasion.

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Roger Berry (Kingswood, Labour)

I support the Bill, and hope that I shall have an opportunity to explain why.

Given that the proposals relating to work-related activity depend heavily on the use of private and voluntary-sector providers, can my right hon. Friend assure us that decisions on sanctions will be made not by those providers but by Jobcentre Plus?

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John Hutton (Secretary of State, Department for Work and Pensions; Barrow and Furness, Labour)

That is certainly the current arrangement, but, as my hon. Friend will know—I suspect that that is why he asked the question—clause 15 allows the possibility of benefit sanction decisions being made by some of our private and voluntary-sector providers. I shall come to that section of my speech shortly, but let me say first that a number of providers have told us that they would like to have those powers. I agree that not all them may want the powers, and I quite understand why, but it is worth exploring the issue a bit further.

I consider the additional obligations to be central to the reform package that we are proposing. As I said earlier, I believe that the vast majority of people will consider them to be reasonable and necessary. They are very much powers of last resort. As with any such measures, the proof of their success will come not in large numbers of cases in which the sanction is imposed, but in the number of people whom we can return to employment and, therefore, lift from poverty. In the current pathways areas where extra conditions have been imposed, the benefits of fewer than 1 per cent. of claimants have been sanctioned. That is a mark of the success of the deal that we have offered people on incapacity benefit.

I know that some have expressed concern—as my hon. Friend just did—about clause 15, which permits the application of employment and support allowance benefit sanctions by private and voluntary-sector providers. I can reassure the House and my hon. Friend that a clear system of safeguards, similar to that used in pathways, will be used before any such sanction can be applied, and that the normal rights of appeal will be fully applicable. We will talk to private and voluntary-sector providers about whether they wish to exercise the function, but I think it is important for us to explore whether the new power will be helpful as we engage with a wider range of welfare-to-work providers in the years ahead. We will invest a further £360 million over the next two years to support the measures in the Green Paper, and to secure national coverage of pathways to work.

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David Laws (Shadow Secretary of State for Work and Pensions, Work & Pensions; Yeovil, Liberal Democrat)

Will the Secretary of State clarify what aspect of non-compliance the private and voluntary-sector providers might sanction? Might it relate to participation at an interview, taking up employment opportunities, or obtaining medical assistance?

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John Hutton (Secretary of State, Department for Work and Pensions; Barrow and Furness, Labour)

No sanctions would apply to health care provision. I think it would be entirely wrong to apply sanctions to how an adult decides to obtain health care. Nor would sanctions apply to the job-seeking that the hon. Gentleman describes, because that is not part of work-related activity planning. Essentially, we are talking about work-related activity when it becomes a mandatory condition for benefit—if it does—along with work focus interviews and the drawing up of action plans. Only in those areas could benefit sanctions apply.

Working with our partners in the private and voluntary sector will be a critical part of our building of a modern, active and increasingly devolved welfare state which makes more use of a wider range of providers with the skills and expertise to target local labour market issues more successfully. I said a few moments ago that a modern welfare state could not afford to leave anyone behind, and should not seek to do so. That is why we will roll out our offer of help and support for existing claimants of incapacity benefits—available on a voluntary basis—as pathways spread nationwide. In Somerset, for example, we are already piloting a regular set of work-focused interviews for all existing customers as part of pathways, and if that approach works, we will seek to expand it further as resources allow.

In time, as provided for by schedule 4, existing claimants will be "migrated" to the new employment and support allowance. That will help to reduce the complexity involved in having two completely separate administration systems running indefinitely. I want to make one thing clear, however: existing claimants will not be mandated to undertake work-related activity as a condition of receiving the full amount of the new benefit. Clause 12 gives us the necessary power to require ESA claimants to undertake work-related activity, but we will ensure that the regulations made under the clause reflect the position that we set out in the Green Paper in relation to existing incapacity benefit claimants. As the Green Paper also made clear, the current benefit level of existing claimants will be fully protected.

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Angela Browning (Deputy Chairman (Organising and Campaigning), Conservative Party; Tiverton and Honiton, Conservative)

What is the position of people who are still receiving the old severe disablement allowance, which preceded incapacity benefit? Will those whose claims show that they still have SDA status be brought within the incapacity benefit loop, or will they be treated as a separate group?

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John Hutton (Secretary of State, Department for Work and Pensions; Barrow and Furness, Labour)

That is a very good question and I wish that I had the exact answer to it right now, but I will ensure that my hon. Friend the Minister for Employment and Welfare Reform deals with it in his winding-up speech.

Following consultation on the Green Paper, we made two substantial changes to our proposals. First, we listened carefully to concerns that the adoption of jobseeker's allowance rates in the employment and support allowance would penalise disabled young people. It was never our intention to discriminate against young disabled people and we decided that young people will now get the same basic allowance as everyone else in the main phase of the ESA.

Secondly, there were strong concerns from employers over our proposals to simplify statutory sick pay. Our intention was to simplify the process of administering the scheme while maintaining the crucial balance between helping to keep costs down and retaining protection for the most vulnerable employees. Employers felt that the simplicity they would gain from these changes was not sufficient to outweigh the loss of flexibility that waiting days gave them, so we decided not to proceed with those proposals at that point. We will instead invite all interested stakeholders to discuss with us the scope for alternative approaches to simplification, which must not, however, involve unreasonable costs to employers.

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Danny Alexander (Shadow Minister and Disability Spokesperson, Work & Pensions; Inverness, Nairn, Badenoch and Strathspey, Liberal Democrat)

In his answer to my hon. Friend Mr. Laws, the Secretary of State suggested that conditionality would not apply in respect of medical activities. Will he confirm that the conditionality in the Bill can apply to the work-focused, health-related assessments that are proposed in clause 10?

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John Hutton (Secretary of State, Department for Work and Pensions; Barrow and Furness, Labour)

Yes, but it will not and we will make sure of that in the regulations.

Part 2 takes forward our Green Paper proposals to simplify the existing housing benefit system to improve work incentives and encourage personal responsibility for housing choices. Following the success of the 18 pathfinder areas, the Bill will facilitate the extension of local housing allowance across the deregulated private rented sector. Where possible, to promote personal responsibility among tenants, we propose that payments of housing benefit will be made to the tenant, rather than the landlord, but appropriate safeguards will be in place to protect both tenants and landlords so that in cases where tenants are likely to have difficulty in managing their affairs, payments can still be made to the landlord.

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Andrew Love (Edmonton, Labour)

My right hon. Friend rightly points to the success of the 18 pathfinder areas. One reason for their success is the enhanced money advice provided in those areas, so will he give us an assurance that such an enhanced money advice service will be available on the roll-out nationwide?

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John Hutton (Secretary of State, Department for Work and Pensions; Barrow and Furness, Labour)

Yes, we will certainly want to do that and it will feature in subsequent debate and the Minister for Employment and Welfare Reform will comment further at the end. He is going to have to make a longer speech than he anticipated, but there we are.

The Bill also provides for a reduction in housing benefit where someone has been evicted from their home on grounds of antisocial behaviour and refuses to co-operate with the support that is offered by the local authority to help improve behaviour. There is clear research evidence that the provision of intensive support and supervision can achieve significant changes in the behaviour of persistently antisocial households.

An active welfare state, with rights and responsibilities at its heart, must send a clear signal to those evicted for antisocial behaviour that they are at the end of the line and cannot simply expect to move to another property and continue their bad behaviour at the expense of decent hard-working families. That would serve only to undermine public confidence in our welfare system and if we are right to expect minimum standards in other areas of the welfare state—I believe that we are—we should be consistent across the whole system, including housing benefit.

We intend to pilot the sanction in about 10 English local authorities over a two-year-period as soon as we have the legal power to do so. Proper consideration will be given to the needs of any children involved in such cases, but we cannot go on turning our back on those who have to put up with that kind of behaviour and who rightly look to us to deal with the problem. The Bill makes a start in the right direction in this sphere.

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Terry Rooney (Bradford North, Labour)

My right hon. Friend knows that I have some doubts, but if people in rented accommodation suffer from that penalty, should it not also apply to those who receive state support for mortgage interest payments? If guilty of similar antisocial behaviour, should not those people be subject to a similar regime?

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John Hutton (Secretary of State, Department for Work and Pensions; Barrow and Furness, Labour)

As my hon. Friend knows, that is not in the Bill, but if he raised that matter again in Committee or on Report, I am sure that we would reflect carefully on any arguments that he deployed.

Those responding to the Green Paper consultation expressed concerns about introducing local housing allowance for tenants in social housing. We recognise those concerns, and we have therefore decided not to introduce such legislation at the moment.

Part 3 proposes a number of measures to improve the administration of social security, including new powers to allow greater sharing of information to improve the take-up and delivery of benefits and other services administered by my Department and by local authorities. For example, where pensioners are entitled to both pension credit and council tax benefit or housing benefit, common information on personal and financial circumstances will only need to be given once.

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Madeleine Moon (Bridgend, Labour)

Can my right hon. Friend explain who will decide whether an individual should receive personal payments of their rent allowance? There is great concern among professionals working in the health and social care sectors that families with children will find themselves in debt, as their benefit will be paid into overdrawn bank accounts, the banks will use it to pay off bank arrears and it will never reach the landlord. Can he explain how we can ensure that people are not forced into further debt under that proposal?

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John Hutton (Secretary of State, Department for Work and Pensions; Barrow and Furness, Labour)

I can just point to the research and the outcomes in the pathfinder areas, and my hon. Friend might want to study them. We have seen no correlation between the direct payment of the local housing allowance in those areas and any difficulty that those tenants have in paying their rent. There has been no increase in arrears and no problem with landlords then seeking to evict tenants. As a general principle, it is right to treat adults as adults and for the payment of rent to go directly to them.

There are safeguards, however, and in the pathfinder areas—we have been very clear about this—about 15 per cent. of those who are eligible for local housing allowance have not received it directly, because they felt that they were at risk of not paying up. There are problems, for example, if someone has a drug or alcohol dependency. We certainly do not want to make matters worse in those cases. There is a sensible way to deal with those concerns that does not undermine the fundamental principle—this must be right in the welfare state—that we should treat people in the benefits system as adults. We manage money; they are perfectly capable of managing money, too, and we should not start with any assumption that they cannot do so.

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Kali Mountford (PPS (Rt Hon Des Browne, Secretary of State), Ministry of Defence; Colne Valley, Labour)

My right hon. Friend is describing a new system that will bring together those in different parts of the civil service who did not work so closely together previously, along with other sectors. May I tell him that my discussions with people inside Jobcentre Plus suggest that that is causing them some concern. They need to learn lessons from the past. They are also concerned about the target that has been set of benefiting 1 million people's lives. The assessment that others have made that that target is not too challenging does not fit with their concerns about the new system.

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John Hutton (Secretary of State, Department for Work and Pensions; Barrow and Furness, Labour)

We will have plenty of opportunities to listen to those concerns and to act on them where we think that that is the right thing to do. I think that my hon. Friend is referring to the aspiration—the objective—of getting 1 million people off incapacity benefit. That is the right objective for us to have. We are investing significantly more in the help and support available to people who have a measure of incapacity. They and the organisations that represent disabled people have made very clear to us the importance that they attach to extending what my hon. Friend Tony Lloyd, who is no longer present, referred to as the right to work. That is the right and proper thing for us to do, but I am quite sure that the debate about how we implement these reforms will continue inside and outside Jobcentre Plus, and we are certainly more than willing to listen to what people are telling us about them.

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Gordon Marsden (Blackpool South, Labour)

I want to touch on the 1 million target, which, although ambitious, should be put in front of us. However, does my right hon. Friend agree that it is extremely important—particularly in a constituency such as mine, where many of the target people on IB might have been in that position for five or 10 years—to focus on an element of job progression if we are successful in getting them into work, so that they do not think that they are coming into work at a relatively low level, without aspirations and skills or the training that they need to develop them thereafter?

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John Hutton (Secretary of State, Department for Work and Pensions; Barrow and Furness, Labour)

I absolutely agree with that, and some of the issues to which my hon. Friend refers will be picked up by Lord Leitch, when he reports to my right hon. Friend the Chancellor on how and to what extent we can do more to support the skills of the labour force. However, I agree with my hon. Friend fundamentally: we are here to help, and we will be long-term partners in incapacity benefit reform. We have a role to play in supporting people not just to get a job, but to make progress up the labour-market ladder as well. I agree with him that that is very important.

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Lyn Brown (West Ham, Labour)

Given that 60 per cent. of people come off incapacity benefit within the first year, is it realistic to assume that we can take 1 million people off it? If we are basing that estimate on pathways to work figures, how can we be sure that the 8 per cent. of people in respect of pathways to work are not also included in the 60 per cent. of people who would normally naturally come off incapacity benefit in the first year?

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John Hutton (Secretary of State, Department for Work and Pensions; Barrow and Furness, Labour)

In pathways areas, access to help and support has not been confined to new claimants; in some parts of the country, the entire stock is being looked at, and in others the pathways are looking back five, six, seven or eight years. I believe that we should set ourselves difficult targets. If a Government set themselves a target that they know they can reach, that is easy; and it is worse to set a target in respect of which we can torture the data until they confess and tell us that we have met it. There should be a genuinely objective measurement of our progress, but if we are to make a difference to the lives of disabled people, it is right and proper that we aim high, not low.

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Sammy Wilson (East Antrim, DUP)

We broadly support these measures, but may I take the Secretary of State back to what he said about withdrawing benefits from those who were engaged in antisocial behaviour? Perhaps he did not mean to do so, but he seemed to gloss over the point about what happens in cases involving families with children and where homelessness might result. I think that his answer to that was that the interests of children would be taken into consideration. Will the Secretary of State spell out exactly what he meant by that? Will this sanction not be imposed on families with children, or else in what other ways will the interests of children be looked after?

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John Hutton (Secretary of State, Department for Work and Pensions; Barrow and Furness, Labour)

I am grateful to the hon. Gentleman for his signal of support for the package of measures. In relation to children and the housing benefit sanction, we must remember that housing benefit is administered by local authorities. We intend to give the decision maker—the local authority—an area of discretion in cases involving families with vulnerable children. We do not envisage the full sanction applying in such cases but, for the reasons to which I referred, it is important that a line is drawn. We as a society, and we as law makers in this House, should send out a clear signal that we are no longer prepared to ignore the antisocial behaviour of the small number of people—it is a very small number—who continue to flout any proper standards of social behaviour to their neighbours, and who expect their neighbours, through their taxes and income, to support their lifestyle. However, it will of course be necessary when there are competing considerations—when there is not just a single person or a couple with no children—to take into account the innocent children who are wrapped up in such cases, and we will of course make sure that there is no question whatever of families with children being turfed out into the street.

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Katy Clark (North Ayrshire and Arran, Labour)

Does my right hon. Friend agree that there seems to be a direct relationship between levels of employment and the number of people on incapacity benefit? Between 1979 and 1997, the number of people on incapacity benefit trebled, and that was accompanied by huge levels of unemployment. The current Government have made huge strides in this area; 2.4 million more people are in work, and employment in my constituency has increased by 25 per cent. But in areas such as mine, we still have a long way to go in respect of securing full employment. Therefore, does my right hon. Friend agree that we must be realistic in respect of targets, and recognise that they will be reached only as our policies for employment are put in place?

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John Hutton (Secretary of State, Department for Work and Pensions; Barrow and Furness, Labour)

That is obviously true, but we should be confident that we will succeed in meeting the ambitious target that we have set ourselves. The economy and the labour market are strong. Employment opportunities clearly exist, and they are continuing to grow. More people are in work this year than when we came into office, and the numbers are still increasing. Under the stewardship of my right hon. Friend the Chancellor, those of us on the Labour Benches are entitled to be confident about our economy developing in the right way.

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Geraldine Smith (Morecambe and Lunesdale, Labour)

I congratulate my right hon. Friend on the measures to deal with antisocial behaviour. Let me give him an example of such behaviour. In Morecambe last night, I was called to a house at 10.30 pm to witness extremely loud music that was being played by people in flats across the road—I suspect that those people claim benefit. I was told that they continue to play their music until 3 o'clock in the morning and drink alcohol outside. Of course, those people might not have to get up for work the next morning, but several people in the street do. This is a considerable problem, so the Secretary of State is right to look at measures to deal with people on benefit who are committing antisocial behaviour.

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Michael Lord (Deputy Speaker)

Order. Before the Secretary of State answers, I should say that interventions are getting longer and longer. An awful lot of people who are seeking to catch my eye are sitting waiting very patiently. It is not for me to curtail debate, but I just mention that fact.

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John Hutton (Secretary of State, Department for Work and Pensions; Barrow and Furness, Labour)

I shall try to speed up, as well, Mr. Deputy Speaker. I am sure that my hon. Friend Geraldine Smith speaks for many Members of this House, and we all have those problems to deal with in our constituencies. We need to be fair to people—as, of course, we will be—and there will be a due process that can be followed, but I do not think that the vast majority of law-abiding, decent people find it acceptable to continue with the current system, under which people can behave in the way that my hon. Friend describes with total impunity. Just as we have other measures across the benefit system that require a reasonable response from people on benefits, we should have one here, and I am grateful for my hon. Friend's support for this measure.

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John Hutton (Secretary of State, Department for Work and Pensions; Barrow and Furness, Labour)

I shall give way once more but not again, because I need to get on.

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Joan Walley (Stoke-on-Trent North, Labour)

I am most grateful. May I take the Secretary of State back to the issue referred to a couple of interventions ago—areas in which many people are on incapacity benefit? Will he work with colleagues to develop a joined-up approach to this issue, and try to find opportunities to link the relocation of Government Departments under the Lyons review to areas such as Stoke-on-Trent, in which we need to create even more jobs?

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John Hutton (Secretary of State, Department for Work and Pensions; Barrow and Furness, Labour)

My hon. Friend has made a very important point and I look forward to working with her to ensure that those benefits are realised, particularly in her constituency.

I now have the answer to the question that Angela Browning asked about the severe disablement premium: people in receipt of it can volunteer for pathways. I am grateful to her and to my hon. Friends for their interventions; it is because there have been so many of them that I have now been able to deal with the hon. Lady's point.

The Bill contains provisions dealing with fraud, and we have decided to go further in this area. Given that some 50 per cent. of fraud against a local benefit also involves fraud against a national benefit, it is crucial that we lift the restrictions that prevent up to 2,000 local authority investigators from tackling the full extent of the benefit fraud that they encounter. Clauses 43 to 45 address those concerns.

Rights and responsibilities lie at the heart of this Bill, and nowhere is the abuse of those responsibilities more blatant than in benefit fraud. Clause 46 will extend the "two strikes" rule for repeat offences, so that people who commit a second benefit offence within five years of their first one can have their benefit withdrawn.

Part 4 of the Bill contains a number of smaller but important measures to correct anomalies in the—

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Michael Clapham (Barnsley West and Penistone, Labour)

I am grateful to my right hon. Friend for giving way. I draw to his attention clause 55, schedule 6 and the reference to pneumoconiosis. Under the schedule, a claim made more than 20 years after a period of employment ended will be disregarded. In effect, that will mean that very few pneumoconiosis-related claims will be made under the Pneumoconiosis etc. (Workers' Compensation) Act 1979. As he will be aware, provision for bringing a claim under that Act came in when British Coal ceased to exist, in 2004, but because of the way in which the schedule is drafted, it will not be possible to make such a claim. I ask the Secretary of State to reflect on that, and to see whether we can consider the nature of the disease in deciding whether a claim is proceeded with.

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John Hutton (Secretary of State, Department for Work and Pensions; Barrow and Furness, Labour)

My hon. Friend has a great deal of experience in this area and I have a great deal of respect for his view, but I think that he is wrong about the effect of clause 55 and schedule 6. We are trying to incorporate a more practical version of the relevant employer condition, which officials have been applying since 1980 on an extra-statutory basis, and to update the 1979 Act to reflect modern partnership rights by providing for civil partners. We are not trying to restrict access to the scheme at all; far from it. We are trying to put on to a statutory footing and basis the current rules that are being applied. The Minister for Employment and Welfare Reform and I would be very happy to pursue this conversation with my hon. Friend later, but I can assure him and the House that there is no suggestion that we are trying to restrict access to the scheme.

Part 4 of the Bill, which my hon. Friend has read, as I am sure others have—it is fantastic—contains a number of quite important provisions. In addition to provisions relating to pneumoconiosis, there are provisions to ensure that disability living allowance recipients around the age of 16 do not lose up to three months of benefit entitlement, which there is a risk that they might do at the moment, and to simplify the operation of the budgeting loans scheme.

With the Bill, we can harness the power of modern advances in health and employment support, and foster a society of genuine equal rights and opportunities for everyone. We can help families lift themselves out of dependency, tackle child poverty and build a lasting legacy for millions of our fellow citizens. We can deliver an active welfare state that does not simply cushion people from the effects of poverty and unemployment, but which instead seeks to tackle those issues at source. The Bill begins the next stage of our reforms to our welfare state. I believe that it enshrines the proper balance between rights and responsibilities. It reflects the values of opportunity and security. It has been built on the foundation of a broad and wide consensus. It is the right way forward if we are to succeed in tackling the poverty and social exclusion that still blights the lives of so many disabled people. I commend the Bill to the House.

5:25 pm
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Philip Hammond (Shadow Secretary of State for Work & Pensions, Work & Pensions; Runnymede and Weybridge, Conservative)

As the Secretary of State knows, we are generally supportive of the overall structure that was put forward in the Green Paper proposals and of which the Bill is an integral part. In the three key areas—incapacity and sickness benefit; getting lone parents into work; and getting older people into the workplace, or enabling them to remain in the workplace—we agree that there is a need for change in order to contribute to the Government's target of 80 per cent. working age participation in the work force. It is essential to achieve that target in the face of a rising dependency ratio. I agree with the Secretary of State that we cannot afford to leave anyone behind in 21st-century Britain, so we are broadly supportive of the proposals that we are considering today, but I hope that he will understand that, within that broad support, there are a number of things that we want to question and matters that we want to raise.

Welfare reform has been on the Prime Minister's "to do" list since 1997. It struck me that there is a remarkable similarity between the language of the 1998 Green Paper and that of the 2006 Green Paper, which the Secretary of State published earlier this year. The 1998 Green Paper states:

"People who could work are too often consigned to a life on benefits; those who satisfy the...Test for incapacity benefits are effectively written off and given no help to make the most of their potential."

Many Labour Members may think that Margaret Hodge went a little far when she said that Labour had done "sweet nothing" to tackle incapacity benefit since 1997, but it is clear that, despite the Welfare Reform and Pensions Act 1999, many of the aspirations in the 1998 Green Paper remain unfulfilled—hence the repetition of some of the language in this year's Green Paper and many of the key elements of the Bill.

Of course, the Bill and the accompanying notes leave a number of questions unanswered. That is partly an inevitable consequence of the structure of the Bill. It is very much a framework and I welcome the confirmation that the Minister for Employment and Welfare Reform was able to give at departmental questions last week that draft regulations will be made available to the Committee before consideration of the relevant parts of the Bill.

Part 1, as the Secretary of State has said, introduces the new employment and support allowance and the arrangements around it, which are inextricably linked to the recently announced roll-out of the pathways to work programme, which will support the measures in the Bill. We agree that a degree of compulsion in the employment and support allowance regime is appropriate, provided that adequate support is in place, especially for people with disabilities. Many people who have been out of the workplace for a long time will lack the self-confidence that they might otherwise have and will need firm encouragement to re-engage in work.

The first point on which I seek clarification relates to the baseline for the Secretary of State's announced target. The Government set out a target of a reduction of 1 million in the number of people on incapacity benefit. In its report, the Select Committee was critical of the lack of detailed baseline information and the Government have subsequently published that information. It shows that in any case—with no additional action whatsoever—it is expected that there will be a 360,000 drop in the number of people on incapacity benefit by 2014-15. That is thus the baseline number, without any of the measures in the Bill or the extended roll-out of pathways to work. Just so that we are clear about the backdrop against which we are conducting the debate, the target for the new regime is to deliver not a reduction of 1 million in incapacity benefit numbers compared with the existing baseline projection, but a 640,000 reduction. When the Secretary of State told the Select Committee that 1 million was "a net figure" and not a

"clever statistical sleight of hand",

he was right, because including 360,000 people who are already in the baseline as part of the net figure is a rather crude statistical sleight of hand. I hope that we are all clear that we are talking about a reduction of not 1 million, but 640,000.

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Hugh Bayley (City of York, Labour)

May I respectfully remind the hon. Gentleman that when his party was in power, the number of people on long-term sickness benefits rose from 600,000 to 2.4 million? He criticised the Government a moment ago for not doing enough to reduce the numbers on incapacity benefit. His figures suggest that about a third of a million people will come off the benefit as a result of measures that have already been taken, but I think that he would agree, having repudiated the policies of the past, that more needs to be done, which is surely what the Bill is about. Can he not support it?

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Philip Hammond (Shadow Secretary of State for Work & Pensions, Work & Pensions; Runnymede and Weybridge, Conservative)

The hon. Gentleman obviously was not listening. I said at the outset that we supported the package of measures. However, if we are to have these debates, it is important that we understand the parameters. When a target is announced against which we will measure the success of a package, we should be clear about what that target is. I hope that we are all now clear about the target.

At the time of the publication of the Green Paper, we and the Select Committee expressed concern that existing claimants should not be written off in the process. The regulatory impact assessment that accompanies the Bill says:

"It is clear that to reduce the caseload our strategy must focus on improving the rate at which people leave incapacity benefits."

Conservative Members strongly agree with that statement, but much of the focus of the package is actually on tightening the gateway on to benefit. The Select Committee has expressed the concern that existing claimants are in danger of being left behind.

It seems to me that there is a wide consensus in the House in support of measures that will help people back into work because that is the best and most effective way of tackling poverty and social exclusion. However, if we all agree on the value of the programme, we cannot accept that those who were specifically referred to and offered hope as long ago as the publication of the 1998 Green Paper should be left behind. The reduction in numbers must therefore represent a genuine increase in off-flow as well as a reduction in the numbers of new claimants. I urge the Minister to give in his winding-up speech a commitment to providing disaggregated targets for those two components of the total reduction to which the Government are committed.

We also need to understand the Government's thinking about the migration of existing claimants. It has come out during our extensive debate so far that provisions in schedule 4 will allow the migration of existing claimants on to the new system. However, as is consistent with the broad architecture of the Bill, schedule 4 contains largely regulation-making powers. It would therefore be helpful to understand how and when existing claimants will become subject to the new regime.

We understand that the Government's original intention was that existing claimants would remain on the old incapacity benefit, with work-focused interviews being gradually rolled out. The Secretary of State has now made it clear that there will be a migration process, but, if I have understood it correctly, with existing benefit levels protected. Will the Minister of State be clear, either when he winds up the debate or in an intervention, about what that means? If an existing claimant goes for a new reformed personal capability assessment test and fails it, he would presumably be obliged to claim jobseeker's allowance, but if benefit levels are to be protected, he would get JSA but at the rate of his former incapacity benefit. Is that correct? Would the JSA come with the usual conditionality—the actively seeking work and available for work tests? We need to understand how the proposals would work in practice.

All the Government announcements and publications that I have seen give the impression that eventually everyone will be included in the system and eventually there will be a requirement to engage in work-related activity, rather than just to complete an action plan and then not necessarily act on it. However, the Government continually enter the caveat "as resources allow". The Secretary of State made it clear that there can be no further roll-out of the programmes until after the comprehensive spending review.

We agree that it is right to extend the compulsion elements of the programme only when the necessary support is in place and available, but we are talking about a programme that is intended to deliver huge savings—billions of pounds of savings—to the Exchequer. The Government's analysis, such as it is, says that there is an 8 per cent. increase in off-flow in the pathways pilot areas and that the scheme is very much more than self-financing. The Minister of State said in a press release, I think, last week that the average cost on a pathways programme was £800 and the average saving was about £8,000. So talk about being unable to roll out the programme because of resource constraints does not ring true, or at the very least it betrays a desperate lack of financial imagination.

The Green Paper says that pathways will be rolled out in new areas by the private and voluntary sectors, paid for by results and in a way that allows

"new and innovative approaches to be tested."

The announced roll-out will use private and voluntary sector providers, but on a much-diluted basis compared with what the Green Paper envisaged. They will not conduct the roll-out in all new areas, they will not be paid wholly by results, and the roll-out will be with a degree of prescription that, frankly, will stifle the most innovative in their ambitions for those programmes. It is almost as if the proposal for roll-out with the private and voluntary sectors has been designed not to maximise the potential benefits that could be squeezed out of using them.

I have a number of different points to suggest to the Minister. There is not enough transfer of risk in what is being proposed.

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John Hutton (Secretary of State, Department for Work and Pensions; Barrow and Furness, Labour)

I was not planning to intervene, but the hon. Gentleman's concerns about the roll-out of pathways through the private and voluntary sectors are fundamentally misplaced. We will shortly discuss with the potential new providers of pathways our proposals for how we want the roll-out to proceed. It will certainly not remove the opportunity for innovation, development and flexibility. We want to pursue, and rightly so, the best possible value for money for the taxpayer. If he is prepared to wait a bit longer, he will see from the documentation, which he has asked for and which I am happy for him to see, confirmation that his fears are misplaced.

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Philip Hammond (Shadow Secretary of State for Work & Pensions, Work & Pensions; Runnymede and Weybridge, Conservative)

I am grateful to the Secretary of State and I am encouraged by the fact that he does not intend to hamper the innovation that the private and voluntary sectors can deliver. However, I have talked to private and voluntary sector providers at some length over the past few days. Perhaps he will allow me to set out my concerns and intervene again if he wants to. I would be more than happy if, after the next three or four minutes, I was able to say that he had dealt with all my concerns.

The transfer of risk seems a fundamental part of the purpose of engaging the private sector in such a programme. Payment by results was promised, but we understand that a 30 per cent. up-front payment of the fee is now proposed. A payment of 30 per cent. of the fee up front is precisely what creates the resource constraint which is constantly referred to as a reason for not rolling out the programmes more quickly. Why not utilise the private and voluntary sectors' appetite for risk? Why not roll out the migration of existing claimants and the work-related activity element via private and voluntary sector providers on a genuine no win, no fee basis, with a fee structure that maximises the incentive of the private and voluntary sectors to reach those furthest from being work-ready and that is cash-neutral to the Treasury—paying them only when they have not only placed someone in work but maintained them in work long enough to produce a stream of benefit savings that will cover the fee that they are to be paid?

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Kali Mountford (PPS (Rt Hon Des Browne, Secretary of State), Ministry of Defence; Colne Valley, Labour)

I am listening carefully to the hon. Gentleman's remarks, having talked to the private and voluntary sectors myself. They have concerns because they sometimes take a great deal more risk, as their client groups are much more difficult to reach and to place in work. When talking to me they have been concerned about whether they would be able to sustain participation if there were no payments up front in order to enable them to deliver a service.

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Philip Hammond (Shadow Secretary of State for Work & Pensions, Work & Pensions; Runnymede and Weybridge, Conservative)

I would be happy to swap notes with the hon. Lady after the debate, but some of the larger providers to which I have talked, in both the voluntary and the private sectors—the not-for-profit sector—assure me that they can deliver such a programme. We all agree that we have an excellent programme—there is consensus that the roll-out of the programme is a good thing—but what bothers us on the Opposition Benches is that we are hearing that, because of resource constraints, neither the migration of existing claimants nor the work-related activity requirements can be rolled out any faster. For perfectly good and understandable reasons, the Treasury is not prepared to invest large amounts of money up front on the Secretary of State's promise that there will be a saving at some time in the future. I am suggesting that the private and voluntary sectors can deliver some real benefit; they can do something that no Government Department can do. They can take on the risk on their balance sheets and allow the removal of the resource constraint in order to roll out the programmes more quickly.

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Anne Begg (Aberdeen South, Labour)

Does the hon. Gentleman agree that resources are not just money and not necessarily merely Government money? I agree that the not-for-profit sector and some private sector providers are very good, but there are capacity problems, particularly concerning trained people such as cognitive behaviour therapists who deal with those with mental health problems. We cannot magic such people out of the air, and it is in those professions that some of the resource constraints lie.

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Philip Hammond (Shadow Secretary of State for Work & Pensions, Work & Pensions; Runnymede and Weybridge, Conservative)

What the hon. Lady says is self-evidently true. There are real as well as financial constraints, but we can deal with one of the largest constraints—the financial resource constraint. I suggest to the Secretary of State that it can be done. The resource constraints boil down to a lack of imagination—I will not say in the Secretary of State's Department; it might be in the Treasury or elsewhere—rather than a lack of cash. The benefits of the programme could be made more widely available more quickly through such a transfer of risk. As the Secretary of State knows, a faster roll-out will produce medium-term fiscal savings as well as greater economic and social benefits in the short term.

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Michael Weir (Spokesperson (Work & Pensions; Trade & Industry); Angus, Scottish National Party)

I am interested in what the hon. Gentleman has to say. Many voluntary sector providers, especially those who deal with more difficult cases such as people with autism and other learning difficulties, feel that they will be pushed out of the market because they are niche providers. How will his system deal with that problem?

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Philip Hammond (Shadow Secretary of State for Work & Pensions, Work & Pensions; Runnymede and Weybridge, Conservative)

The hon. Gentleman makes an excellent point, and he is right that some of the smaller, more specialist providers fear that the model that the Government are rolling out, in which there is a single provider in an area, will squeeze them out of any chance of a role as a prime provider. I think that there will be a consolidation, whereby specialist and smaller providers act as sub-contractors in consortium arrangements with larger, perhaps financially stronger, lead providers.

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Angela Browning (Deputy Chairman (Organising and Campaigning), Conservative Party; Tiverton and Honiton, Conservative)

On the issue of sub-contracting to so-called niche or specialist providers, at the moment, the system—and I cannot picture it changing, unless the Minister tells me otherwise—is that large contracts are issued, and are top-sliced by the companies or organisations that win them. When they then sub-contract in a specialism in which there are, of necessity, higher per capita costs if they are to deliver, they make it uneconomic for those specialist providers to play a part in the market. That is the challenge that the Minister must address.

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Philip Hammond (Shadow Secretary of State for Work & Pensions, Work & Pensions; Runnymede and Weybridge, Conservative)

My hon. Friend makes a good point. Perhaps I can provide some grounds for optimism by explaining my understanding of what is taking place in the marketplace between lead providers and specialist providers. Providers of specialist services are very much sought out by those who seek to be lead providers. That is because, in presenting their bids to Government, those lead providers need to show that they can access those specialist services, so I hope that the balance of negotiating power is not as lop-sided as my hon. Friend fears.

We have a unique opportunity to exploit one of the advantages of using private and voluntary sector providers, and allow those providers to take on some of the risk, so that there is quicker roll-out, and so that we do not always have to listen to admirable ambitions for programmes that cannot be rolled out until resource constraints allow it. We may be failing to maximise the advantages of engaging the private and voluntary sectors as a result of a prescriptive structure. In particular, I was concerned, as were some potential providers, to learn that it is intended that Jobcentre Plus will, in every case, deliver the first work-focused interview. That proposed model hugely constrains the private and voluntary sectors.

I understand that the Department for Work and Pensions has a screening tool to screen out those who are closest to the workplace, and that is quite right under value-for-money considerations; it would be frankly barmy to allow private sector contractors to take on people who were about to go back into the workplace, and to collect a large fee. I completely agree that there has to be a way of ensuring that that does not happen, but in a system where work-related activity is not compulsory, and in which even delivering the action plan is not required, the first interview will be the key to success.

The first interview is the point at which many private and voluntary sector providers believe they can genuinely deliver value—by galvanizing a marginalised individual into seeing, understanding, and grasping his potential for getting back into the workplace and overcoming the disadvantages that his absence from it has caused him. He must be able to see the potential to change his situation. In other words, we must turn the rhetoric of putting the focus on what people can do into a reality. I am not saying for a moment that Jobcentre Plus staff cannot do that; I am saying that the first contact is integral to the whole process. In private and voluntary sector-led areas, the work-focused interview should be carried out by the provider, as an integral part of the process. Otherwise, there is a risk that the model proposed by the Secretary of State will be compromised.

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Terry Rooney (Bradford North, Labour)

Does the hon. Gentleman not accept that, under the system, claimants have an initial interview as part of the process of making a claim, so it makes perfect sense, and is cost-effective, to wrap that up with the initial work-focused interview?

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Philip Hammond (Shadow Secretary of State for Work & Pensions, Work & Pensions; Runnymede and Weybridge, Conservative)

The problem that I see is that there are two different functions—policing of the benefit rules and arrangements, and trying to catch someone's imagination and get them to think about what they could do and to think outside the box that they have been in. Even the most positive person, even the person who is most determined to try and get himself back into the workplace, will still want to secure his benefit arrangements and will have an eye focused on that. It has been strongly suggested to me by people I have spoken to that there is an inherent conflict that people face when talking to Jobcentre Plus staff about their benefit arrangements and entitlements, and about their abilities and possible courses of action. In areas where the private and voluntary sector is rolling out the positive side of the relationship, it should be allowed at the first contact to try to catch the person's imagination and engage them.

I agree with Roger Berry that one of the roles that should correctly remain with Jobcentre Plus is the sanctioning arrangements. Following logically from what I have just said to the Chairman of the Select Committee, it would be perverse if the provider who is trying to focus someone resolutely on the positive side was engaged in a sanctioning role. The Secretary of State said that private sector providers had said that they wanted that power. None of those that I have talked to want to go within a mile of having a sanctioning power. They all said that they would rather Jobcentre Plus had that role.

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Mark Pritchard (The Wrekin, Conservative)

I welcome my hon. Friend's comments about the voluntary and not-for-profit sector. That proposal would be helpful where Jobcentre Plus staff have been laid off, as many thousands have been over the past few months, but where there are still Jobcentre Plus staff, does he agree that they are in the best position to undertake the first interview and assessment, and that there is a role in the job market for both providers? That may be a way forward, rather than one or the other, as the Government are suggesting.

Photo of Philip Hammond

Philip Hammond (Shadow Secretary of State for Work & Pensions, Work & Pensions; Runnymede and Weybridge, Conservative)

I thank my hon. Friend for that intervention. As the Chairman of the Select Committee rightly pointed out, there is a temptation to say that there are two functions: one entails gate-keeping the system, and the other relates to the first work-focused interview. There is a sense in which it might be economical to combine them. I am suggesting that that might cause considerable damage to the private sector providers' specific innovative approach.

When the Minister for Employment and Welfare Reform winds up, will he touch on the Transfer of Undertakings (Protection of Employment) Regulations 1981? I am concerned by reports that TUPE requirements might be imposed on private and voluntary sector providers of pathways programmes, even though it would be a new programme being rolled out in those areas. It would be helpful if the Minister could clarify that.

The Secretary of State is aware of and touched on the concerns that have been expressed about the design of the personal capability assessment, which is central to the process. We are all aware of the problems with the current system. The high success rate on appeal tends to suggest poor decision making in the Department for Work and Pensions. The Green Paper suggests that there are likely to be fewer appeals under the new system, but no indication is given of how we will achieve that step change in the quality of decision making following a more complicated assessment. It will be interesting to hear whether the Minister has any idea how we will get the number of appeals down. Will that be through better decision making or through a process change that will make it more difficult for people to appeal?

I should like to ask the Minister about the single interview. My understanding—I am happy to be corrected if it is wrong—is that the personal capability assessment, the basic assessment of a person's ability and whether it is reasonable to expect them to work, and the capability for work test, the test to establish whether it is reasonable to expect them to engage in work-focused activity, and possibly the work-focused health assessment for those in the non-support group as well, will all be carried out at the same time. Concerns have been expressed by some providers that there will be perverse incentives for the individual going to a single interview that deals with those three very different things.

I understand that it is the intention to pilot the new personal capability assessments, and I assume that that will be a piloting of the test itself within the framework of the existing benefit structure before the ESA is introduced. The explanatory notes suggest that there will be piloting, but I am happy to be corrected if that is not the case.

One of the most important topics of the Green Paper was early intervention. The Green Paper referred to interventions in the GP's surgery and during the statutory sick pay period. The Opposition believe strongly that there is a need for early intervention. What was a pure test of medical condition has often become confused, with different standards being applied and different factors taken into account by different GPs. The Green Paper made proposals for changes to statutory sick pay and the Government were right to abandon the idea of scrapping the three-day rule, but the focus on on-flow will be incomplete if SSP is ignored.

There is nothing in the Bill about SSP, but that may be because it does not require primary legislation. I urge the Secretary of State not to ignore this aspect. It cannot be right to ignore somebody in work who has become sick or incapacitated for six months before even considering their case and what ought to be done.

My hon. Friend Mr. Ruffley and I made an interesting visit to the Netherlands a couple of months ago—I understand the Minister may do so in due course—to see how the system operates there, with early and active intervention to help avoid people reaching the stage of long-term sickness.

Photo of Terry Rooney

Terry Rooney (Bradford North, Labour)

The hon. Gentleman should tell the full story. For the first two years of sickness, the employer remains liable for full wages under that system. That is a powerful incentive for the employer to get involved in rehabilitation. Does the hon. Gentleman want the same system in the United Kingdom?

Photo of Philip Hammond

Philip Hammond (Shadow Secretary of State for Work & Pensions, Work & Pensions; Runnymede and Weybridge, Conservative)

If the hon. Gentleman will allow me, I was about to say that the situation in the Netherlands is quite different from the situation that we have in this country, but as a model for early intervention, it was extremely informative. The Select Committee has also made a visit and drew broadly the same conclusions, and I believe the Minister is due to make a visit. I met many people who are looking forward to greeting him in due course.

We do not want to impose further burdens on employers. They have quite a few of those coming down the line anyway. Mr. Rooney will forgive me if, after having stood up and been counted recommending a 3 per cent. compulsory contribution to NPSS—national pension savings scheme— pensions, we do not want to impose too many new burdens on employers.

However, what we think is necessary is a simple procedure to identify likely long-term cases early in the statutory sick pay period—perhaps after six weeks, although I do not know whether that is the right period—so that people who remain in employment and on statutory sick pay could begin the processes of assessment under the ESA. That would entail engagement with their existing employer to look at their options, which is the preferred route, or engagement with job brokers or pathways providers to find suitable alternatives. That makes sense for both the individual and society. If we leave somebody idle and cast aside for six months on SSP, we raise the bar significantly to their eventual return to work.

The proposal will also be attractive in the short term to the individual employee, because if he can get the assessment period for ESA under way while he is still on SSP, he will be chewing up some of the 12-week period in which he will be on an effective JSA rate of support and getting—

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Michael Lord (Deputy Speaker)

Order. Call me old-fashioned, and initials are all very well, but sometimes it is a good idea to say everything in full, not just for the sake of the Official Report, but for people outside the House.

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Philip Hammond (Shadow Secretary of State for Work & Pensions, Work & Pensions; Runnymede and Weybridge, Conservative)

I am grateful to you for that guidance, Mr. Deputy Speaker. It is remarkable how quickly we slip into the jargon of our portfolios. The only trouble is that removing all the initials will probably double the length of the debate. JSA is the jobseeker's allowance and ESA is the employment and support allowance.

If it were possible to get somebody on to the assessment stage of ESA during the statutory sick pay period, that would be sufficiently attractive to the individual for this to be an entirely voluntary programme. I simply want to float this idea to the Minister and ask whether the Department is considering that, and if not, whether he would be prepared to do so, because from all the work that we have done it seems to be the key to addressing the problem, at least for the group of people who go from work on to long-term incapacity payments.

Many other issues have been raised during the course of the consultation, and they will be probed more fully in Committee. However, I have a couple of other questions to put to the Minister in relation to part 1. The DWP five-year plan refers to a further conditional payment for fulfilment of action plans. That seems to have been dropped in favour of work-related activity, which the notes explicitly say could be different from the action plans. It is difficult to understand the point of making an action plan if people will then be allowed to fulfil their obligations by doing something different from what has been written in the action plan, so perhaps the Minister could explain why that pledge has been dropped. I make no apology for having concentrated on the employment and support allowance and the pathways to work programme.

The Green Paper made a clear commitment to getting 300,000 lone parents and a million older people back into work. There is nothing specific in the Bill about achieving those targets, and there may not need to be because they may not need legislation, or the legislation may exist elsewhere. We strongly support the proposals, but there is a need for employer education and a change in some employer attitudes. My point in raising that at this stage is to say that while that may not need primary legislation in a DWP Bill, I hope that the DWP is prepared to act as lead supporter for the initiative in government. I am shocked that private and voluntary sector providers of up and running programmes universally say that placing people with the public sector is much more difficult than placing people with the private sector. The Government, as the largest employer in the country, should aspire to lead from the front and be the most flexible and receptive employer to the particular needs of people coming off incapacity benefit, older workers wanting to work flexibly and part time, and lone parents with particular requirements for a particular kind of flexibility in their working life, if they are to get back into work.

The changes to housing benefit fall into two parts, the first being greater tenant engagement in achieving value for money. No one could possibly disagree with that. That is a sensible and unbureaucratic way of trying to give people some real responsibility for the consequences of their decisions, and some benefit from making the most appropriate decisions.

The second part is the direct payment of rent, and I have some reservations about the wisdom of going down that route. The theory that the Secretary of State outlined is unimpeachable: giving people greater responsibility must in general be a good thing. But housing benefit payments will often be a very significant part of a person's total income, and some at least of the people who receive those direct payments will succumb, either to temptation or to pressing alternative need, and the consequence will be that they get into debt, into rent arrears, and ultimately perhaps face eviction. The Secretary of State says that the evidence from the pilots does not suggest that, and I know that the full results of the pilots will be published in due course, but what he says is so counterintuitive, and everybody involved in dealing with housing benefit tenants in the housing markets is so surprised by that outcome, that we need to do some more work on that area.

On Friday, I visited a homeless drop-in centre in Chester and I asked how many of the people who were being referred on to hostel accommodation were there as a result of having got into rent arrears and having been evicted from private accommodation. The answer was about 50 per cent. one way or another. The manager of that centre gave me an unequivocal assurance that the numbers would go up if a significant number of her clients were to receive direct payment of benefits. I know that there is a provision for local housing authorities to identify people who are at risk and not to make the payments direct to them, but the Minister will know that the guidance notes suggest that local authorities should not in any way be proactive in seeking out people who may be vulnerable in that way, so there is a real problem there that needs to be considered further. It is not a dogmatic point. There is a clear consensus that if we can give people responsibility, we should, but surely to goodness, not at the expense of them getting into rent arrears and debt, and facing possible eviction.

When the Minister winds up, will he confirm my understanding that it will not be possible to roll out the new local housing allowances to people who are in existing tenancies? There are practical and technical reasons for that. There is something of a double standard in not rolling out these arrangements to the social sector, and in particular to local authority tenants, where the landlord would be both the payer of the benefit and the receiver of the rent. From a basic economics point of view, there must inevitably be a reaction by landlords to the creation of greater risk for them in the marketplace. If a landlord who has been used to receiving a rent cheque reliably once a fortnight from a local authority, virtually a gilt-edged payment, is now to be invited to receive the rent from the tenant directly when and as he is able to make that payment, over time a premium will be demanded for taking on such tenants. Again, that will be to the disadvantage of the Exchequer if ultimately a two-tier market is created, and a marketplace that at the moment is regarded as attractive by landlords of housing benefit tenants because of the method of payment becomes an unattractive one with premiums and perhaps higher deposits demanded.

We remain deeply sceptical about the housing benefit sanctions for antisocial behaviour. We support entirely the taking of the toughest possible stance with those who are guilty of antisocial behaviour, but we have been here before, and the question is being asked whether this is a real threat or just a headline gimmick. If the threat of eviction has failed to change someone's behaviour, will the threat of losing their housing benefit make the difference? The suggestion that has been put to me is that it is most unlikely in those circumstances that the policy would be effective. Therefore, I am open-minded, but at this stage I am sceptical.

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Andrew Love (Edmonton, Labour)

Is the hon. Gentleman concerned that families will effectively be put out on the street and that children will be taken into care?

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Philip Hammond (Shadow Secretary of State for Work & Pensions, Work & Pensions; Runnymede and Weybridge, Conservative)

That is one of the principal concerns. The Secretary of State has addressed that point and is well aware of the concern. He is confident that the arrangements will ensure that that does not happen, although, again, it is not clear how that will be guaranteed.

I want the Minister for Employment and Welfare Reform to clarify one final point in his winding-up speech. At last Monday's Second Reading of the Compensation Bill, the Under-Secretary of State for Constitutional Affairs, Bridget Prentice, suggested that this Bill might be an appropriate place to address issues in respect of asbestos-related diseases that had arisen in the debate on that Bill, which would go beyond what is already in clauses 55 and 56. It would help if the Minister were to tell us whether the Government intend to go further in that area in this Bill or whether the Under-Secretary did not intend to give that hint.

We support the Bill's key objectives to get 1 million people off incapacity benefit and 300,000 lone parents and 1 million older workers back into the workplace. We recognise that that is an enormously complex area and that the detail of the Bill will need to be scrutinised along with the detail of the supporting programme and the draft regulations, which will be laid in due course.

We believe that the laudable objective of tackling poverty and social exclusion by reintegrating people into the work force through an increase in off-flow will most quickly be achieved by a greater transfer of risk to the private and voluntary sector, thus overcoming the resource constraints, which hon. Members have mentioned, and allowing the benefits to flow as widely and as quickly as possible. Coupled with that, we believe that there needs to be a new focus on early intervention during the statutory sick pay period to try to ensure that people in work stay in the work force, even where their current work is no longer appropriate for them.

I have not addressed many specific concerns which I know that other hon. Members will raise in the debate. We will listen carefully to what is said and genuinely look forward to a constructive experience in Committee. We will certainly not oppose the Second Reading of the Bill tonight, so it can go forward in Committee.

Several hon. Members:

rose—

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Sylvia Heal (Deputy Speaker)

Order. I remind hon. Members that Mr. Speaker has imposed a 12-minute limit on speeches by Back Benchers.

6:12 pm
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Hugh Bayley (City of York, Labour)

Since 1997, Labour's macro-economic policies, support for flexible labour markets and welfare to work incentives have guaranteed faster growth in this country than across the EU as a whole, created 2.5 million additional jobs and reduced employment to less than 1 million. That success has brought tangible improvements to the welfare of millions of employees and their families, but those improvements have not been shared by sick and disabled people of working age.

In my intervention on Mr. Hammond, I mentioned that the number of people of working age who were not working and who were claiming ill-health benefits quadrupled when his party was in power. Labour's achievement has been to stabilise those figures. In our first term, the number of people on incapacity benefit decreased marginally from 2.4 million to 2.263 million. In the second term, the figure rose marginally, but it was still slightly below the level that we inherited when we came to power. However, it is clear that stabilising the figures is not enough. More needs to be done and I therefore welcome the Bill.

I was the Minister responsible for disability benefits when the Welfare Reform and Pensions Act 1999 was before the House. I do not need to remind hon. Members who were in the House at the time that the Bill had a rocky ride.

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Justine Greening (Putney, Conservative)

I apologise for returning to the hon. Gentleman's earlier point about stabilising the figures, but I have been looking for a statistic. Is he aware that, since 1997, the number of young people under 25 claiming incapacity benefit has risen by 71 per cent. to 170,200? Does he agree that that statistic is particularly concerning?

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Hugh Bayley (City of York, Labour)

The hon. Lady should not pick among the figures. Any rise is a concern, and any reduction—there have been reductions among other age groups—is a benefit. The demonstrable difference between the Labour party's time in power and when the Conservative party was in power is that the number of people claiming incapacity benefit quadrupled under the Conservatives. Overall, the Labour Government have stabilised the figures, but we need to change that and get the numbers down. When the Conservative party came to power, 600,000 people were on invalidity benefit, so it must be possible to have fewer than 2.4 million people on incapacity benefit now.

When the 1999 Act was before the House, two points attracted criticism. The first concerned the changes to the contribution conditions for incapacity benefit and the second concerned the reduction in the value of incapacity benefit for those claimants who had occupational pensions. The Government responded to those criticisms by amending the legislation, but the controversy drew attention away from the Government strategy to increase benefits for severely disabled people who could not work and to start to provide support for people on incapacity benefit to return to work through the new deal for disabled people.

As many hon. Members have acknowledged, the Government have set an ambitious target to reduce by 1 million the number of people claiming incapacity benefit by enabling those people to get back into work. Having set such an ambitious target, I do not want the Government to make the same mistake now as we did in 1999 by giving the impression of narrowing the eligibility gateway to incapacity benefit instead of enabling people to overcome the limitations imposed by illness or disability in order to remain in work or to return to work.

The Government have demonstrated through the new deal for disabled people and, more recently, through pathways to work that, with appropriate help and support, people on incapacity benefit can return to work and, importantly, cope with work when they get there. Simply enabling people to get a job is not enough, because one must give them support to enable them to make a success of their jobs. Through the new deals, some 75,000 disabled people have come off incapacity benefits and returned to work.

In the UK, we reap the benefits of a flexible labour market so far as overall employment is concerned, but we still have an inflexible labour market when it comes to employment opportunities for sick and disabled people. Compared with other OECD countries, we have an acute shortage of occupational health services. We also have a rigid culture among both employers and employees that either one is well and working or one is limited by illness or disability, and off work temporarily or permanently.

As my hon. Friend John Robertson said, far too many GPs still sign sick notes without recognising the cost or that work, perhaps with reduced hours or changed responsibilities, may aid recovery. We must ensure that welfare forms an important part of GPs' initial training and postgraduate education. Perhaps we should examine ways to reward GPs who use sick notes wisely in the same way as we reward GPs who prescribe rationally and wisely.

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Ian Gibson (Norwich North, Labour)

My hon. Friend will know that an important part of the assessment is that a doctor appointed by the Secretary of State will be chosen to help the decision maker to decide whether a person no longer has the capacity to work. How will those doctors be chosen and how will we know that they are doing this with some understanding at different stages of the process?

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Hugh Bayley (City of York, Labour)

My hon. Friend raises an important point. When I became the Minister with those responsibilities, there was no specific training in disability assessment for such doctors. The Royal College of Physicians introduced a postgraduate diploma in disability assessment medicine to train them and it was intended to ensure over time that all doctors working for the Department for Work and Pensions would be trained in disability management. That is an extremely important part of the package.

There is a shortage of vocational rehabilitation services, including medical and psychological services and practical help with overcoming functional impairments. A study in 14 OECD countries, "Transforming Disability into Ability", which was published in 2003, compared the number of people who each year go through vocational rehabilitation with the number flowing on to long-term incapacity benefits. In Norway, Denmark and Korea, more people get access to vocational rehabilitation than go on to incapacity benefits. In Germany, Sweden, the Netherlands and the United States, about 50 per cent. of the number who go on to incapacity benefits get access to rehabilitation services. In Switzerland, Australia and Portugal, the figure is some 20 to 30 per cent. In the UK, it is still less than 5 per cent. We are second lowest of the 14 OECD states in the study.

More revealingly, the study calculated that spending on vocational rehabilitation as a percentage of spending on disability benefits varies enormously. In Norway, Germany, Sweden, Switzerland, Portugal, Australia and Belgium, spending on rehabilitation is between 70 and 100 per cent. of spending on incapacity benefits. In Denmark, Korea and the United States, the figure is about 50 per cent. In the UK, along with Poland, Austria and the Netherlands, we spend less than 20 per cent. of the amount spent on benefits for long-term sick and disabled people on rehabilitation. It is therefore not surprising that fewer people are rehabilitated in the UK or that the number of incapacity benefit claimants here is higher than the number of people claiming similar benefits in most other OECD countries. It is important to complement the measures in the Bill by substantially increasing the resources available for vocational rehabilitation. That would gain widespread support from organisations representing disabled people.

Within the national health service, there has been a substantial increase in resources for rehabilitation. However, its priority is to rehabilitate hospital patients to the point at which it is possible to discharge them so that they may return home, and not necessarily to continue the rehabilitation to the point where they can return to work. The NHS needs to earmark more resources for vocational rehabilitation.

The Government should consider creating financial incentives to reward successful cases of rehabilitation. As the hon. Member for Runnymede and Weybridge said, huge savings accrue to the DWP and the Government when people come off incapacity benefit. Those savings should be recycled to pay for more people to be rehabilitated.

There are lessons to be learned from abroad, although not necessarily from the Netherlands, where, as my hon. Friend Mr. Rooney pointed out, there is an incentive for employers to rehabilitate their staff because they carry the cost of somebody being off work for the first two years of absence. That is not the situation in this country. We could perhaps learn a better lesson from Germany or Switzerland, where, under the Bismarck insurance scheme, employers pay into a common fund that gives cover for health, rehabilitation and pensions. The German phrase for such funds is "Rehabilitation vor Rente"—"rehabilitation before pension". Those insurance funds have an incentive to rehabilitate, because the person then goes back to work and starts paying contributions again. If the scheme fails to rehabilitate, it ends up paying a pension for life.

There have been similar experiments in Sweden, where pilots have merged benefits and health budgets at local level to pass benefits savings on to health care providers when rehabilitation successfully gets people back to work. I should like our Government to adopt a similar approach. Perhaps a simple way to pilot it would be to give a health and vocational rehabilitation purchasing budget to the managers of the pathways into work pilots. If the NHS does not have the incentive to rehabilitate to the point at which people get back to work, we need to create an incentive for the DWP to reap the financial benefits when somebody is successfully rehabilitated and returned to work.

When the Conservatives were in power and unemployment broke the 3 million barrier for the second time, a Conservative Chancellor of the Exchequer said that, sadly, there was no alternative. The record of this Labour Government in their first two terms has shown that there is an alternative. For fit people of working age, unemployment has fallen dramatically to fewer than 1 million. That is something that this Labour Government will be remembered for. The challenge for the third term is to show that there is an alternative for people on long-term sickness and incapacity benefits. The Bill shows the way forward, but it needs to be complemented by greater investment in rehabilitation services.

6:26 pm
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Danny Alexander (Shadow Minister and Disability Spokesperson, Work & Pensions; Inverness, Nairn, Badenoch and Strathspey, Liberal Democrat)

It is a great pleasure to follow Hugh Bayley. I agree with the stress that he puts on the need for more emphasis on rehabilitation in the training of doctors and a greater sense of awareness, particularly among GPs, of the importance of work and occupational health as a route to dealing with medical conditions. The medical practice in Camden in north London where the idea of having an employment adviser within the practice has been piloted has received visits from all the Front Benchers present, and it is probably getting sick of politicians trooping through the place. The lesson to be learned is that such a measure can have a great deal of success in helping people back to work, as well as reducing medical bills.

This debate has been delayed for far too long. The fact that more than 2.5 million people remain on incapacity benefit is unacceptable, and it is a disgrace that that group has been so long neglected by Governments of both parties.

The Minister will be pleased to hear that we strongly agree with the principles behind this reform—principally, that society should play a much more active role in enabling the sick and disabled to take the opportunities afforded by participation in the labour market. That objective is vital not only for the individuals concerned but for society as a whole. As has been said, work is the best route out of poverty, and we all benefit, as a society, from higher levels of economic activity.

While supporting the principle of welfare reform and many of the measures in the Bill, we are concerned because the Government's proposals are short on detail, because there is a shortage of funding in some respects, and because they rely for delivery on a Department that is under massive pressure. Liberals have long believed that freedom is curtailed by poverty and disadvantage. Today, my right hon. and learned Friend Sir Menzies Campbell again made tackling poverty a top priority for Liberal Democrats. Welfare reform is central to that objective.

Despite the long wait, the Bill gives every impression of being rushed in some respects. Huge chunks of important policy detail are relegated to secondary legislation, and by leaving Second Reading until just before the recess, the Minister gives himself time to work out the detail in many of those areas. The carry-over procedure, which will be the subject of a later motion, was neither designed as a general catch-all to allow Departments to delay legislation nor to apply to Bills that had not been subject to pre-legislative scrutiny. If the carry-over motion is to have all-party support—it was intended that such motions should—the Minister for Employment and Welfare Reform must provide a specific justification for using it in the case that we are considering. I hope that he will do that in his winding-up speech.

I hope that the Minister can also give a clear assurance, linked to my previous point, that sufficient time will be allocated in Committee to allow full scrutiny of the Bill's important provisions. That will require the Government to publish in draft the key statutory instruments—the Minister undertook to do that in answer to oral questions—but I hope that he will include those that deal with the level of benefit, rules of entitlement to benefit, the capability assessment and the other proposed medical assessments, conditionality, the housing benefit reform and sanctions.

The Bill proposes a framework of additional responsibilities for claimants, but that can be fair only if the state and employers take their share of responsibility. As the Disability Rights Commission said:

"In return for effective opportunities and support, we believe it is reasonable to expect more people to move towards work. Without effective opportunities and support, it is not reasonable to expect greater responsibilities of claimants."

The evaluation of pathways to work shows that the scheme has markedly improved employment outcomes. It incorporates the individually focused approach that Liberal Democrats have long advocated, and we welcome its success. However, unless the roll-out of the scheme is properly funded and coherently planned, I have grave concerns about whether it can fulfil all the expectations. The Government have allocated £360 million, as the Secretary of State said, to rolling out pathways to work. However, we still do not know exactly how much of the figure will be spent on doing that. Will the Minister give us more detail today? Will he tell us how much money will be spent on the new computer system needed to administer the new employment and support allowance benefit?

Even if all the £360 million were spent on rolling out pathways to work, our calculations, based on the amounts that have been spent in the pilot areas, suggest that the figure is more than £250 million short simply for dealing with the needs of new claimants. If the objective were to support all eligible claimants, the welfare black hole would be even greater. Given the cuts at Jobcentre Plus, it is also unclear whether there will be sufficient well-trained personal advisers, let alone extra resources from the Treasury, to deliver the scheme.

Although the Secretary of State did not mention the matter, the newspapers report that the Government have tacitly admitted that the funds are inadequate by suggesting that the support through pathways to work should be targeted at those with children. Will the Minister confirm whether that is the Government's intention?

The Government have made it clear that they want to target pathways resources in other ways. For example, the city strategy is a welcome attempt to tackle concentrations of incapacity benefit claims by joining up resources in specific cities. However, there is a worrying neglect of the challenging issue of helping claimants in rural and remote areas back to work, not to mention the pockets of deprivation found in rural towns and villages. I hope that the Minister can deal with that point, which was also made in an earlier intervention.

It is worth pointing out that the success of pathways to work has not been even for all groups. The Department-funded evaluation, which the Institute for Fiscal Studies carried out, found no statistically significant improvement for people with mental ill health as the primary reason for their claim. Age Concern said that the scheme had been much less successful for the over-50s. Better support for both groups is vital if welfare reform is to be a success.

The voluntary and private sectors can be highly successful in getting people back to work. In some ways and some places, they have been more successful than Jobcentre Plus. I highlight the work of the SHIRLIE project in Inverness, in my constituency. It helps especially those with learning disabilities back to work. The working neighbourhoods project in Parkhead in Glasgow has received several visits from politicians, but has also been successful in targeting not only those on incapacity benefit but a range of disadvantaged groups, through one joined-up project.

However, it is important to ask how the experience of the voluntary sector will be used throughout the country. The current plan is a bit of a dog's breakfast, with Jobcentre Plus delivering 40 per cent. of provision and the voluntary and private sectors being used for the remaining 60 per cent. If the voluntary sector is as effective as the Government say it is—we agree about that—why will their expertise not be on offer throughout the country?

Work-related activity must reflect the nature of a person's impairment. Specialist as well as more local providers should therefore be contracted to help specific client groups. There should not simply be big contracts with big providers.

In dealing with the needs of people with mental health problems, we need to ensure that there are enough trained therapists throughout the UK, as Lord Layard, for example, proposed. Given the five-year training for many of those roles, what plans have the Government to train people to fill the roles that will be needed if welfare-to-work support is to be properly available for people whose first reason for claiming benefit is mental ill health?

In proposing the new employment and support allowance, the Government have missed an opportunity to simplify our enormously complex benefits system. They have also missed an opportunity to tackle the poverty and low income traps that remain far too prevalent in the benefit system, not least in the tapers for housing benefit, council tax benefit and income disregards. There is an opportunity to unify the system. The income disregard is currently a great deal smaller than that for incapacity benefit. That means that although the income disregard for incapacity benefit may encourage people to try out work for a few hours a week, they then get caught in the housing benefit trap, which leads to their losing benefit and acts as a strong disincentive to taking work.

Will those who receive the income-related employment and support allowance, who would previously probably have been entitled to income support, also be entitled to passported benefits—for example, free NHS prescriptions and dental treatment, free school meals, funeral expenses and so on? That is important for many claimants. Unless the Minister can clarify the matter, there may cases of the new benefit leaving people worse off.

Will the Minister also explain why employment and support allowance, once decided, is not to be backdated to the start of the claim? Not doing that will cause serious problems for some people, especially those who leave work or statutory sick pay, or younger claimants who will be penalised through the reduced rate that applies in the early phase of the benefit.

I want to consider the proposed medical assessment process. The incapacity benefit medical assessment desperately needs reform. It is subject to persistent concerns about unfairness and poor decision making, especially about mental health. Some 50 per cent. of appeals are granted. A working group is considering improving the assessment, and I welcome the Secretary of State's commitment to ensuring that more detail is available before the Committee discusses the matter. It is vital for the Government to get it right. The Royal College of Psychiatrists want rigorous testing and evaluation of the new assessment system for those with mental health conditions. In a written answer, the Minister suggested that some sort of testing, but not a formal piloting process, will take place. Will he explain exactly how the new assessment will be tested?

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John Robertson (PPS (Dr Kim Howells, Minister of State), Foreign & Commonwealth Office; Glasgow North West, Labour)

Does the hon. Gentleman agree that there should be rigorous testing of GPs and the way in which they examine some of their patients to whom they give sick lines so readily?

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Danny Alexander (Shadow Minister and Disability Spokesperson, Work & Pensions; Inverness, Nairn, Badenoch and Strathspey, Liberal Democrat)

The hon. Gentleman makes an important point, which the Minister should address. There is also a problem with appeals. Roughly 50 per cent. of GPs do not reply to requests for information for the first medical assessment. It is only when the appeal phase is reached, and the GP then provides information, that the appeal is successful. There may be a link, which the Government should explore, between those factors.

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Michael Weir (Spokesperson (Work & Pensions; Trade & Industry); Angus, Scottish National Party)

Does the hon. Gentleman accept that one of the problems with the assessment process is that many people who go for an assessment feel that the person conducting it does not have sufficient knowledge of the specific condition from which they suffer? If we are to make changes, it is important to ensure that all those who conduct assessments have sufficient knowledge of the person or condition that they assess.

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Danny Alexander (Shadow Minister and Disability Spokesperson, Work & Pensions; Inverness, Nairn, Badenoch and Strathspey, Liberal Democrat)

I agree. The hon. Gentleman makes an important point. It is a common complaint that the test takes into account someone's condition only on that specific day. The new test needs to deal better at dealing with fluctuating conditions and progressive conditions, such as multiple sclerosis.

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Philip Hammond (Shadow Secretary of State for Work & Pensions, Work & Pensions; Runnymede and Weybridge, Conservative)

There seems to be some confusion about whether the new personal capability assessments are to be piloted. When I mentioned the matter earlier the Secretary of State appeared to suggest that they would not, and that there would be testing rather than piloting. According to my Library briefing, the Department's response to the Select Committee report states, on page 8:

"The working groups are due to report to DWP Ministers by September 2006, after which there will be a period for piloting the revised PCA."

Perhaps the hon. Gentleman would care to comment on that.

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Danny Alexander (Shadow Minister and Disability Spokesperson, Work & Pensions; Inverness, Nairn, Badenoch and Strathspey, Liberal Democrat)

I have already expressed the view that this proposal should be subject to rigorous piloting. I hope that in the Minister's response—

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Jim Murphy (Minister of State (Employment and Welfare Reform), Department for Work and Pensions; East Renfrewshire, Labour)

rose—

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Danny Alexander (Shadow Minister and Disability Spokesperson, Work & Pensions; Inverness, Nairn, Badenoch and Strathspey, Liberal Democrat)

I shall give way to the Minister, so that he can tell us now.

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Jim Murphy (Minister of State (Employment and Welfare Reform), Department for Work and Pensions; East Renfrewshire, Labour)

I am sorry for intervening on the hon. Gentleman, because I know that many hon. Members wish to participate in the debate, but I want to clarify the confusion. It is our intention that once the review has concluded in September, we will run both systems in parallel with each other to ensure that proper testing takes place. Whether we call that a dummy run or piloting, it will be an effective way of ascertaining whether we have got the new system absolutely right. We shall compare it with the current assessment of existing cases.

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Danny Alexander (Shadow Minister and Disability Spokesperson, Work & Pensions; Inverness, Nairn, Badenoch and Strathspey, Liberal Democrat)

I am grateful to the Minister for clarifying that point— [ Interruption. ] However, my hon. Friend Mr. Heath has just suggested from a sedentary position that it is possible for both systems to be wrong at the same time. The Minister's plan is not necessarily a guarantee of success—

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John Robertson (PPS (Dr Kim Howells, Minister of State), Foreign & Commonwealth Office; Glasgow North West, Labour)

They could both be right.

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Danny Alexander (Shadow Minister and Disability Spokesperson, Work & Pensions; Inverness, Nairn, Badenoch and Strathspey, Liberal Democrat)

They could, but I shall certainly be keen to see a lot more details of the testing that the Government have in mind. Perhaps the Minister will say more about that when he winds up the debate.

It is also important to understand how the new capability assessment relates to the proposed work-related health-focused assessments. If only those on the work-related activity premium are to be subjected to the latter, but the two assessments are supposed to take place at the same time—as it says in the explanatory notes—how will it be decided whether it is appropriate for someone to move on to the work-related health-focused assessment at stage two? Will that decision be taken on the day, or will they be invited back?

It will be disappointing if, as has been hinted, the new assessment is still to be based purely on a medical model of illness and disability. A test that can take account of psycho-social factors and the barriers that disabled people face would give fairer outcomes. The Government recognised in their Green Paper that the term "personal capacity assessment" had negative connotations. However, so does a test for "limited capability". If the tests are to be taken together, they should be given a different name, such as the labour market disadvantage test. That would signpost a different approach, focused on identifying impairment-related barriers to work. I hope that the Government will consider that suggestion.

I want to turn now to the conditionality arrangements in the Bill. The principle of responsibility is an essential part of liberalism. Provided that comprehensive support is available to help individuals to get back to work, and appropriate safeguards are in place to protect the most vulnerable, the idea that people should take responsibility for engaging with the available support is one that we encourage. Indeed, it must surely be a central objective of policy to reach a position where disabled people are supported to the extent that they can play their role as full and active citizens, with all the rights and responsibilities that that entails.

However, we have some concerns about the conditionality regime as it is proposed in the Bill. Conditionality will apply not only to engaging with support through work-focused interviews, which we support, but to work-focused activity and, according to the Bill, to taking part in additional work-focused health-related assessments—although the Secretary of State suggested in response to my intervention that the Government had now dropped that plan, which sounds quite sensible.

Pathways to work will need much higher investment if the balance between the quality of support and the personal responsibility of the claimant is to be fair. That is particularly important if the receipt of benefit is to be conditional on work-related activity. Nor, in the Government's proposals, is there any limit to the period for which conditionality will apply. If someone has struggled to enter the labour market for a long time without success, despite benefiting from the full range of support on offer, should they really be forced to continue to take part in fruitless activity?

By leaving the details entirely to secondary legislation, the Government are allowing the possibility that a less compassionate Government—or, indeed, the present Government in one of their less compassionate moods—could increase the sanctions and reduce the support.

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David Ruffley (Shadow Minister, Work & Pensions; Bury St Edmunds, Conservative)

Yes, Labour.

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Danny Alexander (Shadow Minister and Disability Spokesperson, Work & Pensions; Inverness, Nairn, Badenoch and Strathspey, Liberal Democrat)

I hear a "yes" from the Conservative Front Bench. Perhaps the hon. Gentleman is anticipating an occasion on which he could do exactly that. This is why we need to be careful about what is in the Bill and what is to be introduced through regulations. We remain to be convinced that the safeguards in the system for vulnerable people are sufficient, and a robust system of appeals must also be put in place.

As the hon. Member for City of York rightly said, preparing disabled people for work is not enough if there are no employers ready and willing to take them on. On this point, the Bill and the Green Paper are both lamentably silent. Much more could and should be done to work with employers. For example, the access to work scheme is one of the Government's best kept secrets. According to their own figures, for every person helped through the scheme, there is a £1,400 net benefit to the Exchequer and a £3,000 net benefit to the economy. Yet still the Government fail to promote the scheme adequately, and about 80 per cent. of small employers are unaware of it.

The Government should use the Bill as an opportunity to invest in the promotion of the access to work scheme, particularly to small businesses, and to make changes to the way in which access to work decisions are made, so that people will know their access to work entitlements before they approach an employer. Also, I hope that the Minister will review the decision to remove the access to work scheme from central Government Departments. The DWP's poor performance in employing disabled people sets a bad example.

The Employers Forum on Disability has pioneered the auditing of disability standards for employers. The Government should consult on a duty for larger employers to carry out such audits because, as the forum makes clear, this should not be seen as a burden. After all, disabled people are customers, employees, stakeholders, partners and competitors, and 82 per cent. of customers with disabilities surveyed recently have taken their business to a more disability-confident business competitor in the past 12 months. Each year, 25,000 people leave work due to injury and ill health, but this drain of talent is unnecessary. Forty-three per cent. of European workers say that they could work if employers made adjustments.

I hope that the Minister will also take the opportunity that the Bill provides to pick up the idea proposed in a 10-minute Bill by John Robertson. I am sure that the hon. Gentleman will say much more about that in his speech, and I do not wish to steal his thunder. However, his proposal for rehabilitation leave is a significant one, and it could make a real difference.

I now turn to the Bill's proposals on housing benefit reform. The proposed local housing allowance has some positive features, but the evaluation has shown that although some benefits have emerged, there have been fewer than had been hoped. The Bill provides welcome simplification of the process of obtaining extended payments when a claimant enters work or has a significant rise in income. The Liberal Democrats welcome the steps to encourage greater financial responsibility. I am pleased that the worries about increases in rent arrears—which Mr. Hammond mentioned—and about evictions have so far not been realised in the pilots.

The evidence from the pilots also suggests, however, that the objective of simplifying the administration and reducing administration costs has been undermined because the new vulnerability assessment—which I welcome—is needed to help people who cannot manage direct payments. So the savings that will be made by administering the new benefit will have to be balanced against the increase in administration needed to make the vulnerability assessment work properly.

There has been a welcome fall in the number of people facing a shortfall in their rents in the pilot areas. However, this depends on how the local housing allowance rates are set. They are set according to broad rental market areas, and are based on the local market rent. Different outcomes can therefore be found in different areas. In Conwy, for example, Shelter found that only 10 per cent. of property was affordable for local housing allowance recipients, whereas the figure was 55 per cent. in Edinburgh. Perhaps rent officers should be guided by the statutory minimum proportion of affordable property in each broad rental market area when establishing those areas. Given the housing and benefit provision duties of councils, it would be reasonable to require the rent service to consult them on the setting of broad rental market area boundaries.

The pathfinder areas were given significant extra financial resources to provide financial advice and help to those who had not received direct payments of housing benefit before. I hope that the Minister will make it clear that that will continue as the new system is rolled out across all the local authorities, because in many areas, help such as that provided by Citizens Advice was crucial in preventing the short-term drop-off in payments and subsequent rise in arrears and evictions that the hon. Member for Runnymede and Weybridge mentioned.

The Liberal Democrats have always opposed the single room rent, as did the present Secretary of State, and the Prime Minister, when the Conservative party introduced it. It will continue under this Bill, however, in a slightly different form—the shared room rate. While the shared room rate is slightly more generous, the basic unfairness and large rent shortfalls will continue. We will introduce amendments to scrap it, which we hope will have the support of all those who voted against the single room rent when it was introduced in 1996.

I now turn to the provisions relating to antisocial behaviour. Liberal Democrat Members bow to no one in our determination to deal with antisocial behaviour, as the performance of Liberal Democrat-run local authorities across the country will show.

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Danny Alexander (Shadow Minister and Disability Spokesperson, Work & Pensions; Inverness, Nairn, Badenoch and Strathspey, Liberal Democrat)

I did say it with a straight face, because it is true. However, the people who suffer from antisocial behaviour want measures that work on the ground, not just on the front page. We will need to examine in Committee whether the proposal will deliver a real benefit, or whether it is just a gimmick to provide headlines for the Government.

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Greg Hands (Hammersmith and Fulham, Conservative)

My impression has been that the Liberal Democrats have pretty much opposed every piece of antisocial behaviour legislation. Can the hon. Gentleman go into a little detail about why he opposes this measure? It seems to me that it is removing housing benefit from people who have already been evicted for antisocial behaviour, and is essentially designed to get such people to undertake a rehabilitation course?

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Danny Alexander (Shadow Minister and Disability Spokesperson, Work & Pensions; Inverness, Nairn, Badenoch and Strathspey, Liberal Democrat)

I am grateful for that intervention, as it gives me the opportunity to point out that, as my colleagues reliably inform me, Liberal Democrat and Conservative Members have been in the same Lobby on most votes on antisocial behaviour. We will not take any lessons from the hon. Gentleman on antisocial behaviour. If he is interested in discussing antisocial behaviour, he might care to reflect on ideas such as acceptable behaviour contracts, which have been pioneered by Liberal Democrat councils such as Islington, and which have even been celebrated by Government Members; perhaps when they did not realise that they were Liberal Democrat ideas. If he had listened carefully, he would recall that I said that the measure would need to be examined carefully in Committee to see whether it will deliver a real benefit.

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Andrew Love (Edmonton, Labour)

The hon. Gentleman is absolutely correct that the rehabilitation courses suggested will need to be considered carefully. As I understand it, however, the Government are suggesting that there should be a number of pilots over two years. Is not it sensible to wait for the results of those pilots?

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Danny Alexander (Shadow Minister and Disability Spokesperson, Work & Pensions; Inverness, Nairn, Badenoch and Strathspey, Liberal Democrat)

I am aware that the Government have said that there should be pilots for the measure. Ministers, although not the Secretary of State, have also said that the number of occasions on which they expect it to be used is very few—

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David Laws (Shadow Secretary of State for Work and Pensions, Work & Pensions; Yeovil, Liberal Democrat)

Tiny.

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Danny Alexander (Shadow Minister and Disability Spokesperson, Work & Pensions; Inverness, Nairn, Badenoch and Strathspey, Liberal Democrat)

As my hon. Friend says, the word used was "tiny". What we will learn from the pilots I do not know. As I said, we will need to scrutinise the proposal carefully in Committee.

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Adrian Bailey (PPS (Rt Hon Hilary Armstrong, Minister of State (Cabinet)), Cabinet Office; West Bromwich West, Labour)

Given the hon. Gentleman's declared Liberal Democrat opposition to this policy, will he say whether any Liberal Democrat councils will agree to be part of the pilot scheme?

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Danny Alexander (Shadow Minister and Disability Spokesperson, Work & Pensions; Inverness, Nairn, Badenoch and Strathspey, Liberal Democrat)

As a good Liberal Democrat, I take the view that democratically elected councils should be in a position to decide such things for themselves. I do not share the authoritarian tendencies exhibited far too often both by Ministers and by Conservative Members. If the hon. Gentleman had listened carefully, he would know that I have not declared stringent Liberal Democrat opposition to the measure. I have said that it needs to be considered carefully in Committee. I was also about to make clear—this point may be of interest to some Members who intervened earlier—that there are still real concerns about the impact of the proposal on families with children. Who is being asked to take the punishment for antisocial behaviour? Is it the children of an antisocial tenant, or perhaps even the parents or siblings of an antisocial teenager? We need a lot of answers on that point. I look forward to debating the matter in Committee. [Interruption.] I am not sure whether that was an intervention, so I shall press on. Perhaps an acceptable behaviour contract would be appropriate.

In relation to the provisions on compensation for mesothelioma, I welcome the Government's steps to expedite the issue. It is important, however, that we get a proper answer to the point that Mr. Clapham made in an intervention. Can the Minister ensure that the compensation process is as rapid as possible, and that it will extend to partners suffering from those diseases, such as wives exposed to the fibres while cleaning overalls? The issue has been much debated, and it is important that we press on, as time is of the essence.

The objective of the Bill is to help more people off incapacity benefit and into work. We support that objective. I hope that the Bill will receive its Second Reading tonight, so that it can proceed to Committee and the issues and flaws that I have identified can be addressed. We will work constructively to improve the Bill. Whether we support it when it returns to the Floor of the House, however, will depend entirely on the extent to which Ministers are willing to listen to the many concerns that exist both in the House and outside.

6:55 pm
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Karen Buck (Regent's Park and Kensington North, Labour)

All-party consensus usually makes me a little nervous. On a topical note, the high degree of consensus in relation to the introduction of the Child Support Agency should act as a salutary reminder that the fact that we all agree with something does not mean that we have got it right. Undoubtedly, however, the thrust of this Bill is right, sensible and carefully balanced. Both current and recent Ministers should be congratulated on tackling an issue that only a few years ago was toxically controversial, and producing a package of proposals that can command broad support, subject to debate about a number of specific and detailed issues of implementation.

I want to spend most of my time talking about the housing benefit elements of the proposals—housing benefit is an issue in which I take an almost unhealthy interest. Before I do so, I want to spend a few minutes on incapacity benefit, especially as it relates to my community. As my hon. Friend Hugh Bayley was saying, just as national trends in incapacity claims tell us a great deal not just about the claimants but about the labour market, social and even cultural context, so local trends can alert us to something important going on, and warn us that we need to take action.

In my constituency, the leafy-sounding Regent's Park and Kensington, North, 11 per cent. of the working age population are on incapacity benefit—more than the number of people who claim incapacity benefit in the Rhondda, the equal highest percentage in London, and a higher percentage of the working age population than many areas traditionally associated with high IB levels, such as Barnsley, Bradford, Chesterfield and Clwyd. In addition, my constituency has 1,100 more claimants than in 2001, making it one of the largest increases in benefit take-up in the whole country. Therefore, something important is going on. We have some understanding of what is happening, but not necessarily of why it is happening. The message, of which I ask Ministers to take due note, is about the dynamic of London and London poverty, and not only about incapacity benefit. It requires us to take a much more robust approach to the analysis and treatment of such problems in London than has hitherto been the case.

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Justine Greening (Putney, Conservative)

As a fellow London MP, I am listening to the hon. Lady with some interest, and she has a very good point. Some of the incapacity benefit claimants who come to my surgery are highly skilled people who, for one reason or the other, have ended up on that benefit. The current system is not really structured to help them to get back into work. For example, they might be ex-IT consultants who were offered what, for them, would essentially be remedial, basic IT courses. Perhaps she has experience of a similar group of people.

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Karen Buck (Regent's Park and Kensington North, Labour)

Disturbingly, there seems to have been another outbreak of all-party consensus. That is absolutely true, and I was about to refer to precisely that problem.

In London and in my constituency in particular, there is an even sharper IB profile than can be seen in the country as a whole. The increase in mental illness and mental ill health is evidently a particularly strong driver of IB claims. In my constituency, 49 per cent. of IB claimants have a mental-health problem as their primary disorder, compared with 39 per cent. in the country as a whole. Claimants are younger, and—importantly—much more are black and minority-ethnic. That does not reflect the nature of the population disproportionately, but it demonstrates that we need a more sophisticated package of support than has sometimes been provided.

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Sadiq Khan (Tooting, Labour)

My hon. Friend has spoken of problems that are specific to London. Is she aware that the number of recipients of IB with mental or behavioural disorders increased from 21 per cent. in 1995 to 39 per cent. in 2005?

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Karen Buck (Regent's Park and Kensington North, Labour)

I was not aware of that statistic, but it makes perfect sense in the context of what I am saying.

In my inner-city community and, I suspect, in others, we see a peculiarly compounded set of problems, leading to an extremely complex case load. Some people's first language is not English; some may have physical problems, which may be exacerbated by a range of mental-health problems. Let me return to what was said by Justine Greening. The refugee communities in my constituency display all those characteristics, and define the problem very well. They include people with exceptionally high skills, and the level of education among them is significantly higher than that of the general population. Many of them have been victims of torture and have experienced the trauma of exile as well as their underlying conditions; many also have language difficulties. Nevertheless, they could contribute a great deal to the economy if they received the intensive support services that are needed to help them to work.

Let me give some examples. Ali, who was an architect in Sudan, now has to deal with chronic depression—unsurprisingly—and with damage to his back and legs as a result of torture, but is perfectly capable of working as an architect. The amount of help that could help him to use his qualifications is very limited. Fatima, who was a midwife, is also extremely keen to return to work. She suffers from mental-health problems, depression and back pain. She would be able to return to work, but is frequently sent on skills courses and asked to consider employment in the retail industry. She has neither the training nor the application for that.

It is not only refugee families that experience such problems. Dennis, whom I saw a few weeks ago, had a high-powered job in an advertising company until he had a nervous breakdown and was accepted as homeless. He is keen to return to work. Unfortunately, he turned down an offer of permanent accommodation because he was nervous about the area. The council then discharged its duty to house him, and now he is homeless on top of all his other problems.

Historically, we in inner London have not enjoyed anything like the success that welfare programmes have generally achieved in other parts of the country. The new deal has been less successful in inner London, and there has been a much lower take-up of tax credits. A range of excellent programmes, which I strongly support, do not deliver in the area. There is a real danger that that will happen again. If we do not accept the particular complexity of case-load needs and the existence of multiple disadvantages, compounded in many cases by housing problems, we will not be able to deliver the outcomes that we want.

That is even clearer when seen in the context of the London labour market, where we see a projected continued reduction in the level of entry to the lower-skilled jobs towards which so many claimants are directed in the first instance. If we do not raise our game in terms of the quality of skills training offered to those people, we will find ourselves trying to encourage them to return to a market that no longer exists for them.

What worries me greatly is that unemployed people, those on income support and, indeed, IB claimants who are anxious to return to the labour market, or at least to be diverted from long-term benefit dependency, are being leapfrogged by globalisation. A wider labour market throughout the south-east of England—and, nowadays, throughout Europe and worldwide—is taking the jobs that are needed by so many of our disadvantaged individuals.

Let me say a little about housing benefit. The Bill does not refer to the problems experienced by families in temporary accommodation in overcoming disincentives to work. The Department for Work and Pensions is running a small pilot scheme in Newham, "Working Futures", designed to help families paying the high rents that are charged for temporary accommodation and treated as if they were standard social housing rents for the purposes of benefit claims. Why is that a tiny single-borough pilot scheme?

My borough contains 3,000 households in temporary accommodation, of which 92 per cent. are not in the labour market. That compares with 67 per cent. of all social housing tenants. We can therefore assume that, almost at a stroke, 1,000 households in a single borough could be encouraged into work if their housing benefit were treated differently. As it is, those people are asked to clear a rent of £400 or £450 every week before they can gain any benefits from working. Given the interaction of the tapers, it is no wonder that most people feel that that is simply not worth their while. There are 100,000 families in such accommodation in the country as a whole. We should be bold and sensible, and roll out the pilot scheme as quickly as possible. The Treasury is spending £400 or £450 a week on housing benefit, which is lining the pockets of private landlords and trapping people in benefit dependency.

I generally welcome the roll-out of the standard housing allowance across the private sector, and strongly welcome the decision not to proceed with its extension into the social sector. The fundamental difference is that most private-sector tenants on housing benefit were already subject to shortfalls between rent and housing benefit. That is not the case in the social rented sector, so there would have been a huge number of losers. It would have been insane to proceed, and I am very pleased that the Government saw sense.

I worry about the possibility that the local housing allowance in high-value areas could result in more homelessness. The pilot schemes show a disproportionate impact in different areas. We may find that it works perfectly well in some parts of the country, but leaves us with a headache in others. I hope that we will watch the situation closely.

I, too, am extremely anxious about the sanctions for antisocial behaviour. I am pleased about the decision not to proceed along the lines proposed in 2003. I acknowledge that there will be pilot schemes, and that the proposal is infinitely better targeted and more carefully drawn up than the original version. I still believe, however, that in what will almost certainly be the majority of cases, because of the profile of families in social housing, families with children will find sanctions locking them further into a downward spiral of homelessness and debt. They simply displace the problem from one form of housing to another, without doing anything fundamental to deal with the problem.

In that context, I am aware of young children with personality disorders, including autism, whose control over their behaviour is extremely limited, but there is virtually no provision for helping families with such children. They are almost entirely outwith the support system. It is right to do what we can to take such families and individuals into intensive rehabilitation. Sanctions in respect of tenancy have to apply, but I believe that this will not be a productive way forward.

In summary, it is an excellent Bill with much to commend in it. I hope that it will be strengthened still further by a constructive set of proposals that will take us through Committee. I remain hopeful that in respect of one or two aspects of the Bill, there is still time for a rethink.

7:10 pm
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Angela Browning (Deputy Chairman (Organising and Campaigning), Conservative Party; Tiverton and Honiton, Conservative)

I would like to focus on the part of the Bill that deals with incapacity benefit and on the problem of getting people with disabilities into work. A broad range of charities and organisations welcome and support the Bill, but that support is not unqualified. Those organisations and I have expressed many caveats about which we are concerned.

In response to the Green Paper, I submitted a document on the specific subject of Asperger's syndrome and how to help adult sufferers of it into work. I am grateful that the Secretary of State met me in March to discuss that paper; and that, last week, the Minister for Employment and Welfare Reform met me and a representative from the National Autistic Society, who runs the Prospect employment scheme. We discussed how best to interface with the Government's plans, and particularly how best to get this group of people into work.

Why Asperger's syndrome? There are reckoned to be about 332,000 people of working age who have an autistic spectrum disorder and are thought to be of average or above average intelligence. Of those who hold down a job, however, only 6 per cent. are in paid employment and among the high functioning end of the spectrum, the Asperger's group, only 12 per cent. That shows how low the figures are, yet we are talking about a group of people who are capable of education, in some cases right through to degree level.

When I try to describe Asperger's syndrome to people, I try to get the mix right and it sometimes sounds a bit quirky. If we think back to the second world war and those highly intelligent people who worked at Bletchley Park and cracked the codes, quite a high percentage are reckoned to have had Asperger's. That tells us the level of expertise and intelligence that those with the syndrome may have. At the same time, such people can be difficult to place in work. Why? It is not because they are learning disabled in the recognised sense of having an IQ of under 70, but because autism often presents problems of communication and social interaction and difficulties associated with ritualistic behaviour. That, despite their educational and training experience, makes them least well equipped for today's workplace. Even some of the most basic jobs on offer today demand good, socially interactive skills. Employers often want people who are good team players with good communication skills. Even stacking shelves in a supermarket demands being able to communicate with customers, to be polite, personally to direct customers to where the soap powder is stocked and so forth. Social skills are a core part of just about every job advert and they are likely to be important in the interview.

Placing those with Asperger's in work thus needs expertise. Those trying to help them must understand the condition from which those people suffer and must be able to develop their work-ready skills. As we described to the Minister last week, the Prospect scheme run by the National Autistic Society could be a valuable resource for the Government.

I want to pick up a point that others, including my hon. Friend Mr. Hammond, have already mentioned—the fact that what we are talking about is not a cheap option. It is not something that can be read up in a textbook or that people can be briefed about for a few hours on a training course. It is not possible to learn how to help those people on that basis.

From my experience of working with and advising adults with Asperger's, I am aware of current problems. Some are already engaged in the process of trying to get into employment through job centres and other organisations, but the weakness is that much more time needs to be spent on developing their skills in preparing them for interviews or preparing a CV, for example. All of that is pretty routine, but the vast majority really need someone present with them during the interview process. That means that the employer as well as the potential employee need to be coached and prepared for the interview to come. That is necessary if people with Asperger's are to get a fair chance to be considered for a vacancy on the same basis as everyone else.

All too often—this is the key weakness—all the different stages are gone through with all the boxes ticked on job preparation, job coaching and preparing for the interview, but the problem is that those people seem to be left on their own to find the job in the first place. They are almost abandoned at that point. Finding the job is one of the hardest parts of the whole process, because in the main, we are talking about people who have great difficulty, if it is not within their own experience, in imagining what a job would be like. I recall one young man who repeatedly declared that he wanted to be an astronaut. It was totally unrealistic, but because he had seen it on television and identified what the job was, he felt quite safe and secure in saying that he wanted to be an astronaut. He could relate to that, but the truth is that he would have made an extremely good accountant.

We know from the people with Asperger's who get into work that they are extremely reliable. As with other conditions, however, such as mental health problems or learning disabilities, they present certain challenges from the employer's point of view. Sometimes they take up management time once they are in post. That is why helping them into a sustainable job involves more than just helping them to find the job or getting them through the interview process. It is not about having someone to do the job for them—they can do it themselves—but having someone to troubleshoot on their behalf once they are accepted into the workplace. Occasionally, things can happen that are quite difficult for the staff to deal with, but if someone comes in to troubleshoot the situation, it is much easier to solve the problem so that the individual can stay in the job.

As to how this particular group can benefit from the changes that the Government have outlined in the Bill and presented today, I am reassured that Ministers are now well versed about this condition and have a good understanding of what is needed. The challenge is whether they can procure enough specialist advice around the country to help that group of people access opportunities for work along with everyone else. The vast majority are desperate to work. Some may realistically be able to sustain their attention span only for part-time work, but whether it is just a few hours a week, whether it is part-time or full-time, those people deserve the same chance as everyone else.

I welcome the Bill, which I view as a huge opportunity and step forward, so long as the Government are able to provide the necessary specialist support. That will require resources, but we discussed with Ministers how specialist provision—it is already there, albeit through limited providers—can help us to roll out help nationally. We should be able to ensure that within any county, district or area, however divided up, at least one disability employment adviser is peripatetic. If job centres knew that, perhaps on a Wednesday afternoon, the person who specialised in Asperger's syndrome would be available in the region, it would be a huge step forward in helping those people into work.

I shall repeat one or two of the things that I included in the paper that I submitted to the Government, because they are important if the policy is to be successful. The worst thing that we can do is to set people up to fail. The impact on their mental well-being if they keep on trying and nothing happens cannot be overstated. However the Government approach that group, right from the beginning, they must distinguish those who cannot work from those who can, however limited the work, because for some people within that definition, as with those who have mental health conditions or learning disabilities, it would be grossly unfair to put them through the process of getting into paid work when that might not be the answer. They might, of course, benefit from doing voluntary work to which they do not have access now, so I would not want any of them to be excluded—to use the Minister's words—but identifying who can and who cannot benefit will be very important.

Clear information is needed on what happens to people who go through the process, but for whom work ultimately fails. We must know how we will pick up the pieces, or we will leave behind more damage than we started out with. Some thought must be given to what happens if work fails, although I hope that that would involve only a small minority of people.

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Mark Pritchard (The Wrekin, Conservative)

My hon. Friend makes her points very well indeed. Does she agree that, if someone is employed and it does not quite work out, it undermines employers' confidence in perhaps considering other people in the future?

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Angela Browning (Deputy Chairman (Organising and Campaigning), Conservative Party; Tiverton and Honiton, Conservative)

Yes, my hon. Friend is exactly right. That is why the schemes that work for people with Asperger's involve briefing the employers and having a buddy in the work place who can help to broker some of the day-to-day problems that occur. Those problems can be very simple. For example, people whose behaviour is ritualistic might be prepared to eat only between certain times of the day. I know of one person who will only eat between 1.15 and 4 pm. So if such people are put on the 12 to 1 lunch shift, they go to lunch, but they do not eat. They do not say anything and cannot communicate the fact that they are under stress. They come back to work, and they are clearly in state of great anxiety in the afternoon. It is easy-peasy to sort out that problem—it can be done as soon as someone knows that that is the problem. Those are the sort of things that need to be taken into account in briefing employers, so that they know what the difficulties are, so that they do not occur in the first place. Where the system works and works well, it is a delight to see, but that group of people need special treatment from the beginning.

I am pleased to see the Minister for Employment and Welfare Reform his place, as he has been extremely helpful to me on this subject.

The Government will get support, but I am still not convinced that the cost of providing the specialist so-called niche services has yet been thoroughly thought through. I have mentioned the fact that subcontracting immediately takes a slice of money from what is the already high per capita cost of providing a good quality service. I urge the Government to consider how they can contract directly, without top-slicing a chunk of money that is wasted, with the organisations that know what they are doing and have already made a difference to the lives of adults with Asperger's syndrome. The Government can make so much more difference if they get it right.

7:24 pm
Photo of Roger Berry

Roger Berry (Kingswood, Labour)

It is a pleasure to follow Angela Browning. I congratulate her on her speech, and I am sure many other hon. Members agree with what she has said.

I shall speak only to part 1, on the employment and support allowance and related matters. I congratulate Ministers on the consultation that has taken place in getting this far—I might be slightly more critical than that in a moment, but just let me get that in first. We had about a year's consultation before the Green Paper. We had a proper Green Paper exercise and submissions where made to the Secretary of State. We now have a Bill. It has been a long process; it has not been a rushed process, with a Bill emerging from the clear blue sky. I congratulate my colleagues on the fact that we have had plenty of time to discuss these issues before debating the Bill on Second Reading.

My hon. Friend Ms Buck made a comment about previous debates on incapacity benefit being toxic. My hon. Friend Hugh Bayley, who is no longer present, referred to the Welfare Reform and Pensions Act 1999. As someone who is prone not to scratch old sores, I will not go in that direction, but my hon. Friend the Member for Regent's Park and Kensington, North suggested that there appeared to be a degree of welcome consensus on where we go from here. That is true, and it is not something that could have been said five or six years ago.

The truth is that, because of events five or six years ago, many people in receipt of incapacity benefit and those who might receive it have become quite concerned about any new proposal and any change. They fear—dare I say it?—another cut in benefit, as under the previous Government and, sadly, as in 1999. Therefore, I start by praising the Bill, because of the clear assurance that it is not about cuts: it is about enabling disabled people and people with long-term sickness either to retain employment or to get back to work.

The problem with the number of people in receipt of incapacity benefit has never been one of fraud—it is about the most fraud-free benefit that we have—and it has never been about the benefit being generous. It is far from generous. People on incapacity benefit are usually living in deep poverty. Those two things have never been the problem. The problem is that we need to remove the barriers that prevent a very large number of people in receipt of incapacity benefit who want to get back to work from doing so. The Green Paper's sub-title, "Empowering people to work", is precisely what part 1 is about and precisely why we should congratulate the Government on introducing it.

We should never forget some of the basic facts that we are addressing. According to the Disability Rights Commission 48 per cent. of disabled people are out of work—virtually one in two. That increases to 79 per cent. for people with mental health problems, and it is 84 per cent. for people with learning disabilities. Those figures are shocking. They suggest that we must all address the current problems if we are serious about securing full employment for all.

The link between being out of work and being in poverty is stark and obvious, and the House does not need me to repeat the facts at length. Let me simply say that, in relation to the Government's laudable policy and success in taking children out of poverty, 40 per cent. of children with a disabled parent today live below the poverty line. Almost one in two children of a disabled parent are in poverty. Yes, we must talk the language of the right to work; we must also talk the language of taking children and their families out of poverty. Therefore, the emphasis must be both on ensuring that people who want to work and can work receive the support to secure fulfilling employment and on ensuring that people who cannot work get a decent benefit. Those two approaches are essential if we are to make progress. The implication is that more support must be provided for disabled people in those two ways.

Let me talk about securing employment. The Green Paper was a bit vague. The direction was absolutely right, but it was difficult to pin down one or two issues. The Bill is only marginally less vague than the Green Paper. If we are honest about it, that is the truth. I am not being critical; I am simply saying that that is the situation. The Government have rightly promised that draft regulations will be produced as soon as possible. To back up comments made by other Members—and because I feel strongly about this myself—I would be grateful if the Minister could say when draft regulations are to be made available. I hope that that will not be only for the first Committee sitting; a summer recess is coming up, during which we will all be busy working, and it would be good if we could have the draft regulations earlier rather than later.

On which provisions will those drafts focus? I was talking to a specialist the other day, and she assured me that the Bill gives the Secretary of State—or all the Ministers in the Department—400 or so separate powers. [Interruption.] No, exactly. Another specialist told me the next day, "No, there are 600 powers." I know not whether there are 400, 600 or 800 regulation-making powers in the Bill, but I know that there are a lot; there have to be a lot because the Bill is fairly vague. Can we have an assurance that these regulation-making powers will be published in draft form as soon as possible? When will that be, and which are the key areas that will be covered?

We need to know fairly soon what are the criteria for determining into which category of employment and support allowance a recipient might fall. How do we distinguish between those two groups? I cannot answer that question. We need to have some information on benefits, in order to make sure that people will be better off and not worse off. We also need to know more about how conditionality will work. Who will make the decisions? How will the appeals process work? In respect of a Bill of this kind, it is understandable that we do not have such details before us today, but I urge Ministers to make them available as quickly as possible.

On funding, the hon. Member for Tiverton and Honiton is absolutely right that in some circumstances supporting some disabled people back to work—or supporting them in retaining employment—might not be expensive but in other circumstances that can be quite expensive. If this job is to be done properly, the resources have to be found. I recall the Secretary of State saying at the time of the Green Paper that getting 1 million people back to work would save £7 billion for the Exchequer. I join the plea made by my hon. Friend the Member for City of York that a bit of recycling is a good idea. As people go back to work—

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Danny Alexander (Shadow Minister and Disability Spokesperson, Work & Pensions; Inverness, Nairn, Badenoch and Strathspey, Liberal Democrat)

I totally agree with the hon. Gentleman's point, but it is not just a point about recycling money. It is also a point about the overall benefit to the economy. As the Organisation for Economic Co-operation and Development has said, active labour market programmes are a good way of spending money because they release more money back to the Exchequer. So we all win.

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Roger Berry (Kingswood, Labour)

I would not suggest that there is never a net cost, but the fact is that enormous benefits come from programmes of this kind. However, as my hon. Friend the Member for City of York pointed out, the UK's record in respect of spending on labour market programmes for disabled people is pitifully poor. The figure that I have in mind is a telling one: we spend 0.02 per cent. of national income—a fifth of the average European Union spend—on work-related programmes for disabled people. We can do better.

There is another issue that I must again raise. I know that the Government are now spending £62 million on access to work. That programme is one of the best kept secrets; 75 per cent. of employers have never heard of it, but those who have heard of it know how important it is—and many Members know constituents who have benefited enormously from it. When the Department for Work and Pensions writes to me that, for every £1 million spent, the Treasury gets back £1.7 million, it makes me ask: can I be assured that the DWP and the Treasury have ongoing discussions to ensure that access to work gets more money? I am deeply concerned at the announcement that that initiative will no longer be available for Government Departments. I know that it has already ceased to be available in the DWP. Before the Government go ahead with that decision, I urge them to provide evidence that it will not have a harmful effect. It is perfectly reasonable to say that Government Departments have large budgets—

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Anne McGuire (Parliamentary Under-Secretary (Disabled People), Department for Work and Pensions; Stirling, Labour)

I can give my hon. Friend and the House the reassurance that the Office for Disability Issues has said that it will monitor the situation, but of course all Departments are covered by a disability equality duty, which should mean that there is no detriment.

Photo of Roger Berry

Roger Berry (Kingswood, Labour)

I accept that, but I tabled parliamentary questions to all Departments asking how many disabled staff in each Department received support from access to work. It is interesting that some Departments simply did not know, and that others provided figures. Indeed, one Department—the Department for Education and Skills—to its credit has an earmarked fund, the reasonable adjustments fund, to deal with such requests. All I am saying is that I would like to be assured that there will not be any incentive on line-managers not to appoint somebody because they have a disability. If half a dozen people are coming for an interview for a post all of whom can do the job equally well so that the decision as to which to appoint is a marginal one, if one person will cost more money to employ because they are disabled, I would be worried, even in respect of a Government Department, that there might be an in-built bias to discriminate against that disabled person. As long as the situation is being monitored carefully, I will happily accept my hon. Friend's assurance that I have completely misunderstood the problem and that such situations will never arise—but I will still be looking for it, just in case. Ring-fencing funds for that purpose—which is apparently what the DFES does—might be a way around that.

Where are the 1 million jobs to come from? I have only two minutes left, but let me make a few comments about the important role of employers. I attended a breakfast meeting with Mr. Weir. [Interruption.] I attended a breakfast on Thursday morning along with one or two Members—I can recall one of them at least—with the New Beginnings coalition, whose aim is to identify and help to dismantle the barriers faced by disabled people in employment, and particularly to ensure that employers are engaged in welfare reform. It is an organisation that my Front-Bench Friends will be well aware of, and it does sterling work. A number of issues were raised in relation to the employers' role, and I think that it is fair to say that there was a general feeling that most employers are not engaged in the welfare reform exercise very much at all. There was a comment to the effect that as employers to some degree interface with the Department of Trade and Industry, could we pass on the message that we know that the DWP has the major role to play in this, but the DTI might also put in some effort to using its good offices to persuade employers to adopt good practice in this regard?

There is a range of issues to do with using the private and voluntary sector in pathways to work. I have said for quite some time that, sadly or otherwise, I have often found that there are private and voluntary sector organisations that are far better placed to give support than many of our Jobcentre Plus offices; that is the truth. There are some very good voluntary sector organisations, but they need to have good contractual arrangements. In an advertisement that I saw in SocietyGuardian last Wednesday—if I can mention The Guardian without the Whips getting too irate—for the new pathways to work contracts, the key contractors were offered contracts of three years-plus, but if there are subcontractors, I hope that they get more than mere one-year contracts under this system. Organisations that provide such support must be able to work in decent conditions, not least because the good ones employ lots of disabled people, which is why they are very good at providing the service.

7:38 pm
Photo of Greg Hands

Greg Hands (Hammersmith and Fulham, Conservative)

It is a great pleasure to follow Roger Berry, who made a characteristically passionate and well-informed speech. I want to make a few brief remarks about cancer patients, and others facing long-term illness, before moving on to consider the housing benefit proposals in some detail and the proposal to introduce the new local housing allowance.

On cancer patients and their families, carers and supporters, I have in my constituency both Macmillan Cancer Support and CLIC Sargent, with which I do quite a lot of work on ways to reduce the non-medical costs of cancer and long-term care. There are some depressing statistics. In respect of those aged 55 or less, seven out of 10 households with a member suffering from cancer suffer a loss of income, with the average income fall being in the region of 50 per cent. I applaud the campaigns to reduce those costs, which are very expensive, especially in London, and include parking fees and congestion charging, as well as other medical expenses. We need to look closely at lightening the load on cancer patients and those close to them.

I turn to housing benefit and the new local housing allowance. Housing benefit is an important benefit and it is vital to scrutinise it and the proposed changes properly. It is currently paid to 4 million households in the UK——mainly low-income tenants but also people of working age and pensioners. Only 20 per cent. of those 4 million live in privately rented properties—the primary sector under consideration in this Bill—and a key test for the future of these regulations will be when and if they are applied to social housing.

The gist of the new local housing allowance scheme is that it pays a flat rate that varies only according to the size of the family and the area in which the tenant or household live. That contrasts with the current system, under which housing benefit is related to the total rent of a house or flat. Under the new LHA system, tenants have a chance to shop around for cheaper property and pocket the difference, or to trade up and make up the extra rent themselves. As I understand it, that scheme will be introduced only for future tenants and that existing ones will, in effect, be "grandfathered", at least for the time being.

The Bill also allows benefit reduction for those who commit antisocial behaviour and who refuse help in order to reform their behaviour. I shall not dwell on the idea for too long, but it has potential. As currently expressed, the scheme will kick in only after eviction and put the onus merely on going on a rehabilitation course. We could explore that idea further. In my constituency, too many tenants and residents have suffered for too long from the effects of antisocial behaviour, and they have seen little action from the outgoing Labour council in the past 20 years to combat the problems. The new Conservative council in Hammersmith and Fulham is certainly taking such problems very seriously.

In general, I greatly support initiatives to help those who are less well off in what are otherwise prosperous areas—a typical situation in large parts of inner London, including Regent's Park and Kensington, North, to which reference was made earlier. For example, I took part in the launch of the new Hammersmith and Fulham credit union a couple of months ago, which is a scheme designed precisely to help the less well-off in an area that is otherwise superficially very prosperous. However, a constituency such as mine contains many very successful people, as well as many who are struggling. In my view, otherwise wealthy areas that contain a large number of poor people have suffered badly under this Government through, for example, the changes to the index of local deprivation, the capping of council tax benefit at band E over a six-year period, the fixing of funding formulae against London, and so on.

As a former councillor, I have a lot of experience in dealing with housing benefit cases in my own constituency; in fact, I used to represent tenants at housing benefit tribunals. The "HB regs", as they used to be known, have evolved somewhat since the mid-1990s and have been updated many times, so I had to do a little updating myself before taking part in this debate. But I know from experience that changes to housing benefit need to be properly thought through and carefully piloted, and I certainly welcome the piloting approach that has been taken. Housing benefit has been particularly subject to fraud and poor administration over the years, as witnessed, for example, by problems in London councils during the late 1990s. We need to approach reform with caution, but reform is much needed.

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Danny Alexander (Shadow Minister and Disability Spokesperson, Work & Pensions; Inverness, Nairn, Badenoch and Strathspey, Liberal Democrat)

Does the hon. Gentleman share my concern about how the areas in which the local housing allowance is being set are being decided? In a constituency such as his, which has well-off and not so well-off areas, the LHA could be set too high or too low for the people living there.

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Greg Hands (Hammersmith and Fulham, Conservative)

I thank the hon. Gentleman for his intervention. He is right and he makes the point well; indeed, I shall come to that in a moment.

I strongly support the general principles referred to in the Green Paper and agree that we need to get tenants to take more responsibility for their own financial affairs. That said, I shall now outline a few difficulties that I can foresee with the new LHA. Much depends on what constitutes a region or an area and, although it is obvious what is meant from the pathfinder studies in the nine local authorities, it is otherwise by no means clear. There are particular problems in London in setting the level of benefit. What constitutes a decent, normal market or median rent in London, given the huge discrepancies in rent levels in different boroughs across the capital? For example, rents in Barking and Dagenham or Havering are far lower than in Westminster, Kensington and Chelsea or Hammersmith and Fulham. Even within a very small local authority area such as my own, the difference in rent levels between Fulham—around the Hurlingham club—and in Shepherd's Bush can be huge, so it is very important that we define such areas well. I should be grateful for guidance from the Minister on this issue.

If such areas are made too big, the natural reaction may well be for people to move from expensive boroughs to cheaper ones, or from more expensive areas within a given borough to cheaper ones. Some might view that as desirable and say that it is merely tenants following market forces, but I am not so sure. If the different parts of London are to remain sustainable and solid communities, we need a range of people living in each. Pricing the poor out of the centre of London, or out of places such as Fulham, could have consequences that we need to consider carefully before going down that route.

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Justine Greening (Putney, Conservative)

My hon. Friend is making a very good point. As recently as last Friday, I met the head teacher of my local school—the Elliot school—and one of the things that she is very passionate about is the fact that the children whom she teaches constitute a very diverse group. My hon. Friend is right to highlight the danger associated with this legislation. We need to be careful to ensure that we understand its impact.

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Greg Hands (Hammersmith and Fulham, Conservative)

I thank my hon. Friend. It is important to be careful both in setting the areas and in defining exactly how we are going to arrive at the median rent level. Of course, a big range will create much more potential for people moving out of expensive areas and into cheaper ones. I urge the Government—in London, at least—to make the regional considerations as small as possible and to make the areas as small as can reasonably be assessed. Indeed, the same should perhaps be done in other parts of the country.

In the Green Paper, the Government state:

"tenants are able to compare how much support is available towards their housing costs in different areas and for different property sizes."

That is probably a great thing—we do want tenants to start looking around and assessing the economics of particular properties—but we do not want to encourage too much mobility out of the better-off areas.

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Sadiq Khan (Tooting, Labour)

Does the hon. Gentleman think that, if tenants are thinking about the price that they have to pay for accommodation, it will make them more responsible and lead them away from receiving allowances and toward paying rent themselves?

Photo of Greg Hands

Greg Hands (Hammersmith and Fulham, Conservative)

I agree entirely and in principle that this is a very good reform. I am simply saying that in constituencies such as ours, exactly how we define the median rent level and the area concerned needs to be approached with care.

We should also consider the potential for arrears. Although the Green Paper highlights the expectation that tenants set up standing orders to pay rent, there is clearly no compulsion to do so. Moreover, no consideration has been given to how councils might play a part in setting up such arrangements, or to the costs that might be involved to councils in offering services in this area if people get into trouble. In creating individual responsibility, councils might need to have resources to help such people get through the transitional period. I welcome the commitment given at the start of this debate to extending throughout the country the support being made available in the pathfinder projects to help tenants in more difficult and challenging circumstances to make that transition.

I want to talk about an issue that has not really been touched on this debate—the potential for overcrowding. There is a real risk, which has not been totally borne out by the pathfinder projects, that many tenants will trade down their accommodation, move into smaller premises, take the higher level of local housing allowance, save money on the local allowance by paying less rent than they really should, pocket the difference and use it for something else. Some might say that that is fantastic and that it encourages more responsibility on behalf of that tenant, but if it leads to more overcrowding in places such as inner-city London and my constituency, that could be an unfortunate consequence. I would be grateful for the Minister's views on what sort of protection can be put in place against people who are, in effect, moving to a much smaller property than they should be.

One of the most interesting aspects of this debate is the potential for extending the provisions to the 80 per cent. of housing benefit recipients who are in social housing. I have two practical concerns. I know that this aspect is not in the Bill, but there is the potential to introduce it. Having spoken to my council, I know that it believes that the local housing allowance would cost more to administer than current arrangements for its council tenants. It also thinks that arrears would probably increase in the social housing sector and that probably some transitional help would be needed for councils.

I would be interested to see some of the results for the nine pathfinder authorities. Regrettably, we have not yet got the final report from those authorities—I do not think that it is due till the end of the year—to enable us to assess the situation properly. There are some mixed experiences if one compares, say, Lewisham with Conwy, which I suppose is not that surprising when one considers the mix of housing stock and tenants in the two areas. Apparently, in the pathfinder areas, 56 per cent. of landlords said that the new local housing allowance scheme would make them less likely to let to housing benefit tenants due to fear or experience of arrears.

In answer to Mr. Khan, I think that we need to start giving people responsibility for their financial futures. Undoubtedly, some tenants will struggle with an incoming payment and outgoing payment when previously the cash flow was effectively hidden from them and managed on their behalf. But surely, as my right hon. Friend the Leader of the Opposition says repeatedly, we need to start trusting people and getting them less dependent on the state to do everything for them. Let us be bold and back the new local housing allowance.

In conclusion, we need to support this scheme, but we need to look at perhaps three or four areas where there are concerns. I would like the Minister to address them in his summing up. The first is the potential for mobility, both within an area of inner London and out of inner London into outer London. Secondly, there is the potential for the overcrowding of tenants to save money. Thirdly, there is the potential for greater arrears. Finally, there is the potential for greater administration costs, especially if the two schemes are going to be run in tandem, which I think is what the proposal states. Effectively there will be a lot of historic existing tenants on the existing housing benefit system, plus a large group on the new local housing allowance. I hope that the Minister will address those points.

We should welcome the new local housing allowance. We need to move ahead with caution. The current system is too susceptible to fraud, too complex and destroys individual aspiration. It is time for something better, but we still need a little caution.

7:52 pm
Photo of Janet Dean

Janet Dean (Burton, Labour)

I thank Ministers and officials for the intensive consultation that has taken place over recent weeks. As a member of a number of all-party groups and the chairman of the all-party group on lupus, as well as the all-party autism group, I know how much effort has been put into discussing the proposed reforms with MPs and patient groups. There is widespread support for the proposals in the Bill, which bring a real opportunity to change the way in which we look at disability and work. Although pathways to work has begun to change the culture of the system, employers need to be encouraged to retain and accommodate staff who may become ill or suffer an injury. The system needs to enable people to play as active a part in work as possible. Individuals need to have faith that the process is working for them.

I agree with the charity Rethink when it refers to people needing

"support and encouragement rather than negativity and discrimination".

I believe that the new system will be judged on its ability to focus on individuals' needs. In order to do that, there will need to be increased training for Jobcentre Plus staff and for doctors carrying out capabilities assessments. Although I recognise that, as now, people will be assessed according to how the illness or disability affects them, rather than which condition they have, there is a need for those who interview or examine individuals to have some knowledge of different conditions. They will need to recognise that those who have a learning disability or who are autistic do not need rehabilitation, but, as others have said, may need long-term support in employment or when there are changes in that employment.

Employees at Jobcentre Plus and personal advisers will need to recognise that many people, especially those with a mental health problem, may have their condition worsened if they are placed under too much pressure. Advisers will need to know that long-term conditions, some of which, such as lupus, are not well known, will vary between individuals. Indeed, conditions such as lupus do not just affect individuals differently; those who have the condition may feel quite well one day and be confined to their home the next. Some people with lupus have depression, or they may have memory or cognitive problems because of the cerebral involvement of their illness. Those who are assessing and working with those individuals will need to be aware of the varying nature of such conditions. The issue of training is not covered in the Bill and I would be grateful for reassurance that there will be such training in specific impairments, such as autistic spectrum disorders.

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Alison Seabeck (PPS (Rt Hon Geoff Hoon, Minister of State), Foreign & Commonwealth Office; Plymouth, Devonport, Labour)

My hon. Friend is talking about the range of different effects that illnesses can have on different people, particularly people with lupus. Does she agree that, as part of the assessment, there is some importance in interviewing not only the person with the illness, but the carers of that person, who are often better able to describe what is going with that individual?

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Janet Dean (Burton, Labour)

I certainly agree. Indeed, sometimes the person with a particular condition underestimates the problems that they have with it, so having a partner or a carer with them can be of great help.

Understanding of autism is still lacking among professionals. If the employment and support allowance is to work for people with an autistic spectrum disorder, more training for personal advisers, jobcentre staff and health professionals is essential. A tiered system of training could be developed to ensure that all personal advisers had a basic level of knowledge and could call on people at a regional level for more in-depth knowledge. Any organisations that are in receipt of contracts to work with individuals should also have adequate understanding of the needs of people with different impairments.

As Angela Browning said earlier, about 260,000 of the estimated 330,000 people of working age in the UK with an autistic spectrum disorder are thought to be of average or above average intelligence and yet only 6 per cent. of all people with an autistic spectrum disorder are in full-time paid employment. We need to do better. However, unlike some of the disabilities, once a suitable job is found for someone with an autistic spectrum disorder, it is essential that continuing support is available while that person is in work. Because of difficulties in social interaction and communication, working environments can present many problems. Regular meetings or access to someone to call on can prevent the breakdown of a job and the sense of failure that may follow that.

That support to individuals in employment is best delivered by specialist agencies that have a deep level of understanding, as well as a commitment to ongoing support. For those with an autistic spectrum disorder, the National Autistic Society's prospects service has a proven success record of achieving lasting employment. Several patients' organisations have expressed their concern that contracts are tending to be awarded to larger, less specialised providers who may not be able to provide effective support for individuals with particular needs.

It will be necessary to monitor closely the categories of those who are found employment and who receive support in that employment. In that respect, there is concern about outcome-based contracts, if that outcome relates to numbers rather than the detailed analysis of those who have received help and are continuing to receive ongoing support. There is a great deal that the voluntary sector can offer in the provision of services. I was particularly interested to hear of the Citizens Advice suggestion that it and other organisations could be involved in the delivery of certain services, such as providing independent financial advice to people who are considering a return to work or advice to employers who need to know about the new benefit structure and their rights and responsibilities to employees with mental or physical health problems. Such use of the voluntary sector would also bring reassurance to those with an illness or disability.

One area of concern that has been raised by several organisations, and this evening, is that much of the detail of the legislation has been left to regulations. May we have a reassurance that sufficient time will be allowed for consultation on that detail? The effectiveness and responsiveness of the new system will depend on the detailed application of the legislation.

Another point of concern is the extension of the use of sanctions from attendance at interview to involvement in work-related activity, especially since it is suggested that that work-related activity could be changed by a personal adviser at any time. Sanctions should be applied only by qualified staff who understand the medical conditions or disability of the individual who might lose some financial benefit, rather than private or voluntary sector providers. If necessary, reference should be made to a person with greater knowledge of the condition, such as a hospital consultant.

Care will need to be taken before applying sanctions in all cases. It will be necessary to consider the impact of a person's disability on his or her ability to comply. For example, there must be consideration of whether people with a learning disability can understand what is required of them and whether they receive sufficient support to enable them to comply with the requirement.

I welcome the Secretary of State's earlier reassurance about those with mental illnesses, but Rethink has concerns about clause 17, whereby people could be disqualified from receiving ESA if their capability of work was reduced through their own misconduct, their failure to take medical advice without good cause, or their failure to observe the prescribed rules of behaviour. Patients with mental health problems might cease medication because of side effects. They could present with unusual behaviour, or might not attend for interview because of their condition.

People with autism might appear to be not engaging with the process because they have difficulty with social interaction. The difficulty that people with an ASD have with social communication can affect verbal and non-verbal communication, so facial expressions and tones of voice might cause misunderstanding. Along with difficulties with social imagination, which includes planning ahead and the flexibility of thought, those problems make it difficult to acquire and maintain a job. It is important that great care is taken when applying sanctions to those with chronic, long-term conditions that might fluctuate, such as lupus.

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Lynne Jones (Birmingham, Selly Oak, Labour)

Does my hon. Friend agree that one of the best ways of helping people to get work-ready and to overcome the stigma that many experience when trying to get jobs from employers, especially if they have mental health problems, is for them to do voluntary work? Does she share my concern that the Department for Work and Pensions recently ruled that people doing voluntary work could no longer receive payments for lunch, or free lunches, while doing such work without that affecting their benefits, which is hardly in accordance with the social inclusion agenda?

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Janet Dean (Burton, Labour)

I agree entirely. It might be that some people with long-term conditions who would find it difficult to retain employment would be better advised to undertake voluntary activity when their illness allows, rather than feeling pressured to enter paid employment in which they might be destined to fail, which would have a consequential negative effect on their well-being. Although we want all people to have the opportunity to work, we must accept that the loss of benefit, however little that benefit is, in some ways, can cause some people great concern and make their condition worse. Voluntary work can be a real bonus to many people.

We must make sure that the Bill is seen as a positive effort to change the lives of people with illness and disability and to ensure that everyone can reach their full potential. Sanctions should be a last resort that are kept only for those who try to abuse the system. The success of ESA will be in the detail. We will need to ensure that staff are properly trained and that the focus is on the individual who needs advice and support to find and keep a job.

8:03 pm
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Robert Syms (Shadow Minister (Local Government), Communities and Local Government; Poole, Conservative)

It is a pleasure to contribute to the debate, which has been extremely thoughtful and well considered. We have heard from a lot of people who are experts in the field, although I do not pretend to be one of those. I was certainly impressed with the speech made by my hon. Friend Angela Browning, who certainly has great specialist knowledge. She and Roger Berry made very good contributions to the debate.

I would first like to talk about the antisocial behaviour aspect of the Bill. All of us have met constituents in our surgeries with antisocial neighbours on their estates. We thus write letters to the chief executive of the local council and feel frustrated not only for ourselves, but on behalf of our constituents. Mr. Field did us all a great service with his private Member's Bill on withdrawing benefit from those who displayed antisocial behaviour. I was initially pleased with the measures in the Bill, but the more I consider them, the more I think that they are rather disappointing.

The withdrawal of housing benefit is to be a threat after eviction, but I do not think that the power will be used very often. We heard from the Secretary of State earlier that the Government will be sensitive to situations involving children. The power will be used in very few cases. There would be merit in allowing local authorities to use housing benefit as a lever before they reach the point of eviction, largely because that might present the opportunity to modify people's behaviour before they lose their home and their families become homeless.

Danny Alexander made a good point about schemes that local authorities can run to provide rehabilitation and to change people's behaviour. It would be far better to have several sanctions that local authorities could use to improve people's behaviour, rather than the measure in the Bill, which can be used only after an eviction. As we know, an eviction is always an extreme case. I cannot foresee that the sanction would be used in very many cases. I do not understand the logic of the measure, so I hope that my Front-Bench colleagues will examine it in Committee.

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Paul Rowen (Shadow Minister, Transport; Rochdale, Liberal Democrat)

Given that such people would have already been evicted once, does the hon. Gentleman agree that a more effective sanction would be a probationary tenancy, which would allow a local authority to remove an offending person immediately without going through the rigmarole of removing benefits?

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Robert Syms (Shadow Minister (Local Government), Communities and Local Government; Poole, Conservative)

The hon. Gentleman makes a good point. My central point about the antisocial behaviour measure is that although it sounds tough, it will not be used very often. If the powers were a little more sweeping, chief executives of local authorities and housing departments would be in a much better position to tackle the problem. The way in which neighbours are dealt with is one of the biggest problems that many of our constituents face.

I welcome the measures in the Bill on benefit fraud, including the "two strikes and you're out" approach, for which it is sensible to extend the relevant period from three to five years. I listened carefully to my hon. Friend Mr. Hands, who spoke with great experience about housing benefit and the local housing allowance. Generally speaking, I am in favour of the way in which the Government are going. It is sensible to move towards a more market-related solution, although I understand my hon. Friend's real concerns about how large a region or area is. London has specific problems because great discrepancies can be seen even a few miles apart. I certainly welcome the suggestion of further trials. However, in any sort of use of the welfare state, it is important, when possible, to increase the amount of personal responsibility that people have. We should not always assume that people have to rely on the state to do everything for the outcomes that they want.

When I first read the figures for incapacity benefit, I was rather shocked that 2.71 million people, or 8 per cent. of the working age population, are on incapacity benefit and that more than half those people had been on it for more than five years. I was also a little shocked to find that 40 per cent. of those people had mental or behavioural problems, because that is an extremely high figure. I also noted that the number of young people on incapacity benefit has gone up by 71 per cent. There is evidently a big problem.

As we have heard throughout the debate, if we are to tackle poverty and social exclusion, and deal with child poverty in particular, we must bite the bullet by tackling incapacity benefit and doing our best to get as many people as possible into the work force. The Government have set quite an ambitious target, whether the figure is 1 million or the 640,000 that my hon. Friend Mr. Hammond cited, but until we know all the details—problems with draft regulations have been mentioned—it is difficult to be too specific about several aspects of the Bill.

Early intervention is important. There has been little mention of the national health service, but we all know that some people on incapacity benefit are waiting for operations. They are thus waiting for the NHS to assist them by putting them in a position in which they can go back to work—so it is important to have joined-up government.

I welcome the fact that the Government are allowing private, voluntary or not-for-profit organisations to deliver some of the pathway projects, although I understand the concerns raised by my hon. Friend about their not being given enough latitude to bring innovation into the system. That is one thing that the private and voluntary sector can do.

There is an ambitious programme. According to the Library, even Poole has 3,200 people on incapacity benefit—about 6 per cent. of the working age population. That is a lot of people. If the Government's target is to be met, about 1,000 people will have to move from incapacity benefit into work. As my hon. Friend the Member for Tiverton and Honiton said, it is important that to do the assessment, there is a range of people who understand the problems that people have. With mental difficulties and behavioural problems, it is important that niche services are provided, so that we get it right.

As was mentioned earlier, the problem is that if we do not get it right, there are consequences both for the individuals if they go back into work and do not stick to a particular course, and for employers. If employers take on someone with a particular problem and it works out, they may go back and take on a second, third or fourth person. However, if it does not work out, the whole scheme may fail. It is important that we do not just focus on individuals. We also have to focus on employers and educate them. Clearly, if we are to mobilise a lot of people on incapacity benefit—many of them have specific problems, and niche problems—it will be a big job to educate employers on how to deal with that and to get the best out of them.

Broadly, I welcome the Government's direction. Much will depend on the details, and the detail in regulation. I am sure that my hon. Friends on the Front Bench will test many of the propositions in Committee. There is a degree of consensus, and it is important that we give this large number of people the right and the opportunity to get back into work, because of the impact that it will have on their lives, the state of their mental health and so on. As we all know, work is important. It must be very difficult for those who are denied it who feel that they have been sentenced to many years on benefit, without the tools to get back into work and to join in many of the things that the rest of us who have worthwhile jobs do.

8:12 pm
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Anne Begg (Aberdeen South, Labour)

I welcome the tone of the debate on both sides of the House. It has been a positive discussion. That reflects the briefing papers that I received—perhaps other hon. Members were also deluged by them—from various organisations with an interest in welfare reform. There has been a general welcome for the principles of the Bill, although inevitably there was concern about the detail.

I want to concentrate on the first half of the Bill, which deals with disability and getting people with disabilities and ill health back into the workplace. Many other things in the Bill are also important, such as provisions covering lone parents, people over 50 and housing benefit. I am afraid that I do not have the expertise in housing benefit that my hon. Friend Ms Buck has. She said that she had an unhealthy interest in housing benefit. I am glad to say that I do not, but I do know that it is very important to many of our constituents. They are often in a benefits trap because of housing benefit. That is a particular problem for those in the private rented sector. Their rent is so high that they cannot afford to get into work, but they cannot get a council house because, although their housing provision is extremely expensive, there is nothing wrong with it and the council think that they are adequately housed. However, the problems that my constituents face are nothing compared with those that the constituents of London MPs must face. I do not know how people can afford to live and work in London, because of the huge cost of housing.

It is important that the debate has been couched in the tone that has been used today. It has taken a long time for us to get to this stage. I remember a journalist at the last Queen's Speech saying that the Government would have to face down their rebels on welfare reform and that there would be huge opposition to it. Instead, we have discovered that there is no major opposition on either side of the House. That is a tribute to officials and Ministers at the Department for Work and Pensions, who have managed to change the tone of the debate by talking about welfare reform as a positive thing that will be good for people. They have said that it needs to be done, and that as a result, people will be better off.

Like my hon. Friend Roger Berry, I have spoken to disabled people and they have been apprehensive about what reform means. MPs take reform to mean change for the better, but in the collective memory of many disabled people, "reform", "welfare reform" and "benefit reform" have meant changes that have resulted in them being worse off, with a worse service and less money from the Government. It has taken a long time to change their perception and to build up trust in the Government's actions as being something to their benefit, not to their detriment.

One way in which the Government have done that is by having examples of good practice that they can point to. Those examples are not only in the pathways to work projects. Many hon. Members mentioned specific programmes in their constituencies which have worked. Aberdeen Foyer has been incredibly successful in dealing with predominantly young people who live on the margins of society and who are often recovering drug addicts. It has delivered a number of welfare-to-work programmes, including progress to work and getting people to the job-ready stage, capable of doing a work-focused interview and getting into work. The examples exist to show that such success is possible. Whether it is down to DWP staff themselves, the third sector or, in some cases—this is particularly true in Glasgow—the private sector, there are models that work. That has begun to allay some of the fears of many disabled people.

It is also important that reform is not about saving money. Although ultimately it should save the Government money—partly because when people get off benefit and into work they will contribute to the Exchequer in the form of paying taxes, rather than taking from it—that is always a side issue. It must never be the central issue for any kind of welfare reform. The aim is to make welfare work for people, and for it not to be a barrier.

One of the big disincentives to work has been the welfare system itself. We talk about the different barriers that disabled people face, but disability or ill health is often not the primary barrier to disabled people getting into work. Sometimes that is three, four or five strands down the list. Child care and travel to work may be bigger barriers than a disability. There is no doubt, however, that the welfare system is one of the main barriers to work. That cannot be a good system.

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Danny Alexander (Shadow Minister and Disability Spokesperson, Work & Pensions; Inverness, Nairn, Badenoch and Strathspey, Liberal Democrat)

I agree about the barriers to work in the welfare system. Does the hon. Lady share my concern about the taper for housing benefit and council tax benefit? On going into work, people find that they lose their benefit at the rate of 85p in every pound, so the incentive to work is much less than it should be.

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Anne Begg (Aberdeen South, Labour)

It is important that work must always pay. That is why I always have been a very strong supporter of the tax credit system; it has made sure that people in work are obviously better off than those out of work. Whether a taper at 85 per cent. for housing benefit or council tax benefit is correct—perhaps it is on the sharp side and could be flattened slightly—the Government's overriding concern must be to ensure that there are no disincentives in the welfare system, and that people do not think that they are working for nothing. I do not accept the argument, "Well I'm not working for £20 a week extra," because people are in fact working for £200 or whatever it is in benefit, plus the extra. If everybody took the attitude that they were working only for any amount above what they would receive on benefit, we would not have enough people in the workplace to pay for benefit for others.

Work in itself has value, not just because of social contact and many other reasons, but because it is easier for someone in work to get a better job. I am not as critical as many about people coming off incapacity benefit and going into entry-level jobs, because once they have on their CV the fact that they are able to sustain that job, they will be able to move up the chain of employment skills. They certainly cannot go in further up that chain without the experience that they gain from being in work.

Some organisations have expressed concerns that the Government must address. When pathways to work is rolled out across the country it is crucial that it must not be "pathways lite"—a watered down version. It has been so successful because of the investment and dedicated work of those in the DWP and in organisations brought in to provide the employment programmes.

I will not go on about what will be in the regulations, because that has been covered by other hon. Members, although all the organisations that wrote to me were certainly keen to have sight of them, and for the matter to be addressed.

I was going to say a great deal about the role of rehabilitation and preventive measures, but I could not possibly follow the comments of my hon. Friend Hugh Bayley, who summed up everything that I had planned to say on the issue far more eloquently. Employers have a responsibility to ensure that those who are already in work do not fall out of work, to keep them in work for as long as possible and to adapt the workplace to ensure that they remain.

I have some questions about work-related activity. Is there a role for somebody to become a perpetual volunteer? Some hon. Members have said that there must somehow be an end to work-related activity, when somebody must enter a job—but that might not be the best solution for everybody. I think of someone who has a progressive condition who would not want to be written off completely and be on the support element alone, and who would want the employment support element of benefit. Volunteering could provide enough hours to keep them in a workplace of sorts. Volunteering is not necessarily less valuable than paid work, so there might be a case for allowing someone to remain on the higher level of benefit but continually to have a volunteering role. That would overcome the problem that some face of putting their benefit in jeopardy as a result of volunteering.

I am also interested in the Government's comments on the backdating of holding benefit. I accept that holding benefit will be at jobseeker's allowance levels for those who are going on to the employment and support allowance, because that is at the level drawn by other unemployed people—but what about people who have been diagnosed with a terminal illness or have a rapidly progressive condition? If they have to wait three months to receive the higher benefit and it is not backdated, it might be too late for them. My hon. Friend the Minister for Employment and Welfare Reform is nodding, so hopefully there is an answer to that.

Finally I want to talk about where things are still very difficult and specific help must be given—in the area of mental health. Every organisation that has written to me, and all those to which I spoke last summer when I was consulting on issues in the White Paper, mentioned stigma and discrimination, and the fact that employers need to change their attitudes. That is still regarded by many with mental health problems as the biggest barrier to work. I do not have problems with conditionality, provided that it is there for a purpose, that it is not punitive and that the support is right. We often heard complaints that that would be a problem with the new deal for the young unemployed, but it turned out not to be so. Provided that the programme in which people are engaged is of a sufficiently high standard, conditionality does not become a problem, and instead acts as an incentive to get people through the door and over the threshold so that they can see what they can do to open up life for themselves.

Several hon. Members:

rose—

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Michael Lord (Deputy Speaker)

Order. Clearly a large number of hon. Members are seeking to catch my eye. If Members take considerably less than 12 minutes each, it would be very helpful and allow me to call many more Members.

8:26 pm
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Michael Weir (Spokesperson (Work & Pensions; Trade & Industry); Angus, Scottish National Party)

I should like to say at the outset that the Scottish National party and Plaid Cymru are not opposed in principle to the objectives of the legislation.

In my experience, most people on disability benefits genuinely want to work, but there are many barriers to that aim and it is those rather than a wish to languish on benefits that prevent them from doing so. In so far as the legislation genuinely helps and encourages people, providing support for them to get into work and, crucially, to retain work, it will have our wholehearted support.

One problem, however, is that we are effectively debating in a vacuum, because we do not yet have the regulations that will set out the detail of the system. Mencap makes the telling point in its briefing that the Bill refers to regulations 243 times in its 73 pages, which is more than three times a page. I appreciate that the Minister has said that the regulations will be published prior to considering the Bill in Committee and that is welcome, but I reiterate that we need to see them well before that stage so that we can consider the detail and so that those of us who are lucky enough to serve on the Committee do not have to deal with them there and then.

Miss Begg made some very good points. Like her, I arranged meetings with groups in my constituency and throughout Tayside to discuss the White Paper when it was first published. The meetings were useful. In some cases I was able to reassure people about some of the more wild stories. One headline in Third Force News read "Welfare Reform Plans Outrage Disability Groups". The reason behind it was a comment made by the Secretary of State about more responsibility and increased obligations. In the early stages, there was much concern among groups representing disabled people that the reforms would impact seriously on them. As it turned out, as is often the case, once the White Paper was published and looked at, people realised that it was not as bad as had been trailed.

The meetings were also useful because they enabled me to make a submission to the consultation. One of the principal concerns, which is reflected in various briefings that have been sent to us, is about the scope of the personal capability assessment. Every hon. Member must have had a number of constituents raising concerns about the operation of the current system and claims of inadequacy of the assessment by the medical practitioner appointed by the DWP. It is interesting but hardly surprising to note the findings of the report "Paying the Price: the real costs of illness and disability" for Citizens Advice Scotland, which noted that there was a 63 per cent. success rate among its clients who appealed against a decision. That must suggest that a significant proportion of decisions were incorrect in the first instance.

In particular, many of those I consulted were concerned that the people assessing them did not have sufficient expertise in their condition. Many felt that they were given a cursory examination by a complete stranger who lacked relevant experience, and that is reflected in briefings. For example, Mencap said:

"The reform of the PCA must be carried out with expertise in learning disability factored in at every stage."

Rethink said:

"People should have a choice as to whether examinations, assessments or interviews occur at their own homes or at examination centres."

Macmillan Cancer Relief made the very good point that people suffering from terminal cancer cannot be expected to go through the same assessment procedure as others. They should have the choice of being assessed at home, rather than in an examination centre. The more cynical could say that all those organisations are making special pleas for their own groups, but the crucial point is that they are all making the same pertinent argument. Whatever form the PCA takes, we must ensure that whoever carries out the assessment has expertise in the particular illness or disability from which the subject of the interview suffers.

Rethink makes an additional point that people who suffer from severe mental illness may not open letters or answer the telephone, not through ill will, but often through forgetfulness or disorganisation. That is a particular concern, as anyone who is deemed to fail to co-operate at various stages could face benefit sanctions. A reasonable person would conclude that allowances should be made for such situations, but I encountered a similar problem with a constituency case, related not to incapacity benefit but tax credits. My constituent has a bipolar mental illness, and for long periods she does not open mail or, in fact, deal with any of her affairs. She failed to fill in a form to renew her tax credits, and they were stopped. She received demands for repayment of tax credits, even though it appears that she would have been entitled to them had she filled in the form. The Department is insisting on repayment. I approached officials in the Department, but I was told that they had absolutely no discretion in the matter because the form had not been filled in.

I appreciate that that case does not relate directly to the Bill, but it shows what can happen when regulations do not take into account the specifics of particular conditions. Clearly, such situations are much more likely to occur in relation to incapacity benefits. I therefore urge the Minister to ensure that the regulations make provision for someone with sufficient knowledge of the condition to carry out the assessment. Alternatively, as some groups have suggested, much more weight could be given to a written medical assessment from people who are treating the applicant. At present, that does not seem to enter into the equation until the inevitable appeal.

There is genuine concern about how people on benefits would fare if they tried to obtain work. The CAB report disclosed that more than half of such people thought that they would need benefits protection while they tried work. That is a serious problem for those on benefits who would not automatically be subject to the new rules—at least, not initially—but who could volunteer for inclusion. Many fear doing so because they are concerned that, if matters did not work out for them, they could end up worse off than if they had simply remained on benefit. Serious thought needs to be given to the question of whether we could introduce a guarantee period, in which anyone who obtained a job that did not work out within the period would not be worse off. I appreciate that that would not be easy, but it would help a great deal.

Angela Browning made a very good point about supporting people once they are in work. In the Norwegian scheme, there is a buddy system to help people who find work to complete the initial period, and to make sure that they stay in work. That is essential to allow people with mental illnesses and learning disabilities to become used to the work environment. In those cases, we are not talking about rehabilitation; in many cases, we are talking about getting people into work for the first time. I agree that those on the new allowance should receive automatic access to other benefits, as is the case for people on jobseeker's allowance. I appreciate that some things, such as prescription charges, are a matter for the Scottish Executive, but others are a matter for the DWP, and I think that the issue needs to be considered again.

Some organisations expressed concern about the use of private organisations to encourage people back to work. They feared that easy cases would be cherry-picked if payment is based on the number of people who returned to work, with difficult cases being omitted from the project. It is vital that that is not allowed to happen, as almost 90 per cent. of people with learning disabilities who are known to social services are unemployed. People with learning disabilities who are employed often work part-time and receive low pay. People with learning difficulties can work, and they want to do so. If the reform truly aims to help them into work, serious thought must be given to the provision of services so that we can ensure that providers encourage and support them into work. I was interested in what Mr. Hammond said on the subject, and in what the hon. Member for Tiverton and Honiton said about top-slicing. We must ensure that sufficient funds are provided for niche providers, whether or not they belong to a consortium, that provide the greater support required by that group. If we seriously wish to tackle the problem, the easy cases, if there are such things, must not be skimmed off and only those people helped back to work. Serious efforts must be made to ensure that people with lifelong disabilities are helped, too, which will entail serious discussion with employers on employment practices and, in some cases, their views on the employment of disabled people.

The supported group—I appreciate that I am arguing for both sides of the coin—should not simply be labelled as unemployable. The National Autistic Society has called for the establishment of a clear system so that that group receives appropriate advice about work and training opportunities, as well as reassurance that their benefits will not be jeopardised. The reform must encompass everyone and, although I accept that Ministers face a difficult job in balancing all those concerns and desires, we need early sight of the regulations. That leads me on to one area where there may be serious disagreement about the Government's strategy. The Bill appears to be driven by a desire to save money but, if we genuinely wish to do so, we must achieve joined-up thinking between Government Departments and the devolved Administrations. We must tackle, too, the problem of finding jobs for people who are coming off benefit—a matter that was touched on by Roger Berry.

A large number of people ended up on incapacity benefit as a result of the mass unemployment of the late 1970s and 1980s, and many of them stayed on it for many years. We must not allow that to continue: when we roll out pathways to work it must be funded as fully as the pilot projects—a point that was well made by the hon. Member for Aberdeen, South. Many organisations have expressed concern that the pilot projects were successful because they were well funded, with everything available at their beck and call. If such support is not available when the project is rolled out, we will not achieve the same success nationally. The initiative must not be viewed as a way of saving money. We may need to spend money, at least in the short term, to save money in the long term. The initiative is worth while, and it has our support, but we need to see the regulations and exactly what has been proposed.

8:37 pm
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Natascha Engel (North East Derbyshire, Labour)

I am a big fan of the proposals. It is not going too far to say that if we get it right, the Bill more than any other piece of legislation could be what this Labour Government are remembered for. Together with our Sure Start programme, the Bill finally gives people on incapacity benefit a chance to work their way out of poverty.

I echo some of the thoughts expressed by my hon. Friend Roger Berry, especially the point that on average a person on incapacity benefit will receive less then £80 per week. There are an estimated 2.7 million people on incapacity benefit. That is 2.7 million people living on £80 per week. I do not think that any of us in the House can imagine what living on £80 a week must be like. People on incapacity benefit are poor. Not having a job is far more likely to mean that they are depressed and stressed. They do not have access to the social life that working can bring. Work is good for people's mental and physical well-being. Second to winning the national lottery, it is still the best way out of poverty.

Beveridge understood that when he first thought of the welfare state. His welfare state was proactive. He intended it to rid the world of want, disease, squalor, ignorance and idleness. His welfare state was founded on universal access to free health care and education, decent housing, and a benefit system that would provide security for those who could not work, and most crucially, help to find a job for those who could. From education and health to unemployment benefit and welfare, the Beveridge plan had security at its heart, but work was its lifeblood.

The welfare state did just that, until Thatcher and our changing economic landscape made welfare a passive dumping ground for the victims of industrial decline. Millions of people were written off on the benefit system with no expectation that they would work. Those are not just numbers; they are people. Most of us have seen the harm, the upset and the chaos that worklessness causes. It robs people of their dignity, self-confidence and self-worth. It is no surprise that suicide rates are 35 times higher among the long-term unemployed. To leave people on incapacity benefit and not to help them find work is not an option. No one is arguing that the modern welfare state adequately reflects modern labour markets and employment patterns. We need welfare reform, but we need to get it right.

The Bill recognises that the world of work has changed since the days of Beveridge, or even Thatcher. It is no longer the case that incapacity benefit claimants are all men from the industrial heartlands with bad backs. As many hon. Members have mentioned, mental health problems caused by stress at work may be as big a problem in this century as industrial injuries were in the last century. That is why it is vital that we focus on identifying mental health problems that impact on people's ability to work and finding better ways to help people overcome them.

In order to do that, we need to find better ways of engaging with employers—another issue that has been highlighted by many hon. Members. We should ensure that people do not feel forced out of work in the first place, but more importantly, we need to educate employers about mental health issues. There is still too much stigma attached both to mental health problems and to physical disability.

Most employers tend to be in small and medium-sized firms. We no longer have great monolithic state institutions. Instead, we live in the age of the flexible labour market, which is fine for those who are qualified and skilled enough to be in control of it, but it is not fine for the unskilled and semi-skilled whose lives are determined by it. Flexibility means that no one size fits all, and flexibility does not suit everyone. Flexibility means that we have to tailor our welfare state to meet the work and welfare needs of individuals.

That is why the pathways to work pilots have been the single most successful intervention for getting people off benefits, out of poverty and into sustainable, meaningful work. My constituency is North-East Derbyshire, which falls into the Derbyshire pathways to work pilot area, which was the first pathways area in England.

A claimant who takes part in the pathways pilots gets a personal adviser who will take them through the journey from incapacity benefit to sustainable work.

One of the elements that has worked best in pathways to work has been the condition management programmes. People who have been away from work for long periods often have additional needs, such as dealing with the stress caused by poverty and not working, or the pain that they are experiencing from their illness or disability.

Specialists are brought in to work with claimants until they can manage their condition. Jobcentre Plus works closely with local colleges to ensure that the necessary training is given to qualify people for suitable jobs.

As a result, 25,000 people nationally have entered work through the pathways pilots, which, as we heard, have been running for just over two years. People who leave IB for work in pathways areas earn on average £72 a week more than elsewhere. That is a significant statistic because it is a direct result of pathways making sure that people get the right job, not just any job. That is an important part of the welfare reforms.

There is a national downward trend of 1 or 2 per cent. in people claiming incapacity benefit. In my area that figure is well over 6 per cent. The national roll-out of pathways is key to the reforms, but the most needed reform is changing the medical examination to a personal capability assessment. At present, a person claiming incapacity benefit has to go to a medical examination centre about once a year. The doctors who work at these centres are testing for incapacity. They ask questions and tick boxes. Enough so-called right answers mean that the person can stay on incapacity benefit.

I have lost count of the number of people who have told me that doctors at the medical examination centres do not look at them. They do not even look them in the eye. Hopefully, that will change when doctors and personal advisers look at what a person is capable of doing, and not just for the few moments that they spend being assessed. Too many people with fluctuating conditions and mental health problems fail the test because at the time of their assessment they are feeling okay. The personal capability assessment must look at a person's long-term history and the person must be looked at physically. Getting rid of the computer screens at medical examination centres would be a very good start to doing that.

It can be the most satisfying and rewarding thing in the world to see someone's life change because they have been helped back to work. I went with the Work and Pensions Committee to visit Derby so that we could see for ourselves how the pathways to work pilot was running. It was incredible. People who had been helped back to work were often very tearful and spoke of their lives having been given back to them. I have never seen such a dramatic difference being made to people's lives.

But there can also be deep frustration. We can work in partnership, we can work laterally, we can identify different pots of resources, but what happens when someone agrees to a back-to-work plan, they are taking part in pain and condition management, they sail through skills training and education, they are ready and eager to go to work, they are totally job ready, and then there is no job for them to go to? That is where the cities strategy comes in, which is the best bit of the Bill. Our cities have the highest concentration of incapacity benefit claimants, and it is right that we target the greater number in the cities. The cities strategy pools resources and initiatives within a city and brings together local partners to work within and as a community to improve economic regeneration through skills, employment and health.

This is fantastic stuff, but what happens in rural areas such as North-East Derbyshire? We have no cities, but we do have high concentrations of incapacity benefit claimants. It is like lots of ex-mining communities where many people live in isolated, rural villages with poor transport links and no cars, and those are the people on incapacity benefit. Transport infrastructure in cities is much better than it is for people in the countryside, and someone who lives in a city will have a wider range of jobs available in a smaller area. Fundamentally, the cities strategy is about going out to the areas where we know the largest number of incapacity benefit claimants live rather than calling them in to jobcentres. There is no reason why we cannot transfer that model to a rural setting.

We will be setting up a rural pilot in North-East Derbyshire, bringing together all the key stakeholders from welfare rights organisations, Jobcentre Plus, some private and voluntary training providers and job brokers, Chesterfield college and large employers. We will work together to ensure that our current labour markets and future jobs and skills needs are properly mapped. It is the only way to ensure that local people at least have a chance of getting local jobs.

One final thought. The Bill can be as radical and imaginative as the very creation of the welfare state itself, but the reforms need to be carefully thought out. They must meet the needs of a wide-range of different people with minor or severe conditions, people who are recently out of a job and others who have never been able to work. If we get this wrong, we let down the most vulnerable people in our society. But if we get it right, we could lift millions of people out of poverty and give them back their lives.

8:47 pm
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Sammy Wilson (East Antrim, DUP)

This legislation, at least as it stands, does not apply to Northern Ireland. As one who the chattering classes have described as coming from the celtic fringe, I hope that I do not incur the wrath of others on the Opposition Benches for taking part in this debate. I wanted to join in the general outbreak of consensus and good will that there has been on this Bill towards the end of this Session for two reasons in particular—first because it is an important part of the economic policy that will keep the United Kingdom working well, and secondly because it is an important micro-economic policy that deals with a vulnerable group of people, whom we simply cannot dismiss and say that they have no part in the economic life of our country.

I hope and believe that the Bill will eventually apply to Northern Ireland, because much of what has been said about other parts of the United Kingdom here tonight applies even more so to Northern Ireland. It is well known that members of my party do not trot into the Lobby with the Government too often, but I congratulate them at least on the macro-economic policy in Northern Ireland, where we are now experiencing the lowest level of unemployment that I can remember in my lifetime. However, our economy still contains significant pockets of people who have faced unemployment for a long time. In parts of Northern Ireland, up to 40 per cent. of the working population is on incapacity benefit, and I do not believe that all those people cannot contribute in some way to the economic life of that part of the United Kingdom. If the Bill were to channel such people back into work, it would do them a favour, and it would do our economy good.

As Natascha Engel has said, the system will examine people's personal capabilities. I have dealt with too many constituency cases in which GPs have treated people week after week, month after month and year after year simply by writing them a line, because they are disabled.

On the assessment for incapacity benefit, 70 per cent. of those whose cases are reviewed in Northern Ireland have the outcome changed on appeal, which indicates that the initial assessment is not done that well. People's personal capabilities are important, and perhaps the new system will focus on the contribution that people can make.

I have a couple of concerns that I would like the Minister to address. First, Age Concern has pointed out that even under the existing pathways programme, the people who do not get moved into work easily are over 50, but I cannot see anything in the Bill indicating that there will be a greater success rate for over-50s.

Secondly, if we are to meet the Government's target in Northern Ireland, more than 30,000 people who are currently regarded as disabled in some way must be put into jobs, which will require a massive change, and the change will probably need to be greater in the public sector than the private sector. Given the importance of the public sector in Northern Ireland, it worries me that we are holding out the promise of a new route to work for people, who may find themselves in endless work-related programmes, but may never get into work.

Some time ago, I was involved in a voluntary sector project to get hard-to-place youths into work. The success rate was one thing that gave those who joined the scheme a bit of drive—85 per cent. of those who went through the scheme got into full-time employment, which injected discipline into youngsters who might otherwise have found it difficult to stay on the programme. Unless such success rates are achieved, people will quickly become fed up and think that the scheme is just another failed initiative.

Giving employers sanctions has generated some concern, but I do not share that worry. In my experience of that youth project, the employer having sanctions can sometimes be important, because the people who are directly involved can best judge whether a sanction is appropriate and which sanction is appropriate. I am not therefore worried about the fact that employers will have the ability to impose sanctions.

Turning quickly to housing benefit, I have two concerns. First, I am concerned about the payment going directly to the tenant, who will then pass it on to the landlord. Some Members have argued that that is good because it teaches people who receive the benefit responsibility, but many, sad to say, are unable to bear that responsibility because when they get the money they will immediately spend it on drink, drugs or whatever, or if they do not, their husband, wife or partner will. If the money goes into a bank account, sometimes the bank will take it. There is already an element of responsibility involved anyway. Most people do not get 100 per cent. of housing costs met through housing benefit, so they have to budget somewhat for housing. We need to consider whether direct payment is appropriate in all circumstances. The Minister said earlier on that there would be opportunities for some people to have money paid directly to the landlord, but that merely puts in place yet another expensive bureaucracy for assessing who should have direct payment and who should not. Either we have it or we do not.

Secondly, I am concerned about the issue of housing benefit being withdrawn in the case of antisocial behaviour. We need to impose as many sanctions as possible on those who engage in antisocial behaviour and make people's life a misery on estates. However, I wonder how much of this part of the Bill is down to getting a headline in the papers, some of which have already zoomed in on it and said that people will lose housing benefit if they do not behave. However, the Minister has made it clear that he is already imposing a restriction. When I asked him about it earlier, he said that there is no chance of families with children being turfed out on to the street. If so, we are already ruling out a whole range of people who may cause misery for their neighbours. We have to ask ourselves when and how this measure will be applied if it is to be effective.

I trust that the Bill will be introduced in parallel in Northern Ireland. That is necessary given the circumstances of those in that part of the United Kingdom who find themselves out of work and on incapacity benefit without some of the support that is required. Antisocial behaviour is a big issue on many estates, so any sanctions that can be imposed, albeit that they have been weakened by what the Minister has said, will be an important element of the armoury in fighting against that blight on society.

I appreciate the opportunity to take part in this Second Reading debate and trust that some of the points that have been raised will be teased out more fully so that the Bill returns in an even better form.

8:58 pm
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Andrew Love (Edmonton, Labour)

I, too, warmly welcome the Bill for all the reasons that other Members have mentioned. I am particularly concerned with part 2, which deals with housing benefit.

We all know about the problems with the housing benefit system. It is incredibly complex: anyone who has seen the local authority manual for housing benefit will know just how complex. It is bureaucratic, as anyone who has had to endure it when trying to claim housing benefit will know, and that leads to significant delays in payment. Primarily, there are enormous shortfalls in the payment of housing benefit compared with the rents that people have to pay.

For all those reasons, it has been a priority for the Government to reform the system. They introduced the local housing allowance pathfinders in 2003 and we are now beginning to get the results of those pilots. The pathfinders' objectives were to: promote fairness, increase choice for the tenant, have greater transparency—tenants would know in advance the amount of local housing allowance that they were to receive—and increase personal responsibility. I shall revert to the latter shortly. The primary objective was bringing an end to the interminable waits for claims because of the bureaucratic nature of the system.

Pathfinders have achieved most of the objectives and were especially successful in reducing the shortfalls between benefit and rent—from £24 to £17 on average. That is to be warmly welcomed. However, we need to consider several matters in our scrutiny of the Bill.

All hon. Members who commented on housing benefit reforms mentioned direct payments to private tenants. I accept the objective of trying to increase personal responsibility. It is important if we are to assist people into employment, and the results of the pathfinders are encouraging. However, there are dark clouds on the horizon for the national roll-out of the scheme. Many people mentioned landlords' resistance and expressed a view that that will increase the risk of non-payment and falling into arrears. I have some concerns that that will reduce the supply of accommodation for housing benefit tenants.

However, my main worry is about vulnerable tenants. They include the elderly, people who are leaving supported housing or care and the statutory homeless. There is a whole group of vulnerable tenants. Although I accept that provision has been made for local authorities to pay the benefit directly to the landlord, the system does not contain adequate safeguards and we need to consider whether trained and qualified staff are required to make an assessment to ensure that those who are most exposed under a system of personal responsibility do not fall into significant arrears.

One of the reasons for pathfinders' success is the increased provision of financial advice to tenants in the pilot areas. Genuine difficulties undoubtedly arise when people have to set up bank accounts. Unfortunately, the Post Office card account is not available because, for some reason, the Post Office and local authorities do not have any agreements and people therefore have to set up bank accounts. There are major problems, with which people need help. For example, the European money-laundering regulations mean that people have to produce original documentation. That has proved a genuine difficulty in other circumstances. I was pleased that the Minister gave the reassurance today that the enhanced money advice facilities will be available when the scheme is rolled out nationwide.

I want to consider the local housing allowance. Under the Bill, the rent service will set the local housing allowance and decide the broad rental market areas that that amount of local housing allowance will cover. Again, the pathfinder experience has been good. I welcome that and congratulate the Government because there has been a substantial reduction—from 58 per cent. to 39 per cent.—in the shortfalls that people experienced in those broad rental market areas. However, there have been significant variations, and several hon. Members voiced genuine concerns about that. For example, in Leeds, the scheme almost halved the number of people with a gap between their rent and housing benefit, but Conwy experienced only a small reduction. We need to look more closely at that experience, to determine how we can learn from it. There are also issues relating to transparency and to the boundaries of the broad rental market areas. I take the point made earlier about the significant variation in rental levels across Greater London, and we need to ensure that we get those boundaries right if we are going to make a success of the local housing allowance.

The shared room rate restriction will apply to childless claimants under 25 years of age. I will not go into that matter in detail, but I have raised an Adjournment debate on the subject. I welcome the extension of the shared room rate introduced by the Government, and the subsequent reduction in shortfalls experienced by young people in the pathfinder areas. However, there is still a major difference between young people, who experience an average shortfall of £35, and others, whose average shortfall was just over £16. We need to look into this matter, and I hope that Ministers will be sympathetic to a debate in Committee on the best way forward for the shared room rate.

I should like to make a brief plea in relation to interim payments, which have presented a particular problem in the housing benefit system. It does not look as though any changes will be made to the present arrangements, and I assume that that is because it has been accepted that the delays inherent in the existing system will not arise in the new system. However, we ought not to take that on trust. We need to strengthen the interim payments structure to ensure that people will be protected if their housing benefit is not paid, rather than finding themselves in arrears and threatened with eviction.

Finally, I want to say a brief word on the housing benefit sanction to tackle antisocial behaviour. I am sympathetic in principle to what the Government are trying to achieve. We have to crack down on antisocial behaviour and I am interested in the rehabilitation support that has been suggested. However, we must ventilate some of these arguments in Committee to ensure that that support is real. We must also consider the implications for families and, especially, young children who are evicted and who have action taken against them. I am certainly sympathetic to the idea of establishing pilots to enable us to look carefully at this issue, because that is what is needed, and I hope that we will be able to improve the system to ensure that antisocial behaviour is dealt with.

I strongly welcome the Bill overall, and I particularly welcome the provisions for setting up the local housing allowance. The Bill will make a significant difference to people at the margins of our society, and I hope that it will not only encourage them to get back into work but ensure that they are looked after with a proper safety net while they are in the transition period.

9:07 pm
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Greg Clark (Tunbridge Wells, Conservative)

Natascha Engel —and indeed the Secretary of State—referred to William Beveridge. I should like to refer to that other great titan of the 20th century, Sir Winston Churchill, who summed up the vision for our party's involvement in social policy with two images: the ladder and the net. That has served us well during the 20th century, but it is an outdated vision for the 21st. People get tangled up in nets, and our purpose in this age must be to propel people upwards, not to leave them languishing in a net, however humane the intention behind its provision.

Nothing could better illustrate that problem than incapacity benefit. We know that once someone has been on IB for a year, they are likely to spend an average of eight years on it. The reasons for that are complex. People have special needs that can be difficult to deal with. When setting targets for reforming welfare provision to alleviate poverty, it is appropriate to tackle the difficult cases as well as the easier ones, and I urge those on my Front Bench as well as the Government to take that on board.

I applaud the Government's achievements in reducing child poverty, but when we look at the construction of that target and at how progress towards it has been made, we realise that it has consisted largely of increasing the income of people just below the 60 per cent. poverty line to just above it. However, the number of people on less than 40 per cent. of median earnings—those in more severe poverty—has increased. Some 800,000 more people are now in severe poverty than 10 years ago. Many of those people are disabled. In a very good lecture to the Fabian Society, the Secretary of State pointed out that 25 per cent. of all children in poverty have at least one disabled parent. It is therefore extremely important that we direct our attention to that group. I hope that the Government's headline targets will not distract them from that purpose. Our welcome for the Bill reflects the fact that it goes some way to show that the issue is not being entirely forgotten.

What can be done about it? Mr. Khan and I serve on the Public Accounts Committee and we recently had the pleasure of scrutinising a report from the National Audit Office that considered the Department's record on support for disabled people. It contained some shocking revelations. For example, as the Minister knows, 2.6 million people are on incapacity benefit, but only 125,000 of them are engaged in programmes to get them back into work. That is a drop in the ocean. If we are serious about giving people with disabilities the chances that they require and about extending to them the social justice that we extend to other parts of society, it is vital that we increase the number and quality of places available.

The NAO also found that, since April 2001, one third of all workstep suppliers have not progressed a single person into unsupported employment. As well as providing some of the sticks and carrots in the Bill, we need to consider the quality and availability of that provision. In so doing, I urge the Minister to make far greater use of the private and voluntary sectors, which have a record of innovation that commends itself. I have had some experience of the work of Tomorrow's People in my constituency and around the country. It has a fantastic record in dealing with the difficult problems that people face and helping to alleviate and, in some cases, cure them, so that people can go back into unsupported employment and have a decent chance of staying in it.

I also commend to the Minister's attention the experience of Kent, where the supporting independence programme was a trailblazer for what is possible when local councils are trusted to think imaginatively about how to take welfare spending and turn it into positive opportunities for people. Over the past three years, Kent has seen a 4 per cent. reduction in welfare spending, responding to the challenge set by Ministers through public service agreement targets to take on responsibility, for example, for getting people from welfare back into work. That has been a great success. It has not only helped the chances of people with disabilities but been a positive economic factor.

I also welcome the city strategy programme that Ministers are advancing. I hope that Kent will be selected to be part of that. Sometimes people get the wrong idea about Kent and think that the garden of England is universally affluent and without social problems, but we have great problems of social deprivation.

Photo of Justine Greening

Justine Greening (Putney, Conservative)

I am interested that my hon. Friend mentioned the city strategy. Does he agree that it is ironic that London features in the last wave of the pathways to work roll-out, and my area will only be rolled out in April 2008, nearly two years from today?

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Greg Clark (Tunbridge Wells, Conservative)

I am grateful for my hon. Friend's intervention, which underlines that we perhaps need to be more ambitious in rolling out such programmes. There is no point having financial penalties and interviews if programmes are not available for people who are keen, to the point of being desperate, to get into work. I hope that the pressure from this debate might encourage Ministers to roll out such programmes more quickly and aggressively across the country.

I am aware that others wish to speak, so I will cut my remarks short. Let me end by saying that, as I believe was pointed out by a Labour Member, this is an historic opportunity for the Government to add to their achievements in welfare reform—which, for the most part, have been relatively disappointing from our point of view—and to take a major step forward. So far, the Government's record in returning people with disabilities to work has not been one of their highlights, but I hope that as a result of the Bill, especially if it is taken a little further in the direction that I have suggested, many hundreds of thousands of people with disabilities will benefit.

9:15 pm
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John Robertson (PPS (Dr Kim Howells, Minister of State), Foreign & Commonwealth Office; Glasgow North West, Labour)

As a fellow Celt, Sammy Wilson will appreciate that I do not give a jot about what members of his party think of my contribution. Someone from Glasgow, a city that may contain the largest number of people on benefit, will consider it important to look at exactly what the Government are trying to do. Their attempt to place 80 per cent. of the population in employment suggests a taxing target, to say the least, but an honourable one, which I hope all Members will support. We have already observed a degree of consensus tonight.

We ought to remember that, in the 1980s, the Tories took people off the unemployment list and put them on benefits. At one stage, fewer than 60 per cent. of Glasgow's people were employed; the rest were either unemployed or, in most cases, claiming benefits. In cities like Glasgow, it has been hard work to return people to employment. It is difficult to believe that our city contains third generations who are incapacitated. I do not understand how it is possible to be on incapacity benefit without having had a job in the first place, but it happens. In cities such as ours, there is a great deal of work ahead of us.

Reforming incapacity benefit and income support is very important to those who, we hope, will eventually be given work. Thanks to Pathways to Work, people in Glasgow have returned to employment, and not just cheap employment: a number have obtained first-ever jobs paying over £15,000 a year, so there is hope. Nevertheless, the Trades Union Congress, among others, has concerns about, in particular, employment and support allowance. As far as I know, there has as yet been no mention of ESA rates, which makes it difficult to calculate the number of people who will be better off or, in some cases, worse off. I shall reserve judgment until we see the figures.

The Bill states that new claimants will receive an ability assessment within 13 weeks of their claims, but Citizens Advice rightly fears that that is not achievable. It is unacceptable that families on low incomes having to adapt to new or worsening health conditions should have to survive on jobseeker's allowance for more than 13 weeks through no fault of their own. Can the Minister comment on the idea of backdating entitlement if the target is not met? Backdating does not mean that such people should not be employed, but it might help them by confirming that although their health is bad, they want employment. It would help them to feel part of the system.

As my right hon. Friend the Secretary of State said earlier, pathways to work has been a highly successful pilot scheme. I see the positive results in my constituency. The scheme was launched on 31 October, and was designed to help people claiming incapacity benefit to return to work. About 9,000 pathways to work interviews have been conducted, and, as has been said, the average national rate of voluntary participation is 8 per cent. I am proud to say that in Glasgow the figure has reached 20 per cent.

Before the introduction of pathways to work, 1,760 claimants were in receipt of incapacity benefit or income support. Those people have now moved back into work and about 74 per cent. of them—1,300 people—are in receipt of return to work credit: £40 a week for 42 weeks, before moving into full-time incapacity benefits. My concern over pathways to work is about the lack of training of advisers, so will the Minister assure me, my colleagues and people who work in the Department that advisers will be properly trained? I have not found any reference to that in the Bill, but it should be included. Advisers should also be fully trained in mental health issues. I shall not go into further detail on that, as many hon. Members who have much more experience than me have already dealt with it.

The Minister should also be aware of the half-truths spread by the media. Some might say that there is nothing new there, but the media seem to imply that the Government are forcing people into work. Will the Minister assure my constituents that that is not the case and will he dispel the propaganda of the populist press?

The role of the new deal in getting people into work is important. Mr. Hammond, who is unfortunately not in his place, described the new deal as an expensive flop, yet 310 young people, 250 under-25s and 400 lone parents in his constituency have benefited from it.

We have done a similarly good job with tax credits. The shadow Chancellor, Mr. Osborne said:

"I do not acknowledge that the present tax credit system has helped in the reduction of child poverty"—[ Hansard, 12 July 2005; Vol. 436, c. 704.]

Will the Secretary of State confirm that the tax credit system has helped bring 700,000 children out of poverty? I wonder whether the hon. Member for Tatton is going to remove the credits from the 5,500 families in his constituency who benefit from the system?

Pension credit is very important to my constituency, which has many elderly people. Pension credit claims are worth about £47 to pensioners in my constituency. Yet Mr. Cameron claimed:

"Pensioners I meet don't want the extra fuel allowance, the free television licence, and all of the other condescending handouts from Gordon Brown: they want back more of the money that they paid in tax all their lives, in the form of a higher basic state pension."

So much for a caring, cuddly, hugging leader. In his constituency, 3,730 pensioners receive pension credit, there are 3,300 in the shadow Chancellor's constituency and 3,210 in the constituency of the hon. Member for Runnymede and Weybridge. That amounts to 7,240 pensioners—the poorest pensioners—who will not be getting a hug from the Tory party, but a slap in the face. In supporting the Bill, will we see yet another flip-flop from the Tories? To vote for or not to vote for——that is the question.

Before finishing, I want to mention my ten-minute Bill on rehabilitation leave. I hope that the Minister will carefully consider the points that I made in that Bill and seek to incorporate some of them into the excellent Bill before us now. My Bill provides a statutory right for newly disabled employees to have their employment capacity and support needs properly assessed and addressed—as far as I am concerned, that fits into the present Bill—and, where necessary, to have a period of leave to adapt or undergo rehabilitation and retraining before returning to work, which is another theme that runs through the Bill.

Recent figures from the CBI show that 84 per cent. of businesses now offer rehabilitation schemes to help people back into work, so that must be cost-effective for them, but businesses say that they need more support from employees' GPs to allow them to offer more rehabilitation to employees before returning to work.

In 1972, the Secretary of State for Employment in Edward Heath's Conservative Government, Robert Carr, believed that employers were too wise and astute to let apprenticeships fail. That resulted in the Conservative Government getting rid of the training incentives needed to develop apprenticeships, and the skills shortages that we have today are the result. I ask my hon. Friend the Minister to consider the people who need training—young people—and that elderly people could be used to help to train them.

What the Government propose in the Bill is a fundamental change, like those that we have proposed already in relation to tax credits and the new deal. It has already been shown to be good for Glasgow; it will be even better in the months and years ahead, and I hope that that will be the same in the whole country.

9:25 pm
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Paul Rowen (Shadow Minister, Transport; Rochdale, Liberal Democrat)

Like many other hon. Members, I welcome the opportunity to debate some of the issues raised in the Bill. As Miss Begg said, we have come a long way since the initial discussions, and what we have now is very much a framework for getting people to work. I hope that, as the Bill proceeds through the House, Ministers will give us an opportunity to see more of the substance and form.

Certainly, in Greater Manchester, the 10 district councils are already working to ensure that, when the system starts in our area, we can make it a success. However, there are concerns about whether it will be joined up across the piece. For example, I am concerned that the Learning and Skills Council is cutting funding for some low-level courses that are helping people with learning difficulties, when getting on to those courses may well be a prerequisite to getting back to work. Similarly, business support is being externalised and moved away. If we are to make ESA work, we must ensure that there is the necessary joined-up thinking.

In view of the lack of time, I want to address my main remarks to housing benefit. I welcome some of the proposed changes to simplify the system and make it much clearer. However, like other Members, I have concerns about the way that local housing allowance will work. I hope that its primary purpose is to ensure that the supply of affordable private rented housing will increase. Mr. Hands spoke about the problems in London. I believe that those problems exist elsewhere in areas without a plentiful supply of private rented housing. It is therefore important that the underlying rationale used by rent officers in setting the level of rent for housing allowance to be paid is made available, so that people can understand it.

I hope that Ministers will understand that many people do not have a choice about where they live, because of family ties and so on, and that they must live near where their children go to school. Therefore, it is important that the local housing allowance reflects what they can pay. There is a huge and growing gap. Hon. Members have mentioned some of the pathfinders and the variance between what happened in Leeds and Conwy will not help those people. That issue needs to be resolved.

Similarly, I hope that, when the system is rolled out, the support given to people to help them to manage their own affairs is the same as that available in the pathfinders—to do otherwise would be extremely cruel. People have visited my surgery to tell me about the problems that they have experienced during mental breakdowns and how they have got themselves into horrendous debt and how Government agencies and benefit providers do not accept and understand their problems. Mr. Weir mentioned a very similar case. Those problems must be taken care of when the regulations are introduced.

I also want to mention dealing with antisocial behaviour. I bow to no one in respect of saying that that is important and has to be dealt with, but I do not believe that the Government are going about it in the right way, because let us be clear: we are talking about giving another tenancy to people who have already been evicted. I would prefer the Government to propose that they be given a probationary tenancy that is tied to their attendance at certain rehabilitation courses, because that would be much more effective than the threat to remove their housing benefit. As has been made clear, such people will probably end up with considerable housing arrears and will not be too bothered by such threats. We need to give them a real threat: "You get the house if you behave yourself; if you don't, you're out." Such a policy is much firmer, and it is more likely to succeed.

Mr. Clapham raised the issue of payments in respect of mesothelioma, and I hope that the Minister will answer some of the questions that he asked. It is an important issue that several Members are concerned about and we want it to be dealt with in the Bill, as it has been in another piece of legislation that has already passed through the House. This is an important Bill, and I am grateful to have had this chance to contribute to our proceedings on it.

9:30 pm
Photo of David Ruffley

David Ruffley (Shadow Minister, Work & Pensions; Bury St Edmunds, Conservative)

This has been a constructive debate marked by good intentions from all parts of the House. Members of my party believe that those who can work should have the barriers in their way removed. Getting out of dependency and leading a more fulfilling life is what many of the 2.7 million people who are on incapacity benefits desperately wish to do. That is why we believe in active labour market policies. However, we also believe that security must be guaranteed for those whose level of disability is so great that they cannot work; that is one of the hallmarks of the civilised society in which we all wish to live.

We have also agreed in our debate about regulations. In the Bill's 76 pages, there are more than 240 references to regulations. That is part of a trend over the past nine years: some Ministers have sought to make major policy changes via statutory instruments, which are not amendable. Therefore, I hope that the Minister will agree tonight with his hon. Friends the hon. Members for Kingswood (Roger Berry) and for Burton (Mrs. Dean) that the draft regulations should be published well before the Committee stage. Will the Minister tell us tonight what the draft regulations will be and when we can expect to see them, in the interests of having a grown-up and mature debate?

The Bill is in the form that it is in, and is being somewhat rushed through this House, because of earlier delays. Before the last election, we were promised a Green Paper sometime in the summer of 2005, but it did not see the light of day until January 2006. That probably had something to do with the No. 10 policy unit sticking its oar in and pushing for welfare changes that were so draconian that not even the then Secretary of State, Mr. Blunkett, approved of them. An e-mail of last October from the Prime Minister to the then Secretary of State infamously demanded more means-testing for all incapacity benefit recipients, the time-limiting of incapacity benefit, naming and shaming GPs who allegedly signed off too many sick notes, and commuting a portion of the incapacity benefit amount into a non-cashable voucher with which claimants would have to buy rehabilitative care. Thankfully, none of that saw the light of day, but what we do have today is a Bill whose level of generality raises many questions, many of which have been posed in our debate.

First, we must be clear about the Government's target of removing 1 million people from incapacity benefit by 2016. On March 6, the Secretary of State said:

"we are starting from 2.7-2.72 million. By 2015/2016 I would like to see that figure down to 1.72 million, so it is a net figure. We are not trying to do any clever statistical sleight of hand on this."

But in a parliamentary written answer to me on 16 June, the Under-Secretary of State for Work and Pensions, Mrs. McGuire published figures—she should listen because she probably does not remember what she put in Hansard—showing that if there were no changes at all, in 10 years' time there would be only 2.36 million incapacity claimants anyway. [Interruption.] The Secretary of State says, "Is this a serious debate?" It certainly is, because the point that we are making—my hon. Friend Mr. Hammond made it earlier—is that the Government will have to assist only 640,000 people, not the 1 million whom the Secretary of State said he would help. [Interruption.] That is a serious point, and if the Secretary of State does not think so, it is him who should grow up.

Secondly, this Bill gives insufficient help to existing claimants, half of whom have been trapped on IB for more than five years. They risk being left out in the cold.

Photo of David Ruffley

David Ruffley (Shadow Minister, Work & Pensions; Bury St Edmunds, Conservative)

A June Department for Work and Pensions consultation report confirms that existing claimants will be migrated to the new allowance "in time", and "as resources allow". That seems unfair to many outside bodies, so will the Secretary of State publish a date by which existing claimants will be able to access support under his new regime? Is he prepared to do that?

Photo of David Ruffley

David Ruffley (Shadow Minister, Work & Pensions; Bury St Edmunds, Conservative)

This problem has particular relevance —[Interruption.] The Secretary of State may not think that the plight of existing claimants is a problem, but many people do.

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David Ruffley (Shadow Minister, Work & Pensions; Bury St Edmunds, Conservative)

I am very happy to give way to my hon. Friend.

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Justine Greening (Putney, Conservative)

I am delighted that my hon. Friend has given way; my persistence has paid off. Does he agree that one other problem with the 1 million target is that it was set when the Green Paper was issued, and that between then and now, the Government have said that they will assist existing claimants on to the employment and support allowance in order to help them back into work? So in theory, the 1 million figure should surely be adjusted to reflect the new cohort of people on IB who will get help who were not going to get it before.

Photo of David Ruffley

David Ruffley (Shadow Minister, Work & Pensions; Bury St Edmunds, Conservative)

My hon. Friend makes an excellent point, and I hope that the Minister will answer the question about the 1 million target: are we talking about 1 million people, or some 650,000?

Photo of David Ruffley

David Ruffley (Shadow Minister, Work & Pensions; Bury St Edmunds, Conservative)

I need to make progress because time is short; I might give way in a minute.

The Bill is meant to deliver the Green Paper's further aim of increasing the number of older workers by 1 million. Age Concern said:

"We recommend the Department sets interim targets so it has an incentive to support people who are too old to count towards targets that are a decade or more away. We recommend the Government states its employment aspirations for older people for the short and medium term by setting a clear, stretching target for the end of the next CSR period."

Will the Secretary of State agree to that request?

Thirdly, many welfare stakeholders openly wonder whether the funding for the Bill is adequate. The chief executive of the Disability Alliance said that the roll-out could end up as "pathways lite". The Select Committee said:

"There are widespread concerns that"

the funding

"may not be sufficient without services being watered down."

The funding issue gets murkier when we turn to the Bill's regulatory impact assessment. There is no statement on the proposed benefit rates for the new allowance. In addition, it proposes that certain elements of the new regime be introduced only as resources allow. It states:

"The overall cost of moving on to the new ESA will be dependent on where the benefit rate is set. In addition, it is likely there will be implementation and IT costs incurred during the transition; again these costs will vary depending on the agreed solution."

We know that according to the Chancellor, the likely cut in the DWP baseline next year will be in the region of 5 per cent.; let us hope that he is not the road block to reform in delivering on this Bill. To clear up worries outside this place about the adequacy of funding, will the Minister undertake today to publish biannually statistics on the incapacity claimant case load and on progress toward the target reductions, and to publish estimates of the resources that will be required to achieve that target?

Fourthly, the evidence shows that payment by results can get more people back to work more quickly—an example being the providers of employment zones. As participants progress through the programme, providers receive payments throughout that activity, and additional payments are received for achieving sustainable employment. A November 2003 DWP research report found that 28 per cent. of the employment zone participants surveyed had a job of 16 hours or more per week, compared with 17 per cent. of new deal 25-plus participants.

There are other examples, too. Yet the Bill does not introduce a serious payment by results regime, the objective of which would be to get more people off IB more quickly. That is why my hon. Friend the Member for Runnymede and Weybridge today proposed a radically better deal for claimants. Our no win, no fee proposal would offer providers the opportunity to get existing claimants into sustained employment, but we would pay the provider only when actual benefit savings had tangibly been realised. Significantly, that model would help to get round the comprehensive spending review constraints that the Treasury is currently imposing on the Secretary of State.

We would, of course, provide safeguards so that more modestly sized providers in the private and voluntary sector, which might be concerned about cash flow, would not be excluded from winning contracts. In particular, we understand the point made by Mencap, which said:

"Niche providers with specialist expertise in learning disability are losing contracts with Jobcentre Plus due to the current policy of awarding contracts to large, generic providers."

That is why we would like a fuller debate about the way in which bids in the pathways scheme roll out, and how they can be structured to ensure that small providers such as Mencap and Tomorrow's People, which my hon. Friend Greg Clark referred to in his excellent speech, continue to thrive. My hon. Friend Angela Browning made similar points.

Finally on the issue of the private and voluntary sector, we know that the roll-out from October 2007 until April 2008 will extend the pathways scheme to the remaining 60 per cent. of new customers. The departmental press release said that that would happen

"mainly via private and voluntary sector partners."

Will the Minister tell us what so many providers are asking? What does "mainly" mean? Does it mean that 100 per cent. of the provision will be by the private and voluntary sector, or 90 per cent., or 80 per cent? What is the figure?

Fifthly, the sensitive operation of the new limited capability for work test in clause 8, the limited capability for work-related activity in clause 9, and the work-focused health-related assessment in clause 10, is vital to the establishment of an efficient new allowance. Under the current system, too many cases go to appeal. Concerns are already emerging about the Bill's proposal that at least two and possibly three of those new tests will be administered not only at the same time, but by the same assessor. Stakeholders have pointed out that that could lead to inaccurate decisions because a claimant will first have to demonstrate that they are sick and then, a few minutes later, demonstrate what they are capable of doing. Any rational claimant will undoubtedly grasp that the more capability he or she demonstrates, the more that could undermine a judgment about his or her disability.

The potential for that to go wrong is great, and I was rather disappointed that the Minister talked about dummy runs, not a proper pilot. That is why the Disability Benefits Consortium has said:

"We believe that getting the interaction between these two assessments right is vital and the dummy runs the Government have proposed are inadequate for testing out such a substantial change to the entitlement system."

Will the Minister think again on that?

I want to ask about housing benefit in part 2 of the Bill. My hon. Friends the Members for Poole (Mr. Syms) and for Hammersmith and Fulham (Mr. Hands) had much of interest to say on that. In most of the pathfinder areas, the flat rate housing allowance has reduced the shortfall experienced by claimants between the benefit that they receive and the rent that they owe. We welcome that. However, clause 27 revises the local housing allowance model. It proposes changes to the methodology used to calculate the flat local housing allowance rates, to the room size criteria and to the cap on the amount that a claimant can retain. Will the Minister agree with Shelter, and with us, that before the Committee stage, the Department for Work and Pensions should publish its detailed modelling of the anticipated impact of those adjustments in the Bill?

I also want to ask about the controversial provisions in clause 28 for the loss of housing benefit following eviction for antisocial behaviour. Will the Minister reflect on what Barnado's has said:

"Our particular concern is about the effect on children...it is not a child's fault that their families are in difficulties...but the withdrawal of financial benefits from the family is likely to drive more children into deeper poverty and...work against the Government reaching its target for reducing poverty. Ultimately, of course, subsequent eviction from the home might lead to an increase in the number of children entering the care system"?

The Bill will not succeed in helping people simply because it has broadly desirable aims. The nuts and bolts of reform must be right; the devil is in the detail. Conservative Members will thus challenge Government assumptions when we must. We will put forward modern Conservative alternatives when we can, such as proposing a system of payment by results, which would get more people off benefit more quickly. It is in the spirit of constructive criticism—and in that spirit alone—that we will give the Bill a Second Reading tonight.

9:45 pm
Photo of Jim Murphy

Jim Murphy (Minister of State (Employment and Welfare Reform), Department for Work and Pensions; East Renfrewshire, Labour)

I welcomed the tone and content of the speeches that we heard from hon. Members on both sides of the House. The debate was quite rightly passionate at times. I do not have enough time to respond to all the specific points raised by my hon. Friends and Opposition Members. We heard 20 speeches, including those made by my hon. Friends the Members for City of York (Hugh Bayley), for Regent's Park and Kensington, North (Ms Buck), for Kingswood (Roger Berry), for Burton (Mrs. Dean), for Aberdeen, South (Miss Begg), for North-East Derbyshire (Natascha Engel), for Edmonton (Mr. Love) and for Glasgow, North-West (John Robertson). We also heard several sincere contributions from Opposition Members. Perhaps the most striking of those speeches was that made by Angela Browning, who spoke with great passion and commitment.

We also heard from my hon. Friend—uniquely, for the purposes of this debate, given the way in which he strongly supported the proposals in the Bill—Sammy Wilson. I can confirm to him that given the suspension of the Assembly, the proposals in the Bill will be part of a Northern Ireland welfare reform Order in Council. The roll-out of pathways will take place in 2008, which reflects our commitment throughout the country.

We heard 20 speeches with strong tone and content—up until the last one. In a debate about transforming people's lives, Mr. Ruffley tried to transform the debate into one of personal insults and invective, which did him, his cause and case, and the contributions made by other Conservative Members no good.

The purpose of the Bill is to acknowledge the fact that too many long-term sick and disabled people have been written off for too long by the welfare system. The Bill will put that right. It is worth reflecting, as hon. Members did, on the progress that has been made in recent years. Less than five years ago, the Employment Service and the Benefits Agency worked in isolation from each other. In many towns, two separate offices stood on the same high street, which drew a profound physical distinction between those who could work to support themselves and those who were implicitly deemed to be beyond the scope of the labour market. That situation demonstrated the real need for organisational change, policy change and cultural change to our focus on the labour market.

The Bill will be underpinned by the national roll-out of pathways. In many senses, pathways is the culmination of the Jobcentre Plus approach of uniting help and support for our customers with a clear focus on work for those who can. Hon. Members spoke about their experiences of and aspirations for pathways when the national roll-out reaches their constituency. My hon. Friend the Member for North-East Derbyshire talked with great passion about her assessment of the success of pathways in Derbyshire.

I have met people throughout the country whose lives have been literally transformed—and occasionally saved—as a consequence of the support that pathways and the advisers involved in it have been able to provide to those who are most in need of support. It is worth reflecting on the testimonies of those who have been supported by pathways. I sense that too many of those people were written off by society and employers in the past. Most importantly and tragically, however, in many cases, those people had given up on themselves and what they could contribute to society.

I listened with interest to my hon. Friend the Member for Glasgow, North-West, who talked about the wider impact of the reliance on incapacity benefit. The link between inactive benefits and child poverty has been well made. Reliance on inactive benefits not only in parts of Glasgow, Liverpool, Manchester, London and other great cities, but also in some of our rural communities, villages and towns, has become generational—as if it was an inherited benefit. There is a wider impact on life expectancy, which my hon. Friend has commented on before. The life expectancy in the poorest areas of Glasgow is a full 27 years shorter than in the most prosperous parts of London. Even within London, the levels of disparity between life expectancy are acute.

Photo of Lynne Jones

Lynne Jones (Birmingham, Selly Oak, Labour)

I share my hon. Friend's praise for the pathways to work scheme, but does he share my concerns that his departmental evidence shows that the programmes are less effective in helping people with mental health problems? Will he ensure that when the new arrangements come in, we have programmes that help those most disadvantaged people, who are greatly discriminated against by employers?

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Jim Murphy (Minister of State (Employment and Welfare Reform), Department for Work and Pensions; East Renfrewshire, Labour)

I thank my hon. Friend for that intervention, but pathways has shown that folk with mental health illnesses, fluctuating mental health conditions and learning disabilities can be supported with the right level of tailored support, focused on their needs and on what they can still contribute to society and employment. That is an important distinction from what went before.

On the specifics, pathways is the most successful initiative of its type from any Government in this country. Some 25,000 job entries are a consequence of pathways, and it is testing a new and innovative approach, involving the private and voluntary sector, to support the specific needs, conditions, aspirations and abilities of the individual. I disagree with Mr. Hammond that pathways will stifle innovation, and I do so for a number of important reasons.

In respect of the way in which we are constructing contracts, our current plans will allow for 70 per cent. to be paid on the basis of outcomes, with 30 per cent. set aside to enable others to enter the market and to provide cover for overheads for smaller organisations in particular. On the way in which we shape the outcomes, it is important that we construct the contracts in such a way that the private and voluntary sector does not simply help those whom it is easiest to support into work. That is an important distinction as we extend pathways through the private and voluntary sector.

In respect of support for those who have fluctuating mental health conditions and other fluctuating conditions, as my hon. Friends the Members for City of York and for Burton and the hon. Member for Tiverton and Honiton said, it is important to reflect on the fact that the single biggest contribution to people coming on to incapacity benefit is fluctuating mental health conditions. That is a remarkable change in recent years. I can confirm that the reformed PCA process will take into account the fluctuating nature of many conditions of those on incapacity benefit. It will not be a snapshot of one experience at a point in one day. We will continue to assess individuals over a period of time. Key to that, however, is that we ensure that the staff in Jobcentre Plus and in private and voluntary sector providers have the level of skills, knowledge, empathy and understanding to ascertain the needs and experiences of the customers they support.

Photo of Danny Alexander

Danny Alexander (Shadow Minister and Disability Spokesperson, Work & Pensions; Inverness, Nairn, Badenoch and Strathspey, Liberal Democrat)

Before the Minister leaves the subject of pathways to work, will he address the questions raised on the level of funding? As I have said before, and as Miss Begg said, "pathways lite" will not be good enough to help people across the country.

Photo of Jim Murphy

Jim Murphy (Minister of State (Employment and Welfare Reform), Department for Work and Pensions; East Renfrewshire, Labour)

The Government agree. That is not our intention. We will fully invest in pathways so that it can be rolled out across the country. We will learn from the best experiences and replicate best practice, so that it becomes common practice. There is no question whatsoever of us underinvesting in what is the most successful initiative of its type in the history of active labour-market policies in this country in supporting people on inactive benefits.

On local housing allowance, about which hon. Members on both sides of the House asked, it is our intention to make payments directly to the tenant rather than to the landlord. It is part of the continuing effort on financial exclusion and personal responsibility. Evidence from the pilot schemes is that up to 25 per cent. of those who received the payments directly opened a bank account for the first time, which is an important advance in respect of financial inclusion. The policy is also part of an agenda to ensure that housing benefit should not simply be passive, whereby we treat the customer as a passive recipient.

I confirm to my hon. Friend the Member for Edmonton that there will be continuing financial advice to customers about whom he so carefully asked and to whom he is so passionately committed. I confirm to other hon. Members that responsibility for setting the local rates will lie with the Rent Service in England and Wales and with rent officers in Scotland.

A number of hon. Members on both sides of the House asked about the housing benefit sanction. It is our view as a Government and as Labour politicians that the antisocial behaviour that devastates lives, tears communities apart and terrorises neighbours can no longer be tolerated. The measures in the Bill are an important step in the continuing effort to drive up behaviour in some of our communities. It is important that the sanction is linked as part of a package to rehabilitation. The sanction will apply after eviction. It is about preventing someone being able after eviction to claim housing benefit and to perpetuate antisocial behaviour by moving from one community to another and continuing to terrorise law-abiding neighbours. I confirm that we intend to pilot the proposal in 10 English local authorities over two years.

Hon. Members on both sides of the House asked about the availability of regulations in draft. I confirm again that it is our intention to provide the key regulations in draft for Committee, which is entirely appropriate. In line with normal procedure for such legislation, we are talking about regulations concerning limited capability for work, limited capability for work-related activity, work-focused health-related assessments, work-focused interviews, local housing allowance and the housing benefit sanction.

One thing that has been missing from the debate has been the usual ritualistic, retrospective justification of the previous Government's approach to this important issue of public policy. Occasionally, Conservative Front Benchers have flirted with an implicit apology for their record, but it is worth reminding the House what happened in the 10 to 15 years prior to our coming to power. Incapacity benefit numbers not only doubled but trebled under the previous Government. In 1995, 1 million people went on to incapacity benefit; in 1996, 1 million people went on to incapacity benefit. During that period, unemployment went over 3 million twice, and there was no pathways or equivalent. It is important to recognise the scale of the challenge that we faced.

Our approach is that no one should be automatically written off as they were in the past. An industrial injury, a fluctuating physical or mental health condition, should no longer enable somebody to be written off as they were in the past. This Bill is about the traditional Labour demand of the right to work for all. It is also an acknowledgment that the Government can go further in fulfilling our responsibility to provide support for every individual, giving them the chance to get into work and to stay in work, and every opportunity if they leave work to return to the labour market when appropriate. I commend the Bill to the House.

Question put and agreed to.

Bill accordingly read a Second time.